Marketing: 5,6,7 Flashcards
what are sales channels and outline the differneces between direct sales and indirect sales
Sales channels are the methods to reach customers:
* Direct sales channels are those owned by the firm
* Indirect sales channels are owned by an intermediary
when are direct sales channels more cost-efficient than indirect
Level of **customisation & complexity **of the product:
* Usually if a product is strongly aligned to individual customer requirements (specificity) OR complex.
When demand is very concentrated on a relatively small n.o customers, then direct sales channels are the most efficient (indirect sales channels are better alternative for firms with a large & diffuse customer base)
Outline all the conditions in which direct sales channels are better
- Direct sales for products highly complex and customized:
- Strongly aligned with customer individual requirements (staff training)
- Cost-efficient
- Lots of B2B, industrial goods.
- Number of customers/demand concentration small then direct (Jackson and d’Amico, 1989)
- Direct gives better consumer data (purchase frequency, shopping behavior) to really understand customers
- Higher monetary value of product > direct
Explain the integrated sales channel and the dept of sales channel
Channel integration refers to strategies aimed at consolidating — either physically or logically — customer information and its use to provide an all-encompassing view of the customer.
Depth:
- Zero level channel;
- one level channeln
- Two level channle
Explain all the depths of sales channels
Zero-level channel = distribution of the product is direct from the producer to the customer or user (direct selling).
One-level channel = when the product is NOT sent directly from the producer to the consumer but is instead sold to retailers who sell to the consumer (retail channel) e.g. waitrose
Two-level channel = two different kinds of intermediaries between the producer & the consumer - i.e the manufacturer. e.g pharma
Describe and explain the width of sales channels
Exclusive selling = only to few selected sales partners which allows for a consistent market presence BUT gives limited market coverage (e.g luxury goods).
Intensive selling = cooperation with large volume of sales partners which allows for maximum market coverage BUT has difficulties in controlling and monitoring marketing activities (e.g coca cola).
Selective selling is a midway between the two (e.g Hugo Boss and Apple)
Explain how sales channels develop
Physical to website to app to hybrid (integrated channels for a seamless experience)
Linking physical stores with the online channels
Integrated multichannel sales are split to store concept and frontline workers
Explain store concept
Experience-centric offline store formats do not just expand market coverage BUT also tend to amplify the future positive customer behaviours both online AND offline.
Studies have shown that it tends to increase the average transaction value and average number of product categories purchased (by “supercharging” the customers).
- Supercharging: when customers are nurtured in a small footprint location (which typically holds no inventory) but are fulfilled by a fast/efficient distribution center
- Offline first / online to offline approach means customers have a meaningful experience»_space;
Explain the bonobo store concept
- Started online then physical stores for better fitting mens’ clothes
- Zero-inventory concept > view and try on products, engage with frontline staff
- All purchases are made as orders
- The showroom concept increased transaction value, reduced purchase time and increased number of categories purchased (more brand engagement and brand loyalty)
- Clothes return rate also went down ^^
how can profit be increased using store concept method
Encouraging online (and offline) shoppers (via coupons) to come instore > more impulsive buying,
this also depends on physical distance to store (further better)»_space; esp encouraging online only to come in store
Explain the concept of frontline workers
- Contribute to customer experiences
- Success of branding depends on whether they live up to brand values and promises
E.g - Roadway study (Wentzel, 2009): motorcycling fanatic clothes > employees either lived up to ruggedness look or didn’t
Consistency with ruggedness had favor for brand attitude and better perception of brand values, inconsistent had negative perception of brand values
How can you promote brand value in frontline workers?
o Brand building behavior
o Improve performance
o Help those underperforming and praise overperformance
How do you measure performance metrics for frontline workers
Can be objective or subjective
within that could be bahaivour or outcome
* o Outcome looks at KPIs
* o Behavior looks at how the KPIs are achieved
what are the characterisitcs to ensure you set effective performance metrics
Goal relevanc e
Controllability
Time Efficiency
Level of Protection
Level of objectivity
Comprehensiveness
Measuring goals
Outline and explain the 3 ways of influence tactics to leverage in sales
1 Normative influence (compliance techniques)
* Foot in the door technique → marketers try to enhance compliance by getting consumers to agree first to a small favour which makes them more likely to offer a larger one later on
* Door in the face technique → the marketer first asks the consumer to comply with a very large (outrageous) request and then presents a smaller more reasonable request which is more likely to be accepted due to the initial anchor
2 Social influence → people are influenced by what other people do due to social pressures - you can increase uptake by giving a descriptive norm message (containing social information) → it is better with younger people, and if there is a prime that there is identity similarity to those in the social information
3** Customer loyalty
**
Explain customer loyalty as a reward
- For sales and distribution
- Loyal customers are more profitable
- Customer acquisition often has setup costs but long-term benefit of up and cross selling + referrals but customer loyalty has none.
- Loyalty behaviours: Positive WOM, cross and up buying (volume and upgrading), repurchase behavior
- ## Consumers request discounts for loyalty.
What is rational economic theory and what consumer behaviour theories violate it
Rational economic theory stipulates that the choice between two products with the same utility is a rational decision BUT consumer behaviour violates this:
- Power of defaults
- Self-signals from Choices
- Availability Heuristics
- Hedonic Editing
- Temporal Non-Monoticitty
- Protection Motivation
Explain availability heuristic
Availability heuristic involves where consumers will base their judgements based on how easy it is to retrieve information about something from out minds → availability heuristic
ie. the easier it is to retrieve info from our mind, the more likely we think it is to occur, the more we like it
For example if there are less choices then there is less information needing to be brought up → this can increase liking and probability judgements
This can even persist between and within brands:
What is hedonic editing
There is a non-linear mismatch between the satisfaction between gains & benefits:
Prospect theory stipulates that loses have a higher difference in utility than gains do (but empirically this is only true for very large losses)
Explain Temporal non-montonicity
o Duration plays a small role in the retrospective evaluation on events.
o Peak and final moments are dominating (primacy and recency effect)
o Eg cold water + warmer water long trial less unbearable that just cold-water short trial.
The emphasis is that there is a STRONG influence of the **end-of-encounter **experience for example in cappuccino ordering:
Explain protection motivation theory
Understanding responses to fear appeals > when/how do people protect themselves from risky behaviour.
4 indicators increase protection.
The theory therefore says that in order for an individual to adopt a health behavior, they need to believe that there is a severe threat that is likely to occur and that by adopting a health behavior, they can effectively reduce the threat. The individual should also be convinced that he is capable of engaging in the behavior which should not cost him a lot.
Explain self signals from choices (consumer behaviour)
Economics predicts utility of a chosen item is independent of the non-chosen options in the choice set:
Homogenous choice sets are preferable as there is no drawback to choosing say an unhealthy option from a portfolio of unhealthy food options
Rational econ suggest you should choose red apple regardless of set. But this theory suggest you will choose green over red as red will have lesser utility in this set
