Entrepreneurial Marketing Mix - Distribution (PDF)

# MARKETING MIX ## DISTRIBUTION(PLACE) - Distribution also known as place refers to the activities and strategies involved in delivering goods or services from the producer to the final consumer - It also refers to spreading products throughout a marketplace so consumers can purchase them in differe...

# MARKETING MIX ## DISTRIBUTION(PLACE) - Distribution also known as place refers to the activities and strategies involved in delivering goods or services from the producer to the final consumer - It also refers to spreading products throughout a marketplace so consumers can purchase them in different locations and serves as link between producers and consumers - Its primary objective is to efficiently store and handle the products and supply them in the best possible condition to consumers in different locations. ## PURPOSE - Transporting products - Ensure products reach customers at the right time, place, and quantity - Protecting products - Bridges the gap between production and consumption - Ensures efficient delivery and customer satisfaction - Cost reduction ## PROCESS OF DISTRIBUTION - **Production** - Products are created in factories. - **Warehousing** - Products are stored in a safe place until needed. - **Transportation** - Products are moved to other locations, like stores or delivery centers. Products are moved to other locations, like stores or delivery centers. - **Channel Selection** - Businesses decide the best way to sell, like through stores, online, or both. - **Retail/Delivery** - Products are sold to customers in stores or delivered to their homes. - **Feedback And Improvement** - Customer feedback is collected to make products and services better. ## INTERMEDIARIES - They assist in the flow of goods and services from producers to end-users; they include agents, wholesalers and retailers; marketing services agencies; physical distribution companies; and financial institutions - Referred to as middleman ## TYPES OF INTERMEDIARIES - **AGENTS AND BROKERS** - Both of these intermediaries sell products and services on a commission or percentage basis. - They are legally appointed to impart information about a product to the customers on behalf of the manufacturer or producer. - **WHOLESALERS AND RESELLERS** - They typically buy goods from the manufacturer in bulk and resell them to the retailers or other businesses. - They are independent businessmen and take ownership of the products purchased from the manufacturers or producers. - **DISTRIBUTORS** - The distributors are selected by the manufacturers to distribute their products to the wholesalers or resellers in different locations. - **RETAILERS** - are the mediators between wholesalers and customers. - They purchase different goods from the wholesalers and sell them to the ultimate customers in small quantities from one place. ## TYPES OF DISTRIBUTION STRATEGIES - **EXCLUSIVE DISTRIBUTION** - This option is defined as when a company grants another company or individual the sole right to sell, distribute, or resell its products or services in a defined territory. - **INTENSIVE DISTRIBUTION** - Involves making a product available in as many outlets as possible, aiming for maximum market exposure. - This approach is common for products that are frequently purchased on impulse, like snacks or candy. - **SELECTIVE DISTRIBUTION** - This option focuses on selling certain types of goods in a market to a network of retailers, resellers, or wholesalers. - Distributors take this approach as a middle road between intensive and exclusive forms of distribution. - **DIRECT DISTRIBUTION** - Refers to the strategy of selling products or services directly to consumers without the involvement of any third party. - Ability to offer a personal touch - Products or services more directly from the manufacturer or producer to the end consumer. - **DIGITAL DISTRIBUTION** - Refers to the process of delivering digital content, products, or services to consumers through online channels such as websites, social media platforms, email, mobile apps, and digital marketplaces. - It enables businesses to reach a global audience quickly and efficiently, without the need for physical distribution channels. ## DISTRIBUTION MIX - Is the combination of channels and distribution that an organization uses to make customers aware of the product or services and to deliver and sold its products to consumers - The strategic combination of various distribution channels and methods a company uses to reach its customers effectively. - It involves selecting and managing the optimal mix of direct and indirect channels ## DISTRIBUTION CHANNELS - Refers to the methods used by a company to deliver its products or services to the end consumer. - Refer to the means of communication between manufacturers and consumers, either directly or indirectly. ### EXAMPLE Consumer goods, pharmaceuticals, automotive, technology, fashion, food. ## FUNCTION OF DISTRIBUTION CHANNELS - The functions of distribution channels involve a range of activities and tasks that facilitate the efficient flow of products from the producer to the end consumer. - **INFORMATION** - Gathering and distributing market research. - One of the most important functions of the distribution channels that carries and transfers the information - **PROMOTION** - It is to develop and spread communication about offers. - **NEGOTIATION** - Negotiation is a key part of distribution channels, where manufacturers and retailers often bargain over trade terms. - **CONTACT** - Contact it involves finding and communicating with prospective buyers. - **FINANCING** - Refers to the process of providing funds to support intermediaries within the distribution channel - **RISK-TAKING** - The distribution channel isn't all about transporting. - Sometimes, distributors have to take risk of buying a company's product without knowing whether the product would sell or not. - **PHYSICAL DISTRIBUTION** - The process of moving and storing the goods from their point of origin to their final distribution channel. - **MATCHING** - Is to adjust the offer to suits a buyer's need including, grading, assembling and packaging. ## CLASSIFICATION OF DISTRIBUTION CHANNELS - **DIRECT DISTRIBUTION CHANNELS** - Is a direct to customer approach where the producers usually control all aspects of distribution. - **INDIRECT DISTRIBUTION CHANNELS** - Is a method which the company uses intermediaries in order to deliver the products or services to their consumers. - **HYBRID DISTRIBUTION CHANNELS** - Combine elements of both direct and indirect channels. - It involves a combination of selling products directly to consumers while also utilizing intermediaries to distribute and sell products on behalf of the producer. - **LEVELS OF DISTRIBUTION CHANNELS** - Distribution channels can operate at different levels, each representing a stage in the process of getting products from the producer to the end consumer. - Zero level channel, one level channel, two level channel, three level channel. - **DIAGNOSTIC DISTRIBUTION** - It is the proper matching of distributions of channels to the selling process - It helps manufacturers to identify what are the best ways to get their products to customers at the right place and time. - **EVALUATING DISTRIBUTIONS CHANNELS** - The right distribution channel can significantly impact a brand's image, market reach, costs, revenue, and customer satisfaction. - To optimize your distribution strategy, carefully evaluate various channel options and select the one that aligns with your brand's goals and ## EVALUATING DISTRIBUTION CHANNEL OPTIONS 1. Understanding market reach 2. Cost and efficiency 3. Channel flexibility 4. Partner relationships 5. Customer experience ## BACKWARD DISTRIBUTIONS CHANNELS - Also known as reverse distribution or reverse logistics channels. - The product is returned from the point of sale to the manufacturer or distributor for recovery, repair, recycling, or disposal. ## EXAMPLES OF REVERSE DISTRIBUTION - Product returns - Product disposal - Product recycling - Product refurbishment ## 3RS OF REVERSE LOGISTICS - Reduce - Recycling - Reuse ## TYPES OF REVERSE LOGISTICS - **GREEN REVERSE LOGISTICS** - The products return to go through a process of repair, recycling, or disposal in an environmentally friendly way before being sold again. - **REVERSE RETURN LOGISTICS** - The product is put back into stocks again to be sold again without needing to go through any additional process. - **GRAY DISTRIBUTION MARKET** - Refers to the trade of goods through channels that are unofficial or unauthorized by the original manufacturer or producer but are nonetheless legal - These goods are often referred to as gray market goods. - Means is distinct from the black market, which deals in illegal goods or services - **THE CHANNEL CONFLICT THEORY** - Explains that conflicts occur when multiple distribution channels exist for the same product, especially when these channels deviate from the manufacturer's preferred distribution strategy. - Gray market distribution arises as a direct consequence, - Loss of control over brand, price discrepancies and undercutting, disruption distribution network, and inconsistent product quality and warranty issues. - **ISSUES IN DISTRIBUTION ON GRAY MARKET** - Conflict with official sellers - Messed up pricing - Legal issues - Reduced profits - Brand damage - **DISTRIBTUION IN GLOBAL AND REGIONAL MARKETS** - Distribution in global and regional markets involves managing the movement of goods from producers to customers across diverse geographic areas. - Companies must adapt their strategies to account for varying customer needs, infrastructure, regulations, and competitive landscapes in different regions. ## GLOBAL MARKET DISTRIBUTION - A strategy to distribute goods or services across multiple countries or continents. - Adapts products or strategies to local preferences - Cultural Sensitivity: Understanding local buying behaviors and preferences. - Franchise or licensing models for localized distribution. ## CHANNEL MANAGEMENT THEORY - This group of scholars is well known for their work in distribution channel management. Their book, Marketing Channels (multiple editions), is one of the foundational texts on channel management, - Limited local distribution infrastructure, cultural barriers and consumer preferences, regulatory compliance, tariffs and trade barriers, and currency fluctuations and payment issues - **ISSUES IN GLOBAL DISTRIBTUION** - Supply chain, logistical challenges, regulatory compliance, cultural differences, and currency and economics risks ## REGIONAL MARKET DISTRIBUTION - A more focused approach targeting a specific geographic area, such as a continent, country, or group of neighboring countries. - Tailored strategies, proximity advantage, and regulatory focus - **CENTRAL PLACE THEORY** - It focuses on the spatial distribution of cities and their surrounding market areas. - Accesibility, building trust, higher distribution costs, limited retail outlets, limited data availability - **ISSUES IN REGIONAL DISTRIBUTION** - Differences in local regulations, competition from local businesses, uneven market demand, limited access to distribution channels, and currency exchange and payment system ## MARKETING MIX ## PROMOTIONAL MIX(LESSON 5) ## ADVERTISING - Advertising is an action or calling public attention and enables companies to bring their products and services in front of the public. - Advertising is a process by which a designated sponsor used paid announcements. - Advertising, the techniques and practices used to bring products, services, opinions, or causes to public notice for the purpose of persuading the public to respond in a certain way toward what is advertised. ## CHARACTERISTICS OF ADVERTISING - **PAID FORM** - Advertising requires the advertiser (also called sponsor) to pay to create an advertising message, buy advertising media slot, and monitor advertising efforts. ## TOOL FOR PROMOTION - Advertising is an element of the promotion mix of an organization. ## ONE WAY COMMUNICATION - Advertising is a one-way communication where brands communicate to the customers through different mediums. ## PERSONAL OR NON-PERSONAL: - Advertising can be non-personal as in the case of TV, radio, or newspaper advertisements, or highly personal as in the case of social media and other cookie-based advertisements. ## ADVERTISING CATEGORIES - **Above the line advertising** - Largely non targeted and have a wide reach. - **Below the line advertising** - Directed toward a specific target group. - **Through the line advertising** - Both ATL and BTL used. ## 5 TYPES BASED ON THE ADVERTISING MEDIUM USED. - Print advertising - Broadcast advertising - Outdoor advertising - Digital advertising - Product/Brand integration ## ADVERTISING OBJECTIVE - Are the strategic goals that steer a brand's advertising campaigns toward success. - These objectives, whether they focus on digital advertising, play an important role in determining how a brand communicates with its target audience. - They're not just about creating flashy banner ads or engaging digital ads: they're about crafting a message that resonates with potential and existing customers, driving brand building, and increasing brand awareness. - **To Inform**- Advertisements are used to increase brand awareness and brand exposure in the target market. - **To Persuade**- Persuading customers to perform a particular task is a prominent objective of advertising. - **To Remind**- Another objective of advertising is to reinforce the brand message and to reassure the existing and potential customers about the brand vision. 1. Introduced Brand/Product 2. Acquiring Customer 3. Create Awareness 4. Customer Retention 5. Brand Building 6. Differentiation & Value Creation 7. Create Desire ## ADVERTISING MIX - Also known as Promotional mix - A various of methods used to promote a company's products or services. - It's a subset of the marketing mix, and is also known as the promotional mix. - Advertising mix includes paid channels like television, radio, print, and the internet. ## SALES PROMOTION - Sales promotion is a marketing strategy in which a business uses a temporary campaign or offer to increase interest or demand for its product or service. - Based on (Kelwig, 2023) Sales promotion allow companies short-term revenue boosts through a wide variety of customer benefits. - Is a marketing strategy where a business will use short-term campaigns to spark interest and create demand for a product, service or other promotional offers. ## CHARACTERISTICS OF SALES PROMOTION - To induce customer for immediate buying or dealer effectiveness or both. - It involves all the promotional efforts other than advertising, personal selling, and publicity. - Sales Promotions are action-focused. - Are designed to impact consumer behavior directly. - Sales Promotions are designed to influence consumers or marketing intermediaries. ## TYPES OF PROMOTION - CONSUMER ORIENTED PROMOTION TOOLS - TRADE ORIENTED SALES PROMOTION ## CONSUMER ORIENTED PROMOTION TOOLS - **COUPON EXCHANGE** - A voucher entitling the holder to a discount for a particular product. - **SCHEME DISCOUNT** - On sales promotion is a temporary price reduction on a product or service to encourage customers to buy. - **PREMIUM OFFERS** - A technique in which two or more products are sold in one piece, as a bundle. - **PERSONALITY PROMOTIONS** - Helps to create stronger connections with existing and prospective customers by allowing businesses to create effective marketing campaigns that deliver content more likely to resonate with their target audience. - **INSTALLEMENT SALES** - Installment sales require the buyer to make regular payments—i.e., installments. ## TRADE ORIENTED SALES PROMOTION - **CASH BONUSES** - Any type of financial compensation given to an employee above and beyond their normal wage. - **CREDIT TERMS** - Return Credit Terms a credit to Distributor in an amount equal to the price paid by Distributor for Products less any price protection credits but not including any early payment. - **DEALER CONFERENCES** - Is a meeting where automotive dealers and other industry professionals gather to learn, network, and share strategies. - **DEALER TROPHIES** - Are awards given to retailers in recognition of their achievements. ## PUSH INCENTIVES - Compensation, usually in the form of money, offered to retail salespersons to push the sale of a particular product; also called spiffs. ## SALES PROMOTION PLAN: - Sales promotion plan is an activity or guide, outlining the specific marketing activities, tactics, and channels to promote a product, service, or brand. - It provides a roadmap for businesses to communicate effectively with their target audience, increase brand visibility, and achieve specific marketing objectives. - Promotion plans are devised by external specialist who are experienced on the assignment. ## 3 sales promotion theories 1. Push theory 2. Pull theory 3. Combination theory ## LIMITATIONS OF SALES PROMOTION - It typically cannot reverse a genuine declining sales trend. - Marketers cannot reasonably expect sales promotion to convert rejection of an inferior product into acceptance. - Sales promotion may even weaken the brand image. - Sales promotion has also been blamed for encouraging competitive retaliation. - Short-term volume gain at the sacrifice of profits. ## SALES PROMOTION EVALUATION - Sales promotions offer the customer extra value in return for purchases. - The success of their promotion based on the sales volume check for additional brand awareness or a better brand profile sales promotions for reasons that may affect their purchases before and after the promotion. ## MARKET PROFILE, PROMOTION OBJECTIVES, COMPETITIVE ACTIVITY AND BUDGET ## PUBLIC RELATION - Is "the set of techniques and strategies related to managing how information about an individual or company is disseminated to the public, and especially the media" - A renowned marketing author and professor. ## DIFFERENCE BETWEEN PUBLIC RELATION AND ADVERTISING - Advertising is a purchased or paid media, whereas public relations is an earned media. - Advertising is a one way communication while Public relation is a two way communication. - Advertising focuses on short-term goals such as sales promotion, while PR pursues long-term objectives such as a positive brand image. - In advertising, the placement of the ad is guaranteed, but there is no such guarantee of placement in case of public relations. - Credibility/ Believability ## COMPONENTS OF PUBLIC RELATIONS - **MEDIA RELATIONS** - The emphasis of forging a strong relationship with public media organizations. A media relations team often works directly with external media by directly delivering company news. - **PRODUCTION RELATION** - Is closely related to the direct operations of a company. - This department supports broad marketing plans and is often related to specific, one-time endeavors. - **INVESTOR RELATION** - Is the oversight of the relationship between the company and its investors. - This aspect of public relations handles investor events, over sees communication. - **INTERNAL RELATION** - Is the public relations branch between a company and its employees. - Internal relations pertain to counseling employees, ensuring all workers are satisfied. - **COMMUNITY RELATION** - Is public relations focused on brand and reputation within a specific community. - **CUSTOMER RELATION** - Is the bridge that connects the company and its customers. - Public relations often involves handling key relationships, conducting market research, understanding the priorities of its customers, and addressing major concerns. - **FINANCIAL RELATIONS** - Creating and maintaining investor confidence and building good relationships with the financial community. - Also known as investor relations or shareholder relations. - **INDUSTRY RELATIONS** - Relating with other firms in the industry of an organization and with trade associations.