Global Marketing Exam 4

Channel Distribution

An organized network of agencies and institutions that, in combination, perform all the activities required to link producer with users to accomplish the marketing task

What do marketing channels exist to create for customers

Utility

Place Utility

Availability of a product or service in a location that is convenient to a potential customer.

Ex. Coke can be purchased in Sydney Australia

Time Utility

Availability of a product or service when desired by a customer.

Ex. A NYC restaurant that serves food 24hrs

Form Utility

Availability of the product processed, prepared, in proper condition and/or ready to use

Ex. Chips that are not broken

Information Utility

Availability of answers to questions and general communication about useful product features and benefits

Ex. Virtual assistants from Singapore

Direct Distribution/Direct Involvement

The company establishes its own sales force or operates its own retail stores

Indirect Involvement

The company utilizes independent agents, distributors, and/or wholesalers called intermediaries

What does channel strategy have to do?

Must fit the company’s competitive position and marketing objectives within each national market

Golden Store

Stores that carry at least 40 P&G products with displays, promo materials through this program

Working with Channel Intermediaries

To choose channel partners

1. Select distributors

2. Look for distributors capable of developing marketing, rather than those with a few good customer contacts

3. Treat local distributors as long-term partners, not temporary marketing entry vehicles

4. Support market entry by committing money, managers, and proven marketing ideas

5. From the start, maintain control over marketing strategy

6. Make sure distributors provide you with detailed market and financial performance data

7. Build links among national distributors at the earliest opportunity

Intermediaries

They are implementing the company’s marketing strategy but are autonomous

They may maximize its profit rather than the manufacturer’s

Cherry Picking

Only focusing on products with known demand

Global Retailing

Any retailing activity that crosses national boundaries

Environmental factors that cause retailers to look outside the home country

Saturation in the home country market

Recession or other economic factors

Strict regulation on store development

High operating costs

Organic Growth

Culturally close/easy to enter.

Company sues its own resources to open a store on a greenfield site or acquire one or more existing retail facilities.

Franchise

Culturally distant/easy to enter.

Appropriate strategy when barriers to entry are low yet the market is culturally distant in terms of consumer behavior or retailing structures

Chain Acquisition

Culturally close/difficult to enter.

A market entry strategy that entails purchasing a company with multiple existing outlets in a foreign country

Joint Venture

Culturally distant/difficult to enter.

This strategy is advisable when culturally distant, difficult to enter markets are targeted

Channel of Distribution

From producer to consumer, and where the manufacturer’s marketing effort occurs

Value Chain

Broader and includes supply from raw materials to final consumers

Supply Chain

All the firms that perform support activities by generating raw materials, converting them into components or finished products, and making them available to customers

Upstream

removed from consumer

Downstream

Close to consumer

Physical Distribution and Logistics

The means by which products are made available to customers when and where they want them (place and time utility)

Logistics

The management process the integrates the activities of all companies to ensure an efficient flow of goods through the supply chain

Order Processing

Includes order entry in which the order is actually entered into a company’s information system; order handling, which involved locating, assembling, and moving products into distribution ; and order delivery. Order to payment cycle is key

Warehousing

Warehouses are used to store goods until they are sold

Distribution Centers

Designed to efficiently receive goods from suppliers and then fill orders for individual stores or customers

Inventory Management

Ensures that a company neither runs out of manufacturing components or finished goods nor incurs the expense and risk of carrying excessive stock of these items

Transportation

Method or mode a company should utilize when moving products through domestic and global channels; the most common modes of transportation are rail, truck, air, and water

What is a channel of distribution also known as?

Marketing Channel

If Australia is considered culturally close and easy to enter, which approach to retail expansion would make most sense?

Organic Growth

Which transportation mode ranks as the slowest in speed but lowest in cost?

Water

Integrated Marketing Communications (IMC)

A process that assures that all brand contacts. received by a customer work together to reinforce one another and are consistent over time enabling the company to reach its strategic goals

• Build brand which improves profit

Methods of Communication

Advertising

Digital and social

Mobile

Direct Marketing

Events and Experiences

Word of Mouth

Publicity and Public Relations

Personal Selling

Advertising

Any sponsored, paid message that is communicated in a non-personal way (paid media)

• One message

• Cheaper per contact

• Advertising may have halo effect (brand must be good if paying for ads)

• Less control

Global Advertising

The use of the same advertising appeals, messages, art, copy, photographs, stories, and video segments for worldwide suitability

• Economies of scale are enabled along with improved distribution channels- customers demand the brand and distributors want it too

Globalization and Product Cultures

The potential for effective global advertising increases where “product cultures” have emerged

• Products such as coffee and beer are true global products

Communication Process

Experts agree that the elements of effective communication do not vary from country to country

Difficulties to note regardless of location for communication

• The message may not get through to the intended recipient

• Message may not be understood, or misunderstood

• Message may not compel action

• Noise may interfere with messaging

Pattern Advertising

A middle ground between 100% standardization and 100% adaptation

A basic global communication concept for which copy, artwork, or other elements can be adapted as required for individual countries

In house Advertising Agencies

Allows greater control, superior brand knowledge, and lower cost

Outside Advertising Agencies

May be in international markets which allows for cultural understanding and localization

What is at the heart of advertising?

The message

Creative Strategy

A statement or concept of what a particular message or campaign will say

Big Idea

An idea that is so big that if offers opportunities for seemingly unlimited number of new executions (and works globally)

Legs (meaning)

It can go for a long time

Ex. Nike- Just do it

Rational Approach

Depends on logic and speaks to the consumer’s intellect; based on the consumer’s need for information; contains a great deal of copy

Emotional Approach

Tugs at the heartstrings or uses humor; evokes an emotional response that reinforces the brand attitudes and directs purchase behavior

Copy

The words that are spoken in broadcast advertising, or written in a print advertisement

• Should be short

• Avoid slang, common expressions, and acronyms

Global Media Decisions: Where to place the ads

Print such newspapers and magazines

Electronic media like TV, radio, and the internet

Other such as outdoor or direct mail

Know country specific regulations and characteristics of the individual countries

Public Relations (PR)

A strategic communication process that builds mutually beneficial relationships between organizations and their publics. Inside and outside the firm

Publicity

Communication about the company or product for which the company does not pay (earned media)

Image Advertising

Enhances the public’s perception, creates goodwill

Advocacy Advertising

Presents the company’s point of view on a particular social, environmental, or cultural issue

_____ is a process that assures that all brand contacts received by a customer work together to reinforce one another and are consistent over time enabling the company to reach its strategic goals

Integrated Marketing Communications (IMC)

“Open a Coke. Open Happiness” is an example of a/an _____ appeal

Emotional

When Unilever issues a press release hoping that the local newspaper will pick up the story and write about it in the evening news, they are seeking _______

Publicity

Sales Promotion

Any paid consumer or trade communication program of limited duration that adds tangible value to a product or brand

• A collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumer or the trade

Advantages of Sales Promotion

Offers incentive to buy

Reduces the perceived risk associated with purchasing a product

Provides a method of collecting additional data for the database

Consumer Sales Promotions

Aimed at consumers to raise awareness, encourage trial, or increase demand

Price Promotion- Consumer Sales Promo

Sales price reduction, coupon, mail-in rebates

Non-price Promotion- Consumer Sales Promo

Fee samples, free gifts, sweepstakes, contests

Trade Sales Promotion

Aimed at intermediaries in the channel of distribution to encourage them to carry the brand, stock heavier, promote the brand

Price Promotion- Trade Sales Promo

Price discount off list price, extended payment terms, allowance

Nonprice Promotion- Trade Sales Promo

Free goods

Sampling

Provides consumer with opportunity to try product at no cost

Examples of Sampling

May be distributed in stores, in mail, at events, or door to door

Advantages of Sampling

More likely to result in actual trials of the product, especially important if consumers are not persuaded by claims made in advertising

Disadvantages of Sampling

Cost

• Average cost per sample ranges from $0.10- $.50

Difficult for marketing managers to assess the ROI

On-pack Coupons

Are on the package and can be redeemed at checkout

In-pack Coupons

Are inside a package for later use

Cross Coupons

Are distributed with one product but redeemable for another (toothpaste and toothbrush)

Sales Promotion: Issues and Problems

Fraud

Regulations vary by country; highly regulated in Europe; Popular in Scandinavia where broadcast ads are highly regulated

Cultural dispositions to coupons and other sales promotions

Personal Selling

Person to person communication between a company representative and a prospective buyer

• crucial issues is whether to use a direct sales force in country sales or a remote force stationed in the home country

Expatriates

Employees who are sent from their respective home country to work abroad

Advantages to using in country nationals

Market understanding and cheaper to employ

Disadvantages to using in country nationals

Work style, less control

Advantages to Expatriates

Product and company knowledge. motivated by the personal gain from working abroad (promotable)

Disadvantages to Expatriates

Ethnocentric and cost for the firm

Direct Marketing

Any communication with a consumer or business recipient that is designed to generate a response in the form of an order, request for further information, a visit to a store or other place of business

Out of home (OOH)

Includes transit and billboard

Event Sponsorship

A company pays a fee to be associated with an event, team or athletic association, or sports facility

Product Placement

Arranging to have the company’s products and brand names appear in TV shows, movies, and other types of entertainment

• marketers also lend or donate celebrities and other public figures

Digital Revolution

Has been evolving for 85 years

E-Commerce

The general exchange of goods and services using the internet or a similar online network as a marketing channel

Promotion Sites

Provide marketing communications about a company’s goods/services but don’t try to sell

Content Sites

News and entertainment; support PR

Transaction Sites

Online retail operations that allow customers to purchase goods and services- Amazon and Walmart

Click Through Rates

The percentage of users who click on an advertisement that has been presented

Search Engine Optimization (SEO)

Using the best words (keywords) that the search engine will pick up on and then rank the website higher in an organic search

Search Engine Marketing (SEM)

Paying to have the brand displayed at the top of a search result

Cybersquatting

Registering a domain name with the intent to resell it to the company when they enter that market

Website Design

1. Register a country specific domain name

2. Arranging Payment

3. Localizing sites-reflect local culture, language, aesthetics

4. Addressing privacy issues-EU laws more stringent

5. Setting up distribution

Broadband

A communication system that has sufficient capacity to carry multiple voice, data, or video channels simultaneously

Bandwidth

Determines the range of frequencies that can pass over a transmission channel

What country has the world’s fastest internet speeds?

South Korea

M-commerce

Involves the use of cell phones as channels for delivering advertising messages and enabling purchases of products and services

Global Positioning System (GPS)

Allows phone to register user’s exact geographic position

• Enabling location based advertising