View
- Term
- Definition
- Both Sides
Study
- All (90)
Shortcut Show
Next
Prev
Flip
BCOR 2400: FINAL
Marketing Channels |
Def: individuals involved in the process of making a product or service available for use to consumers or industrial users.
Goal: deliver
1. the right goods and services that consumers want..
2. at the right time
3. in the right location
4. in the right form
-thereby creating utility and an exchange |
Middleman |
an intermediary between the manufacturer and end-user markets |
Agent or Broker |
Any intermediary with legal authority to act on behalf of the manufacturer |
Wholesaler |
an intermediary that sells to other intermediaries |
Retailer |
An intermediary that sells to consumers
|
Distributor |
an imprecise term, usually used to describe intermediaries who perform a variety of distribution functions including selling, maintaining inventories, extending credit and so on |
Dealer |
a more imprecise term than distributor that can mean that same as distributor, retailer, wholesaler, and so forth. |
Multichannel Marketing |
the blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers who shop and buy in traditional intermediaries and online.
-seeks to integrate all channels
--mix of online, direct, indirect, to same targets |
Dual distribution |
different channels for different targets ie( Pfizer sells directly to hospitals to reach doctors and directly through retailers like walgreens to reach customers) |
Strategic Channel Alliances |
-one firm's marketing channel is used to sell another firm's products.
-popular in global marketing where the creation of a marketing channel is expensive and time-consuming
-eg(general mills and nestle have an extensive alliance that spans about 130 international markets from mexico to china) |
Vertical Marketing Systems (VMS) |
Def:professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact
Benefits: If players work together
-control
-cost savings
-logistic efficiencies
-marketing efficiencies |
Corporate VMS |
Def: the combination of successive stages of production and distribution under a single ownership
ie(producer owns retailer)
-eg(Kroger, operate MFG facilities that produce everything from aspirin to cottage cheese for sale underneath the Kroger label) |
Contractual VMS |
Def: independent production and distribution firms integrate their efforts on a contractual basis to obtain greater functional economies and marketing impact than they could achieve alone.
-ie(wholesaler contracts with retailer, retailers band together, producer has franchises)
eg(IGA and Ben Franklin variety and craft stores represent wholesaler-sponsored voluntary chains where member retailers can concentrate buying efforts through the wholesaler and plan collaborative promotional and pricing activities)
*Most popular |
Administered VMS |
Def: achieve coordination at successive stages of production and distribution by the size and influence of one channel member rather than through ownership
ie(Producer coordinates efforts with retailers)
eg(P&G given its broad product asssortment, is able to obtain cooperation from supermarkets in displaying, promotion, and pricing its products. Same with Wal-Mart..making products out of cheaper materials for the products to be sold cheaper.) |
Forward Integration |
-Buying up intermediaries in a downward direction from producer(top) down to retailer(bottom)
-"towards consumer"
-control the retail experience, reduce distribution costs
-ie(ralph lauren manufactures the clothing and also owns specialty RL stores) |
Retailer sponsored cooperative |
-when small independent retailers form an organization that operates a wholesale facility cooperatively
-"retailers band together to achieve volume discounts"
eg(ace hardware) |
Direct Channel |
Def: producer and ultimate consumers deal directly with each other
eg(Schwann food) |
Indirect Channel |
Def: intermediaries involved in getting the product from the ultimate producer to the consumer
eg(7-eleven) |
Backward Integration |
See forward integration but..
-"away from consumer"
-more control over supply availability and costs in order to optimize profit |
Voluntary Retailer Chain |
-wholesaler develops contractual link with retailers to standardize practices and gain efficiencies. |
Franchise |
-producer allows franchisee to use brand name and practices for a fee
eg(McDonalds) |
Industrial Channels Vs. Consumer Channels |
Industrial:
1. shorter
2. less intermediaries
3. fewer, bigger customers
4. concentrated geographically |
Traditional channels |
-everyone for themselves |
Horizontal Channel Conflict |
Def: conflict that exists horizontally among middlemen of the same level
ie(retailers vs. retailers)
eg(home depot vs. lowes, bona cleaning products sold to both even though they are arch competitors) |
Vertical |
Def: conflict that exists vertically among middlemen of the different levels in between the producer and the consumer
ie(Manufacturer vs. retailer)
eg(renaissance cruise traditionally sold through independent travel agents, but when they started to also offer online and undercut the price of the travel agents, conflict arose between the agencies and the cruise line) |
Channel Captain |
-exerts the most influence, but can be producer wholesaler, retailer, etc |
Channel Structure Considerations |
Which channels should I sell through?
1.Target Coverage
--Intensive distribution (everywhere)
--Selective distribution (a few places)
ie(the distribution intensity associated with shopping products such as electronics, clothing, and costume jewelry)
--Exclusive distribution (one place)
2. Buyer Requirements
--Info, convenience, variety, service
3. Profit
ie(to walmart or not to walmart) |
Clayton Act |
Def: specifically prohibits exclusive dealing and tying arrangements when they lessen competition or create monopolies. |
Sherman Act |
Def: prohibits resale and specifies restrictions |
Illegal Tying Arrangements |
Def; when a supplier requires a distributor purchasing some products to buy others from the supplier
-often arise in franchising |
Exclusive dealing |
Def: exists when a supplier requires channel members to sell only its products or restricts distributors from selling directly competitive products |
Resale Restrictions |
Def: refer to a supplier's attempt to stipulate to whom distributors may resell the supplier's product and in what specific geographical areas or territories they may be sold
-protected under Sherman act |
Test of Legality |
-Does it lessen competition? |
Retailing |
Def: includes all activities involved in selling, renting, and providing products and services to ultimate consumers for personal, family or household use. |
The Value of Retailing |
-Form: customization to fit the exact needs of the consumer
-Time: fast-paced convenience
-Place: location-based convenience
-Possession: makes the purchase easier ie (payments transported via mobile phone to vending machines facilitates the possession of products) |
Functions performed by middlemen |
-Transactional: buying, selling, risk-taking
-Logistical: assorting, storing, sorting, transporting
-Facilitating: financing, grading, marketing info |
Product Line Breadth |
Def: # of different product lines ie(shoes, appliances, CDs, Men's clothing)
eg(walmart, amazon)
Benefit: |
Product Line Depth |
Def: # of items inside a specific product line ie(shoes: basketball, sneakers, fashion, womens, mens, cleats, slippers, etc)
eg(Best Buy and other specialty outlets)
Beneift:? |
Level of Service Spectrum |
-Self Serve<----->Assisted Sale
-Costco<-------------->Apple Store |
Superfeet case study |
To win the land of self serve, Superfeet must
-Build brand awareness
-have amazing in-store presence
-dumb down their science story (be easy to understand) |
Nonstore Retailing |
-Retailing outside of a traditional "Brick and Mortar" store
Examples:
1. Automatic Vending
-time and place utility, very cheap to buy and maintain
2. Direct Mail and Catalogs
-eliminates the cost of a store and clerks, improve marketing efficincy through segmentation and targeting and are fast and convenient means of making a purchase, and serve as a tool to direct customers to websites, social media, or a B&M store
3. Television Home Shopping
-helps attract new customers, persuasive salesmen, act now causes impulse buys
4. Online Retailing
5. Telemarketing
6. Flash Sales ie( whiskey malitia)
-act now causes impulse buys
7. Pop up stores
***Be innovative |
Why is direct selling growing significantly? |
Result of 2 Trends
1. Many direct selling retailers are expanding into markets outside of the united states
-due to a lack of effective distribution channels and lack of consumer knowledge of brands and products
2. Growing number of companies that are using direct selling to reach consumers who prefer one-on-one customer service |
How can brick and mortar stores win? |
Create value inside the store!!!
-make the in-store experience, an experience worth the drive and the time, etc
--(from slides) must offer utility, price matching, unique items, and a special experience |
Metrics of Success in Retail |
... |
Slotting Fees |
-paying for shelf space in a store |
Product Life cycle - Promotional Implications |
Stages (Purina Example)
1.Introduction
obj: to inform
activities: publicity in vet magazines, advertising, sales force calling on intermediaries, free samples
2.Growth
obj: to persuade
activities: personal selling to intermediaries, advertising to differentiate dog chow attributes from those of competing brands ie (Royal Canin)
3. Maturity
obj: to remind
activities: reminder advertising, sales promotion in the form of discounts and coupons, limited personal selling, direct mail reminders
4. Decline
obj: none
activity: spend little money on advertising |
Importance of promotional elements across the purchase cycle |
1. Personal Selling
-Pre-purchase: low
-Purchase: high
-Postpurchase: med-high
2. Sales Promotion/Direct Marketing
-Pre-purchase: med
-Purchase: med-high
-Postpurchase: med
3. Public Relations
-Pre-purchase:med-high
-Purchase: med-low
-Postpurchase: low
4. Advertising
-Pre-purchase:high
-Purchase:low
-Postpurchase: high |
Push Strategy |
-a firm directs the promotional mix to channel members to gain their cooperation in order and stocking the product.
--stimulation of demand flow from MFG towards consumer
ie(mainly personal selling directed to intermediaries) |
Pull Strategy |
-a firm directs the promotional mix at ultimate consumers to encourage them to ask retailers for the product, who then order it from wholesalers or the firm itself.
--stimulation of demand flow from MFG to consumer back up the channels
ie(mainly advertising directed to consumers |
Direct Marketing |
Def: communication aimed directly at a consumer to generate a response
ie(face2face selling, direct mail, catalogs, phone solicitations, direct response advertising (TV, print or radio), and online marketing
Attributes:
-interactive process that
-addresses communication that
-uses one or more advertising media
-to effect a measurable purchase, lead, or charitable donation
-analyzed on a database for the development of ongoing, mutually beneficial relationships between marketers and customers, prospects, or donors
-allows organizations to inform potential customers, create brand awareness, or spur immediate purchase behavior
***Advantages over mass advertising
-measurability
-efficiency
-testability
-higher ROI |
The Promotion Decision Process |
1. Planning: developing the promotion program
-identify the target market/audience
-specify the objectives
-set the budget
-select the right promotional tools
-design the promotion
-schedule the promotion
2. Implementation: executing the promotion program
-pretest the promotion
-carry out promotion
3. Evaluation: assessing the promotion program
-post test the promotion, analyze results
-make needed changes for re-implementation and greater profitability |
Percentage of Sales Budgeting |
(most common)
Def: allocating funds to promotion as a percentage of sales or anticipated sales, in dollar or unit terms
-"our promotion budget for this year is 3 percent of last year's gross sales"
-MAJOR FALLACY: implies sales cause promotion, with this theory, a company may reduce its promotion budget because of a downturn in past sales, when in reality this may be a time in dire need of increased promotion |
Competitive Parity Budgeting |
Def: matching the competitor's absolute level of spending or the proportion per point of market share
aka "matching competitors" or "share of market" |
All-you-can-afford Budgeting |
(common for small businesses)
Def: money is allocated to promotion only after all other budget items are covered |
Task and Objective Budgeting |
(best approach)
Def: The company..
1. determines its promotion objectives
2. outlines the tasks it will undertake to accomplish those objectives
3. Determines the promotion cost of performing those tasks
**Difficulty is expert judgement to accurately and precisely determine the tasks needed to accomplish objectives |
Advertising |
Def: any paid form of non-personal communication about an organization, product, service, or idea by an identified sponsor
-Product Ad: to help sell a good or service
--goals:
-Institutional Ad: to build a brand image
Strengths:
Weaknesses |
Product Ad |
Def: advertisement to help sell a good or service
Goals:
1. pioneering (informational) ie("Stop gout patient's suffering)
-tells people what a product is, what it can do, and where it can be found
2. reminder ie(Hungry? Eat a snickers)
3. competitive (persuasive) ie(Political)
-comparative ie(touting strengths relative to a competitor) ie(Verizon vs. AT&T, Mac vs. PC)
Note*: many ads contain a bit of more than one objective |
Deception |
Def:a material representation, omission or practice that is likely to mislead the reasonable consumer |
Institutional Ads |
-ads that aim to build a brand's image
Goals:
1.Advocacy: states our position ie(McD's we don't hire turks, greeks, poles, etc, we hire individuals that are ambitious and determined)
2. Pioneering: brand building ie( IBM: solutions for a small planet)
3. Competitive: promotes one product class over another ie(Got Milk?)
4. Reminder Institutional: bring our name to market's attention ie(Nike, "Just Do It") |
Types of Advertising Appeals |
-emotional
-fear:
--important guideline: Don't make the appeal so strong that consumers want to "tune out" the advertisement.
-sex
-humor |
Reach |
Def: # of people exposed |
Rating |
Def: % of households tuned in to a specific show |
Frequency |
Def: average # of times a person is exposed |
Gross Rating Points (GRP) |
Def: reach x frequency |
Cost Per Thousand |
Def: Cost to reach 1,000 people or HHs |
CPM ($) = |
Advertising cost ($)/(impressions generated (#)/1,000) |
Online Metrics |
1. Clicks- number of times an ad is clicked on by a user
2. Impressions- the number of times your ad is displayed
3. Click-through-rate (CTR) the ratio of ad clicks to ad impressions
4. Cost-per-click (CPC) the cost incurred for a click to ad impressions
5. Cost-per-thousand-impressions (CPM)- The cost incurred for your da to appear 1000 times |
+ and - of Television as a media alternative |
(+): Reaches extremely large audience, uses picture, print, sound and motion for effect, can target specific audience
(-): high cost to prepare and run ads; short exposure time and perishable message; difficult to convey complex information |
+ and - of Radio as a media alternative |
(+): low cost; can target specific local audiences; ads can be placed quickly
(-): no visual element; short exposure time and perishable message; difficult to convey complex info |
+ and - of Magazines as a media alternative |
(+): can target specific audience; high quality color; long life of ads; can convey complex info
(-): long time needed to place ad; relatively high cost; competes for attention with other magazine features |
+ and - of Newspapers as a media alternative |
(+): excellent coverage of local markets; ads can be placed and changed quickly ads can be saved; quick consumer response; low cost
(-): as compete for attention; short life span; poor color |
+ and - of Yellow Pages as a media alternative |
(+): long period of use; available 24/7; geo segments
(-): proliferation of competitive directories in many markets; difficult to keep up to date |
+ and - of Internet as a media alternative |
(+):video and audio; animation; ads can be interactive
(-): animation and inter |
+ and - of Outdoor as a media alternative |
(+): low cost; local market focus; high visibility; opportunity for repeat exposures
(-): message must be short and simple; criticized as a traffic hazard |
+ and - of Direct Mail as a media alternative |
(+): high selectivity of audience; can contain complex info and personalized messages; high quality graphics
(-): high cost per contact; poor image (junk mail) |
Continuous Schedule of Advertising |
Def: consistent throughout the year (steady)
ie(toothpaste) |
Flighting Schedule of Advertising |
Def: on and off periods of advertising (intermittent)
ie(Vail Resorts, for skiing) |
Pulse Schedule of Advertising |
Def: a mix of continous and flighting (burst)
ie(roses, chocolates, children's toys) |
Pretesting Advertising |
Pretests
1. Portfolio Tests: several ads shown to consumers
2. Jury Tests: show copy to panel
3. Theater Tests: viewing a show or movie containing ads |
Posttesting Advertising |
-Unaided recall (no prompting): what brands are you aware of that make snowbaords?
-Aided Recall: Have you heard of the following brands of snowboards
others are self explanetory
-Attitude Tests
-Inquiry tests
-sales tests |
Media Planning Goals |
1. Maximize exposure vs. minimal costs
2. maximize revenue produced vs. costs incurred |
Social Media |
-aka "user generated content"
-an online media where users submit comments, photos, and video
-involves a genuine conversation
-communication is 2 way and involves a
feedback loop from consumers
-brands are catalysts to the conservation |
Key Trends of Social Media |
Trends
-better connectivity and tech
-proliferation of mobile/smart phones
-user generated content
-communities of interest and passionate followers
-culture of immediacy and transparency |
Self-Disclosure |
Def: the degree to which an individual shares personal information about themselves
-greater self-disclosure is likely to increase one's influence on those reached |
Media Richness |
Def: the degree of acoustic, visual, and personal contact between two communication partners.
-highest being face2face, lowest being email
*similar to communication channel richness in Papuzza's class |
Social Media Lessons for Brand Managers |
-Communicate with key influences
-respond swiftly
-communicate through social media
-listen for feedback to recover brand |
Field Of Experience |
Def: a similar understanding and knowledge that the sender and receiver apply to the message so that it can be communicated effectively during the communication process. |
Buyer Requirements |
... |
The Value of Retailing |
-Time Utility:
-Form Utility
-Place Utility:
-Possession Utility: makes the purchase easier |
Wasted Coverage |
Def: Communication with consumers who are not in the target audience |