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INTRODUCTION TO
MARKETING MANAGEMENT
Dr. Franck VIGNERON
CSUN College of Business & Economics
Review for Quiz 3
Chapters : 12, 13 14,15, and 17
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Chapter 13Distribution Channels and
Logistics Management
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What is a Distribution Channel?
A set of interdependent organizations
(intermediaries) involved in the
process of making a product orservice available for use or
consumption by the consumer or
business user.
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Contact
Financing
InformationRisk Taking
Promotion
MatchingNegotiation
PhysicalDistribution
Members of the marketing channel perform many key functions.
They are:
Distribution Channel Functions
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5M W J R
C
M W R C
M R C
M C
Channel 1
Channel 2
Channel 3
Channel 4
Channel Level
= Each Layer of Marketing Intermediaries that Perform Some Work inBringing the Product and its Ownership Closer to the Final Buyer.
Number of Channel Levels
Direct Channel
Indirect Channel
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Channel Behavior & Conflict
For the channel to perform well, each channel
members role must be specified and conflict
must be managed.
When this doesnt happen, conflict occurs:
Horizontal Conflict occurs among firms at the same
level of the channel, i.e retailer to retailer. Vertical Conflict occurs between different levels of the
same channel, i.e. wholesaler to retailer.
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Conventional Marketing Channel Vs.
a Vertical Marketing System
ConventionalMarketing
Channel
VerticalMarketing
System
Manufacturer
Retailer
Wholesaler
Manufacturer
Wholesaler
Retailer
Consumer Consumer
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Contractual
VMS
RetailerCooperatives
FranchiseOrganizations
Wholesaler SponsoredVoluntary Chain
Service-Firm-Sponsored
Franchise System
Manufacturer-Sponsored Wholesaler
Franchise System
Manufacturer-Sponsored RetailerFranchise System
Vertical MarketingSystems (VMS)
Corporate
VMS
Administered
VMS
Types of Vertical Marketing Systems
40% of
Retail
Sales
Ford + dealers Coca-Cola Hertz/Avis, McDo/Bking, H/R Inn
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Innovations in Marketing Systems
Horizontal MarketingSystem
Two or More Companies at
One Channel Level JoinTogether to Follow a New
Marketing Opportunity.
Example:
Banks in Grocery Stores
Competitors helping each other
E.g., Outside US Nstl sellingGeneral Mills cereals
Hybrid Marketing
System
A Single Firm Sets Up
Two or More Marketing
Channels to Reach One
or More Customer
Segments.
Example:Retailers, Catalogs, and
Sales Force
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1. Analyzing Consumer Service Needs
2. Setting Channel Objectives & Constraints
ExclusiveDistribution
SelectiveDistribution
IntensiveDistribution
3. Identifying Major Alternatives
4. Evaluating the Major Alternatives
5. Designing International Distribution Channels
Channel Design Decisions
Rolls-RoyceMaytagFast Moving C. G.
Review Economic, Control, and Adaptive Criteria
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Push and Pull Strategies
Producer Wholesalers Retailers Customers
Producer Wholesalers Retailers Customers
Push Strategy
Pull Strategy
Push/Pull Strategies
Producer Wholesalers Retailers Customers
Advertising and Promotion
Distribution Strategies
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InventoryWhen to order
How much to orderJust-in-time
CostsMinimize Costs of
Attaining Logistics
Objectives
WarehousingStorage
DistributionAutomated
Order ProcessingReceivedProcessedShipped
Logistics
FunctionsTransportation
Rail, Truck, Water,
Pipeline, Air,Intermodal
Major Logistics Functions
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Marketing Logistics
Involves planning, implementing, andcontrolling the physical flow of materials,final goods, and related information frompoints of origin to points of consumption tomeet customer requirements at profit.
INBOUND + OUTBOUND = Market Logistics
Supply Chain + value chain management
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RailNations largest carrier, cost-effectivefor shipping bulk products, piggyback
Truck
Flexible in routing & time schedules, efficientfor short-hauls of high value goodsWater
Low cost for shipping bulky, low-value,non perishable goods, slowest form
PipelineShip petroleum, natural gas, and chemicals
from sources to markets
AirHigh cost, ideal when speed is needed or
distance markets have to be reached
Transportation Modes
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1. Speed (door-to-door time)2. Dependability (meet
schedules)3. Availability (area served)
4. Costs (per ton-distance)
5. Flexibility
Checklist for ChoosingTransportation Modes
Choosing Transportation Modes
(ability to handlevarious products)
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INTRODUCTION TO
MARKETING MANAGEMENT
Dr. Franck VIGNERON
CSUN School of Business & Economics
Chapter 14
Distribution Strategies
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What is Retailing?
Includes all
the activities Involved inSelling Goods orServices Directly to FinalConsumers for Their
Personal, NonbusinessUse.
Retailers - those firms engaged primarily
in wholesaling activity.
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Product Assortment and Services
Decisions
Product AssortmentWidth and Depth of Assortment Quality of Products
Product Differentiation Strategies
Services MixKey Tool of Nonprice Competitionfor Setting One Store Apart From
AnotherStores Atmosphere
Physical LayoutFeel That Suits the Target Marketand Moves Customers to Buy
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Retail OrganizationsIndependent, Corporate, or
ContractualOwnership Organization
Amount of ServiceSelf-Service, Limited-Service and
Full-Service Retailer
Product LineDepth/Length and Breadth of the Product
Assortment
Relative PricesPricing Structure that is Used
by the Retailer
Classification of Retailing
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Breadth vs. Depth of
Merchandise Lines
Nike running shoes
Florsheim dress
shoes
Top Sider boat
shoes
Adidas tennis shoes
Amana
refrigerator
Sony TV sets
JVC videocassette
recorders
General Electric
dishwashers
Sharp microwave
ovens
Classical
Rock
Jazz
Country Western
Suits
Ties
Jackets
OvercoatsSocks
Shirts
Depth:
Number of
items within
each productline
Breadth: Number of different product lines
Shoes Appliances CDs Mens Clothing
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Specialty Stores
Department Stores
Supermarkets
Convenience Stores
SuperstoresDiscount Stores
Narrow Product Line, Deep Assortment i.e.The Limited or Athletes Foot
Wide Variety of Product Lines i.e. Clothing,
Home Furnishings, Saks Fifth AvenueWide Variety of Food, Laundry, & Household
Products i.e. KrogerLimited Line of High-Turnover Convenience
Goods i.e. 7-ElevenLarge Assortment of Routinely Purchased
Food & Nonfood Products i.e. Toys R UsStandard Merchandise at Lower Prices
i.e. Wal-Mart
Off-Price RetailersChanging Collection of Higher-Quality
Goods at a Reduced Price i.e. T.J. Maxx
Warehouse ClubsLimited Selection of Brand-Name Grocery
Items, Appliances, Etc. i.e. Sams Club
Classification of Retailing: Product Line
Store Description
E.g., + What is an Hypermarket?
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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.
Wholesalers buy mostly fromproducers and sell mostly to:
Retailers,
Industrial consumers, and
Other wholesalers.
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WholesalerFunctions
Management
Services & Advice
Selling and
Promoting
MarketInformation
Buying andAssortment Building
Risk Bearing Bulk Breaking
Transportation
Financing Warehousing
Wholesalers are Often Better at Performing One or Moreof the Following Channel Functions:
Why are Wholesalers Used?
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Types of Wholesalers
Merchant WholesalerIndependently Owned
Business that Takes Title to theMerchandise it Handles.
Brokers/ AgentsThey Dont Take Title to
the Goods, and TheyPerform Only a Few
Functions.
Manufacturers Sales
Branches and OfficesWholesaling by Sellers orBuyers Themselves
Rather Than ThroughIndependentWholesalers.
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Consolidation within the Industry is Reducing # of Wholsalers
Distinction Between Large Retailers and Wholesalers Blurs
Wholesalers Will Continue to Increase the Services Provided
Wholesalers Are Beginning to Go Global
Trends in Wholesaling
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Chapter 15
Integrated Marketing
Communication Strategy
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Advertising
PR
Place(Distribution)
Personal
Selling
Product
Sales
Promotion
Promotion
Place
The Promotional Mix
Advertising Strategies
4Ps
Price
Direct
MKG
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Informative AdvertisingInform Consumers or
Build Primary Demand
i.e CD Players
Comparison AdvertisingCompares One Brand to
Another
i.e. Avis vs. Hertz
Persuasive AdvertisingBuild Selective Demand
i.e Sony CD Players
Reminder AdvertisingKeeps Consumers Thinking
About a Product
i.e. Coca-Cola
Advertising ObjectiveSpecific Communication TaskAccomplished with a Specific
TargetAudience
During a Specific Period ofTime
Setting Advertising Objectives
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Figure 9.3 Comprehensive
Communication Model
Sender
(Source)
Receiver
(Consumer)
Messag
e
Channel
(Medium
)Decodes
Feedback
Responds
Appropriately
?
Miscomprehends
?
Yes
Yes
No
No
Commercial
Non-ProfitIndividual
Formal vs.
Informal
Symbols
Pictures
Words
Images
Verbal vs. Nonverbal
1-sided vs. 2-sidedFactual vs. Emotional
Paid vs. Unpaid
Print, Broadcast, Electronic
Personal vs. Impersonal
Pretests to Ensure Message Will be Received
Posttests to Ensure Message Was Received
Selective
Exposure IndividualsTarget Audience
Intermediary Audience
Unintended Audiences Mediated by:
Involvement
Mood
Experience
Personal Charac.
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Step 1. Identifying the Target Audience
Step 2. Determining the Communication ObjectivesBuyer Readiness Stages
Purchase
Conviction
Preference
Liking
Knowledge
Awareness
Steps in Developing Effective Communication
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Step 3. Designing a Message
Message ContentRational Appeals
Emotional AppealsMoral Appeals Message StructureDraw Conclusions
Argument TypeArgument Order
Message FormatHeadline, Illustration,
Copy, & ColorBody Language
Steps in Developing Effective Communication
AIDA model.1). Get attention 2). Hold interest
3). Arouse desire 4). Obtain action
Appeals
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Appeal - the creative attempt to motivate
consumers toward some form of activity,
or to influence attitudes toward a product or service
Rational appeal -a focus toward the consumers
practical utility oriented needs
Emotional appeal -a focus on psychological
rather than utility needs
(all appeals can be positive or negative
and should be meaningful, distinctive,
and believable to be effective)
Humor ComparativeFear Sex Ego
Oriented
Appeals
Advertising Strategies+ Morale Appeal:Social causes & Human Rights
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Structure & Format
The marketing communicator needs astrong structure and format for themessage.
1). Three structure issues must beaddressed: a). Whether to draw a conclusion or leave it to the
audience.
b). Whether to present a one-sided argument or atwo-sided argument.
c). Whether to present the strongest argumentsfirst or last.
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Structure & Format (continuous)
2). The message format decides on the
headline, illustration, copy, and color.
3). To attract attention the advertiser canuse:
a). Novelty and contrast.
b). Eye-catching pictures and headlines.
c). Distinctive formats.
d). Message size and position.
e). Color, shape, and movement.
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Nonpersonal CommunicationChannels
Step 4. Choosing Media
Personal CommunicationChannels
Steps in Developing Effective
Communication
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Issues in Credibility
Credibility of Informal Sources
E.g., Word-of-mouth
Credibility of Formal Sources Differ. Between for profit vs nfp Org.
Credibility of Spokespersons and
Endorsers
Importance of perceived competency and expertise
Message Credibility
Past experience with organization
CREDIBILITY OF THE MEDIA CHANNELS
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CREDIBILITY OF THE MEDIA CHANNELS
SPONSORING VERSUS ADVERTISING
+ -
CREDIBILITY OF THE SOURCES
FOR-PROFIT Org. VERSUS NOT FOR PROFITOrg.
- +
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CREDIBILITY OF THE MEDIA CHANNELS IN
RELATION WITH THE SOURCES
FOR-PROFIT Org. VERSUS NOT FOR PROFIT Org.
SPONSORING
+ ++VERSUS
ADVERTISING
-- -
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Campaign Evaluation
Communication Effects
Is the Ad Communicating Well?
Advertising Program Evaluation
Sales Effects
Is the Ad Increasing Sales?
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AffordableBased on What the
Company Can Afford
Objective-and-TaskBased on DeterminingObjectives & Tasks, Then
Estimating Costs
Percentage of SalesBased on a Certain Percentageof Current or Forecasted Sales
Competitive-ParityBased on the CompetitorsPromotion Budget
One of the Hardest Marketing Decisions Facing aCompany is How Much to Spend on Promotion.
Setting the Total Promotion Budget
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Sales Promotion + PR
+ Advertising
Chapter 16
Dr. Franck Vigneron
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What is Sales Promotion ?
Sales Promotion is a Mass
Communication Technique ThatOffers Short-Term Incentives toEncourage Purchase or Sales of aProduct or Service.
Offers Reasons to Buy Now.
Stimulate earlier or strongermarket response.
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Sample
Coupons
Cash Refunds
Price Packs
Premiums
AdvertisingSpecialties
Trial amount of a product
Savings when purchasing specified
products
Refund of part of the purchase price
Reduced prices marked on the label orpackage
Goods offered free or low cost as anincentive to buy a product
Articles imprinted with an advertisersname given as gifts
Major Consumer Sales Promotion
Tools/1
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Patronage Rewards
Point-of-Purchase
Contests
Sweepstakes
Game
Cash or other rewards for the use of acertain product
Displays and demonstrations that takeplace at the point of sale
Consumers submit an entry to be judged
Consumers submit their names for adrawing
Presents consumers with something everytime they buy
Major Consumer Sales Promotion
Tools/2
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Trade-PromotionObjectives
Persuade Retailers orWholesalers to Carry a Brand
Give a Brand Shelf Space
Promote a Brand in
AdvertisingPush a Brand to Consumers
Major Trade Sales Promotion
Tools/1
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Major Trade Sales Promotion
Tools/2
Trade-PromotionTools
Discountsa straight reduction in price onpurchases during a stated periodof time. Can be called price-off, off-invoice, or off-list.
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Major Trade Sales Promotion
Tools/3
Promotional money paid by manufacturersto retailers who agree to feature themanufacturers products in some way.Forms include:
a). An advertising allowance compensates
retailers for advertising a product.
b). A display allowance compensates them forusing displays.
c). Manufacturers may offerfree goods, whichare extra cases of merchandise, to resellerswho buy a certain quantity or who feature a
certain flavor or size.
d). Manufacturers may give retailers freespecialty advertising items that carry thecompanys name (such as pens).
Allowances
Trade-PromotionTools
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Business-PromotionObjectives
Generate Business Leads
Stimulate Purchases
Reward Customers
Motivate Salespeople
Business-PromotionTools
Conventions
Trade Shows
Sales Contests
Major Business Sales Promotion
Tools
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Decide on the Size of the Incentive
Set Conditions for Participation
Evaluate the Program
Determine How to Promote andDistribute the Promotion Program
Determine the Length of the Program
Developing the Sales Promotion
Program
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What is Public Relations?
Public Relations Involves Building Good
Relations With the Companys VariousPublics by Obtaining Favorable Publicity,Building Up a Good Corporate Image,
and Handling or Heading OffUnfavorable Rumors, Stories, andEvents.
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Press Relations
Product Publicity
Public Affairs
Lobbying
Investor Relations
Development
Public Relations
Departments May
Perform Any of All
of the FollowingFunctions:
Major Public Relations Functions
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News
Speeches
SpecialEvents
WrittenMaterialsAudiovisual
Materials
CorporateIdentityMaterials
PublicService
Activities
Web Site
Major Public Relations Tools
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Setting Public Relations Objectives
Choosing the Public Relations Messagesand Vehicles
Implementing the Public Relations Plan
Evaluating Public Relations Results
Major Public Relations Decisions
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What is Advertising?
Advertising is Any Paid Form ofNonpersonal Presentation andPromotion of Ideas, Goods, or
Services by an Identified
Sponsor.
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Media Selection
Deciding on reach, frequency, and impact.
a). Reach is the percentage of people in the target
market exposed to an ad campaign during a given
period.
b). Frequency is the number oftimes the average
person in the target market is exposed to an
advertising message during a given period.
c). Media impact is the qualitative value of anexposure through a given medium.
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6 major advertising
media
Television
Radio
Magazines
Newspaper
Internet
And Outdoor (e.g., billboards)
Copy and Message Direct ion
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Motivational
Source
Motivation =Product
Performance
Perf. Is
representation ofproduct
Copy of Message
Centered on Product
1. Message on
Product
Perf. is + thanrepresentation
product
Copy of Message
Centered on Resultsfrom Product
Motivation =Association with
Product Universe
Copy of Message
Centered on Psyco
-socio of Product
2. Message on
Resultats
3. Message on
Universe
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Chapter 18
Competitive Strategies: Attracting,
Retaining, and Growing Customers
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Customer Relationship Marketing
Traditional marketing theory and practice have focused on
attracting new customers rather than retaining existing ones.
1). The move today, however, is toward re lat ionsh ip market ing--
creating,maintaining, and enhancing strong relationships withcustomers and other stakeholders.
2). Beyond designing strategies to attract new customers and
create transactions with them, companies are going all out to
retain current customers and build profitable, long-term
relationshipswith them.3). This new view is that marketing is the science and art of
finding, retaining, and growing profitable customers.
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Satisfaying the Needs
Retain Customer
By Maintaining Satisfaction
Create the Product
NEEDSSTAGES PRODUCTS
Identify
The needs
to Satisfy
Adapt and
Deliver
the Products
to The Right
Target
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Customer Delivered Value
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Customer Satisfaction
Expectations are Based onCustomers Past Buying Experiences,the Opinions of Friends, & Marketer
and Competitor Information andPromises.
Product FallsShort of
Expectations
Customer isDissatisfied
ProductMatches
Expectations
Customer isSatisfied
ProductExceeds
Expectations
Customer isHighly
SatisfiedorDelighted!
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Steps in Analyzing Competitors
Identifying thecompanyscompetitors
Assessing competitorsobjectives, strategies,strengths and weaknesses,
and reaction patternsSelecting whichcompetitors toattack or avoid
= BENCHMARKING
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Overall Cost
Leadership
Differentiation
Focus
Middle ofthe Road
Basic Competitive Strategies
Competitive Strategies: Value
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Competitive Strategies: Value
Disciplines
OperationalExcellence
Alaska Airlines
CustomerIntimacy
Ikea
ProductLeadership
intel
Companies GainLeadership Positions byDelivering Superior Value
to their CustomersThrough TheseStrategies:
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Competitive Marketing Strategies
Firms Competing in a Given Target Market Differ in theirObjectives and Resources so May Choose the Following
Forms: