Marketing Management Module-(5/5)

8/4/2019 Marketing Management Module-(5/5)

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Module 5:Distribution and IntegratedMarketing Communication

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd. 8-1


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Module-5 Content

Chapter 15: Designing and Managing IntegratedMarketing Channels

Chapter 16: Managing Retailing, Wholesaling, andLogistics

Chapter 17: Designing and Managing IntegratedMarketing

Chapter 18: Managing Mass Communications:Advertising, Sales

Chapter 19: Managing Personal Communications:Direct and Interactive Marketing, Word ofMouth, and Personal Selling



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Designing and ManagingIntegrated

Marketing Channels

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Marketing Management

A South Asian Perspective, 13th

ed


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Chapter Questions

What is a marketing channel system andvalue network?

What work do marketing channels perform?

How should channels be designed?

What decisions do companies face inmanaging their channels?

How should companies integrate channelsand manage channel conflict?

What are the key issues with e-commerce?


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Raymondpresents

world-classexperiencethrough its

stores


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What is a Marketing Channel?

A marketing channel system is theparticular set of interdependent

organizations involved in the process of

making a product or service availablefor use or consumption.


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Channels andMarketing Decisions

A push strategyuses the manufacturerssales force, trade promotion money, andother means to induce intermediaries to

carry, promote, and sell the product to endusers.

A pull strategy uses advertising, promotion,and other forms of communication to

persuade consumers to demand the productfrom intermediaries.


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Aldi Adjusted Its Strategyfor the U.S. Market


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Buyer Expectations forChannel Integration

Ability to order a productonline and pick it up at aconvenient retail location

Ability to return an online-ordered product to anearby store

Right to receive discounts

based on total online andoffline purchases


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Rural Distribution

Traditional Channels

for Reaching Out toRural Customers Haats

Mandis

Melas

Innovative Distribution

Channels for RuralMarkets Hub and Spoke Model Mobile shops and offices Linkage with community

based organizations

(SHGs, NGOs, andcooperatives


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Categories of Buyers

Habitual shoppers

High value deal seekers

Variety-loving shoppers

High-involvement shoppers


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Types of Shoppers

Service/quality customers

Price/value customers

Affinity customers


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Channel Member Functions

Gather information

Develop and disseminate persuasivecommunications

Reach agreements on price and terms

Acquire funds to finance inventories

Assume risks

Provide for storage Provide for buyers payment of their bills

Oversee actual transfer of ownership


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Figure 15.2 Marketing Channel Flows


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Figure 15.3Consumer Marketing Channels


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Figure 15.3Industrial Marketing Channels


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Designing aMarketing Channel System

Analyze customer needs

Evaluate major channel alternatives

Identify major channel alternatives

Establish channel objectives


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Channel Service Outputs

Lot size

Waiting/delivery time

Spatial convenience

Product variety

Service backup


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Identifying Channel Alternatives

Types of

intermediaries

Number of

intermediaries

Terms and

responsibilities


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Number of Intermediaries

Exclusive

Selective

Intensive


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Terms and Responsibilitiesof Channel Members

Price policy

Condition of sale

Distributors territorial rights

Mutual services and responsibilities


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Figure 15.4 The Value-Adds vs. Costsof Different Channels


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Figure 15.5 Break-Even Chart for theChoice Between a Company Sales Force

and Manufacturers Sales Agency


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Channel-Management Decisions

Selecting channel members

Training channel members

Motivating channel members

Evaluating channel members

Modifying channel members


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Channel Power

Coercive

Reward

Legitimate

Expert

Referent


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Channel Integration and Systems

Vertical marketingsystems

Corporate VMS

Administered VMS

Contractual VMS

Horizontal

marketing systemsMultichannel

systems
http://www.sherwin-williams.com/


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What is Channel Conflict?

Channel conflict occurs when onemembers actions prevent another

channel from achieving its goal.

Types of channel conflict

Vertical

Horizontal

Multichannel


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Causes of Channel Conflict

Goal incompatibility

Unclear roles and rights

Differences in perception

Intermediaries dependence

on the manufacturer


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Table 15.3 Strategies for ManagingChannel Conflict

Adoption ofsuperordinate goals

Exchange of

employees Joint membership in

trade associations

Cooptation

Diplomacy

Mediation

Arbitration

Legal recourse


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e-Commerce Marketing Practices

Pure-click Brick-and-click


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Managing Retailing,Wholesaling, and Logistics

16

Marketing Management

A South Asian Perspective, 13th

ed


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Chapter Questions

What major types of marketingintermediaries occupy this sector?

What marketing decisions do thesemarketing intermediaries make?

What are the major trends withmarketing intermediaries?


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Tata Steel hasentered

organized steelretailing throughsteeljunction


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What is Retailing?

Retailing includes all the activitiesinvolved in selling goods or services

directly to final consumers for personal,

nonbusiness use.


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Table 16.1 Major Retailer Types

Specialty store

Department store

Supermarket

Conveniencestore

Discount store

Off-price retailer

Superstore

Catalogshowroom


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Levels of Retail Service

Self-service

Self-selection

Limited service

Full service


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Retailing in India and Pakistan

Retailing in South Asia is changing In India retailing is the largest industry

The share of modern organized retailing is

increasing The growth is driven by economic growth,

rising income levels, and consumption

Entry and growth of organized retail iscausing economic, political, and socialtension.


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Nonstore Retailing

Direct

selling

Buying

service

Automatic

vending

Direct

marketing


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What is a Franchising System?

A franchising system is a system ofindividual franchisees, a tightly knit

group of enterprises whose systematic

operations are planned, directed, andcontrolled by the operations franchisor.


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Characteristics of Franchises

The franchisor owns a trade or servicemark and licenses it to franchisees inreturn for royalty payments

The franchisee pays for the right to bepart of the system

The franchisor provides its franchisees

with a system for doing business


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McDonalds is a Franchising System


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Changes in theRetail Environment

New retail forms and combinations

Growth of intertype competition

Competition between store-based and

non-store-based retailing Growth of giant retailers

Decline of middle market retailers

Growing investment in technology Global profile of major retailers


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New Retail Forms and Combinations

Combination retailers

Pop-ups

Showcase stores


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Retailers Marketing Decisions

Target market

Product assortment

Procurement

Prices

Services


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Retailers Marketing Decisions

(cont.)

Store atmosphere

Store activities

Communications

Locations


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Retailer Services Mix

Prepurchase services

Postpurchase services

Ancillary services


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Store Atmosphere

Walls Lighting

Signage

Product placement Floors

Surface space

Music

The Fornarina flagship storefeatures award-winning retail

design.


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Tips for Increasing Salesin Retail Space

Keep shoppers in the store

Honor the transition zone

Dont make them hunt

Make merchandise available to thereach and touch

Note that men do not ask questions

Remember women need space Make checkout easy


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Location Decision

Central businessdistricts

Regional shoppingcenters

Community shoppingcenters

Shopping strips

Location within a largerstore


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Indicators of Sales Effectiveness

Number of people passing by

% who enter store

% of those who buy

Average amount

spent per sale


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Private Labels


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Private Label Brands

Private labels are ubiquitous

Consumers accepts private labels

Private-label buyers come from all

socioeconomic strata

Private labels are not a recessionaryphenomenon

Consumer loyalty shifts frommanufacturers to retailers


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Organized rural retailing

Rural retail has a large potential Traditionally rural retail was done by local

traders

Some companies have entered organizedrural retail

Hariyali Kissan Bazaar, is a pioneer in new

format rural retailing Chaupal Sagar by ITC acts as a collection

centre as well as retail outlet


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Wholesaling Functions

Selling andpromoting

Buying andassortment building

Bulk breaking

Warehousing

Transportation

Financing

Risk bearing Market information

Managementservices andcounseling


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Major Wholesaler Types

Merchant

Full-service

Limited-service

Brokers and agents

Manufacturers

Specialized


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Market Logistics Planning

Deciding on the companys value

proposition to its customers

Deciding on the best channel design

and network strategy

Developing operational excellence

Implementing the solution

Wh


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What areIntegrated Logistics Systems?

An integrated logistics system (ILS)includes materials management, materialflow systems, and physical distribution,

aided by information technology.
http://16_hasbro.mov/


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Market Logistics

Sales forecasting

Distributionscheduling

Production plans Finished-goods

inventory decisions

Packaging

In-plantwarehousing

Shipping-room

processing Outbound

transportation

Field warehousing

Customer deliveryand servicing


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Market Logistics Decisions

How should ordersbe handled?

Where should stock

be located?

How much stockshould be held?

How should goodsbe shipped?

Figure 16 1 Determining Optimal


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Figure 16.1 Determining OptimalOrder Quantity


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Transportation Factors

Speed

Frequency

Dependability

Capability

Availability

Traceability

Cost


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Designing and ManagingIntegrated Marketing

Communications

17

Marketing ManagementA South Asian Perspective, 13thed


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Chapter Questions

What is the role of marketingcommunications?

How do marketing communications work?

What are the major steps in developingeffective communications?

What is the communications mix and howshould it be set?

What is an integrated marketingcommunications program?


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Doves Campaign for Real Beauty

What are
http://www.dove.us/


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What areMarketing Communications?

Marketing communications are themeans by which firms attempt to

inform, persuade, and remindconsumers, directly or indirectly, about

the products and brands they sell.


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Modes of Marketing Communications

Advertising

Sales promotion

Events and

experiences Public relations and

publicity

Direct marketing

Interactivemarketing

Word-of-mouthmarketing

Personal selling


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Figure 17.1 IMC Builds Brands


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Table 17.1 Communication Platforms

Advertising

Print and broadcast ads

Packaging inserts

Motion pictures

Brochures and booklets

Posters

Billboards

POP displays Logos

Videotapes

Sales Promotion

Contests, games,sweepstakes

Premiums

Sampling

Trade shows, exhibits

Coupons

Rebates Entertainment

Continuity programs


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Events/Experiences Sports

Entertainment

Festivals

Arts

Causes

Factory tours Company museums

Street activities

Public Relations Press kits Speeches

Seminars

Annual reports Charitable donations

Publications

Community relations

Lobbying Identity media

Company magazine


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Special eventsto promote

Scorpio duringits launchcampaign


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Personal Selling Sales presentations

Sales meetings

Incentive programs

Samples

Fairs and trade shows

Direct Marketing Catalogs Mailings

Telemarketing

Electronic shopping TV shopping

Fax mail

E-mail

Voice mail Blogs

Websites


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Word-of-Mouth Marketing

Person-to-person

Chat rooms

Blogs

Figure17 2 Elements in the


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Figure17.2 Elements in theCommunications Process


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Field of Experience

Receiversfield

Sendersfield


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The Communications Process

Selective attention

Selective distortion

Selective retention

Figure 17 3


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Figure 17.3Response Hierarchy Models


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An Ideal Ad Campaign

The right consumer is exposed to themessage at the right time and place

The ad causes consumer to pay attention

The ad reflects consumers level of

understanding and behaviors with product The ad correctly positions brand in terms of

points-of-difference and points-of-parity

The ad motivates consumers to consider

purchase of the brand The ad creates strong brand associations

Figure 17 4 Steps in Developing


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Figure 17.4 Steps in DevelopingEffective Communications

Identify target audience

Determine objectives

Design communications

Select channels

Establish budget

Decide on media mix

Measure results/ manage IMC


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Communications Objectives

Category Need Brand Awareness

Brand Attitude Purchase Intention


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C S


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Creative Strategy

Informational and transformational appeals Positive and negative appeals

Fear

Guilt Shame

Humor

Love

Pride Joy

M S


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Message Source

Celebrity Characteristics Expertise

Trustworthiness

Likeability

I F i Gl b l Ad i


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Issues Facing Global Adaptations

Is the product restricted in somecountries?

Are there restrictions on advertising the

product to a specific target market?

Can comparative ads be used?

Can the same advertising be used in all

country markets?

S l C i i Ch l


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Select Communication Channels

Personal channels

Nonpersonal channels

Integration of channels

Personal


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Communications Channels

Advocate channels

Expert channels

Social channels

Stimulating


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StimulatingPersonal Influence Channels

Identify influential individuals and devoteextra attention to them

Create opinion leaders

Use community influentials in testimonialadvertising

Develop advertising with high conversationvalue

Develop WOM referral channels Establish an electronic forum

Use viral marketing

Nonpersonal


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Communication Channels

Media

Sales Promotion

Events and Experiences

Public Relations

E t bli h th B d t


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Establish the Budget

Affordable

Percentage-of-Sales

Competitive Parity

Objective-and-Task

Obj ti d T k M th d


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Objective-and-Task Method

Establish the market share goal Determine the percentage that should be reached

Determine the percentage of aware prospects thatshould be persuaded to try the brand

Determine the number of advertising impressionsper 1% trial rate

Determine the number of gross rating points that

would have to be purchased Determine the necessary advertising budget on

the basis of the average cost of buying a GRP

Characteristics of


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Characteristics ofThe Marketing Communications Mix

Advertising

Pervasiveness

Amplified

expressiveness

Impersonality

Sales Promotion

Communication

Incentive

Invitation

Characteristics of


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the Marketing Communications Mix

Public Relationsand Publicity

High credibility

Ability to catchbuyers off guard

Dramatization

Events andExperiences

Relevant

Involving

Implicit

Characteristics of


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the Marketing Communications Mix

Direct Marketing

Customized

Up-to-date

Interactive

Personal Selling

Personal interaction

Cultivation

Response

Word-of-Mouth Marketing

Credible

Personal

Timely

Factors in Setting


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gCommunications Mix

Type of product market

Buyer readiness stage

Product life cycle stage

Figure 17.5 Cost Effectiveness by
http://ge.ecomagination.com/


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g yBuyer Readiness Stage

Figure 17.6 Current Consumer States


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gfor Two Brands


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Managing MassCommunications:

Advertising,Sales Promotions,Events and Experiences,

and Public Relations

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Chapter Questions


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Chapter Questions

What steps are involved in developing anadvertising program?

How should sales promotion decisions be

made? What are the guidelines for effective brand-

building events and experiences?

How can companies exploit the potential of

public relations and publicity?

AIDS prevention campaign inWest Bengal was a unique


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West Bengal was a uniqueintegrated mass media campaign

What is Advertising?


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What is Advertising?

Advertising is any paid form ofnonpersonal presentation and

promotion of ideas, goods, or services

by an identified sponsor.

Procter & Gambles


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Advertising History

Figure 18 1 The Five Ms of Advertising
http://18_procter.mov/


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Figure 18.1 The Five M s of Advertising

Advertising Objectives


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Advertising Objectives

Informative

advertising

Reminder

advertising

Reinforcement

advertising

Persuasive

advertising

Factors to Consider in Setting an


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Advertising Budget

Stage in the product life cycle

Market share and consumer base

Competition and clutter

Advertising frequency

Product substitutability

Developing the


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Advertising Campaign

Message generationand evaluation

Creative

development andexecution

Legal and socialissues

Television


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Television

Advantages Reaches broad

spectrum of consumers

Low cost per exposure

Ability to demonstrateproduct use

Ability to portray imageand brand personality

Disadvantages Brief

Clutter

High cost of production

High cost of placement

Lack of attention byviewers

Print Ads


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Print Ads

Advantages Detailed product

information

Ability tocommunicate userimagery

Flexibility

Ability to segment

Disadvantages Passive medium

Clutter

Unable todemonstrateproduct use

Print Ad Components


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Print Ad Components

Headline

Picture

SignatureCopy

Print Ad Evaluation Criteria


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Print Ad Evaluation Criteria

Is the message clear at a glance? Is the benefit in the headline?

Does the illustration support the headline?

Does the first line of the copy support orexplain the headline and illustration?

Is the ad easy to read and follow?

Is the product easily identified? Is the brand or sponsor clearly identified?

Communicating to the RuralAudience


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Audience

Large variations in language and culture

Campaigns have to be tailor made for productand region

Product demonstrations in haats, mandis,

and melas(fairs) are useful TV and print media do not reach all villages

and all customers

Wall paintings and signboards very popular Folk theatre, magic shows and puppet shows

are also used as a media vehicle

Media Selection


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Media Selection

Reach

Frequency

Impact Exposure

Figure 18.2 Relationship Among Trial,A d th E


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Awareness, and the ExposureFunction

Choosing Among Major Media Types


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Choosing Among Major Media Types

Target audience and media habits

Product characteristics

Message characteristics

Cost

Major Media Types


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Major Media Types

Newspapers Television

Direct mail

Radio Magazines

Outdoor Yellow Pages

Newsletters

Brochures Telephone

Internet

Table 18.2 Advertising ResearchT h i


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Techniques

For Print Ads

For Broadcast Ads

In-house tests

Trailer tests

Theater tests

On-air tests

Place Advertising


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Place Advertising

Billboards

Public spaces

Product placement

Point-of-purchase

Measures of Audience Size


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Measures of Audience Size

Circulation Audience

Effective audience

Effective ad-exposed audience

Figure 18.3 Classification ofAd ti i Ti i P tt


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Advertising Timing Patterns

Factors Affecting Timing Patterns


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acto s ect g g atte s

Buyer turnover

Purchase frequency

Forgetting rate

Media Schedule Patterns


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Media Schedule Patterns

Continuity

Concentration

Flighting

Pulsing

Evaluating AdvertisingEff ti


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Effectiveness

Communication-Effect Research

Consumer feedback method

Portfolio tests Laboratory tests

Sales-Effect Research

Figure 18.4 Formula for MeasuringSales Impact of Advertising


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Sales Impact of Advertising

What is Sales Promotion?


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Sales promotions consist of acollection of incentive tools, mostlyshort term, designed to stimulate

quicker or greater purchase ofparticular products or services by

consumers or the trade.

Sales Promotion Tactics


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Consumer-directed Samples

Coupons

Cash refund offers

Price offs

Premiums

Prizes

Patronage rewards Free trials

Tie-in promotions

Trade-directed Price offs

Allowances

Free goods

Sales contests

Spiffs

Trade shows

Specialtyadvertising

Using Sales Promotions


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g

Establish objectives

Select tools

Develop program

Pretest

Implement and control

Evaluate results

Why Sponsor Events?


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y p To identify with a particular target market or

life style To increase brand awareness

To create or reinforce consumer perceptionsof key brand image associations

To enhance corporate image

To create experiences and evoke feelings

To express commitment to community

To entertain key clients or reward employees To permit merchandising or promotional

opportunities

Using Sponsored Events


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g p


Choose events

Design programs

Measure effectiveness

Ideal Events


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Copyright 2009 Dorling Kindersley (India) Pvt. Ltd. 18-

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Audience closely matches target market

Event generates media attention

Event is unique with few sponsors

Event lends itself to ancillary activities

Event enhances brand image of sponsor

Customer Experience Management:Experience Providers


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Experience Providers

Communications

Identity

Product presence

Co-branding

Environments

Internet

Electronic media

People

Steps in the CEM Framework


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p

Analyze the customers experiential world

Build the experiential platform

Design the brand experience

Structure the customer interface

Engage in continuous innovation

Tasks Aided by Public Relations


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y

Launching new products Repositioning a mature product

Building interest in a product category

Influencing specific target groups

Defending products that haveencountered public problems

Building the corporate image in a waythat reflects favorable on products

Public Relations Functions


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Press relations Product publicity

Corporate communications

Lobbying

Counseling

Major Tools in Marketing PR


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Publications Events

Sponsorships

News Speeches

Public ServiceActivities

Identity Media

Decisions in Marketing PR


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Choose messages

Choose vehicles

Implement

Evaluate results

19


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Managing PersonalCommunications:

Direct andInteractive Marketing,Word of Mouth, and

Personal Selling

19


Chapter Questions


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How can companies integrate direct marketingfor competitive advantage?

How can companies do effective interactivemarketing?

How can marketers best take advantage of thepower of word of mouth?

What decisions do companies face in

designing and managing a sales force? How can salespeople improve selling,

negotiating, and relationship marketing skills?

Cokes Embraces Interactive Marketingwith MyCoke com
http://www.mycoke.com/


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with MyCoke.com

What is Direct Marketing?
http://www.mycoke.com/


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Direct marketing is the use ofconsumer-direct channels to reach and

deliver goods and services to

customers without using marketmiddlemen.

Direct Marketing Channels


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Direct Marketing Channels

Direct mail

Catalogs

Telemarketing

Other direct response

Constructing a Direct-Mail Campaign


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Select target prospects

Develop offer elements

Test elements

Execute

Measure success

RFM Formula forSelecting Prospects
http://www.the-dma.org/


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Selecting Prospects

Recency

Frequency

Monetary value

Elements of the Offer Strategy
http://www.the-dma.org/


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Product

Offer

Medium

Distribution method

Creative strategy

Components of the Mailing


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Outside envelope Sales letter

Circular

Reply form

Reply envelope

Types of Telemarketing


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Telesales Telecoverage

Teleprospecting

Customer serviceand technicalsupport

Other Media for Direct Response


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Television

Direct Response Advertising

At-home shopping channels Videotext

Kiosks

Public Issues in Direct Marketing


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Irritation

Unfairness

Deception/fraud

Invasion of privacy

Interactive Marketing


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Tailored messages possible Easy to track responsiveness

Contextual ad placement possible

Search engine advertising possible

Subject to click fraud

Consumers develop selective attention

Online Promotional Opportunities


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Websites Microsites

Search ads

Display ads Interstitials

Internet-specific adsand videos

Sponsorships Alliances and

affiliate programs

Online communities Email

Mobile marketing

A Microsite:Burger Kings Subservient Chicken


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g g

e-Marketing Guidelines
http://www.subservientchicken.com/


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Give the customer a reason to respond Personalize the content of your emails

Offer something the customer could not

get via direct mail Make it easy for customers to

unsubscribe

Word-of-Mouth Marketing isEmpowered by Social Networks


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p y

How to Start Buzz
http://www.myspace.com/


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Identify influential individuals and companiesand devote extra effort to them

Supply key people with product samples

Work through community influentials

Develop word-of-mouth referral channels tobuild business

Provide compelling information that

customers want to pass along

Figure 19.4 Designinga Sales Force


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Sales force objectives

Sales force strategy

Sales force structure

Sales force size

Compensation

Types of Sales Representatives


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Deliverer

Order taker

Missionary

Technician

Demand creator Solution vendor

Sales Tasks
http://19_aflac.mov/


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Prospecting Targeting

Communicating

Selling Servicing

Informationgathering

Allocating

Figure 19.7 Managing theSales Force


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Recruiting, selecting

Training

Supervising

Motivating

Evaluating

Workload Approach to DeterminingSales Force Size


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Customers are grouped into size classes Desirable call frequencies are established

Number of accounts in each size classmultiplied by call frequency

Average number of calls possible per yearestablished

Number of reps equal to total annual calls

required divided by number possible

Components of Sales ForceCompensation


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p

Fixed amount

Variable amount

Expense allowances

Benefits

Table 19.1 Form for Evaluating Performance


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Principles of Personal Selling


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Situation questions Problem questions

Implication questions

Need-payoff questions

Figure 19.8 Steps in Effective Selling


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Prospecting/Qualifying

Preapproach

Approach

Presentation

Overcoming objections

Closing

Follow-up


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END OF MODULE

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