Marketing Test 3
marketing channels for consumer products
1. Direct channel is used to sell products directly to consumers. No intermediaries are used. Examples are telemarketing, catalog shopping, on-line shopping, and television shopping networks. 2. At the other end of the spectrum, an agent/broker channel may be used in markets with small manufacturers/retailers that lack the resources to find each other. The agents or brokers bring the manufacturers and wholesalers together for negotiations, but they do not take title to merchandise. 3. Most consumer products are sold through distribution channels similar to the retailer channel and the wholesaler channel.
global logistics and supply chain management
1. The allure of foreign markets is strong, due to increasing demand for imported products worldwide. Cheap labor advantages and trade barriers/tariffs have encouraged firms to expand their global manufacturing operations. 2. Moving operations offshore exposes companies to risks associated with geopolitical conflict, foreign nationalization of assets and knowledge diffusion, and highly variable quality standards. Foreign suppliers are often less reliable, and due to the lengthening of the supply chain, variability in transportation service can lead to service failures. 3. Companies moving offshore must carefully consider the pros and cons, and build supply management systems that can manage very diverse tasks. Logistically, it is critical for importers of any size to understand and cope with the legalities of trade in other countries. 4. As the world continues to globalize, supply chain management will undoubtedly continue to take on a globalized flavor. 5. Efforts to achieve world-class global supply chain management mean that the balancing of supply and demand—and the satisfaction of more and more customers worldwide—are becoming a reality for many companies.
logistical components of the supply chain
1. The supply chain team, in concert with the supply chain information system, orchestrates the movement of goods, services, and information from the source to the consumer. 2. Supply chain teams typically cut across organizational boundaries, embracing all parties who participate in moving the product to market. 3. The supply chain consists of several interrelated and integrated components, as shown on this slide. 4. The best supply chain teams move beyond the organization to include external participants, such as suppliers, transportation carriers, and third-party logistics suppliers. 5. Members of the supply chain communicate, coordinate, and cooperate extensively.
distinctions between business and nonprofit organizations
1. benefit complexity: nonprofit organizations often market complex behavior or ideas, such as the need to quit smoking. The benefits that a person receive are complex, long-term, and intangible, and therefore difficult to communicate to consumers 2. benefit strength: the benefit strength of many nonprofit offerings may be weak or indirect 3. involvement: many nonprofit organizations market products that elicit low involvement, such as "prevent forest fires", or very high involvement, such as "stop smoking"
nonprofit promotion resources
1. professional volunteers, such as donation of advertising agency time. donated services create goodwill, personal contacts, and general awareness of the organization 2. sales promotion activities that make use of existing services to draw attention to the offerings of nonprofit organizations 3. public service advertising that is donated by a sponsor, so the public service advertiser does not pay for the time or space
target markets
3 issues relating to target markets are unique to nonprofit organizations: 1. apathetic or strongly opposed targets: nonprofit organizations must often target those who are apathetic about or strongly opposed to receiving their services. 2. pressure to adopt undifferentiated segmentation strategies: nonprofit organizations often fail to recognize the advantages of targeting, or are pressured to service the maximum number of people 3. complementary positioning: nonprofit organizations must often complement, rather than compete with, the effort of other groups
AIDA Concept
A - Attention I - Interest D - Desire A - Action Model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message. The goal of any promotion is to get someone to buy a good or service, or take some action. A classic model for reaching promotional goals is called the AIDA concept—attention, interest, desire, and action—the stages of consumer involvement. This model proposes that consumers respond to marketing messages in a cognitive (thinking), affective (feeling), and conative (doing) sequences.
customer integration
A competency that enables firms to offer long-lasting, distinctive, value-added offerings to those customers who represent the greatest value to the firm or supply chain. Integration involves a balance between barriers and enablers. Companies that work closely with their suppliers encounter problems such as corporate culture, information hoarding, and trust issues.
classification of retail operations
A retail establishment can be classified according to its ownership, level of service, product assortment, and price. Retailers use the latter three variables to position themselves in the competitive marketplace. These variables can be combined in several ways to create distinctly different retail operations
supply chain integration
A systems approach where the overall performance of the chain is greater than the sum of its parts. Occurs when multiple functional areas coordinate business processes to seamlessly link to one another.
Target market characteristics
Advertising - widely scattered markets sales promotion - highly informed buyers less personal selling - brand-loyal repeat customers
customer relationship management
CRM allows companies to prioritize their marketing focus on different customer groups according to each group's long-term value to the company or supply chain.
marketing communication
Communication can be divided into two major categories: • Interpersonal communication is direct, face-to-face communication between two or more people. • Mass communication refers to communicating a concept or message to larger audiences, usually through a mass medium such as television or newspapers. When a company advertises, it does not know the consumers personally, nor is it able to respond immediately to reactions to the advertising message. Instead the marketing manager must wait and see how people are reacting to the mass-communicated promotion. Any clutter from competitors' messages or other distractions can reduce the effectiveness of the mass communication effort.
the role of retailing
Current innovations in retail include the use of social media, new business models, shopper marketing, and new store formats.
Services involve
Deeds, performances, efforts
product offering
Developing a product offering is essentially a question of the width and depth of the product assortment. Width refers to the assortment of products offered; depth refers to the number of different brands offered within each assortment. Price, store design, displays, and service are important to consumers in determining where to shop, but the most critical factor is merchandise selection.
channels for business and industrial products
Direct channels are typical in business and industrial markets. Manufacturers buy large quantities of raw materials, major equipment, processed materials, and supplies directly from other manufacturers, particularly if detailed technical specifications are required. The channel from producer to government is also a direct channel. Companies selling standardized items of moderate/low value often rely on industrial distributors. Industrial distributors are wholesalers and channel members that buy and take title to products.
public relations
Evaluates public attitudes, identifies areas within the organization that public may be interested in, and executes a program to earn public understanding. Many organizations spend large amounts of money to build a positive public image. Public relations help an organization communicate with stockholders, customers, suppliers, government, employees, and the community. Social media sites like Twitter can provide large amounts of publicity quickly. Functions include: maintain public image, educate the public about the company's objectives, introduce new products, support the sales effort, generate favorable publicity.
The proper location
Factors to consider in site selection are the area's economic growth potential, the amount of competition, and geography. Choosing a specific site: socioeconomic characteristics, traffic flows, land costs, zoning regulations, public transportation choosing the type of site: freestanding store, shopping mall, mall
pricing decision
Five key characteristics distinguish the pricing decisions of nonprofit organizations from those of the profit sector: 1. Pricing objectives: The main objective is to defray all or partial costs rather than achieve a profit. 2. Nonfinancial prices: In many nonprofit situations, consumers must absorb nonmonetary costs, such as costs of time, embarrassment costs, and effort costs. 3. Indirect payment: Indirect payment through taxes is common to marketers of "free" services, such as libraries, fire protection, and police protection. 4. Separation between payers and users: The services of many nonprofit organizations are used by those who are relatively poor and paid for by those who are better off financially. 5. Below-cost pricing: An example is university tuition, with services priced below cost.
types of buying decisions
For a routine buying decision, such as the purchase of toothpaste, the most effective promotional tools are advertising and especially sales promotion. For buying decisions that are neither routine nor complex, advertising and public relationships help establish awareness. In contrast, consumers making complex decisions need large amounts of information, and personal selling is the most effective tool. Print ads are also effective for conveying large amounts of information.
global channel relationships
Global channel choices must be made with full understanding of economic and political policies because many countries have policies that regulate channel choices, particularly for foreign distributors. When designing marketing channels for foreign markets, the type of channel structure must be considered. The more highly developed a nation is economically, the more specialized its channel types. Marketers must be aware of "gray" marketing channels, in which products are distributed through unauthorized channel intermediaries. Sales of counterfeit luxury items, for example, is estimated at $2 billion a year. The Internet has proved a way for pirates to circumvent authorized distribution channels.
Product life cycle and the promotional mix
In the introduction stage, the basic goal of promotion is to inform the target audience of product availability. Advertising and public relations inform the target audience, while sales promotion encourages early trial. Personal selling gets retailers to carry the product. During the growth stage, advertising and public relations continue to be important, although sales promotion can be reduced because customers need fewer incentives to purchase. The promotional strategy is to emphasize the product's differential competitive advantage. Persuasive promotion is used to build and maintain brand loyalty. Personal selling has succeeded in obtaining adequate distribution for the product. In the maturity stage, competition becomes fiercer, and persuasive and reminder advertising are more strongly emphasized. Sales promotion comes back into focus to try to increase market share. As the product enters the decline stage, all promotion, especially advertising, is reduced. Nevertheless, personal selling and sales promotion efforts may be maintained, particularly at the retail level.
market factors
Includes customer profile, consumer or industrial customer, size of market, geographic location. Market factors include the target customer considerations, such as these questions: Who are the potential customers? What/where/when/how do they buy? Also important to channel selection is the distinction between consumer or industrial customers. Consumers buy in small quantities and don't require much service, whereas industrial customers purchase in larger quantities and require more customer service. If the target market is concentrated in specific areas, direct selling is appropriate. If widely dispersed, intermediaries would be less expensive. In general, a large market requires more intermediaries.
How services differ from goods:
Intangible, inseparable, heterogeneous, perishable
IMC popularity growth
Integrated marketing communications (IMC) is the careful coordination of all promotional messages—traditional advertising, direct marketing, social media, interactive, public relations, sales promotion, personal selling, event marketing, and other communications—for a product or service to assure the consistency of messages at every contact point where a company meets the consumer. Following the concept of IMC, marketing managers carefully work out the roles that various promotional elements will play in the marketing mix Proliferation of thousands of media choices Fragmentation of the mass market slash of advertising spending in favor of promotional techniques that generate immediate response
new developments in retailing
M-commerce Retailers are adopting new strategies to better serve customers. M-Commerce enables consumers using wireless mobile devices to connect to the Internet and shop. Along with developments in m-commerce and smartphone technology, companies are starting to look into new ways to connect with their customers. Social shopping allows multiple retailers to sell products to customers through social media sites. Facial recognition technology allows market researchers to record consumers' non-verbal reactions to products and advertisements. Some retailers are also using facial recognition technology to display specific advertisements and recommendations to specific customers.
internal integration
Management practices that reflect a highly coordinated effort between supply chain firms or across business functions within the same or different firms are said to be "integrated." From an internal perspective, the very best companies develop a managerial orientation toward demand-supply integration (DSI) Under the DSI philosophy, those functional areas in the company charged with creating customer demand communicate frequently and are synchronized with the parts of the business charged with fulfilling the created demand. In short, companies operating under a DSI philosophy are better at their business because all of the different divisions within the company "play from the same sheet of music."
marketing communication
Marketers are both senders and receivers of messages. As senders, marketers inform, persuade, and remind the target market to adopt courses of action. As receivers, marketers attune themselves to the target market in order to develop and adapt messages, and spot new communication opportunities. Marketing communication is a two-way process
advertising
Media choices are plentiful and fragmented. In addition to the traditional advertising media, new methods are being used to reach consumers. Internet advertising is being increasingly used as a vital component of many companies' promotion and marketing mixes. Advantages: reach large number of people, low cost per contact, can be micro-managed Disadvantages: total cost is high, national reach is expensive for small companies.
Order fulfillment
One of the most fundamental processes in supply chain management is the order fulfillment process, which involves generating, filling, delivering, and providing on-the-spot service for customer orders. When the order fulfillment process is managed diligently, the amount of time between order placement and receipt of the customer's payment following order shipment (known as the order-to-cash cycle) is minimized as much as possible.
personal selling
Personal selling is a purchase situation involving a personal, paid-for communication between two people in an attempt to influence each other. Both buyer and seller have specific objectives. The buyer may need to minimize cost or assure a quality product, while the salesperson may need to maximize revenue and profits. Traditional selling - Attempts to persuade the buyer into a specific point of view; creates a win-lose outcome. relationship selling - Long-term relationships; creates a win-win outcome. Traditional methods of personal selling include a planned presentation to one or more prospective buyers. The seller tries to persuade the buyer to accept a point of view or take action. Frequently, the traditional view of personal selling creates a win-lose outcome at the expense of the buyer. Relationship selling emphasizes a win-win outcome and the accomplishment of mutual objectives that benefit both buyer and salesperson in the long-term. The goal is a long-term, committed relationship based on trust and customer loyalty. Personal selling is increasingly dependent on the Internet to attract potential buyers seeking information.
Basics forms of franchising
Product and trade name franchising - dealer agrees to sell in products provided by a manufacturer or wholesaler Business format franchising - an ongoing business relationship between a franchiser and a franchisee A franchise is a continuing relationship in which a franchiser grants to a franchisee the business rights to operate or sell a product. The franchisor originates the trade name, product, operation methods, etc. The franchisee pays the franchiser for the right to use its name, product, or methods. The initial franchise fee generally ranges from $50,000 to $250,000 and higher, and royalty fees paid weekly/monthly are in the range of 3 to 7 percent of gross revenues. For example, a McDonald's franchise's start-up costs for equipment and expenses range from $506,000 to over $1.6 million.
factors suggesting type of wholesaling intermediary to use
Product characteristics, buyer considerations, and market conditions determine the type of intermediary the manufacturer should use. Each of these will determine which type of intermediary is appropriate for a product. Product characteristics include such aspects of a product as standardization and customization, complexity, and gross margin. Buyer considerations include purchase frequency and how long the buyer is willing to wait for a product. Market characteristics include number of buyers and buyer concentration levels
material and service supplier integration
Requires firms to link seamlessly to those outsiders that provide goods and services to them so that they can streamline processes and provide quality customer experiences.
personnel
Retail salespeople persuade shoppers to buy. They are trained in two common selling techniques: Trading up: Persuading customers to buy a higher-priced item. Suggestion selling: Seeks to broaden customers' original purchases with related items.
defining a target market
Retailers develop marketing strategies based on overall goals and strategic plans. Defining the target market begins with market segmentation. Successful retailing is based on knowing the customer. Target markets are defined by demographics, geographics, and psychographics
retailing and CRM
Retailers gather data through data mining, the process of discovering patterns in large data sets for the purposes of extracting knowledge and understanding human behavior, and populate databases with it. These databases are the foundation of a CRM system that allows retailers to gain insights to people who purchase their products. By using that information to interact with the customers on social media or Web sites, retailers can build lasting relationships with their customers.
sales promotion
Sales promotion is generally a short-run tool used to stimulate immediate increases in demand. Sales promotion is used to improve the effectiveness of other ingredients in the promotion mix, especially advertising and personal selling Marketing activities—other than personal selling, advertising, and public relations—that stimulate consumer buying and dealer effectiveness. Sales promotion can be aimed at end consumers, trade customers, or a company's employees.
Communication Process and the Promotional Mix
Shift from one-way communication to customer-controlled, customized, many-to-many communication. Consumer generated media Paid media Earned media Owned Media Consumer generated media impacts the brand image and marketing message because social media makes it easier for large numbers of consumers to connect with each other—something that traditionally has not affected mass-media marketing. Promotional tactics needed new classification: Paid Media: media based on the traditional ad model where a brand pays for media space. Earned Media: media based on a public relations or publicity model that gets customers talking about the brand. Owned Media: new category of media based on brands publishing their own content to maximize brand value.
shopper marketing
Shopper marketing is about first understanding how a brand's target consumers behave as shoppers in different channels and formats, and then using this information in business-based strategies and initiatives that are carefully designed to deliver balanced benefits to all stakeholders—brands, retailers, and shoppers.
integrated marketing communications
The careful coordination of all promotional messages to assure the consistency of messages at every contact point where a company meets the consumer. Marketers determine what roles each aspect of the promotional mix will play in the marketing mix. This includes the timing of promotions and examining campaign results. These activities are generally coordinated by the marketing communications director.
technology and planning integration
The creation and maintenance of information technology systems that connect managers across and through the firms in the supply chain.
customer service management
The customer service management process presents a multi-company, unified response system to the customer whenever complaints, concerns, questions, or comments are voiced. Whereas the customer relationship management process is designed to identify and build relationships with good customers, the customer service management process is designed to ensure that those customer relationships remain strong.
Supplier relationship management
The management of supplier relationships is a key step toward ensuring that firms' manufacturing resources are available, and thereby the supplier relationship management process has a direct impact on each supply chain member's bottom-line financial performance.
manufacturing flow management
The manufacturing flow management process is concerned with ensuring that firms in the supply chain have the needed resources to manufacture with flexibility and to move products through a multi-stage production process. The goals of the manufacturing flow management process are centered on leveraging the capabilities held by multiple members of the supply chain to improve overall manufacturing output in terms of quality, delivery speed, and flexibility, all of which tie to profitability.
product development and commercialization
The product development and commercialization processes include the group activities that facilitates the joint development and marketing of new offerings among a group of supply chain partner firms. New products and services are not the sole responsibility of a single firm who serves as inventor, engineer, builder, marketer, and sales agent; rather, they are often the product of a multi-company collaboration with multiple firms and business units playing unique roles in new product development, testing, and launch activities, among others.
choosing the retail mix
The retailing mix consists of six Ps: the four Ps of the marketing mix (product, price, promotion, and place), plus presentation and personnel. The combination of the 6 Ps projects a store image, which influences consumers' perceptions. Retail stores can be positioned on the three dimensions: service, product assortment, and price. Everything else—place, presentation, and promotion—should be used to fine-tune the basic positioning of the store.
communication process
The sender originates the message. Encoding is the conversion of the sender's ideas and thoughts into a message, usually words or signs. Transmission of a message requires a channel—some communication medium. Reception occurs when the message is detected by the receiver. Transmission may be hindered because of noise—anything that interferes with, distorts, or slows down the transmission of information. Decoding is the interpretation of the language and symbols sent. Proper match between the message to be conveyed and the target market's attitude is the job of the marketing manager. Differences in culture, age, social class, education, and ethnicity can lead to miscommunication. Marketers targeting consumers in foreign countries must also worry about translation and miscommunication issues. The receiver's response to a message is direct feedback to the source. Since mass communicators are cut off from direct feedback, they rely on market research or analysis of viewer perceptions for indirect feedback.
global issues in services marketing
U.S. is the world's largest exporter of services. marketing mix must reflect each country's cultural, technological, and political environment
role of promotion in the marketing mix
Using the overall goals, marketers combine the elements of the promotional strategy into a coordinated plan. This plan becomes an integral part of the marketing strategy for reaching the target market. The main function of promotional strategy is to convince target customers that the goods and services offered provide a competitive advantage over the competition
Alternative channel arrangements
Usually a producer employs several different or alternative channels, which includes multiple channels, nontraditional channels, and strategic channel alliances. -Dual channels: Two or more channels selected is called dual or multiple distribution. Dual distribution systems differ from single channel systems, and managers should recognize those differences. -Nontraditional channels: Nontraditional channels, including the Internet and mail-order channels, help differentiate a firm's product from the competition. -Strategic channel alliances: Producers use another manufacturer's already-established channel.
Available funds
When funds are available to permit a mix of promotional elements, a firm will try to optimize its return on promotion dollars while minimizing the cost per contact. The cost per contact is high for personal selling, public relations, and sales promotions. On the other hand, the cost per contact is low for national advertising since it reaches a large number of people. There is a trade-off among the funds available, the number of people in the target market, the quality of communication needed, and the relative costs of the promotional elements. Trade-offs with funds available Number of people in target market Quality of communication needed Relative costs of promotional elements
postponement
a hybrid strategy that takes advantages from build-to-stock and build-to-order strategies. -Product based on generic forecasts -shipped to locations near major customers -customer places order and manufacturing is completed to customer's specifications
supply chain management
a management system that coordinates and integrates all of the activities performed by supply chain members into a seamless process, from the source to the point of consumption, resulting in enhanced customer and economic value.
promotional strategy
a plan for the optimal use of the elements of promotion: advertising, public relations, personal selling, sales promotion, social media
Marketing channel
a set of independent organizations that eases the transfer of ownership as products move from producer to business user or consumer. Can be viewed as a large pipeline which products, their ownership, communication, financing and payment, and accompanying risk flow to the consumer. Channel members: Negotiate with one another, buy and sell products, and facilitate the change of ownership between buyer and seller in the course of moving the product from the manufacturer into the hands of the final consumer.
relationship integration
ability of 2 or more companies to develop social connections that serve to guide their interactions when working together
retail promotion strategy
advertising, public relations, publicity, sales promotion The goal of retail promotion strategy is to position the store in consumers' minds. Ads, special events, promotions, even grand openings are an orchestrated blend of advertising, merchandising, goodwill, and glitter. Retailers' advertising is carried out mostly at the local level, providing store information, such as location, merchandise, hours, prices, and sales. In contrast, national retail advertising focuses on image.
retailing
all the activities directly related to the sale of goods and services to the ultimate consumer for personal, non-business use.
types of relationship channels
arms length relationship - benefits: Fulfills a one time or unique need; low involvement/risk, hazards: Parties unable to develop relationship; low trust level cooperative relationship - benefits: Formal contract without capital investment/long-term commitment; "happy medium", hazards: Some parties may need more relationship definition integrated relationship - benefits: Closely bonded relationship; explicitly defined relationships, hazards: High capital investment; any failure could affect every channel member
nonstore retailing
automatic vending, shop-at-home TV, online, telemarketing, direct mail, direct retailing, direct marketing In direct retailing, representatives sell products door-to-door, office-to-office, or at home sales parties. Direct marketing, sometimes called direct response marketing, refers to the techniques used to get consumers to make a purchase from their home, office, or other nonretail setting.
outsourcing logistics functions
benefits: reduces inventories, locates stock at fewer plants and distribution centers, provides same or better levels of service 1. Outsourcing, or contract logistics, is a rapidly growing initiative in which a manufacturer or supplier turns over an entire logistical function (often buying and managing transportation, warehousing, and/or light postponed manufacturing) to an independent third-party logistics company (3PL). 2. fourth-party logistics companies (4PLs) or logistics integrators, create and manage entire solutions for getting products where they need to be, when they need to be there. 3. American companies have been offshoring, or outsourcing logistics to service providers located in countries with lower labor costs, such as China or India. 4. Nearshoring to locations such as Mexico or the Caribbean nations ensures low costs while reducing supply chain risk.
traditional focus production scheduling
build-to-stock - in traditional mass-marketing manufacturing, production begins when forecasts call for additional products to be made or inventory is low start of production - inventory based push/pull strategy - push
Service offering
bundle of activities that includes the core service, which is the most basic benefit, and a group of supplementary services that enhance or support the core service
Channel power, control, and leadership
channel power: a channel member's capacity to control or influence the behavior of other channel members channel control: a situation that occurs when one marketing channel member intentionally affects another member's behavior channel captain: a member of a marketing channel that exercises authority and power over the activities of other members
channel conflict
clash of goals and methods among the members of a distribution channel. Conflict within a channel can be either horizontal or vertical. Horizontal conflict occurs among channel members at the same level, such two or more different retailers that handle the same manufacturer's brands. Vertical conflict occurs between different levels in a marketing channel.
product assortment
classification based on breadth and depth of product lines. Product assortment is a third way to classify retail stores. Specialty stores may carry dozens of brands, each in a large variety of shapes and sizes. On the other end of the spectrum, full-line discounters typically carry broad assortments of merchandise with limited depth.
promotional mix
combination of promotion tools used to reach the target market and fulfill the organization's overall goals. Includes: advertising, public relations, personal selling, sales promotion, social media.
Place (distribution) strategy
convenience, number of outlets (intensity of distribution should meet the target market's needs and preferences), direct or indirect distribution (newest form of direct distribution is the internet), location, scheduling (most important for time-dependent service providers like airlines, physicians, and dentists)
core service and supplementary service
core service is the most basic benefit the consumer is buying, the supplementary service is a group of services that support or enhance the core service
specialization and division of labor
creates greater efficiency, provides lower production costs, create time, place, form and exchange utility 1. Specialized expertise of channel members enhances the overall performance of the channel. 2. Time and place utility is created when a transport company moves boxes from the place of manufacture to the store near customers. 3. Form utility is created when channel members transform raw materials into a consumable form for customers. 4. Exchange utility is created when channel members (usually retailers) swap the product for money.
customized services and standardized services
customized services are more flexible but command a higher price, standardized services are more efficient and cost less
price strategy
define the unit of service consumption, determine if multiple elements are "bundled" or priced separately
major types of retail operations
department stores, specialty stores, supermarkets, drugstores, convenience stores, discount stores, off-price stores, used good retailer, restaurants. The discount store is a retailer that competes on the basis of low prices, high turnover, and high volume. An off-price retailer sells at prices 25 percent or more below traditional department store prices because it pays cash for its stock and usually doesn't ask for return privileges.
service mix
determine which new services to introduce, determine the target market, decide which existing services to maintain and which to eliminate
objectives of nonprofits
do not seek to make a profit for redistribution to owners or shareholders, the focus is often on generating enough funds to cover expenses.
persuasive promotion
encourage brand switching, change customers' percetions of product attributes, influence immediate buying decision, persuade customers to call
retail marketing strategy
first, define the target market. then choose a retailing mix. The key tasks in strategic retailing are defining and selecting a target market and developing the retailing mix to meet the needs of the chosen target market
connect promotion
form relationships through social media, encourage transparent information exchange, customers become brand advocates
price
gross margin: the amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted
competitive advantage
high product quality, rapid delivery, low prices, excellent service, unique features The main function of a marketer's promotional strategy is to convince the target market that the goods and services offered provide a competitive advantage. A competitive advantage is the set of unique features of a company and its products that are perceived as superior over the competition. These features are listed on this slide
A service is the result of applying
human or mechanical efforts to people or objects.
product factors
includes: product complexity, product price, product standardization, product life cycle, product delicacy Products that are more complex, customized, and expensive benefit from shorter and more direct marketing channels and through a direct sales force. Standardized products can be sold through longer distribution channels with greater numbers of intermediaries. The choice of channel may change over the life of the product. As products become more common, producers turn from a direct channel to more alternative channels. Perishable items and fragile products require fairly short marketing channels and a minimum amount of handling.
informative promotion
increase awareness, explain how product works, suggest new uses, build company image
classification of ownership
independent retailers: owned a single person or partnership and not part of a larger retail institution chain stores: owned and operated as a group by a single organization franchises: the right to operate a business or to sell a product. with franchising, the advantages of both independent ownership and the chain store organization are combined.
goals and tasks of promotion
informing, reminding, target audience, connecting, persuading Informative promotion seeks to convert an existing need into a want or to stimulate interest in a new product. It is more prevalent during the early stages of the product life cycle. Persuasive promotion is designed to stimulate a purchase or an action. It becomes the main promotion goal when the product enters the growth stage of its life cycle. Reminder promotion is used to keep the product/brand name in the public's mind. It is effective during the maturity cycle. Connecting is designed to form relationships with customers and potential customers to encourage them to be brand advocates. This helps introduce new products, stimulate purchase, and keep the brand in customer's minds, which makes connecting important for all stages in the PLC.
levels of distribution intensity
intensive: form of distribution aimed at having a product available in every outlet. achieves mass market selling, numerous intermediaries. includes convenience goods selective: all but a few in any single area. includes shopping and some specialty goods. has several intermediaries exclusive: one or a few dealers within a given area. works with a single intermediary. includes specialty goods and industrial equipment
channel partnering
joint effort of all channel members to create a channel that serves customers and creates a competitive advantage. By cooperating, channel members can speed up inventory replenishment, improve customer service, and reduce the total costs of the marketing channel Channel alliances and partnerships help managers create the parallel flow of materials and information required to leverage the channel's intellectual, material, and marketing resources
relationship marketing in services
level 1: firm uses pricing incentives to encourage customers to continue doing business. this level of relationship marketing is the least effective because its price-based advantage is easily imitated by competitive firms. level 2: uses pricing incentives as well as building social bonds with customers. the firm keeps in touch with customers level 3: firms adds structural bonds to the formula. this offers value-added services that are not available by competitive firms
benefits of supply chain
lower inventory, transportation, warehousing, and packaging costs. great supply chain flexibility. improved customer service. higher revenues. increased performance and profitability
Pull strategy
manufacturer promotes to consumer, consumer demands product from retailer, retailer demands product from wholesaler, wholesaler demands product from manufacturer.
Push strategy
manufacturer promotes to wholesaler, wholesaler promotes to retailer, retailer promotes to consumer, consumer buys from retailer
factors affecting channel choice
market factors, product factors, producer factors
channel intermediaries
merchant wholesaler - An institution that buys goods from manufacturers, takes title to goods, stores them, and resells and ships them. take title to goods agents and brokers - Wholesaling intermediaries who facilitate the sale of a product by representing channel members. does not own that product or company, do not take title to goods
inventory control
method of developing and maintaining an adequate assortment of materials or products to meet a manufacturer's or a customer's demand. the goal of inventory management is to keep inventory levels as low as possible while maintaining an adequate supply of goods to meet customer demand
inventory control
most companies carry inventory as a sort of insurance policy against customer stockouts: cycle stocks - those items that are expected to be sold as finished goods (or the materials that go into making finished goods) in a given demand period safety stocks - also called buffer stocks, extra allotments of inventory that companies sometimes choose to hold in-transit inventory - moving into the business from a suppliers or out on the way to a customer work-in-process inventory - reflects inventory that is being assembled or manufactured from its raw state into finished goods for sale seasonal inventory
factors affecting the choice of promotional mix
nature of the product, stage in PLC, target market characteristics, type of buying decision, promotion funds, push or pull strategy Promotional mixes vary a great deal from one product and one industry to the next. Advertising and personal selling are used to promote goods and services, supplemented by sales promotion. Public relations helps develop a positive image for the product and the organization. A firm may choose not to use all four promotional elements, or it may choose to use them in varying degrees.
nonprofit organization
organization that exists to achieve some goal other than the usual business goals of profit market share, or return on investment. includes governments, museums, theaters, schools, and churches.
4 types of service processing
people processing (like health care and hairstyling), possession processing (lawn care, car repair, dry cleaning), mental stimulus processing refers to services directed at peoples minds (such as spectator sports, theater performances, and education), Information processing describes services that use technology or brainpower directed at a customer's assets. Examples include insurance, consulting, and banking.
supply management
plan strategies, develop specifications, select suppliers, and negotiate price and service levels. the goal of most supply management activities is to reduce the costs of raw material and supplies.
channel and retailing decisions for services
prioritize customer service by focusing on 4 areas: minimizing wait times, managing service capacity, improving service delivery, establishing channel-wide network coherence
demand management
process seeks to align supply and demand throughout the supply chain by anticipating customer requirements at each level and create demand-related plans of action prior to actual customer purchasing behavior. seeks to minimize the cost of serving multiple types of customers who have variable wants and needs. It is very difficult to predict exactly what items and quantities customers will buy prior to purchase; however, much of the uncertainty in demand planning can be mitigated by conducting collaborative planning, forecasting, and replenishment (CPFR) activities with the company's customers and suppliers
producer factors
producer resources, number of product lines, desire for channel control Producers with larger financial, managerial, and marketing resources are able to use more direct channels. These producers can maintain their own sales force, warehouse their own goods, and extend credit to customers. Producers with several products in a related area choose channels that are more direct, and sales expenses can be spread over more products. A producer's desire to control pricing, positioning, brand image, and customer support may avoid channels in which discount retailers are present. Furthermore, manufacturers of upscale products may sell only in expensive stores to maintain an image of exclusivity.
customer focus production scheduling
push/pull strategy: pull start of production: customer-order based manufacturing: mass customization
Components of service quality
reliability, responsiveness, assurance, empathy, tangibles
reminder promotion
remind customers that product may be needed, remind customers where to buy product, maintain customer awareness
contact efficiency
retailer - firms in the channel that sell directly to customers. retailers simplify distribution by cutting the number of transactions required by consumers, making an assortment of goods available in one location
pricing objectives
revenue-oriented pricing - maximize the surplus of income over costs, operations oriented price - match supply and demand by varying price, patronage-oriented pricing - maximize the number of customers by varying price
When services are assessed
search quality: assessed before purchase (usually applied to goods), experience quality (assessed after purchase), credence quality (assessed only with appropriate knowledge)
unique aspects of nonprofit organization marketing strategies
setting of marketing objectives, selection of target markets, development of marketing mixes
nonprofit organization marketing
share characteristics with service firms. both market intangible products, and often require the customer to be present during the production process. services often vary greatly, and cannot be stored in the same way as tangible goods
marketing channel functions
specialization and division of labor, overcoming discrepancies, providing contact efficiency
promotion strategy
stress tangible cures, use personal informational sources, create a strong organizational image, engage in postpurchase communication
transportation mode choice
supply chain managers choose a mode of transportation on the basis of several criteria: cost, transit time, reliability, capability, accessibility, traceabiltiy
order processing
system whereby orders are entered into the supply chain and filled. order processing is becoming more automated through the use of computer technology known as electronic data interchange (EDI). as an order enters the system, management must monitor 2 flows: the flows of goods and the flow of information
supply chain
the connected chain of all of the business entities, both internal and external to the company, that perform or support the logistics function. a company's supply chain includes all of the companies involved in all of the upstream and downstream flows of products, services, finances, and information, from initial suppliers (the point of origin) to the ultimate customer (the point of consumption)
supply chain technology
the logistics information system serves as the link connecting all of the operational components of the supply chain The components of the system include, for example, software for materials acquisition and handling, warehouse-management and enterprise-wide solutions, data storage and integration in data warehouses, mobile communications, electronic data interchange, radio-frequency identification (RFID) chips, and the Internet. Working together, the components of the logistics information system are the fundamental enablers of successful supply chain management.
measurement integration
the performance assessment of the supply chain as a whole that also holds each individual firm or business unit accountable for meeting its own goals
communication
the process by which meanings are exchanged or shared through a common stet of symbols.
inventory control
tools for managing inventory include: -Materials requirement planning (MRP) or materials management Supplier to manufacturer -Distribution resource planning (DRP) Manufacturer to end user -Automatic replenishment programs Minimal forecasting
communication on the internet
traditional advertising model: impersonal, numbers driven, unquantifiable consumer behavior internet and social media advertising: personal, direct communication, feedback driven, highly visible communication
channel functions performed by intermediaries
transactional functions - contacting/promotion, negotiating, risk taking logistical functions - physically distributing, storing, sorting facilitating functions - researching, financing
Internal marketing
treating employees as customers and developing systems and benefits that satisfy their needs. to satisfy employees, companies have designed and instituted a wide variety of programs such as flextime, on site day care, and concierge services.
mass customization
uses technology to deliver customized services on a mass basis, thus meeting customers' specific needs. examples include land's end and airlines' video on demand
