mkt 3

customer service

time, dependability, communication, convenience

logistics management

The process of strategically managing the efficient flow and storage of raw materials, in-process inventory, and finished goods from point of origin to point of consumption to satisfy customer requirements

channel of distribution

A set of individuals and firms involved in the process of making a product (good/service/idea) available for use or consumption. Part of the supply chain from producer to business user or consumer

channel of distribution example

A North Face print ad shows a rock climber hanging underneath a treacherous overhang, with the tagline, "Never stop exploring." In terms of the communication process, the magazine in which the ad is placed would be considered

Supply chain management

-Integrates and coordinates all activities across firms in a supply chain for the purpose of creating and delivering products that provide value to consumers.*Customer focused and customer driven.*As customers have increasing power in the marketplace, most firms will benefit by creating a supply chain that exists to enhance customer value

Aligning supply chain with marketing strategy

-Understand the customer-Understand the supply chain-Harmonize the supply chain with the marketing strategy (Ensure that what the supply chain is capable of doing well is consistent with the target market's needs and the intended marketing strategy)

supply chain needs to

-Deliver value to end customers-Driven by power of customers in marketplace

example of supply chains at work

-somebody may want training for the product, somebody may want better customer service (returning)-If they aren't working as a system to create the most value for a customers and another supply chain is, the customer will go to the other supply chain

supply chain work together

-figure out what customers want, what do other parts of supply chain need to give value, figure out how to coordinate across system to deliver that value-Customer driven- motivation for sc to work together

examples of channels constantly evolving

-libraries have gone through an evolution from a distribution perspectiveModern age, many communities didn't have the resources to have brick and mortar libraryThey'd pull resources so everybody could access the library (had mobile library that rotated through dif communities)-When maryott was growing up, there were multiple libraries in different parts of the county that were open different days of the weekMay not always be the closest to you-When I go to the library, I use it for space/quiet or a place to do group projectsRarely, people use it for physical booksDoesn't have to be the library to find a place to study-Nowadays, a lot of stuff can be accessed electronically from anywhere in the world-Libraries are trying to figure out how they can get their resources available to as many ppl as possible(where and when customers are looking for them) (now electronically because that's the primary way that people get information

a direct channel

-producer to consumer (no intermediaries) deal directly with each other-require hands-on expertise-buyers are large and well-defined

indirect distribution channel

-at least 1 intermediary-companies can use a combination or multiple types of distribution channels

retailer channel (indirect)

-Likely to occur when a retailer is large and can buy in large quantities from a producer or when the cost of inventory makes it too expensive to use a wholesaler

wholesaler channel (indirect)

Adding a wholesaler is most common for low-cost, low-unit value items that are frequently purchased by consumers (i.e., candy)-intermediary that connects manufacturer and retailer-Own product then sell to any retailer they want-Doesn't sell to customer

Agent/Broker Channel (Indirect):

-Is employed when there are many small manufacturers and many small retailers; an agent is used to help coordinate a large supply of the product-Doesn't take ownership or possession of items. Just connect buyer and seller

What influences channel strategy

Market factors, Product factors, Producer factors, Cost vs Profitability, Adaptability

Market Factors affecting channel choice and management

-Target market coverage-Buyer requirements (where do they shop, when do they shop, what is important to them?) will we satisfy at least some?-profitability (determined by the margins for each channel member and for the channel as a whole)c

Product Factors

-Complexity, customized vs. standardized, perishability, cost of product, etc

Producer Factors

-Resources and capabilities-Desired control

Adaptability

-Needs, wants of consumer may change-Ex: during pandemic our needs changed and retailers needed to find different ways to distribute (target pick up)(Lani lazzari was ok because most people bought online)-Some models are more adaptable than others

choosing supply chain models

-Need to know what your organization can do and how much control you'll have-Considerations related to product. If we know something best, it's best for us to explain things to peopleAs you add layers to channel of distribution, you add time/cost (may be good or bad). Hopefully these layers add valueFor our organization, what are we able to doWe may not have the capabilities, but want to have controlEx: Lazzari didn't have enough space to have inventory to ship things herself. Once she got more space, she could control her inventory like she wanted-What does value mean to them? When/where they want to purchase?-If complex product, producers may be the best to train ppl about our product. Sell directly because we know it best and training is not worth itIt may be difficult to ship, so retailers wouldn't be able to store and sell (may be perishable)-If choose a direct model, may not be able to sell to everybody we want. May need wholesalers

Dual Distribution Systems

a firm reaches different buyers by employing two or more different types of channels for the same basic product to the same target market or to different target markets

Omnichannel Marketing

a retail strategy that provides a seamless shopping experience, whether the customer is shopping online from a desktop or mobile device, by telephone or in a brick-and-mortar store

omnichannel marketing example

panera has online/mobile orders and they also have in person ordering

Multichannel marketing

-either to the same target market or to different target markets-pharmaceutical industry sells to hospitals and clinics directly (B2B) and to consumers indirectly through drug retailers (pharmacy) (B2C)-same thing whether b2b or b2c

examples of Dual Distribution Systems

Ex: a lot of ways I can purchase form dick's, depending on needs/timeA manufacturer sees value in purchasing from dicks bc of the different waysCan order online, can order through app, can go there and try stuff on

Ex: wanted to buy wresting mats. They didn't sell them in her store, so she shipped them to herselfWhen her son needed cleats, they didn't know his size so they tried them on-Customers want a lot of flexibility and see value in having flexibility

Disintermediation

-Channel member bypasses another member and sells/buys products directly-Process by which traditional intermediaries are eliminated as companies question the value added by layers in the distribution channel-If they think they can provide the same value with fewer steps, they limit intermediaries and save money

example of disintermediation

-existing companies cut out layers or take on the responsibility themselves. When apple started their stores, they cut out some intermediaries. You can buy products through many retailers and in many ways. When they started opening up their own stores, they scaled back options (amazon, best buy had conflict because they were taking some business from apple)

Two common sources of horizontal conflict (same level conflict)

-When a manufacturer increases distribution coverage in a geographical area-Dual distribution causes conflict when different types of retailers carry the same brands

Two common sources of vertical conflict (different levels conflict)

-disintermediation-Disagreements over how profit margins are distributed among channel members-When manufacturers believe wholesalers or retailers are not giving their product adequate attention

Can Distributors/Retailers Really Add Value (to the purchaser? ...to the manufacturer?)

-Ex: if you buy online directly from distributor, suit is only $250-If you buy from a local store, its $500 (value u get is you can feel the quality, try it on, get it faster)

is it worth $500 or $250

-Different people place different value on additional benefits-Someone who can sew and has time will only want to pay $250 because the benefits don't outweigh the costs for them

Intermediaries

-institutions who make the flow of products from producers to ultimate consumers possible by performing three basic functions-create value for buyers

Channel Functions Performed by Intermediaries

-The More They Do, the More They Get Paid to Do It-transactions-logistics-facilitating-specialization and division of labor

transactions

-Buying - Purchasing products for resale or as an agent-Selling/Negotiating*Prospecting and qualifying*Asking for the order*Feedback back to the company-Risk-taking - assume risks associated with ownership

logistics

-Storing-Assorting - creating assortments/variety-Sorting - purchase large quantities and break into smaller-Transporting

logistics example

When Amazon and its suppliers work together to move a product from the source of raw materials to consumption

Facilitating

-Financing - extending credit to customers-Grading - inspection, testing, etc.-Marketing information and research

Specialization and Division of Labor

-From producer to end customer, not all of these are needed, but most of them in most purchases happen-Have to figure who will do what (manufacturer can't always do everything and focus on what they do best)

examples of division of labor

Ex: where maryott worked, she had to steam clothes. Because they were the final place in channel of distribution to make the product look nice. That's why she had to do it, because of her order in the process

Walmart is known for having great expertise in logistics and you can rely on them to do that so you can focus on what you're good at

Providing Contact Efficiency- direct

-If throwing a party, you need a variety of drinks-Need plates, napkins, decorations-If you had to go and buy those directly for every manufactures, wouldn't have time for anything because that takes so long-Companies have many customers who don't have time to go directly there

Providing Contact Efficiency- indirect

Now you can get everything from Giant eagleIt's probably more indirect form this, and there are more people in between manufacturer and consumerContact efficiency on both sides of intermediaries

Overcoming Discrepancy of Quantity/Breaking bulk

-Channel members purchase large quantities from manufacturers and sell smaller quantities to many different customers-Consumers don't have the money, ability to store this large of bulks

Overcoming Discrepancy of Assortment/Creating assortments

-channel members provide a variety of products in one location

example of these discrepancies

In Virginia, you can buy beer/wine any drug station, gas station, convenience storeTook someone to a corona manufacturer/warehouseThe distributor can have multiple pallets of corona, but customers can'tThe distributor breaks it down so Sheetz gets 10 cases, Walmart gets 2 pallets

This warehouse only handled alcoholic beverages and retailer could get all their alcoholic beverages from one distributorThat retailer will have more than alcoholic beveragesFor your party, you can go to one retailer and hopefully get different beverages, napkins, platesRetailers create variety which creates value

Providing Utility

time utility, place utility, form utility, possession utility

time utility

-channel members help to provide products when customers are ready to buy them-September, end of October, most of the time people buy costumes (leading up to Halloweens)-Ruby's (manufacturer costumes) doesn't just produce in the fall and not use machines in other months-They will produce consistently, even when consumers aren't really buying costumes-Can't give them to retailers when customers won't buy them-May not have enough space to keep them-So they may need a wholesaler (they can hold inventory more economically)

place utility

-channel members help to provide products where customers want to purchase them-Customers can purchase online, in bricks and mortar location,-If they shop online, make sure our product is available where they will look online

form utility

-enhancing the good or service to make it more appealing to buyers-Manufacturer takes raw materials and turn into finished part-Also making it more attractive is form utility-Ex: Maryott steaming apparel so they look better)Ex: Panera toasting your bagel if you prefer that

Possession Utility

-efforts by intermediaries to help buyers take possession of a good or service so they can enjoy the product (financing, delivery)-Ex: couch company will let you pay later, deliver it to you if you can't get it yourself)

Distribution Intensity - how many distributors should we use?

decision Factors:Company, Customers, Channels, Constraints, and Competition (Intensive, Exclusive, or Selective Distribution?)-How many places want product available-Geographic area definition depends on what product selling and who customers are (city, region, state)

exclusive distribution

-only one location in geographic area carries the firm's products-Have to go out of their way most likely-usually specialty products

exclusive distribution example

Purchasing a Ferrari you'll probably have to go out of your way unless you live in the location they haveThose few locations they have a lot of people in the area who will buy the productDon't have as many locations because they want to make it feel more specialVery expensive so this distribution intensity makes sense. Exclusive product, people will go out of their wayDon't need to sell many units to be profitableProduct strategy is first (positioning, branding), the other p's fit to tell story in product strategy

Intensive distribution

-available a bunch of locations that customers may look for itNot every retail location, but lots of options to purchase from-Designed to place products in as many outlets as possible.

Intensive distribution example

-Ford, Honda, Subaru has more locations (at least 24 dealerships in pgh)*they aren't a luxury product*Focuses on selling quantity and need to sell more units than Lincoln

Selective distribution

a few. In between but closer to exclusive

Selective distribution example

if looking for BMW, there are fewer optionsMay have to go more out of my way, compared to if I was buying HondaThey have an upscale position in market (luxury brand, not as much as Ferrari though)Based on their position in market, they make distribution decisionsNeed to buy more units than Ferrari, but not as many as Honda

Channel Control is Important

\-Channels often control the final 4 P's presented to the consumer.-Therefore Manufacturers would like distribution channels to "behave" - to do what the manufacturer wants-Note: these are different (i.e. the distributor can modify - for better or worse)

\-If there is a wholesaler, it adds another layer to this-Supply chain is driven by power customers have in the market placeIf selling not though exactly them, retailers are establishing marketing strategy that customers seeWhen use intermediaries, you lost some control and there can be a difference between what you want them to see and what they d seeImpacts their perception of the brand, but they have to give up some control

Managing the Channel of Distribution

-who controls and coordinates among channel members and what decisions they make

Channel captain is the dominant firm that controls the channel

-Coordinates, directs, and supports other channel members

Channel captains have some form of influence relative to other members

reward, identification, expertise, legitimate

reward

-Ability to "give" and ability to "take away"*Ex: retailers reward power is often shelf space (where and will they carry your product?)

identification

-Firms want to be associated with you*Ex: if you're a high end jewelry store, you want to carry Rolex product, identifying they are a good jewelry store

expertise

-Firm has greater expertise*Ex: Walmart and amazon have great logistics expertise. A wholesaler may want to have that connection to benefit from the logistics expertise

legitimate

Legal authority, based on contracts (franchising is a great example)

managing the channel example

When laini lazzari comes in, she sold through giant eagle distributions and her as a small entrepreneur used their powerWhen she didn't need their access to customers in that way and shifted to a more direct channel of distribution, because they were requiring that she give up larger margins, so she left

channel relationships

independent/conventional, vertical, horizontal

independent/conventional

channel members mostly work independently of one another

vertical marketing systems

\-Professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact

\-Administered: No common ownerships or contractual relationships, dominant channel member controls the relationship-Contractual: Independent firms integrate their efforts on a contractual basis to obtain greater functional economies and marketing impact than they could achieve alone (most popular type)\*Wholesaler-sponsored voluntary chains, retailer-sponsored cooperatives (operate a wholesaler), franchising-Corporate: Parent company owns multiple levels of channel and can control and dictate the priorities of the channel.\*When apple sells through their stores, they own retailer levels and gain more power because in that channel bc they own more levels

horizontal marketing channel

-Channel members at the same level work together through formal arrangements-May form partnerships to get better terms from wholesalers or manufacturers-Separate from wholesaler and coordinate efforts (not owned by wholesalers or manufacturers)-Ex: at Walmart, can also use a band, get a prescription, get pictures, get subway (provide convenience in co locating)

horizontal example

-Tim and peggy: Meeting at the marked-Host tattoo conventions-Different tattoo artists (retailers) co locate and come together to temporarily set up shop for convention and give value to customers (easy access)

entertainment example

-Had production companies that had made films years in advance and were going to release them-When theaters closed, couldn't traditionally release them-Shifts in different levels of distributions-Movie theaters got into streaming services (they hadn't before)-Production houses went straight to streaming (may add a fee)*Did better in virtual box office than the regular one-Had to shift channel of distribution-Rite aid had certain hours for certain people-UPMC children's pediatrics did virtual visits-Uber eats did even better-Retailers offered own delivery services-My goodness and square café offered different items different times of day-Giant did the shopping for u (target drive up or delivered to your house)

Strategic/Partnering Relationships

-Supply chain members realize the benefits of being committed to maintaining a long-term relationship and investing in opportunities that are mutually beneficial - firms see each other as partners, not as competitors!*Mutual trust*Open communication*Common goals*Interdependence*Credible commitments-By working with each other, more value is created in the supply chain, which benefits all parties-Important to have partnership mindset to create value in customers' mind (work together to create most value)

a strategic channel alliance example

Kroger, the largest U.S supermarket chain, recently partnered with Alibaba, China's largest e-commerce marketer, to sell Kroger's organic private-branded food products.

best buy example- relationships

-For their consumer electronics, would shop at circuit city or best buy for their electronics-Circuit city went out of business, so best buy got a lot of power (primarily shopping through them and the were like the only one)-Exercised that power over manufacturesnTold manufactures they knew customers the best and they'd only shelf their products if they sold the products they wanted-At the time, manufacturers had to do what best buy was requiring (not selling to other people or they'd limit their shelf space)-What happened was, balance of power shifted because consumer behavior shifted (best buy lost some power)-Consumers became more comfortable buying through target, amazon, and non traditional electronic markers-Had been treating manufacturers not very nicely, and manufacturers didn't need them as much and had other options-They lost a lot of sales because manufacturers changed-Apple came to best buy and showed them itunes and asked them to manage the product and they both earn money (declined it and that competition mindset ruined them)-Took them 10 years to repair relationship with manufacturers (change in corporate culture and leadership to have more partnership perspective rather than competition mindset)

Functions of Marketing Communications/Promotion

Any communication by marketers that informs, persuades, reminds, and builds relationships with customers (both internal and external) to influence an opinion or elicit a response-Promotion Mix*Advertising*Sales Promotion*Public Relations*Personal Selling*Direct Marketing

-Create awareness? Inform ppl about product/brand?Certain tools more effective than othersPersuade people to buy product, donate, visit website?-promotion = informing, persuading, reminding, and/or building relationships

hierarchy of effects

Awareness—the consumer's ability to recognize and remember the product or brand name.

Interest—an increase in the consumer's desire to learn about some of the features of the product or brand.

Evaluation—the consumer's appraisal of the product or brand on important attributes.

Trial—the consumer's actual first purchase and use of the product or brand.

Adoption—through a favorable experience on the first trial, the consumer's repeated purchase and use of the product or brand.

coca cola example- communication

coca cola mostly reminds you or builds relationships (unless trying to get you to buy a new product)-Amazing brand awareness

Factors Affecting Promotional Mix

nature of the product, push/pull strategy, funds available, type of buying decision, target market characteristics, product life cycle-Depending on how much money we have to spend (what makes sense depending on product)personal selling is better for more expensive/complex things-Understanding customer to design effective communications-Make adjustments based on where product is in product life cycle

product life cycle

-introduction stage: providing information to consumers in an effort to promote awareness is the primary promotional objective; typically, all promotional mix elements are used-growth stage: the primary promotional objective is to persuade consumers to buy the product; advertising is used to communicate brand differences and personal selling is used to solidify the channel of distribution-maturity stage: advertising is used to remind buyers of the product's existence and sales promotions are used to maintain loyal buyers-decline stage: little money is spent on the promo. Mix

Control Continuum

from high to low control- advertising, sales promotion, personal selling, public relations, word of mouth-most likely use a combination

salespeople are

the critical link between the firm and its customer, the company in the customer's eyes, and Personal selling may play a dominant role in a firm's marketing program

public relations example

-Blogger that decides to write about itTV station, radio station, magazine-They create the story-from customers-Non-marketer controlled-More trustworthy-ex: Special events, lobbying efforts, and press conferences

word of mouth

least control over message-from customers-Non-marketer controlled-Most trustworthy

If create satisfying exchanges with customers

reduce likelihood of engaging in negative word of mouthHumans more likely to engage in negative word of mouth than positive

Reward them when they say good things about us (help engage in positive word of mouth)

push strategy

\-Manufacture is designing communication to wholesalers, retailers-Building relationships so channel members push their product to end customers

Ex: have sales competition to see who can sell more of their productEncourage to push out to customer

Ex: husbands friend created voodoo bureryWould go into restaurant and bars (channel of distributor)Train bartenders on his beers and their ingredients, what it pairs well withTrain them well so they can push product out to customers

\-pushing your brand in front of your potential customer or making it available to the general audience-Personal selling and sales promotion play major roles

pull strategy

\-Designing communications and sending to customer so their demand pull the product through distribution channel-Retailer wants it because customers are asking for itA wholesaler wants to carry it because retailers want it

Ex: all wanna make sure they have the newest iphone because they know people are gonna demand itEx: beer thing. Would go to beer events and give out samples and educate them on ingredients and proves so they'd remember it and ask stores for it (sales promotion and personal selling)

\-pull marketing involves putting in place and implementing strategies that automatically draw consumer interest to your products and services

feedback loop

consists of a response, the impact the message had on the receiver's knowledge/attitudes/beliefs, and feedback, the sender's interpretation of the response and indicates whether the message was decoded and understood as intended

why communication process is important

-As sender/source of message, we have an idea for a communication (encode/created in many ways)-We don't know how customers/receivers are going to interpret itShould pre test it before put in so we can see if they will interpret it like we intend it to be interpreted*Doesn't mean everyone who sees/hears it will interpret it exactly the same way

interpreting example

-Pepsi ad-interpreted it as pepsi helps make people stronger and brings them together*Allows them to be themselves*Is progressive

-Pepsi said the ad was to: get go, choose to act, follow out passion, and nothing holds back-The issue was not everybody interpreted it the way-Interpreted it that pepsi can solve all issues today, performative, misplaced (kendall jenner represented by giving cop a pepsi to make it go away)-Profit off of social injustice, use the movement but don't show how they'll improve the movement to help it-Which movement are they specifically talking abt?

-Issue is that their idea isn't how they can profit off of social injustice, they meant to talk about instances that people stand up and don't back down-Didn't do a good job encoding this message, didn't deliver this communication because not most people understood it this way-Quickly pulled it back down, accepted responsibility, and apologized to Kendall Jenner-Should've realized this design of a communication should have been designed better*Just because we create a communication, doesn't mean that's how customers will interpret it

promotional mix

The combination of one or more communication tools used to: (1) inform prospective buyers about the benefits of the product, (2) persuade them to try it, and (3) remind them later about the benefits they enjoyed by using the product

Communication Process and the Promotional Mix

-Shift from one-way communication to customer-controlled, customized, many-to-many communication-consumer generated media (created by end users)-paid media-earned media (content others create about you)-owned media(we have complete control)

Consumer generated media

-Social media makes it easier for consumers to connect with each other (have a bigger impact)-Consumers have more influence than they previously did-Used to be influenced by geographic area and was more constrained than it is now-Consumers can interact with each other more now

paid media

-advertising, personal selling, direct marketing, sales promotions-Companies creating advertising, paying for them to be placed in certain communication forms-Companies writing something about themselves and paying for someone to put them in newspaper