Summary Marketing Fundamentals PDF

Examen samenvatting Marketing fundamentals (Vanaf ppt 1 dia 46) (PPT1) Marketing process: creating and capturing customer value Understand the marketplace and customer needs and wants Op papier Design a customer-driven marketing strategy Marketing management is the art of choosin...

Examen samenvatting Marketing fundamentals (Vanaf ppt 1 dia 46) (PPT1) Marketing process: creating and capturing customer value Understand the marketplace and customer needs and wants Op papier Design a customer-driven marketing strategy Marketing management is the art of choosing target and building profitable relationships with them. What customers will we serve (target market)? How can we best serve customers (value proposition)? --> a brands value proposition is the set of benefits or values it promises to deliver to customers to satisfy their needs. --> how it will serve targeted customers, how it will differentiate and position itself. ( value proposition is not a slogan or a catch phrase, neither it is a positioning statement. ) ______________________ ❑ Product concept: consumer will favor products that are available and highly affordable  ❑ Production concept: consumers favor products that offer the most quality, performance and features ❑ Selling concept: consumers will not buy enough of the firm’s products unless the firm undertakes a large-scale selling promotion effort ❑ Marketing concept: know the needs and wants of the target markets and deliver the desired satisfactions better than competitors. ❑ Selling and marketing concept: afbeelding op ppt1 dia 53 ❑ Societal marketing concept: companies should balance three considerations in setting their marketing strategies (company profits, consumer wants, society’s interests) Construct an integrated marketing programme that delivers superior value The marketing program builds customer relationships by transforming the marketing strategy into action. It consists of the firm’s marketing mix, a set of marketing tools known as 4 p’s − Product − Price − Promotion − Place − Personal sales --> integrated marketing program: a comprehensive plan that communicates and delivers the intended value Build profitable relationships and create customer delight ❑ Customer relationship management = the overall process of building and maintaining customer relationships by delivering superior customer value and satisfaction ❑ -Customer engagement marketing = fosters direct and continuous customer involvement in shaping brand conversations, experiences and community From marketing by “intrusion” towards marketing by “attraction” The old marketing involved marketing to consumers, the new marketing is customer –engagement marketing  ❑ -Consumer-generated marketing Brand exchanges created by consumers themselves Consumers are playing an increasing role in shaping brand experience ❑ -partner relationship management = involves working closely together with partners in other company departments and outside the company to bring greater value to customers jointly Every single person in a company must understand marketing and be customer focused Complete value chain is involved, supply chain management. The last mile, satisfaction Capture value from customers to create profits and customer equity Final step involves capturing value in return, in the form of, - Sales - Market share - Profits By creating superior customer value, the firm creates satisfied customers who stay loyal and buy more --> creating customer value _____________________ Creating customer loyalty and retention Customer lifetime value = the value of the entire stream of purchases that the customer would make over a lifetime of patronage Growing share of customer and building customer equity Share of customer = the portion of customer’s purchasing that a company gets in its product categories Customer equity = total combined customer lifetime values of all the company’s customers ______________________ Voorbeeld: (FANTA) Strangers: low consumption of soft drink & no preference for Fanta Butterflies: high consumption of soft drinks, but not always choose for fanta True friends: high consumption of soft drinks & fanta is first choice Barnacles: low consumption of soft drinks, but always fanta ______________________ The changing Marketing Landscape - Post-corona reality - The changing economic environment - Not-for profit marketing growth - Rapid globalization - Sustainable marketing - Digital and social media marketing - Marketing in the moments - One golden hour, one golden minute - Mobile marketing (PPT2) company-wide strategic planning Strategic planning =the process of developping and maintaining a strategic fit between the organization’s goals and capabilities, and its changing marketing opportunities ______________________ (nike) Vision statement = to remain the most authentic, connected, and distinctive brand (nike) Values - Inspiration - Innovation - Every athlete in the world - Authentic  - Connected - Distinctive Mission statement = organization’s purpose, what it wants to accomplish in the larger environment Market oriented mission statement = defines the business in terms of satisfying basic customer needs ______________________ Designing the business portfolio Business portfolio = the collection of businesses and products that make up the company Portfolio analysis = a major activity in strategic planning whereby management evaluates the product and businesses that make the company (Company division, product line Whitin a division, single product or brand --> can be strategic business units) ______________________ Market share Developing strategies for growth and downsizing Business portfolio Growth: - Market penetration: marketing mix improvement (new features in mobile app) - Merket development: new demographic/geographical markets - Product development: offering new or modified products to current markets - Diversification: starting up or buying business outside its current products and markets Downsizing - When businesses are unprofitable or that no longer fit to their overall strategy - Weak businesses usually require a disproportionate amount of management attention - Managers should focus on promising growth opportunities Partnering to build customer relations Partnering with company departments Value chain is a series of departments that carry out value creating activities to design, produce, market, deliver and support a firm’s products. The value chain: Walmart’s ability to help you “Save Money. Live better” by offering the right products at lower prices depends on the contribution of people in all of the company’s departments. Partnering with others in the marketing system Value delivery network is made up of a company, suppliers, distributors, and ultimately customers who partner with each other to improve performance of the entire system. Company and Marketing Strategy Marketing strategy and marketing mix Market segmentation = division of a market into distinct groups of buyers who have different needs, characteristics or behaviours and who might require separate products or marketing mixes Market segment = group of consumers who respond in a similar way to a given set of marketing efforts Market targeting = is the process of evaluating each market segment’s attractiveness and selecting one or more segments to enter Market positioning = is the arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers Differentiation = begins the positioning process Managing the marketing effort (ppt3) Analysing the market environment Includes the actors and forces outside marketing that effect marketing management’s ability to build and maintain successful relationships with target customers. Marketeers must be environmental trend trackers and opportunity seekers. Describe the environmental forces that affect the company’s ability to serve its customers Micro-environment = consists of the actors close to the company that affect its ability to serve its customers (the company, suppliers, marketing intermediaries, cs markets, competitors and publics) Macro-environment = consists of the larger societal forces that affect the microenvironment (demographic, economic, natural, technological, political and cultural forces) ______________________ ❑ The company --> in designing marketing plans, marketing management takes other company groups into account (top management, finance, r&d, purchasing, operations, HR, acounting) ❑ Suppliers --> provide the resources to produce goods and services. Treat as partners to provide customer value ❑ Marketing intermediaries --> firms that help the company, sell and distribute its goods to final buyers (resellers, distribution firms, marketing service agencies, financial intermediaries) Partnering with intermediaries: bv. Apple; apple provides its retail partners with much more than phones and smartwatches. It also pledges technical support ______________________ Competitors --> firm must gain strategic advantage by positioning their offerings strongly against competitors’ offerings Publics --> Any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives: Financial, Media, Government, Citizen-action, Local, General, Internal Demographic, economic, natural, technological, political, cultural Explain how changes in the demographic and economic environments affect marketing decisions ❑ The demographic environment involves people, and people make up markets Demography = the study of human populations – size, density, location, age, gender, race, occupation and other statistics Demographic trends = include changing age and family structures, geographic population shifts, educational characteristics and population diversity Generational marketing is important in segmenting people by lifestyle or life stage instead of age ______________________ ❑ The economic environment are economic factors that affect consumers purchasing power and spending patterns − Income − Cost of living − Interest rates − Saving and borrowing patterns Value marketing = involves offering financially cautious buyers' greater value, the right combination of quality and service at a fair price. Income distribution: − Low-income − Middle-income − High income Identify the major trends in the firm’s natural and technological environments The natural environment = the physical environment and the natural resources that are needed as inputs by marketers or that are affected by marketing activities. Trends in the natural environment: − Growing shortages of raw materials − Increased pollution − Increased government intervention − Developing strategies that support environmental sustainability Environmental sustainability = involves developing strategies and practices that create a world economy that the planet can support indefinitely. The technical environment − Most dramatic force in changing the marketplace − New products, opportunities − Concern of safety of new products Explain the key changes in the political and cultural environments Political and social environment Legislation regulating business is intended to protect − Companies from each other − Consumers from unfair business practices − The interests of society against unrestrained business behaviour − Increased emphasis on ethics − Socially responsible behavior − Cause-related marketing The cultural environment = consists of institutions and forces that affect society’s basic values, perceptions, behaviours − Learned, not genetic − Characteristic for a given group − Visible and invisible Elements of culture: − Language (non)verbal − Manners and customs − Technology and material culture − Social institutions − Education − Values and attitudes − Aesthetics − Religion Core believes and values = persistent and are passed on from parents to children and are reinforced by schools, churches, businesses and government. Secondary beliefs and values = more open to change and include people’s views of themselves, others, organizations, society, nature and the universe. Discuss how companies can react to the marketing environment Uncontrollable = react and adapt to forces in the environment Proactive = take aggressive actions to affect forces in the environment Reactive = watch and react to forces in the environment (ppt4) Managing marketing information to gain consumer insights Explain the importance of information in gaining insights about the marketplace and customers. Good propositions and good marketing programs begin with good information. But more than just gathering information, marketers must use the information to gain powerful customer and market insights Customer and Market insights = fresh marketing information-based understandings of customers and the marketplace that become the basis for creating customer value, engagement, and relationships. Important but difficult to obtain: − Needs and buying motives are not obvious − Customers usually can’t tell you what and why BIG DATA = huge and complex data sets generated by today’s sophisticated information generation, collection, storage and analysis technologies Managing marketing information --> the real value of marketing information lies in how it is used, in the customer insights that it provides. Companies are forming customer insights teams: − Include all company functional areas − Collect information from a wide variety of sources − Use insights to create more value for their customers MIS Management Marketing System = refers to the people and procedures dedicated to assessing information needs, developing the needed information, and helping decision makers to use the information to generate and validate actionable customer and market insights. Define the marketing system and discuss its parts (MIS) Marketing Information System provides information to the company’s marketing and other managers and external partners such as suppliers, resellers and marketing service agencies. Characteristics of a good MIS --> balancing the information users would like to have against what they need and what’s feasible to offer. Also taking into account the costs. Marketeers obtain information from: − Internal data − Market intelligence − Marketing research Internal databases = collections of consumer and market information obtained from data sources Whitin the company network − Marketing department − Sales department − Customer service department − Accounting department − Production department − Logistic department Competitive marketing intelligence = the systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketing environment. - Trained Observers to mix and mingle with customers - Sophisticated Digital Command Centers - People Inside and Outside the Company - Online Databases The intelligence game goes both ways. ➔ Protection of own information The growing use of marketing intelligence also raises ethical issues. Managing Marketing Information Outline the role of marketing research and the steps in the marketing research process. Marketing research = systematic design, collection, analysis and reporting of data relevant to a specific marketing situation facing an organization. − Internal research department − Outside research department Secondary data = information that already exists somewhere, having been collected for another purpose. Primary data = information collected firsthand, generated by original research tailormade to answer specific research. Implementing the research plan: − Collecting the information − Processing the information − Analyzing the information Interpreting and reporting findings: − Interpret findings − Report to management − Draw conclusions Explain how companies analyse and use marketing information (CRM) Customer Relationship Management = involves managing detailed information about individual customers and carefully managing customer touch points to maximise customer loyalty. Big data & marketing analytics The analysis tools, technologies and processes by which marketeers dig out meaningful patterns in big data to gain customer insights and gauge marketing performance. The benefit of CRM & big data analytics, don’t come without risks and costs Information distribution = involves making information available in a timely and user-friendly way. − Intranet − Extranet (other marketing information considerations) − International market research − Marketing research based on web 2.0 − Public policy and ethics Marketing research based on web 2.0 − Mobile data (real time geographic information) − User-generated content and text mining (massive, unstructured, “bottom-up” customer information) − Web browsing (use of clickstream data, behavioural targeting) − Social network and online communities (one of the fastest growing sources of information flow, social targeting) − Customer-decision-making data (understanding the entire process consumers go through in arriving to a decision) − Consumer usage data (product embedded with sensors and wireless devices) Discuss the special issues marketing researchers face, including public policy and ethic issues. (ppt5) Consumer markets and buying behaviour Define the consumer market and construct a simple model of consumer behaviour Consumer buyer behavioir = the buying behaviour of final consumers—individuals and households that buy goods and services for personal consumption. Consumer markets = made up of all the individuals and households that buy or acquire goods and services for personal consumption.  ❑ Cultural factors Culture = the set of basic values, perceptions, wants, and behaviours learned by a member of society from family and other important institutions Subculture = groups of people within a culture with shared value systems based on common life experiences and situations Social classes = society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviors. Measured as a combination of occupation, income, education, wealth, and other variables. ( Upper – Middle – Working – Lower Class) Total market strategy = Integrating ethnic themes and cross-cultural perspectives within a brand’s mainstream marketing, appealing to consumer similarities across subcultural segments rather than differences. Featuring interracial and blended families and couples ❑ Social factors Groups = two or more people who interact to accomplish individual or mutual goals Word-of-mouth influence: recommendation of trusted friends Key opinion leader: influential or leading adopters Buzz marketing: creating opinion leaders as “brand ambassadors” Online social networks: communities, where peole socialize and exchange opinions Family = most important consumer-buying organization society Roles and status can v-be defined by a person’s position in a group ❑ Personal factors - Occupation - Age and life stage - Economic situation - Lifestyle - Personality and self-concept ❑ Psychological factors - Motivation (drive) - A need that is sufficiently pressing to direct the person to seek satisfaction of the need - Perception - The process by which people select, organize, and interpret information to form a meaningful picture of the world - Learning - Changes in an individual’s behavior arising from experience - Beliefs – A descriptive thought that a person holds about something - Attitudes – A person’s consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or an idea Need recognition is the first stage of the buyer decision process, in which the consumer recognizes a problem or need triggered by: Internal stimuli External stimuli Information search is the stage of the buyer decision process in which the consumer is motivated to search for more information. Sources of information: Personal sources Commercial sources  Public sources Experiential sources Alternative evaluation is the stage of the buyer decision process in which the consumer uses information to evaluate alternative brands in the choice set. Purchase decision is the buyer’s decision about which brand to purchase. The purchase intention may not lead to the final purchase decision due to: Attitudes of others Unexpected situational factors _______________ Post-purchase behaviour is the stage of the buyer decision process in which consumers take further action after purchase, based on their satisfaction or dissatisfaction. Cognitive dissonance is buyer discomfort caused by post-purchase conflict. Individual Differences in Innovativeness Innovators are venturesome, they try new ideas at some risk. Early Adopters are guided by respect; they are opinion leaders in their communities and adopt new ideas early but carefully. Early Mainstream are deliberate; they adopt new ideas before the average person. Late Mainstream are skeptical, they adopt an innovation only after a majority of people have tried. Lagging Adopters are tradition bound, they are suspicious of changes and adopt the innovation only when it has become something of a tradition itself. Influence of Product Characteristics on Rate of Adoption Relative advantage = The degree to which the innovation appears superior to existing products Compatibility The degree to which the innovation fits the values and experiences of potential customers Complexity = The degree to which the innovation is difficult to understand or use Divisibility = The degree to which the innovation may be tried on limited basis Communicability = The degree to which the results of using the innovation can be observed or described to others. A slow rate of adoption occurred with 3D television, which had promised to bring the cinematic visuals of 3D movies to the residential market. The constraints of 3D technology and limitations in content for the home audience led to dwindling demand and minimal rates of adoption by the public. Eventually, major manufacturers discontinued production of 3D televisions as the rate of adoption never rose to sustainable levels. Marketing Fundamentals 7. Customer Value-Driven Marketing Strategy Focuses on designing strategies that meet customer needs, maximize competitive advantage, and create customer equity. Important for businesses to understand the steps involved in creating a customer values- driven marketing approach. Learning Objectives 7.1 Define steps in designing customer-driven marketing strategy: market segmentation, targeting, differentiation, positioning. 7.2 List and discuss major bases for segmenting consumer and business markets. 7.3 Explain how companies identify attractive market segments and choose market- targeting strategies. 7.4 Discuss how companies differentiate and position products for competitive advantage. Key Steps in Designing a Customer-Driven Marketing Strategy Market Segmentation: Dividing the market into smaller groups with distinct needs or behaviors. Targeting: Selecting the segment(s) to serve. Differentiation: Defining how the product differs from others in the market. Positioning: Establishing a product's identity in the minds of consumers. Market Segmentation Strategies Base Strategies for Segmentation 1. Geographic Segmentation: Divides the market by location (e.g., country, region, city). o Allows for localized marketing strategies. 2. Demographic Segmentation: Based on characteristics such as age, gender, income, education. o Targets specific age groups or income levels to tailor marketing efforts. 3. Psychographic Segmentation: Focuses on lifestyle, personality traits, and social class. o This includes motivations and behaviors. 4. Behavioral Segmentation: Divides consumers based on their interactions with the product, such as usage rate and benefits sought. o Examples include occasions for purchase and customer loyalty levels. Effective Market Segmentation Requirements Measurable: The segments' size and purchasing power can be quantified. Accessible: Segments are reachable through marketing channels. Substantial: Segments are large enough to be profitable. Differentiable: Segments differ in response to marketing strategies. Actionable: Strategies can be developed to attract and serve segments. Market Target Strategies Types of Targeting Approaches 1. Undifferentiated Marketing: One strategy for the entire market, ignoring segment differences. 2. Differentiated Marketing: Targets different segments with tailored marketing strategies. 3. Concentrated Marketing: Focuses on a large share of one or a few segments. 4. Micromarketing: Tailors products to suit the needs of individuals or local customer segments. Differentiation and Positioning Strategies Choosing a Differentiation Strategy Identify competitive advantages and determine how to leverage them. Communicating the unique position of products effectively is crucial for brand perception. Positioning Statement Structure A clear and concise statement that summarizes how you want your brand to be perceived. Example format: o For (target customer), (brand) is (category) that (point of difference). Conclusion Customer value-driven marketing is comprehensive, requiring understanding of market dynamics, customer insights, and effective communication of brand positioning to gain competitive advantage. Marketing Fundamentals 8. Products, Services and Brands Products Definition: Anything offered in the market for acquisition or use to satisfy needs or wants. Classification: o Consumer Products: ▪ Convenience Products: Bought frequently with minimal effort (e.g., newspapers, candy). ▪ Shopping Products: Compared based on quality and price (e.g., furniture, cars). ▪ Specialty Products: Unique brands with loyal customers (e.g., designer clothes). ▪ Unsought Products: Not actively thought about for purchase (e.g., life insurance). o Industrial Products: Purchased for business use, includes materials, capital items, and supplies. Services Definition: Activities, benefits, or satisfactions offered that are intangible and do not result in ownership. Branding Strategy Brand Importance Brands are created in the mind of consumers, impacting their perception of product quality and value. Brand Equity: The differential effect brand knowledge has on consumer responses. Brand Value: Total financial worth of a brand. Key Branding Decisions Brand Positioning: Can focus on attributes, benefits, or underlying beliefs. Brand Name Selection: Should suggest benefits, be easy to remember, distinctive, and translatable. Brand Sponsorship: Options include manufacturer brands, private labels, licensed brands, and co-brands. Marketing Strategies for Products and Services Decision-Making Product Decisions: Attributes like quality, features, design shape customer satisfaction. *Service Characteristics: o Intangibility: Cannot be seen or touched before purchase. o Inseparability: Produced and consumed simultaneously. o Variability: Quality varies based on who provides the service. o Perishability: Cannot be stored for later sale. GoPro Example GoPro exemplifies a brand focused on customer experiences, providing products tailored to enhance storytelling and adventure. Marketing strategies involve extensive use of social media and community engagement. Products Offered: Cameras, accessories, subscriptions, tailored for various activities like travel, adventure, and sports. Conclusion The interplay of product offerings, branding, and customer experiences creates a competitive landscape. Understanding these concepts is essential for developing effective marketing strategies. Chapter 9: Developing New Products and Managing the Product Life Cycle Developing New Products Key Statistics Product Failure Rates: o 80%-90% of new products fail, as cited by various institutions including Harvard Business School and Michigan State University. Factors affecting failure rates vary across different studies. New Product Development Strategy Sources of New Products Acquisition: Buying a company, patent, or license to produce products. New Product Development: Encompasses original products, enhancements, modifications, and new brands arising from internal R&D. The New Product Development Process Steps Involved Idea Generation: Brainstorming new concepts. Idea Screening: Evaluating ideas to filter out unworthy ones. Concept Development and Testing: Creating product prototypes and testing with potential consumers. Marketing Strategy Development: Formulating a marketing plan including target market and positioning. Business Analysis: Assessing market viability and profitability. Product Development: Creating the final product. Market Testing: Introducing the product in limited markets to gauge consumer response. Commercialization: Launching the product on a larger scale. Managing New Product Development Characteristics of Successful Development Customer-Centered: Focused on resolving customer issues and improving satisfaction. Team-Based: Involving cross-departmental collaboration.  Systematic Approach: Fosters a company culture centered on innovation and facilitates a higher volume of ideas. Challenges Reducing spending in turbulent times can affect competitiveness. Product Life Cycle (PLC) Stages Stages and Marketing Strategies 1. Introduction: o Sales: Slow growth o Profits: Little to none o Strategies: High distribution and promotion expenses. 2. Growth: o Sales: Rapid acceptance o Profits: Increasing o Strategies: Consumer education, lowering prices for competitiveness. 3. Maturity: o Sales: Slowdown o Profits: Stabilization or decline o Strategies: Increased promotion and R&D. 4. Decline: o Sales: Falling o Profits: Dropping o Strategies: Maintaining, harvesting, or dropping the product. Characteristics of Each Stage Introduction: Low sales, high costs, negative profits. Growth: Rapidly rising sales, profits begin to rise. Maturity: Peak sales and profits, competition intensifies. Decline: Declining sales, reduced profits. Strategies Across Stages Introductions: Offer basic products, build product awareness.  Growth: Product extensions, penetration pricing, intensive distribution. Maturity: Diversify offerings, increase advertising to retain customers, enhanced promotions. Decline: Phase out weak items, cut prices to maintain sales volume. Revived Brands Brands such as Burberry and Triumph showcase successful brand revivals and utilize marketing strategies to maintain legacy while appealing to modern consumers. Conclusion Effective product development and lifecycle management are critical for marketing success in a competitive environment. Marketing Fundamentals 10. Pricing Chapter Overview Focuses on pricing strategies and understanding customer value. Importance of capturing customer value in a changing market. Oscar Wilde: "People know the price of everything and the value of nothing." What is a Price? Amount charged for a product/service or total value exchanged for benefits. Unique among marketing mix components; influences revenue, unlike other cost- centric elements. Easily adjustable and directly affects firm profits. Value vs. Price Warren Buffett's Quote: Price is what you pay; value is what you get. Emphasis on focusing on value to lessen the significance of price. Major Pricing Strategies Three Core Strategies: 1. Customer Value-based Pricing: Set based on customer's perception of value. 2. Cost-based Pricing: Based on production and distribution costs plus a profit margin. 3. Competition-based Pricing: Aligns with competitors' pricing strategies. Additional considerations in pricing, including: o Market skimming and penetration strategies o Discount and promotional pricing Customer Value-Based Pricing Driven by buyer perceptions rather than seller costs. Pricing begins with understanding customer needs. Good-value Pricing: Combines quality and service with fair pricing. Value-Based Pricing Sub-Strategies: Everyday Low Pricing (EDLP): Consistent low pricing with minimal discounts. High-low Pricing: Regular high prices with sales promotions.  Value-added Pricing: Enhances product with additional features to justify higher prices. Cost-Based Pricing Definition Prices based on production and sale costs plus an acceptable profit margin. Includes fixed and variable costs. o Fixed Costs: Unchanging with production volume (e.g., rent, salaries). o Variable Costs: Fluctuate directly with production levels (e.g., materials). Strategies Cost-plus Pricing: Adds a specific markup to costs; can ignore market demand. Price Escalation: Affects final consumer price due to cumulative costs across the distribution channel. Competition-Based Pricing Prices set based on competitors' actions and market conditions. Considerations Relative position in market and how product offerings compare. Other Considerations Affecting Pricing Decisions Overall marketing strategy alignment (product design, distribution, promotion). The impact of market structure on pricing decisions: o Pure Competition: Minimal price impact due to many sellers. o Monopolistic Competition: A range of prices influenced by product differentiation. Demand and Pricing Relationships The demand curve illustrates the inverse relationship between price and quantity demanded. Price Elasticity of Demand: o Inelastic Demand: Limited sensitivity to price changes. o Elastic Demand: Significant sensitivity to price changes. Economic and External Factors Impacting Pricing Understanding economic conditions, retail responses, regulatory influences, and societal concerns is crucial for setting and maintaining optimal pricing. Marketing Fundamentals 12. Marketing Channels Integrated Marketing Program Goals: o Create customer-driven strategies that capture value. o Manage supply chains efficiently to meet demand. Distribution Choice Key Considerations for Channels: o Direct outlets vs. indirect channels (wholesalers, retailers). o Cost implications of different distribution strategies. Function of Marketing Channels Channel Members: Organizations involved in the product reach. Intermediaries' Roles: Add value through: o Information gathering and distribution. o Promotion and contact with customers. o Matching supply with demand. o Negotiation and physical distribution logistics. Channel Transactions Reduction How Distributors Help: o Reducing contact points between manufacturers and customers, simplifying communication and increasing efficiency. Nature of Marketing Channels Marketing channels impact all other marketing decisions. Long-term commitments with channel partners. Effective use of channels can lead to competitive advantages. Channel Conflicts** Types: o Horizontal Conflict: Differences among entities at the same channel level. o Vertical Conflict: Disputable dynamics between different channel levels (e.g., producers vs. retailers). Marketing Channel Systems  Conventional Distribution Systems: Independent entities seeking individual profit maximization. Vertical Marketing Systems (VMS): Unified approach where one member manages the channel. Channel Design Decisions Key Considerations: o Analyze consumer needs and set specific objectives. o Evaluate alternative channel structures and efficiency. Marketing Intermediaries Types** Direct Sales: Direct to consumers via online or phone. Indirect Sales: Involvement with retailers or value-added resellers. Distribution Strategies: o Intensive: Stocking products across many outlets. o Exclusive: Grants limited dealers exclusive rights. o Selective: Using fewer than all intermediaries recommended. Responsibilities of Channel Members** Collaborate on pricing, conditions of sale, and territory rights. Evaluating Channel Alternatives** Consider economic benefits, control, and adaptability of chosen channels. Channel Management** Importance of continuous evaluation of channel performance. Primary focus on maintaining strong relationships with channel members. Public Policy Implications** Regulations concerning exclusive deals and the integrity of distribution practices.