Download - Bmgt 411 week_9
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BMGT 411: Week #9
Kottler:Chapters 13 - Integrated Marketing ChannelsChapter 14 - Retailing, Wholesaling, and LogisticsWood:Chapter 8 - Channel and Logistic Strategy
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BMGT 411: Chapter 13
Designing and Managing Integrated Marketing Channels
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Chapter Questions
• What is a marketing channel system and value network?
• What work do marketing channels perform?
• What decisions do companies face in designing, managing, and integrating their channels?
• What key issues do marketers face with e-commerce and m-commerce?
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What is a Marketing Channel?
• A marketing channel system is the particular set of interdependent organizations involved in the process of making a product or service available for use or consumption.
• The set of pathways a product or service follows after production, culminating in purchase and consumption of the final end user
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Path to Supermarket
http://www.youtube.com/watch?v=CAbFLBM6uHM
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Channels and Marketing Decisions
• A push strategy uses the manufacturer’s sales force, trade promotion money, and other means to induce intermediaries to carry, promote, and sell the product to end users
• A pull strategy uses advertising, promotion, and other forms of communication to persuade consumers to demand the product from intermediaries
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Push Strategy Example: Paying for Shelf Space
http://www.youtube.com/watch?v=pDxSX-BAs0U
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Pull Strategy Example: Advertising and Branding
Apple iPhone and Carriers
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Multi-Channel Marketing
• When a single firm uses two or more marketing channels to reach customer segments
• Ability to order a product online and pick it up at a convenient retail location
• Ability to return an online-ordered product to a nearby store
• Right to receive discounts based on total online and offline purchases
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Table 13.1 Channel Member Functions
• Gather information
• Develop and disseminate persuasive communications
• 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 13.1 Marketing Flows
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Figure 13.2 Consumer Markets
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Figure 13.2 Consumer Markets
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Figure 13.2 Consumer Markets
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Figure 13.2 Industrial Markets
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Reverse-Flow Channels
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Designing a Marketing Channel System
• Analyze customer needs: based on price, product assortment, and convenience, as well as shopping goals
• Establish channel objectives: Maximizing the desired level of output while also reducing costs
• Identify major channel alternatives: The types of intermediaries, the number needed, and terms and responsibilities of each
• Evaluate major channel alternatives: Comparing the costs of each channel and customer expectations to decide on the best one
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Identifying Channel Alternatives
Types of intermediaries: Merchants or Retailers: Buy take title of goods and resell
Example: Mass Market Stores, Grocery Stores, etc Agents, Brokers, Sales Agents: Negotiating on the producers behalf,
but not taking ownership of the product Travel agencies, Financial Consultants
Facilitators: Assist in getting the product to market, but do not take ownership nor assist in the sales Trains, Trucking, Warehousing, etc
Number of intermediaries Terms and responsibilities
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Identifying Channel Alternatives
Number of intermediaries: Exclusive: Severely limiting the intermediaries, controlling the service
levels and outputs Ex. Product’s like Tiffany, sold only in their stores
Selective: Gaining adequate market coverage by being selective about who carries your product Ex. Whole Foods Vendors
Intensive Distribution: Offering product in as many places as possible, often in convenience goods Ex. Soft Drinks
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Figure 13.3 The Value-Adds versus
Costs of Different Channels
C
B
A
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Channel-Management Decisions
• Selecting channel members: Negative experience at intermediary can cause a negative reaction at the company
• Training channel members: The power has shifted in most cases from producers to intermediaries
• Evaluating channel members: Constant evaluation of most profitable intermediaries, reducing and adding intermediaries by Modifying channel members over time
• Consolidation of stores
• Shifting to direct selling
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P&G eStore
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Different Types of Companies and Intermediaries
• Wal Mart
• Starbucks
• Amazon
• Giant Eagle
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Channel Conflict (Page 208)
• What types of conflict arise in channels?
• What causes conflict?
• Goal incompatibility
• Unclear roles and rights
• Differences in perception
• Intermediaries’ dependence on manufacturer
• What can marketers do to resolve it?
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E-Commerce
• Pure Click: No Physical Stores
• Brick and Click: Existing companies adding an online component
• M-Commerce: Selling directly to customers on smartphones and tablets
• Have any of you purchased something on your smartphone?
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M Commerce Trends
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M Commerce Trends
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M Commerce Trends
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BMGT 411: Chapter 14
Managing Retailing, Wholesaling, and Logistics
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Chapter Questions
• What major types of marketing intermediaries occupy this sector and what marketing decisions do they face?
• What are the major trends with marketing intermediaries?
• What does the future hold for private label brands?
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Table 14.1 Major Retailer Types
• Specialty store
• Department store
• Supermarket
• Convenience store
• Discount store
• Off-price retailer
• Superstore
• Catalog showroom
• Club
• Drug Stores
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Speciality StoreNarrow Product LinesLower Volume, Higher Margins
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Department StoresSeveral Product LinesHigh Volume/High Margins (Depends on Store)
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Grocery StoreHigh Volume/Low MarginOften Regional due to Distribution Limitations
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Drug Stores
Lower Volume/Higher MarginsConvenient Locations
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Convenience StoresHigh Volume/Mixed MarginsGas = lowFood = High
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Superstore Mass Retailers
Very High Sales, Very Low Margin, Low PriceSells Groceries + Everything Else
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Superstore: Built on Distribution Systems Walmart distribution system
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Supply Chain Management
• Supply chain management starts before physical distribution and means strategically procuring the right inputs (raw materials, components, and capital equipment); converting them efficiently into finished products; and dispatching them to the final destinations.
• Integrated Logistics Systems: An integrated logistics system (ILS) includes materials management, material flow systems, and physical distribution, aided by information technology.
• http://www.youtube.com/watch?v=SUe-tSabKag
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Market Logistics
• Sales forecasting
• Distribution scheduling
• Production plans
• Finished-goods inventory decisions
• Packaging
• In-plant warehousing
• Shipping-room processing
• Outbound transportation
• Field warehousing
• Customer delivery and servicing
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Market Logistics Decisions
• How should orders be handled?
• Where should stock be located?
• How much stock should be held?
• How should goods be shipped?
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Figure 14.1 Determining Optimal Order Quantity
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Levels of Retail Service
• Self service: Grocery stores, etc
• Self selection: Customers can find their own goods, can ask for assistance
• Specialty stores
• Limited service: limited service based on needs
• Full service: Service every step of the way (Most expensive)
• Cars, Luxury items
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Trends in Retailing: Growth of Non-Store Selling
• Direct: Avon,
• Direct: 1-800 flowers
• Automatic Vending
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Table 14.2 Major Types of Corporate Retail Organizations
• Corporate chain store: Chain stores and wholesalers owned by the same company
• Voluntary chain: A group of retailers owned by different companies that use one wholesaler (IGA Group)
• Franchise organization: Independently owned, pay a fee to be part of the franchise system. Reduction in marketing costs because of scale (McDonald’s, Jiffy Lube)
• Merchandising conglomerate: Combines several retailing lines under one central ownership group
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Top Retailing Trends
• Entering Urban Areas
• Getting smaller
• Temporary Stores, or pop up stores
• Integrating technology into the experience
• http://www.youtube.com/watch?v=qJWcX3huiZs
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Urban Store Trend East Liberty Target/New York Aldi
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Walmart - Getting Smaller? Walmart Express
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Pop Up Stores Starbucks
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Retailers’ Marketing Decisions
• Target market
• Product assortment
• Procurement
• Prices
• Services
• Store atmosphere
• Store activities
• Store experiences
• Communications
• Location
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Store Atmosphere and Experiences
Bass Pro Shops
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Target Market Gap Inc
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Private Label Brands
• Private Label Brand: a brand that retailers or wholesalers develop
• Consumer accepts private labels
• Private-label buyers come from all socioeconomic strata
• Private labels are not a recessionary phenomenon
• Consumer loyalty shifts from manufacturers to retailers
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Private Label Brands are Often Manufactured by the Same Company
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Clean and Unique StyleTarget’s Up and Up
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Aldi - Only Sells Private Label
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Wood Chapter 8: Key Take Aways
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Multichannel Marketing
• “Multichannel marketing” or OmniChannel puts the emphasis on providing a range of choices for customers who buy through different channels at different times or for different reasons.
• http://www.lincoln.com/concierge-about/
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BMGT 411: Preparing for Week 10
• Review Chapter Notes:
• Kottler:
• Chapters 15 - Managing Integrated Marketing Communications
• Chapter 10 - Planning Metrics for Marketing
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