9-12 Flashcards
what is a channel
path that enables products and services to flow from producers to end users
value delivery network
company, suppliers, distributors, and customers partner to improve performance of entire system
3 types of channel functions
transactional (buying, selling, risk taking, (agent and brokers)
Logistical (transporting, storing, sorting, “breaking bulk”, creating assortments) (distributors, wholesalers, retailers)
Facilitating (financing, payment processing, shipping, information/research, testing/inspecting, promoting) (facilitating and logistical agents)
4 step consumer channel
producer, wholesaler, retailer, consumer
4 step business channel
producer, manufacturer’s sales branch, business distributor, business customer
density of coverage
intensive (all possible), selective, exclusive (single)
brand portfolios enhance
coverage
trends
disintermediation, “downstream power shifts”, tech sophistication in order fulfillment and customer service, omnichannel distribution to reach different customers
disintermediation
move towards direct to consumer, hybrid systems, e-commerce, reduces channel conflict
integration (vertical marketing system (VMS))
combining successive stages of production and distribution under single ownership
corporate vs administered vms
luxottica vs zara
li and fung
flat world philosophy- own nothing
advantages to retail
low barrier to entry, replication and scale, cash flow and growth
key retailing metrics
total revenue - top line, revenue per square foot, gross margin (%), inventory turn: short head (popular, fast turnover) vs long tail (slower turning, less popular)
wal mart
geographic segmentation, tight control of dist. channels, EDLP, agent for customers (reduce cost of living)
whole foods
separate segment from wal mart - wealthy, liberal, higher margins and revenue per square foot
store brand strategies
inferior goods (generics, lesser quality at lower price)
exploit installed base (parity quality at value price, me-too store brands),
private label, (exclusive brands offering unique quality as good or better than category leader, proprietary brand (trader joes))
retailers want to create brands
private label greater profit opportunity, differentiation, bargaining clout with national suppliers, reduced double marginalization
nice! walgreens
brands want to become retailers
retail stores are giant billboards, greater market coverage, control over brand message, full product line offering, reduction in double marginalization
Integrated marketing communications: communications mix
advertising, sales promotion, personal selling, PR, word of mouth (high to low control)
why IMC
extend brand relationship, improve effectiveness of marketing tactics, increase relevance of message, manage marketing resources, drive results and ROI
Paid, owned, earned media
PAID: print, TV, mags, cinema, outdoor, DM, in store (strangers)
OWNED: brochures, stores, website, facebook fan page, apps (customers)
EARNED: word of mouth, social media, blogs/forums (fans and skeptics)
5 M’s
motivation (objectives), money (budget), message, media, metrics (evaluation)
advertising objectives
build awareness, strengthen preference, incite action
inform (awareness and value), persuade (drive decision), remind (value prop top of mind)
