Marketing 3000 exam 3

Coverage (Channel) Width: the number of distributors offering the product or service

Channel Depth: the levels of warehouses/distributors/brokers between producer and consumer

Coverage Strategies

● Intensive Distribution: provides the widest coverage and offering as many outlets as

possible (gum and cigarettes)

○maximizing exposure and coverage, no sales effort

○products in supermarkets or convenience stores, vending machines

○Used for items involving routine buying decisions

○Important for low-priced items that are purchased frequently because customers

wants to minimize the effort involved with buying these items

● Selective Distribution: provide offering in selective (only some) outlets, restricting

distribution in a geographical area to intermediaries based on performance capability

(electronics, appliances, watches, moderately priced goods)

○Medium coverage and sales effort when there is need for it

○Need for salespeople to provide information and help sell the product

● Exclusive Distribution: using only one outlet in a geographical area, objective is to

maximize the “push” of a distributor (grand pianos, Ferraris)

○ Maximum sales effort at a point of purchase, minimum coverage

○Exclusive distributor gets all the sales for the product and they can sell the

consumers other products when they come to their store

● Global Distribution: necessary because of technology, economic development,

competition and converging lifestyles

Retailing: the sale and all activities directly related to the sale of goods and services to ultimate

consumers for personal, nonbusiness use

● Most retail establishments are small but there is a high degree of concentration (small

number of establishments account for substantial share of retail trade)

● Small retailers succeed by serving consumers who seek benefits that small store can

provide better than large stores (better service), forming a contractual vertical marketing

system

Retailer: a firm engaged primarily in retailing, anticipating customers wants and developing

product assortments, acquiring market information and financing

●Corporate chain: centrally owned and managed stores that carry similar products

●Independent: single unaffiliated store

●Contractual vertical marketing system: contract specifies how members will operate

○ Retail cooperative- small retailers establish and operate a wholesale warehouse

○ Voluntary chain- wholesalers contract with interested retailers to provide services

to them

○ Franchising- franchisor provides trademark and assistance in return to payments

from franchisees

○ Communication- marketing research and an increase in long-term sales

● Budgeting

○ All I can afford- percentage of profits

○ Percentage of sales- most popular, % of previous year’s sales or the forecasted

ones

○ Competitive parity- based on the competitors

○ Objective and task approach- sales and communication objections are set and

then advertising tasks to accomplish them are defined

● Selecting the media mix can be difficult because

○ Media fragmentation, increased clutter, critical-thinking consumers

● Mediums

○ Internet- timely, interactive, low cost, measurable (low attention, seen as

intrusive, short message life)

○ Outdoor- no competing clutter, flexible, repeat exposure, inexpensive (viewer

distractions, non selectivity of audience, creative limitations)

○ Magazines- color reproduction, pass-along readership, high attentions (long

closing periods, wasted circulation)

○ Radio- low cost, mass use, audience selectivity (low attention, listener

distractions, audio only, short life)

○ Television- sound and motion, attention getting (expensive, audience non

selectivity, short message life)

○ Direct mail- audience selectivity, personalization (high cost, low attention)

○ Newspapers- local coverage, flexible (non selectivity, short life, expensive)

Personal selling: two-way, personal communication (most expensive and most effective, used

in B2B)

●Pros- direct contact, message can be adapted for specific needs, direct feedback,

targeted to specific markets

●Cons- expensive, difficult to have a consistent and uniform message

● Relationship Selling

○ Transaction selling- customers are sold to and never contacted again

○ Relationship selling- the seller contacts the consumer after the purchase to

determine if they are satisfied or have future needs

○ Partnering- the seller works continually to improve its customers’ operations,

sales and profits

● Consultive selling- the process of helping the customer achieve strategic short and long

term goals through the use of the seller’s goods or services

○ Team leader coordinates information

○ Business consultant gives advice

○ Long-term ally creates win/win situation

● Customer Relationship Selling Process

○ Prospecting

○ Preapproach

○ Approach

○ Presentation

associations with product characteristics

○ Elicit proper brand imagery- (what do i think about you?) abstract associations

with brand intangibles (personality)

○ Create an active, loyal relationship with consumers- (what about you and me?)

brand resonance, sometimes hard to do, easier with big purchases

● Product-line Length

○ Line stretching

■ Trading up (upmarket)- adding a higher priced item to the line to attract a

higher-income market

■ Trading down (downmarket)- adding a lower-priced item to a line to

encourage purchases from people who can not afford the higher-priced

product

■ 2way- doing both

○ Line filling (filling line with competitive product)

○ Line modernization (upgrading line)

○ Line featuring and line pruning (getting rid of a product line)

● Warranty: terms of compensation if a product fails to perform, signal of quality

● Packaging

○ Functional value- protects contents and adds useful benefit (squeezable ketchup

bottle)

○ Attention getting- fresh start detergent in clear plastic bottle

○ Provide information- functional info, ideas and benefits (picture of completed

puzzle)

Sample Questions!!!!!!!!

1. Intensive distribution -> routine decision making

2. Extensive distribution -> expensive products

3. When product complexity and risk are extremely high, use personal selling

4. Which of the following is correct?

a. One key to ending brand leadership is brand proliferation

b. Creating brand resonance is part of the 4th step of building a strong brand

c. Sam’s Choice is one type of generic brand

d. One brand management challenge is asset leverage

e. Of all brands, sunny delight has highest brand equity

5. Which promotional tool has advantage of immediate feedback?

a. Personal selling

6. Which media has a disadvantage that it may be perceived as intrusive?

a. internet