Consists of all the suppliers and consumers in a companies market
the set of firms that supply the raw materials, components, parts, information, finances, and expertise needed to create a product or service.
wholesalers and retailers form a vital link between the firm and its customers
value delivery network
made up of the company, suppliers,distributors, and ultimately customers who “partner” with each other to improve the performance of the entire system
marketing channels/ distribution channels
A set of interdependent organizations thast help make a product or service available for use or consumption by the consumer or business user
How do marketing channels add value for a comany?
create greater effieciency in making goods available to target markets. through their contacts, experience, specialization,and scale of operations, intermediaries usually offer the firm more than it can achieve on its own.
What key functions are performed by channel members?
reduce the amount of work that must be done by both producers and consumers. the role of marketing intermediaries is to transform the assortments of products into the assortments wanted by consumers.
What does the length of a marketing channel refer to? why is this an important consideration for companies?
the number of intermediary levels. the more levels means less control and greater channel complexity
difference between a direct and indirect marketing channel
direct has no intermediary levels and indirect contains one or more intermediary levels
what is a channel conflict
refers to disagreements among marketing channel members on goals, roles, and rewards.
what are the two types of channel conflict
Horizontal conflict occurs among firms at the same level of the channel.
Vertical conflict, which is conflict between different levels of the same channel, is more common.
difference between conventional distribution channel and a vertical marketing system
A conventional distribution channel consists of one or more independent producers, wholesalers, and retailers.
In contrast, a vertical marketing system (VMS) consists of producers, wholesalers, and retailers acting as a unified system.
3 types of vertical marketing system
A corporate VMS- combines successive stages of production and distribution under single ownership.
A contractual VMS- consists of independent firms at different levels of production and distribution that join together through contracts.
The franchise organization is the most common type.
In franchise organizations- a channel member, called a franchisor, links several stages in the production-distribution process.
An administered VMS -coordinates successive stages of production and distribution through the size and power of one of the parties.
horizontal marketing system
in which two or more companies at one level join together to follow a new marketing opportunity.
multichannel distribution system
refers to a single firm that sets up two or more marketing channels to reach one or more customer segments
pros and cons of a multichannel distribution system
With each new channel, the company expands its sales and market coverage and gains opportunities to tailor its products and services to the specific needs of diverse customer segments.
But such multichannel systems are harder to control, and they can generate conflict as more channels compete for customers and sales.
refers to the cutting out of marketing channel intermediaries by product or service producers, or the displacement of traditional resellers by radical new types of intermediaries.
what are the major channel design decisions
analyzing consumer needs
selecting channel objectives
Identifying Major channel alternatives
Evaluating the alternatives
when determining the number of intermediaries to use at each level, what are the 3 strategies available
Producers of convenience products and common raw materials typically seek intensive distribution— a strategy in which they stock their products in as many outlets as possible (provides maximum brand exposure and consumer convenience).
Some producers purposely limit the number of intermediaries through exclusive distribution, in which the producer gives only a limited number of dealers the exclusive right to distribute its products in their territories (common in luxury brands).
Between intensive and exclusive distribution lies selective distribution—the use of more than one but fewer than all of the intermediaries who are willing to carry a company’s products. Most consumer electronics, furniture, and home appliance brands are distributed in this manner.
what are the major steps in marketing channel management
(1) selecting, (2) managing and motivating individual channel members, and (3) evaluating their performance over time.
partner relationship management
working closely with partners in other compnay departments and outside the company to jointly bring greater value to customers
marketing logistics/physical distribution
involves planning, implementing, and controlling the physical flow of goods, services, and related information from points of origin to points of consumption to meet customer requirements at a profit.
is moving products from the factory to resellers and ultimately to customers
is moving products and materials from suppliers to the factory,
involves reusing, recycling, refurbishing, or disposing of broken, unwanted, or excess products returned by consumers or resellers.
supply chain management
managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers.
what are the major logistics functions
warehousing, inventory management, transportation, and logistics information management.
difference between storage warehouses and distribution centers
_______________________ store goods for moderate to long periods.
____________________ are designed to move goods rather than just store them. They are large and highly automated warehouses designed to receive goods from various plants and suppliers, take orders, fill orders efficiently, and deliver goods to customers as quickly as possible.
How are just in time logistics systems and RFID/smart tag technology used to improve inventory management?
producers and retailers carry only small inventories of parts or merchandise, often enough for only a few days of operations.
involves the use of small transmitter chips which are embedded in or placed on products and packaging for everything from flowers and razors to tires.
which combines two or more modes of transportation (accounts for 8%).
Piggyback involves the use of rail and trucks.
Fishyback involves the use of water and trucks.
Trainship involves the use of water and rail.
Airtruck involves the use of air and trucks.
How are electronic data interchange (EDI) and vendor-managed inventory (VMI) systems/ continuos inventory replenishment systems used for logistics information management?
(EDI), the digital exchange of data between organizations, which primarily is transmitted via the Internet.
using VMI, the retailer shares real-time data on sales and current inventory levels with the supplier
Integrated logistics management
emphasizes teamwork—both inside the company and among all the marketing channel organizations—to maximize the performance of the entire distribution system.
third part logistics (3PL) providers
provider is an independent logistics provider that performs any or all of the functions required to get a client’s product to market.
includes all the activities involved in selling products or services directly to final consumers for their personal, nonbusiness use.
What are the areas around which retailers are classified
-Amount of service offered
-Breadth and Depth of product lines
-Relative prices charged
-Way they are organized
What are the differences among self-service retailers, limited-service retailers, and full-service retailers?
_______________________serve customers who are willing to perform their own locate-compare-select process to save time or money. Self-service is the basis of all discount operations and is typically used by retailers selling convenience goods and nationally branded, fast-moving shopping goods.
________________ provide more sales assistance because they carry more shopping goods about which customers need information. Their increased operating costs result in higher prices.
____________________such as high-end specialty stores and first-class department stores, assist customers in every phase of the shopping process. Full-service stores usually carry more specialty goods for which customers need or want assistance or advice.
Different types of retailers based on product lines
Specialty stores- patagonia, northface
Department stores- Nordstrom, ,macys
3 types of off price retailers
Idependent off-price retailers- TJ-MAXX(is either independently owned and run or is a division of a larger retail corporation. )
Factory outlet- Nike, Columbia
Warehouse clubs- Costco, Sams
Retail segementation and targeting
-store differentiation and positioning
retail marketing mix decisions
Product and service assortment
3 major product variables retailers must consider
The retailer’s product assortment should differentiate it while matching target shoppers’ expectations. One strategy is to offer merchandise that no other competitor carries (e.g., store brands or national brands for which the retailer holds exclusive rights). Another is to offer a highly targeted product assortment (e.g., plus size apparel).
The services mix can also help set one retailer apart from another. For example, some retailers invite customers to ask questions or consult service representatives in person or via phone or keyboard.
The store’s atmosphere is another important element in the retailer’s product arsenal. Retailers want to create a unique store experience, one that suits the target market and moves customers to buy. Many retailers practice experiential retailing.
major promotion tools retailers can use
advertising, personal selling, sales promotion, public relations, and direct and social media marketing
Advertising may be supported by newspaper inserts and catalogs.
Personal selling involves store salespeople greeting customers, meeting their needs, and building relationships.
Sales promotions may include in-store demonstrations, displays, sales, and loyalty programs.
Public relations (PR) activities, such as new-store openings, special events, newsletters and blogs, store magazines, and public service activities, are also available to retailers.
Most retailers also interact digitally with customers using Web sites and digital catalogs, online ads and video, social media, mobile ads, and apps, blogs, and emails.
is a group of retail businesses built on a site that is planned, developed, owned, and managed as a unit.
Major types of shopping centers
A regional shopping center, or regional shopping mall, is the largest and most dramatic shopping center. It has from 50 to more than 100 stores, including two or more full-line department stores.
A community shopping center contains between 15 and 50 retail stores. It contains a branch of a department store or variety store, a supermarket, specialty stores, professional offices, and sometimes a bank.
Current retail trends and developments
Omni-channel retailing refers to creating a seamless cross-channel buying experience that integrates in-store, online, and mobile shopping.
Showrooming- shopping in store and then buying online
is a specific blend of promotion tools that a company uses to engage customers, persuasively communicate customer value, and build customer relationships.
– Public relations
-Direct and Digital marketing
Marketing communications mix
major factors changing the face of todays marketing communications
-Consumers are changing
-Marketing strategies are changing
-Advances in digital technology
Creating, inspiring, and sharing brand messages and conversations with and among customers across a fluid mix of paid, owned, earned, and shared communications channels.
Promotional channels paid for by the marketer, including traditional channels and online and digital media.
Promotional channels owned and controlled by the company (e.g., company website, owned social media, blogs).
PR media channels, such as TV, newspaper, blogs, and other media not directly paid for or controlled by the marketer but that incorporate content because of viewer, reader, or user interest.
Media shared by consumers with other consumers, such as social media, blogs, viral videos as traditional word of mouth.
Integrated marketing communications (IMC)
refers to carefully integrating and coordinating the company’s many communications channels to deliver a clear, consistent, and compelling message about the organization and its brands
pros and cons of using each of the promotion mix tools
difference between a push and pull promotion strategy
A push strategy refers to a promotion strategy that calls for using the sales force and trade promotion to push the product through channels. The producer promotes the product to channel members that in turn promote it to final consumers.
A pull strategy refers to a promotion strategy that calls for spending a lot on consumer advertising and promotion to induce final consumers to buy the product, creating a demand vacuum that pulls the product through the channel.
what are the major advertising decisions
in which a company directly or indirectly compares its brand with one or more other brands.
strategies for setting advertising budgets
The affordable method sets the promotion budget at the level management thinks the company can afford. Often used by small businesses. May ignore the impact promotion can have on sales.
The percentage-of-sales method sets the promotion budget at a certain percentage of current or forecasted sales or as a percentage of the unit sales price. It is simple to use but often is based on availability of funds rather than opportunities. It also provides no basis for choosing the specific percentage.
is the strategy by which the company accomplishes its advertising objectives.
2 major elements for advertising strategy
creating advertising messages and selecting advertising media.
aims to make ads so entertaining, or so useful, that people want to watch them.
brand integrations/ branded entertainment
involve making the brand an inseparable part of some other form of entertainment or content.
embedding brands as props within other programming
other brand-produced online content that appears to be native to the Web or social media site in which it is placed.
what does creating the message strategy entail?
the general message that will be communicated to consumers.
that will bring the message strategy to life in a distinctive and memorable way.
various execution styles that can be used for creative concept
slice of life, lifestyle, fantasy, mood or image, musical, personality symbol, technical expertise, scientific evidence, and testimonial evidence or endorsement.
consumer generated content
can incorporate the voice of the customer into brand messages and generate greater customer engagement.
4 steps involved in media selection
– Determining reach, frequency, impact and engagement
-Choosing among major media types
-Selecting specific media vehicles
-Choosing media timing
difference bn reach and frequency
________________is a measure of the percentage of people in the target market exposed to the ad campaign during a given period of time.
_______________is a measure of how many times the average person in the target market is exposed to the message.
major media types
TV; digital, mobile, and social media; newspapers; direct mail; magazines; radio; and outdoor.
specific media within each general media type.
return on advertising investment
refers to the net return on advertising investment divided by the costs of the advertising investment
2 types of advertising results
the communication effects and the sales and profit effects.
is a marketing services firm that assists companies in planning, preparing, implementing, and evaluating all or portions of their advertising programs.
challenges of international advertising
The most basic issue concerns the degree to which global advertising should be adapted to the unique characteristics of various country markets.
, consists of activities designed to engage and build good relations with the company’s various publics.
what functions are performed by PR departments
Press relations or press agency: Creating and placing newsworthy information in the news media to attract attention to a person, product, or service.
Product publicity: Publicizing specific products.
Public affairs: Building and maintaining national or local community relationships.
Lobbying: Building and maintaining relationships with legislators and government officials to influence legislation and regulation.
Investor relations: Maintaining relationships with shareholders and others in the financial community.
Development: Working with donors or members of nonprofit organizations to gain financial or volunteer support.
why is PR used?
build good relations with consumers, investors, the media, and their communities.
what are the major PR tools
PR professionals find or create favorable news about the company and its products or people.
Another PR tool is special events, like news conferences and speeches, brand tours and grand openings, multimedia presentations, or educational programs designed to reach and interest target publics.
PR also involves the preparation of written materials like annual reports, brochures, and company newsletters and magazines to reach and influence target markets.
Audiovisual materials, such as DVDs and online videos, are also being used increasingly as communication tools.
Corporate identity materials can also help create a corporate identity that the public immediately recognizes.
Logos, stationery, brochures, signs, business forms, business cards, buildings, uniforms, and company cars and trucks all become marketing tools when they are attractive, distinctive, and memorable.
Finally, companies can improve public goodwill by contributing money and time to public service activities.