ABM 8 - MArketing Strategy
DEVELOPING THE MARKETING MIX
Group 7
Did you know?
DISTRIBUTION (PLACE)
Distribution aims to make products or service
available to its target market consistent with their
purchasing pattern.
It can substantially improve revenue and profit,
without much change in the other aspects of the
marketing mix.
Distribution mix
What is it?
It is a made decision that includes
Coverage whether to have mass coverage ,
selective coverage, and exclusive
coverage
A product has placement when it is
Placement carried in a store it wants. Placement
objectives ensures the customers
convenience.
Distribution mix
What is it?
It is Critical for the stores to have the
Volume right level of inventory. The store
should not be 'out of stock' and
'overloaded'
A right way of putting the product on
Display display can make a higher probability
that consumers will choose the brand
over the competition.
Distribution mix
What is it?
Right resale prices means to have a
healthy competition among dealers
Resale Pricing consistent with the pricing intent of
the principal. Price war should be
avoided.
A good will is having a best
Goodwill relationship between a supplier and
his channel members. It creates "win-
win" situation
Distribution (PLACE)
For products not distributed through retail stores, the
distribution mix may be different and may need to be revised to
conform to their specialized needs.
Distribution Channel
distribution channel performs the work of moving products
from manufacturers to final consumers or business users.
A good distribution channel shortens the time, place and
possession gaps between the manufacturers and
consumers, and provides convenience to consumers.
Manufacturer
Distributor
Wholesaler Jobbers
Retailer
End Users
Distributors
Distributors are appointed to perform the distribution
function for manufacturers in making their products
available.
They may cover an entire country on an exclusive
distributor basis or may be appointed to do the distribution
function within a defined territory or defined store type.
Distributors may sell to wholesalers or retailers or may
even go directly to consumers
Wholesaling
Wholesaling is the activity of persons or organizations
that sell to those who buy for resale (like retailers) or
business use (like industrial, institutional, and
commercial users).
This makes manufacturers more efficient.
Retailing
Retailing is an activity involving the sale of products or
services directly to final consumers
Examples of store-based retailing:
Clothes store like Uniqlo, Zara, and Bench
Convenience Store like 7/11, Ministop, and HBC
Sports shop like Toby's, RUNNR, and Planet Sport
Retailing
The presence of multinational retailers signaled a change in the distribution set-
up of products sold through retail stores.
Major retailers now charge a Listing Fee.
Other retailers have a policy of carrying only the top 3 brands in every
category. thus maximizing revenues per square inch of limited space
available, while allowing them to carry other categories to maximize
revenues.
Headquarters of multinational retailers are increasingly expected to
negotiate for standard world prices of the same item from muftinational
manufacturers.
Franchising
Accelerated method to expand distribution coverage is through Franchising
In franchising, a franchise fee is paid to the franchise
owner in exchange of an established brand name, a
proven system of operation, training and other
infrastructure support. The rule of thumb is to have at
least 100 000 potential qualfied customers for every
franchise.
Direct selling
In our homeland, direct selling has gone over 3 dozen
members of the Direct Selling Association of the
Philippines (DSAP).
Ex.
AVON
Nu Skin
Tupperware
The Internet
E-business has been the buzzword since the 1900's. No
longer are companies limited to sell products through
stores or through direct sales.
Ex.
Amazon, this generated huge interest, especially
for smaller firs to use the internet as a legitimate
and principal distribution channel.
Unionbank, and BPI, and other banks offer banking
via the internet giving utmost 24/7 convenience to
the depositors.
Home Delivery
Home delivery offers a huge potential influenced
by more women working. lack of household maids,
traffic and parking problems, as well as the
consumer psyche of rewarding themselves for a
hard day's work
The process of home delivery involves appointing a
centralized call center operator who is tasked to
take or suggest orders as well as send these orders
to the branch nearest the customer.
Diagnostic Distribution
We use the term Diagnostic Distribution to mean
the proper matching of distribution channels to the
selling process.
Marketers, for instance, may combine different
distribution channels to achieve desired sales,
profit, market penetration and market shares
objectives.
Selling Cycle Distribution
method
Prospecting e-mail
Qualifying Sales Telemarketing
Approach Direct Selling
Sales Probing
Sales Presentation
Handling Objections
Demonstration
closing Retailing
After-sales Service Independent Service
Center
Evaluating Distribution Channels
Marketers must be careful in choosing their
distribution system, as each channel will provide
different levels of cost and sales volume.
In evaluating alternative distribution channels, the
3c's of distribution must be considered: Cost-
efficiency, control, and Channel modification
A. Cost-efficiency
It is important to estimate the long-term impact of having
one's own sales force versus appointing a distributor.
Once sales volume increases to an economic level,
having one's own sales force may or may not be more
cost-efficient. However, a sudden shift from distributor
to an in-house sales force after a distributor has helped a
company attain the economical volume leaves a "bad
taste in the mouth" and is inconsistent with the Filipino
value of "utang-na-loob".
B. Control
As distributors are not the company's employees, they
may have different priorities.
Profit may be their main objective while the firm's
objective may be market penetration and market shares.
B. Channel Modification
As the marketplace is constantly changing, being flexible and able
to modify distribution may be needed.
ex.
The aggressive marketing of Sensation and Trust brands increased
the acceptability and the market of condoms. They need not be
limited to drugstores but may include supermarkets, convenience
stores, personal care stores, and vending machines as well.
Other changes in the consumer purchasing pattern such as when
the product matures, when new competition arises, and when
innovative distribution emerges. must also be considered.
Distribution Criteria
Use middle men sell directly
product type simple sophisticated
after sales service few critical
company resources weak strong
distribution low control high control
price low high
Backward distribution
Marketing channels usually describe forward movement
of products. from manufacturers to the ultimate
consumers. However, it is possible that backward
distribution will become a trend as well as a challenge
with the increasing popularity of green marketing.
ex.
At present, the bottled beverage industry like Coke, Pepsi,
San Miguel, and Asia Brewery utilize the same distribution
channel to recover empty bottles for reprocessing
Grey Marketing
Gray marketing or parallel distribution is a form
used to describe unauthorized importation and
distribution of products bearing genuine brands
across markets.
Parallel distribution is destructive.
Global and Regional market
One major trend in business is the regionalization of
markets, which will ultimately load to the
globalization of markets. Countries within most
regions have established trade blocs by agreeing on
an exclusive set of common market access
conditions different from those applied to countries
that are not members of the bloc
No of countries Participating countries Estimated Population Estimated GDP in US$
Brunei / Cambodia /
US$ 2.55 trillion
Indonesia / Laos /
ASEAN free trade area 629 million( 8.5 % of (projected to be 50% of
10 Malaysia / Myanmar /
(AFTA) world population) the world's GDP by
Philippines Singapore /
2050)
Thailand / Vietnam
North American free
3 Canada / Maxico / USA 460 milion US$20.08 trillion
trade area(NAFTA)
Austria / Belgium /
Aulgaria / Croatia /
Cyprus / Czech /
/Donmark / Estonia /
finland /Franco A
Germany / Grooco /
Hungary / Iceland /
European economic area troland / Italy / Latvia /
32 513 milion. U$ 14 trillion
(EEA) Lachtenstein / Linuania
/ Luxembora / Mata /
Notoriand / Norway /
Poland / Portugal /
Romania / Siovakia /
Slovenia / Spain /
Sweden / Switzeriand /
Uk
Supply Chain Management
Supply chain management is the management of the
flow of goods and services includes all processes
that transforms raw materials into final products. it
involves the active streamlining of a business supply
side activities to maximize customer value and gain a
competitive advantage in the market place
Thats all thank you!
