Week 15 Marketing - Place Development, Distribution & Channel Systems Lesson Files

9/3/2019
Business Fundamentals for

Analytics
Marketing
Michael Buchanan
Lecturer
Scheller College of Business
Place Development, Distribution &

Channel Systems
1
Lesson Objectives
• Discuss place objectives

• Evaluate channel systems
• Discuss physical distribution/logistics
• Evaluate retailer and wholesaler
considerations
1
9/3/2019
Marketing Strategy Planning Decisions for Place
Place and
Development of
Channel Systems
Place Direct vs. Channel Channel Market

objectives indirect specialists relationships exposure
Place Decisions Are Guided by “Ideal” Place

Objectives
Key Issues
Product classes
Place system may
suggest place
Place decisions be complex
objectives
have long-run
effects
2
9/3/2019
Channel System May Be Direct or Indirect
Direct Channels Are

Common with Business
Customers and Services
3
9/3/2019
When Indirect
Channels Are Best
Channel Specialists Adjust Discrepancies in

Quantity or Assortment with Regrouping Activities
4
9/3/2019
The Best Channel System Should Achieve Ideal

Market Exposure
10
5
9/3/2019
Channel Systems Can Be Complex
11
12
6
9/3/2019

Analytics
Marketing
Michael Buchanan
Lecturer
Physical Distribution and Customer

Service
13
The Role of Logistics and Physical Distribution

Customer Service in Marketing Strategy
Distribution
Customer Service &
Logistics
Logistics customer Transporting Storing

service • Transportation modes • Storage & strategy planning
• No brand
What is it? other than • Benefits and limitations • Inventory costs
• identification
Level to offer with the • Storage facilities
• Cost contents • Distribution centers
• JIT and EDI
14
7
9/3/2019
Physical Distribution Service Levels
15
Trade-Offs among Physical Distribution Costs,

Customer Service Level, and Sales
16
8
9/3/2019
Benefits and Limitations of Different Transport

Modes
Transporting Features
Ability to
Handle a Frequency of Dependability in
Delivery Number of Variety of Scheduled Meeting
Mode Cost Speed Locations Served Goods Shipments Schedules
Truck High Fast Very extensive High High High
Rail Medium Average Extensive High Low Medium
Water Very low Very slow Limited Very high Very low Medium
Air Very high Very fast Extensive Limited High High
Pipeline Low Slow Very limited Very limited Medium High
17
A Cost Comparison of Alternative Systems
18
9
9/3/2019
The Storing Function and Marketing Strategy
19
20
10
9/3/2019

Analytics
Marketing
Michael Buchanan
Lecturer
Retailer and Wholesaler

Considerations
21
Marketing Strategy Planning for Retailers and

Wholesalers
Retailers, Wholesalers &

Their Strategy Planning
Strategy planning Strategy planning

Nature of retailing
for retailers for wholesalers
22
11
9/3/2019
Planning a Retailer’s Strategy
23
Retailer Offerings
24
12
9/3/2019
Retailing on the Internet
25
Retailing Types are Explained by Consumer Needs
26
13
9/3/2019
Types of Wholesalers
27
28
14
9/3/2019

Analytics
Marketing
Michael Buchanan
Lecturer
Pricing Objectives and Policies
29
Lesson Objectives
• Discuss price dimensions

• Evaluate pricing objectives and policies
• Evaluate price setting models
• Discuss demand estimation
30
15
9/3/2019
Pricing Objectives and Policies & Price Setting
Pricing
Pricing objectives
Price Setting
& Pricing policies
31
Price Dimensions
32
16
9/3/2019
Objectives Should Guide Strategy Planning for

Price
33

Price
34
17
9/3/2019

Price
35
Establishing Pricing Policies
36
18
9/3/2019
Skimming vs. Penetration Pricing Policies
37
Discount Policies: Reductions from List Prices
Quantity
Seasonal
Cash 2/10 net 30
Trade
Sale
38
19
9/3/2019
39

Analytics
Marketing
Michael Buchanan
Lecturer
Price Setting
40
20
9/3/2019
Price Setting
41
Markup Pricing
42
21
9/3/2019
High Markups
Don’t Always
Mean Big Total Profits
43
Average Cost Pricing
44
22
9/3/2019
Marketing Manager Must Consider Various Kinds

of Costs Total Fixed Cost
Total Variable Cost
Total Cost
Average Unit Cost
Average Fixed Cost
Average Variable Cost
45
Cost Relationships
46
23
9/3/2019
Break-Even Analysis Can Evaluate Possible Prices
47
Marginal Analysis
48
24
9/3/2019
Profit Maximization with Total Revenue and Total

Cost Curves
Quantity
49
Demand Estimation
Substitute
Ease of Comparison
Who Pays
Total Expenditure
End Benefits
Switching Costs
50
25
9/3/2019
Bid Pricing & Negotiated Pricing
New Prices for Every Job
Ethical Issues
Consider Demand
Negotiated Prices
51
52
26
9/3/2019

Analytics
Marketing
Michael Buchanan
Lecturer
Promotion
53
Lesson Objectives
• Discuss promotion methods and goals

• Assess the adoption process’s impact on
promotion
• Discuss how personal selling and
customer service affect promotion
• Evaluate opportunities for advertising,
publicity and sales promotion
54
27
9/3/2019
Promotion & Marketing Strategy Planning
Promotion Intro. to
Integrated Marketing
Communications
Promotion Managing Promotion

Product Planning
Methods Promotion Budgeting
55
Promotion Methods
Personal Selling
Mass Selling
Advertising Publicity
Different Methods of
Promotion
Sales Promotion
56
28
9/3/2019
Which Method to Use Depends on Promotion

Objectives
Informing
Persuading
Reminding
57
Promotion Objectives Relate to the Adoption

Process and AIDA Model
58
29
9/3/2019
Sales Promotion Tries to Spark Immediate Interest
59
60
30
9/3/2019
61
Push Marketing & Pull Marketing

Producer’s promotion blend
Personal selling, sales promotion, advertising,
and publicity
Promotion to
channel members
Wholesalers’ Wholesalers’
promotion promotion
Promotion push push Promotion
to business to final
customers customers
Retailers’
promotion
push
Business Final
customers consumers
request (pull) request (pull)
product product
62
31
9/3/2019
An Example of Pulling
63
Adoption Processes Can Guide Promotion Planning
64
32
9/3/2019
Promotion Varies Over the Life Cycle
65
Setting the Promotion Budget
Percentage of Sales
Task Method
66
33
9/3/2019
67

Analytics
Marketing
Michael Buchanan
Lecturer
Personal Selling and Customer

Service
68
34
9/3/2019
Strategy Planning and Personal Selling
Personal Selling and

Customer Service
Importance of Personal Selling Personal Selling

Strategy Decisions
Personal Selling Tasks Process
69
The Importance and Role of Personal Selling
Helping to buy is smart selling
Salespeople represent whole

company & customers
Sales force provides market

information
Salespeople can be strategy

planners
Personal Selling
is Important
70
35
9/3/2019
Supporting Sales Force Informs and Promotes in

the Channel
Missionary Salespeople
Technical Specialists
Customer Service Reps
71
The Right Structure Helps Assign Responsibility

Different Markets, Different
Tasks
Major Accounts Sales Force
Telemarketing
Sales Territories
Sales Force Size and

Workload
Team Selling
72
36
9/3/2019
Combining Technology with Personal Selling
73
Key Steps in the Personal Selling Process
74
37
9/3/2019
75

Analytics
Marketing
Michael Buchanan
Lecturer
Advertising, Publicity and Sales

Promotion
76
38
9/3/2019
Advertising, Publicity and Sales Promotion
Advertising, Publicity &

Sales Promotion
Advertising Publicity & Sales

Advertising Channel
Strategy Communication Promotion
Spending Analysis
Decisions Tactics Decisions
77
Media Advertising Spending in the United States
Source: https://www.statista.com/statistics/272314/advertising-spending-in-the-us/
78
39
9/3/2019
Advertising Spending as Percent of Sales for

Specific Product Categories
PRODUCERS
79
Retail Ad Spending
RETAILERS
80
40
9/3/2019
Setting Ad Objectives Is a Strategy Decision

Position Brands
Introduce New Products
Obtain Outlets
Ongoing Contact
Support Sales Force
Get Immediate Action
Maintain Relationships
81
Objectives Guide Implementation
82
41
9/3/2019
Objectives Determine the Types of Advertising
83
Reminder Advertising Reinforces a Favorable

Relationship
84
42
9/3/2019
Choosing the “Best” Medium – How To Deliver the

Message
Promotion Objectives
Target Market Characteristics
Funds Available
Nature of the Media
85
Source: https://www.marketingcharts.com/featured-104785/attachment/pwc-us-ad-market-sizes-2018-2022-june2018
86
43
9/3/2019
Traditional Advertising Channels
87
Digital Marketing / Advertising

Data
Organic & Paid Search
Display Advertising
Social Media & Influencer

Marketing
Mobile
Video
Email
88
44
9/3/2019
Analytics
89
Measuring Advertising Effectiveness - Attribution
Consider the Total Mix
Research and Testing May

Improve Odds
Hindsight May Lead to Foresight
90
45
9/3/2019
Types of Publicity and Different Communication

Tactics
91
Sales Promotion Stimulates Change
92
46
9/3/2019
Problems in Managing Sales Promotion
Erodes Brand Loyalty
Need for Alternatives
Hard to Manage
Lessons Learned
93
94
47

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9/3/2019

Business Fundamentals for

Place Development, Distribution &

• Discuss place objectives

Marketing Strategy Planning Decisions for Place

Place Direct vs. Channel Channel Market

Place Decisions Are Guided by “Ideal” Place

Channel System May Be Direct or Indirect

Direct Channels Are

Channel Specialists Adjust Discrepancies in

The Best Channel System Should Achieve Ideal

Channel Systems Can Be Complex

Business Fundamentals for

Physical Distribution and Customer

The Role of Logistics and Physical Distribution

Logistics customer Transporting Storing

Physical Distribution Service Levels

Trade-Offs among Physical Distribution Costs,

Benefits and Limitations of Different Transport

Rail Medium Average Extensive High Low Medium

Air Very high Very fast Extensive Limited High High

Pipeline Low Slow Very limited Very limited Medium High

A Cost Comparison of Alternative Systems

The Storing Function and Marketing Strategy

Business Fundamentals for

Retailer and Wholesaler

Marketing Strategy Planning for Retailers and

Retailers, Wholesalers &

Strategy planning Strategy planning

Planning a Retailer’s Strategy

Retailing on the Internet

Retailing Types are Explained by Consumer Needs

Business Fundamentals for

Pricing Objectives and Policies

• Discuss price dimensions

Pricing Objectives and Policies & Price Setting

Objectives Should Guide Strategy Planning for

Objectives Should Guide Strategy Planning for

Objectives Should Guide Strategy Planning for

Establishing Pricing Policies

Skimming vs. Penetration Pricing Policies

Discount Policies: Reductions from List Prices

Cash 2/10 net 30

Business Fundamentals for

Average Cost Pricing

Marketing Manager Must Consider Various Kinds

Total Variable Cost

Average Unit Cost

Average Fixed Cost

Average Variable Cost

Break-Even Analysis Can Evaluate Possible Prices

Profit Maximization with Total Revenue and Total

Bid Pricing & Negotiated Pricing

New Prices for Every Job

Business Fundamentals for

• Discuss promotion methods and goals

Promotion & Marketing Strategy Planning

Promotion Managing Promotion

Which Method to Use Depends on Promotion

Promotion Objectives Relate to the Adoption

Sales Promotion Tries to Spark Immediate Interest

Sales Promotion Tries to Spark Immediate Interest

Sales Promotion Tries to Spark Immediate Interest