Better Business 2nd Edition - Napa Valley College Pages · What are the different categories of...

Promotion and Distribution

© 2012 Pearson Education, Inc. Publishing as Prentice Hall

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chap

ter 14

Better Business

2nd Edition Solomon (Contributing Editor) ·

Poatsy · Martin

Learning Objectives

1. What is a promotional mix, and what is its function in a promotional campaign?

2. What are the different categories of advertising, and what role do these categories play in business and society?

3. How are the various public relations tools essential to the marketing mix?

4. What are the steps in the personal selling process?

5. What are the two main types of sales promotions, and what types of tools are commonly used as incentives?

6. Why are marketing intermediaries and distribution channels important elements in marketing?

7. What types of services do agents/brokers and wholesalers provide?

8. Why are retailing and physical distribution key aspects of distribution?


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What Is Promotion?

• All of the techniques marketers use to inform targeted customers of the benefits of a product and to persuade them to purchase the good, service, or idea

• Increases brand awareness, brand loyalty, and sales

• One of the most visible components of the marketing mix

© 2012 Pearson Education, Inc.

Publishing as Prentice Hall 14-3

The Promotional Mix


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Promotional Campaign Steps

1. Identify target market.

2. Determine marketing objectives.

3. Design the message.

4. Determine the budget.

5. Implement the promotional mix.

6. Evaluate and adjust as needed.


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Integrated Marketing

Communication

• Strategy to deliver a clear, consistent, and unified message about the company and its products to customers at all contact points

© 2012 Pearson Education, Inc. Publishing as Prentice Hall 14-6

The Role of Advertising

• Advertising is paid, impersonal mass communication from an identified sponsor to influence a targeted audience

• Effective advertising builds brand awareness, association, loyalty and equity

• Advertising informs consumers

• Advertising industry creates jobs


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Types of Advertising

• Product

• Corporate (or institutional)

• Comparative

• Retail (or local)

• Business-to-business

• Nonprofit

• Public service

• Advocacy

• Interactive

• Internet


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Types of Advertising Media


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Advertising Trends

• Internet advertising

• Product placement and infomercials

• Global advertising


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Public Relations

• The management function that establishes and maintains mutually beneficial relationships between an organization and its stakeholders - Stakeholders include all interested parties,

including consumers, stockholders, employees, suppliers, the government, and the public in general

• The purpose is to maintain a positive image of the organization in stakeholders’ minds


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Public Relations Tools

• Controlled messages - Corporate, advocacy, and public service

advertising and corporate reports publishing

• Semicontrolled messages - Messages are placed on Web sites, in chat

rooms, and on blogs

- Sponsorships

• Uncontrolled messages - Publicity


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Publicity

• Information about an individual, organization, or product transmitted through mass media at no charge

• Advantages - Free - Often more believable as it is presented as a

news story

• Disadvantages - Actual message and timing controlled by the

media, not the seller - Bad news gets shared too


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Personal Selling

• Direct communication between a firm’s sales force and potential buyers to make a sale and to build good customer relationships

• Most expensive part of the promotional mix as a salesperson deals with one buyer at a time

• Preferred with high-value, custom-made, or technically complex products


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Types of Salespeople

• Order getters

- Creative selling

• Order takers

• Support personnel


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The Personal Selling Process

Sales Promotion: Tools

• Coupons

• Rebates

• Frequent-user incentives

• Point-of-purchase displays

• Free samples

• Contests and sweepstakes

• Advertising specialties

• Others: BOGO, catalogs, demonstrations, premiums, etc.


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Trade Sales Promotions

• Trade shows and conventions

• Trade allowances

• Cooperative advertising

• Free merchandise

• Sales contests

• Dealer listings

• Catalogs and store demonstrations

• In-store displays

• Quantity discounts

• Training and support programs

© 2012 Pearson Education, Inc.

Publishing as Prentice Hall 14-18

Advantages & Disadvantages of

Promotional Tools


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Distribution

• The last of the 4 Ps (place)

• Makes products available to consumers when and where consumers want them

• Managing the entire process is called supply-chain management


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Marketing Intermediaries

• A business firm that operates between producers and consumers or business users

- Wholesalers

- Agents/brokers

- Retailers


• The distribution channel is the whole set of marketing intermediaries who get goods from manufacturers to final consumers

Why Are Intermediaries

Needed?


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Types of Distribution Channels

Wholesale Intermediaries


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Types of Wholesalers

• Merchant wholesalers

- Full-service wholesalers

• Wholesale merchants

• Industrial distributors

- Limited-service wholesalers

• Cash-and-carry wholesalers

• Truck wholesalers

• Drop shippers

• Rack jobbers


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Agents & Brokers

• Facilitate buying and selling

• Do not take title to products

• Typically earn a commission on the sale

• Agents are hired on a more permanent basis than brokers are

• Types - Manufacturers’ agents

- Selling agents

- Purchasing agents


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Retail Strategies


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Intensive distribution

• Convenience goods

• Example: Frito Lay chips

Selective distribution

• Shopping goods

• Example: Sony HD televisions

Exclusive distribution

• Specialty goods

• Example: Porsche cars

Types of Retailers


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Non-Store Retailers

• Electronic shopping

• Vending machines

• Kiosks and carts

• Telemarketing

• Direct selling

• Direct marketing

- Catalog sales, direct mail, telemarketing, infomercials


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Retail

• Corporate chain stores

- Safeway, Sears, Wal-Mart

• Wholesale groups

- Independent Grocers Alliance (IGA), Western Auto, True Value, Associated Grocers, and Ace

• Franchises

- McDonald’s, Subway, KFC, Pizza Hut, Jiffy Lube, and Holiday Inn


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Distribution Logistics


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Benefits & Costs of

Transportation Modes


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Warehousing &

Inventory Control

• Storage warehouses store goods from moderate to long periods of time

• Distribution warehouses (or distribution centers) are designed to gather and move goods quickly to consumers


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Chapter Summary

1. What is a promotional mix, and what is its function in a promotional campaign?

2. What are the different categories of advertising, and what role do these categories play in business and society?

3. How are the various public relations tools essential to the marketing mix?

4. What are the six steps in the personal selling process?

5. What are the two main types of sales promotions, and what types of tools are commonly used as incentives?

6. Why are marketing intermediaries and distribution channels important elements in marketing?

7. What types of services do agents/brokers and wholesalers provide?

8. Why are retailing and physical distribution key aspects of distribution?


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