Marketing Management Topic 15

What is an Indirect Channel System?

- Channel systems that use channel intermediaries between the manufacturer and the customer

How do you measure channel performance?

- Customer reach (volume) - Operating efficiency (cost to serve) - Service Quality ( retention)

Characteristics of Colors (atmospherics)

People are drawn to Warm colors (entrances and impulse buys) - Red is associated with warmth and power Cool colors are more pleasant (involved decision making) - Blue is associated with feelings of serenity and trust Discount stores concepts use bright fluorescent lights and warm colors Prestige store concepts us soft lights and cool colors

What is Selective Distribution market exposure?

- A level of distribution intensity where a firm selects a few retail outlets in a specific geographical area. - Selling through a limited/select number of qualified retailers - products are more expensive than intensive distribution - Shopping and specialty goods

Channel behavior (or misbehavior)

- All channel members have a common interest in selling the product - Channel conflict arises when one channel member prevents another channel member from achieving its goal - A primary cause of conflict is the distribution of profits among channel members

What is the Shelf Space affect on Sales

Expanded shelf space can increase sales but Special displays will increase sales more

What is Exclusive Distribution market exposure?

- A level of distribution intensity where only one retail outlet in a specific geographical area carries the firm's products - High end products with high costs - limits total sales but provides a setting, service, and exclusivity needed to support super-premium prices

What colors dominate high end Jewelry and why?

- Black - classic, distinctive, formality, tradition, and sophistication

What is a Mixed Channel System?

- Channel system that has a mix of direct channels and indirect channels

What is a Direct Channel System?

- Channel systems that go from manufacturer directly to customers. - No intermediaries Ex: LL Bean

What is atmospherics?

- Elements in the store's design that appeal to consumers' emotions and encourage buying. - element of retailing mix in presentation - signage, lighting, color, music, smell, temperature, displays - Interior and Exterior

What are Image benefits channels offer?

- Marketers can increase image benefits by selecting partners that reflect or enhance the brand. Ex: High end clothing at high end retailers

What is the Retailing Mix?

- Marketing mix (place, price, promotion, product) - Presentation- Atmospherics- signage, lighting, color, music, smell, temperature, displays - Personnel- number, knowledge, courtesy, competence, communication, dress, etc.

What is Intensive Distribution market exposure?

- Maximum market coverage - firm seeks to make the product available in every outlet where customers might want to buy it. - Convenience goods - Strong price competition

Characteristics of signage (atmospherics)

- Price influences sales more than signs - However, if the product is on sale, pricing signage increases sales over no signs - benefit signs dominate at both regular and sale prices

What colors dominate fast food companies and why?

- Red and Yellow - Red triggers stimulation, appetite, hunger and attracts attention - Yellow triggers feelings of happiness and friendliness - Yellow is the most visible color in daylight

What is the best channel system?

- The best channel system should achieve ideal market exposure

Characteristics of Music (atmospherics)

- Up tempo increases traffic flow - Slower music reduces flow and increases browsing and sales

What are Non-Price costs channels offer?

- channel marketers increase efficiency, thus, lowering the cost of exchange

What are service benefits channels offer?

- channel members increase service benefits by providing a variety of added-value activities (inventory, promotion, payment, credit, delivery) - Customers get products when they want, where they want, and with the terms they want

Customer reach in channel performance

- compare channel types and see how many customers you are reaching and how much revenue you are making from each to determine performance Ex: Epoxy Products get 80% of revenue from direct channel and only 20% of revenue from E-Channel

What are product benefits channels offer?

- enhance product benefits by enhancing product quality - break bulk, which increases value - provide assortments consumers want

How do you increase customer value the marketing channels table?

- increase benefits or decrease costs

What are "Moments of Truth"

- shoppers make up their minds about a product in about the time it takes to read this sentence - in-store advertising and packaging 1st Moment of truth -3-7 seconds when the shopper notices an item on a store shelf and decides whether to buy it 2nd Moment of truth - when consumers use the product - Every usage experience is a chance to delight customers

Improving Cost efficiency with Channel

- transactions go from 36 to 12 using a channel member between producer and consumer

Cabela's consciously designs retail space to orchestrate various dimension of the store—layout, color, sounds, and signage—to appeal to consumers' emotions and encourage buying. This is called: A. Atmospherics B. Wheel of retailing C. Location, location, location D. Retail control E. Sales promotion

A. Atmospherics

Candy bars such as "Snickers" are best sold using which type of distribution? A. Intensive distribution B. Selective distribution C. Exclusive distribution D. Dual distribution E. Minimized distribution

A. Intensive distribution

What is Trade Dress legal protection?

Apple has a trademark for its store layout

What is product assortment, line breadth, and line depth?

Assortment-The breadth and depth of the product line Product Line breadth- number of different product lines Product Line depth- number of products within a line

What are the benefits of using intermediaries?

Break Bulk- buy in quantities you want Provide Assortment- find a variety of products Hold Inventory- get the product when you want it Offer Services- promotion, delivery, warranty Market Efficiency- buy from a few sellers instead of many

What is the purpose of Marketing Channels?

Create value for consumers through four utilities - Time- making the products available at a convenient time - Place- making the product available at a convenient place - Form- making the product in the form consumers want - Possession- transfer product ownership to consumer

What are the channel selection considerations?

Customer- how and where do customers want to purchase the product? Product- How is this product positioned in the eyes of consumers? - What is the ideal market exposure for this product - What is the stage in the product life cycle Pick channels that highlight the product and company

Channel members (intermediaries) make the selling of products more efficient by: A. Maximizing the number of contacts necessary between producers and consumers B. Identifying target markets C. Reducing manufacturing costs D. Reducing the number of contacts between producers and consumers E. Eliminating inventory costs

D. Reducing the number of contacts between producers and consumers

Operating efficiency in channel performance

Direct Channels - produces higher margins - must bear the cost of channel management - must bear all marketing costs Indirect Channels - Produces lower margins - Provides lower channel management costs - Provides lower marketing costs

Service Quality in channel performance

Direct channel - manufacturer controls service quality - manufacturer interfaces with customer at all contact points Indirect Channel - removes the manufacturer from the end-user customer - manufacturer is dependent of channel partners to deliver the desired level of customer service

Channel members can affect customer value by: A. Reducing non-price costs B. Improving image C. Delivering service D. Enhancing the product E. All of the above F. None of the above

E. All of the above

Procter & Gamble (makers of Crest and Covergirl) focuses on winning the first moment-of-truth in retail stores, that is, the first three to seven seconds it takes shoppers to make up their minds which product to take from the retailer's shelf. To do this, P&G marketing managers focus on: A. CPM--cost per thousand impressions B. Discount stores C. Big box stores D. Intensive distribution E. In-store advertising and packaging

E. In-store advertising and packaging

What is distribution strategy about?

Selecting marketing channels to get products to customers(deliver value) in a way that maximizes sales and profits

What do Channels of distribution offer?

Specialization and division of labor -Creates greater efficiency - Provides lower costs - Enables economies of scale - Aids producers who lack resources to market directly