Transcript Principles of Marketing

Principles of
Marketing
Lecture-31
Summary
of
Lecture-30
Retailing
and
Wholesaling
Today’s Topics
Review
rd
3 P
(Place)
Place….Distribution
Channel….Marketing
Channel
Simple Marketing
System
Communication
Product/Service
Producer/Seller
Money
Feedback
Consumer
Right
Place
Right
Cost
Right
Product
Right
Time
Right
Condition
Manufacturer
Customer
Manufacturer
Customer
Manufacturer
Customer
Manufacturer
Customer
Manufacturer
20 Contacts
Manufacturer
Customer
Manufacturer
Manufacturer
Customer
Wholesaling
Intermediary
Customer
Manufacturer
Customer
Manufacturer
9 Contacts
How Channel Members
Add Value?
Channel members add
value by bridging the
major time, place and
possession gaps that
separate goods and
services from those who
would use them.
Distribution
Channel Functions
Risk Taking
Information
Financing
Promotion
Physical
Distribution
Contact
Negotiation
Matching
M
C
Direct
Channel 1
M
R
Channel 2
M


C

C

C
In-Direct
W
R
Channel 3
M

Channel 4
W

J

R
Marketing Channels for
Consumer Goods
Producer
Consumer
Producer
Retailer
Producer
Producer
Wholesaler
Agent/
Broker
Wholesaler
Retailer
Retailer
Consumer
Consumer
Consumer
Marketing Channels for
Business Goods
Business
User
Producer
Producer
Agent/
Broker
Producer
Producer
Agent/
Broker
Business
User
Wholesaler
Business
User
Wholesaler
Business
User
Evaluation of Channel
Alternatives
Economic Criteria
-Potential sales, costs and profits
of channels
Control Criteria
-Amount of control company has over
sales efforts
Adaptive Criteria
-flexibility of channel to adapt to
changing situations
Channel Management
Decisions
Motivating
Evaluating
FEEDBACK
Selecting
The channel will be most
effective when..
Each member is assigned
tasks it can do best.
All members cooperate to
attain overall channel goals
and satisfy the target market.
Conventional
Distribution Channel
vs. Vertical Marketing
Systems
Manufacturer
Wholesaler
Retailer
Vertical
Marketing
Channel
Manufacturer
Wholesaler
Conventional
Marketing
Channel
Retailer
Consumer
Consumer
Logistic
Management
Channels of
distribution
Two different
perspectives
Channels of
distribution
Two different
perspectives
Logistics
(Physical distribution)
Producer
Marketing
activities
Intermediaries
Demand
End users
Demand
Push Strategy
Marketing activities
Producer
Demand
Intermediaries
Demand
End users
Pull Strategy
Marketing Logistics
and Supply Chain
Management
Functions of
Logistics Systems
Costs
Minimize Costs of
Attaining Logistics
Objectives
Order Processing
Submitted
Processed
Shipped
Logistics
Transportation
Water, Truck, Rail,
Pipeline & Air
Functions
Warehousing
Storage
Distribution
Inventory
When to order
How much to order
Just-in-time
Customer Service
Concept
Customer service is the ability
of logistics management to
satisfy users in terms of:
- time
- dependability
- communication
- convenience
Companies today place
greater emphasis on
logistics because…..
–Effective logistics is
becoming a key to
winning and keeping
customers.
–Logistics is a major
cost element for most
companies.
– The explosion in product
variety has created a need
for improved logistics
management.
– Information technology has
created opportunities for
major gains in distribution
efficiency.
Retailing
and
Wholesaling
Classification of
Retailing
Amount of Service
Self-Service, Limited-Service and
Full-Service Retailer
Product Line
Length and Breadth of the Product
Assortment
Relative Prices
Pricing Structure that is Used
by the Retailer
Retail Organizations
Independent, Corporate, or Contractual
Ownership Organization
Nonstore Retailing
Mail Order
•Catalogs - from clothing to computers
•Direct Mail - brochure offering a product
or service at one point in time.
Direct Selling
•Door-to-Door Sales - declining in U.S.
•Parties & Networks - presentations
•Telemarketing - over the phone
Automatic Vending
•Best suited to inexpensive merchandise
and food and beverages.
Direct Response Television
•Home Shopping Networks - TV channels
that sell products
What is
Wholesaling?
All the activities involved
in selling goods and
services to those buying
for resale or business
use.
Wholesaler - those firms
engaged primarily in
wholesaling activity.
Customer Expectations for
Wholesaling
Easy
Inquiry
and
Order
Error-Free
Invoicing
Accuracy
Reliable
Delivery
On-time
Delivery
Post-Sales
Support
Easy Claims
Handling
Suppliers’ Logistics Systems
Warehouse and
Materials-Handling
Receive goods into
warehouse
Functions
of
Materials
Handling
Identify, sort, and
label goods
Dispatch the goods to
temporary storage
Recall, select, or pick the
goods for shipment
Types of Wholesalers
Merchant
Wholesaler
Independently Owned
Business that Takes
Title to the
Merchandise
it Handles.
Brokers/ Agents
They Don’t Take Title to
the Goods, and They
Perform Only a Few
Functions.
Manufacturers’
Sales Branches
and Offices
Wholesaling by Sellers
or Buyers Themselves
Rather Than Through
Independent
Wholesalers.
Right
Place
Right
Cost
Right
Product
Right
Time
Right
Condition
Compete on value (not just
price.)
Save customers time and
energy.
Make shopping fun.
Enough for
Place. . .
Summary
Next….
Principles of
Marketing
Lecture-31