1ZEUA0 New Product Marketing - Session 9 2024 PDF

1ZEUA0 New Product Marketing New Product Development and Marketing USE Line Session 9 – 2024 P of place Marketing Planning Process Business mission Marketing audit INTERNAL EXTERNAL - Operating result...

1ZEUA0 New Product Marketing New Product Development and Marketing USE Line Session 9 – 2024 P of place Marketing Planning Process Business mission Marketing audit INTERNAL EXTERNAL - Operating results - Environmental scanning - Marketing mix effectiveness - Consumer behavior - Human resources - Competitor analysis - Information systems SWOT analysis Marketing objectives New / existing product Invest / Continue / Divest Select target market and positioning Decisions in marketing mix Implement and monitor 2 Marketing Mix 3 Place ‘The point where products are made available to customers’ 4 Place Decisions concerning place Distribution − Distribution channel − Key distribution channel strategy decisions − Channel length and width − Channel integration − Distribution analysis Location − Multi-format retailing − Location-based marketing 5 Distribution Channel “Distribution channels can be viewed as sets of independent organizations involved in the process of making a product or service available for consumption” (Stern, Ansary, & Coughlan, 1996) Availability Quantitative (e.g., number of sale outlets) Qualitative (e.g., retailer support) 6 Distribution Channel Length Manufacturer/Producer Agent Wholesaler Wholesaler Retailer Retailer Retailer Consumer 7 Distribution Channel Width Exclusive distribution Restrict sale of the product to one outlet per geographical area − Specialty goods Netherlands: 2 dealerships USA: 36 dealerships (7 in California) 8 Distribution Channel Width Selective distribution Restrict sale of the product to a limited number of outlets − Shopping goods (specialty goods) Netherlands: 18 boutiques 9 Distribution Channel Width Intensive distribution Obtain maximum exposure at the retail level by saturating every suitable retail outlet with the brand − Convenience goods Netherlands: 243 restaurants USA: 14,155 restaurants 10 Distribution Analysis General metrics Market share Turnover share Distribution metrics Numeric distribution Weighted distribution Selection indicator 11 Distribution Metrics - Total sales of category X to which brand A belongs - #potential sales outlets - Total sales of category X of the shops that carry brand A - Number of shops that carry brand A - Total sales brand A 12 Numeric Distribution (ND) # Shops that sell brand A x 100% # Shops that sell product category X 13 Weighted Distribution (WD) Category X turnover of shops selling brand A x 100% Total market turnover in category X 14 Selection Indicator (SI) Average turnover of product category X of shops that sell brand A x 100% Average turnover of product category X Weighted Distribution (WD) Numeric Distribution (ND) 15 Turnover Share (TS) Turnover brand A x 100% Category X turnover of shops selling brand A 16 Market Share (MS) Turnover brand A x 100% Turnover of shops that sell product category X MS = WD x TS MS = ND x SI x TS 17 Example You are marketing manager at Elmex. You have the following information about the toothpaste market. The average price of a tube of Elmex toothpaste is €3.00. The average market price is €2.50. Each year, 48 million tubes of toothpaste are being sold in the Netherlands (30 million via supermarkets, 18 million via drugstores). In the Netherlands 8,000 supermarkets and 4,000 drugstores are active. Elmex is sold at 6,000 supermarkets and 3,000 drugstores. Elmex sells 3 millions of tubes each year (of which 1 million via drugstores). The supermarkets that carry Elmex in their assortment sell 25 millions of toothpaste each year. The drugstores that carry Elmex in their assortment have a yearly turnover of €35 million in the toothpaste category. Conduct a distribution analysis for Elmex. 18 Numeric Distribution (ND) # Shops that sell brand A x 100% # Shops that sell product category X In the Netherlands 8,000 supermarkets and 4,000 drugstores are active. Elmex is sold at 6,000 supermarkets and 3,000 drugstores. 6,000 x 100% = 75% 8,000 19 Weighted Distribution (WD) Category X turnover of shops selling brand A x 100% Total market turnover in category X The average market price is €2.50. Each year, 48 million tubes of toothpaste are being sold in the Netherlands (30 million via supermarkets, 18 million via drugstores). The supermarkets that carry Elmex in their assortment sell 25 millions of toothpaste each year. 25 x €2,50 x 100% = 83.3% 30 x €2.50 20 Selection Indicator (SI) Weighted Distribution (WD) Numeric Distribution (ND) 83.3 = 1.11 75 21 Turnover Share (TS) Turnover brand A x 100% Category X turnover of shops selling brand A The average price of a tube of Elmex toothpaste is €3.00. The average market price of toothpaste is €2.50. Elmex sells 3 millions of tubes each year (of which 1 million via drugstores). The supermarkets that carry Elmex in their assortment sell 25 millions of toothpaste each year. 2 x €3.00 x 100% = 9.6% 25 x €2.50 22 Market Share (MS) Turnover brand A x 100% Turnover of shops that sell product category X The average price of a tube of Elmex toothpaste is €3.00. The average market price of toothpaste is €2.50. Each year, 48 million tubes of toothpaste are being sold in the Netherlands (30 million via supermarkets, 18 million via drugstores). Elmex sells 3 millions of tubes each year (of which 1 million via drugstores). 2 x €3.00 x 100% = 8% 30 x €2.50 MS = WD x TS = 83.3% x 9.6% = 8% 23 Distribution Metrics - Supermarkets Numeric distribution (6,000/8,000)*100% = 75% Weighted distribution ((25*2.5)/(30*2.5))*100% = 83.3% Selection indicator WD/ND = 83.3/75 = 1.11 Turnover share ((2*3)/(25*2.5))*100% = 9.6% Market share ((2*3)/(30*2.5))*100% = 8% WD*TS = 83.3*9.6 = 8% 24 Distribution Metrics - Drugstores Numeric distribution (3,000/4,000)*100% = 75% Weighted distribution (35/(18*2.5))*100% = 77.7% Selection indicator WD/ND = 77.7/75 = 1.04 Turnover share ((1*3)/35)*100% = 8.6% Market share ((1*3)/(18*2.5))*100% = 6.7% WD*TS = 77.7*8.6 = 6.7% 25 Multi-Format Retailing The use of different stores (formats) next to regular store Walmart US Tesco UK 4000 1800 3500 1600 3000 1400 2500 1200 2000 1000 1500 800 1000 600 400 500 200 0 1998 2002 2014 0 1999 2002 2014 Discount stores Supercenters Extra's Superstore/Compact Express Neighborhood markets 26 Multi-Format Retailing 70 supermarkets 849 supermarkets 35 supermarkets < 200 m2 > 2500 m2 Many snack products Non-food products 27 Reasons Multi-Format Retailing “Multiple formats are of crucial importance to maximize retailer profitability” (Peterson & Balasubramanian, 2002) “Retailers should offer a pallet of diversity to satisfy specific consumer shopping needs at specific moments and locations” (Preddy, 2002) 28 Reasons Multi-Format Retailing Increase customer base Efficient market coverage of local needs Increase customer loyalty Larger share of wallet Marry the consumer to the chain! 29 Implications Multi-Format Retailing Different consumers with different shopping goals AH to go AH supermarket AH XL Major trip 0% 6% 30% Fill-in trip 25% 84% 66% Snack trip 75% 10% 4% Different consumers with different shopping durations AH to go AH supermarket AH XL Minutes in store 3.02 9.34 22.58 30 Implications Multi-Format Retailing Different consumers with different shopping basket AH to go AH supermarket AH XL Ticket amount €3.30 €15.89 €42.95 # Items 2.09 10.14 23.80 # Categories 1.71 5.53 8.94 Different consumers with different price perceptions “I’d sooner not eat than buy my stuff in such an absurdly expensive supermarket.” “The store is very convenient for travelers as it has a large assortment and is not more expensive than other places at the railway station.” 31 Implications Multi-Format Retailing Shopping goals have impact on expectations and evaluations Implications for Price Assortment Store layout Location … 32 Location-Based Marketing ‘Where’ is the key of how, why, when, and who! Decisions of site planning, restructuring, merchandising, and communication are led by understanding the local market situation What is the best location? How many people will pass your store? What other stores are nearby? What are the available facilities? … 33 Location, Location, Location Near the High-traffic entrance? Eye-level? location? …? Complementary products? Kids’ eye- Number of level? facings? Center of the aisle? 34 Psychology of ‘location’ Shopping trick to get you buy more https://www.youtube.com/watch?v=M4h6VESyP3s 35 Future of shopping Hyperreality of shopping https://www.youtube.com/watch?v=YJg02ivYzSs 36 Store atmospherics 37 Store atmospherics 38 Store atmospherics 39 Recap of this lecture What did you learn? 40 Questions? 41