WEEK 3 Flashcards
is a set of decisions that get you to a specific
destination. It’s the overarching approach you adopt
to achieve the set of long-term goals you’ve chosen.
Strategy
The difference between strategy and tactics can be summed
up as
“strategy determines where you want to go”
and “tactics determine how you’ll get there”.
is required to set the overarching direction and
destination of the organization,
Strategy
are required to define the concrete actions you’ll
take to reach your destination.
Tactics
is a road map that gives your business
Franchising Strategy
8 tips for local area franchise marketing that gets results
- Know your local area in detail.
- Build a profile of your target audience.
- Do a competitor analysis.
- Get social.
- Maximize local PR opportunities.
- Be aware of local history and points of interest.
- Connect with clubs, schools and community groups.
- Look for cross-promotional opportunities.
is a long-term partnership and companies who wish to be successful must recognize the true nature of the
relationship, and the responsibilities on each partner.
Franchising
refers to a coordinated
approach where the producer, wholesaler, and retailer
of a product or service work together as a unified group
to meet consumer needs and achieve business goals.
Vertical Marketing System
THREE COMPONENTS OF VERTICAL MARKETING SYSTEM
Producer
Wholesaler
Retailer
the manufacturer who physically makes a product
Producer
purchases products from the producer and manages the distribution to retailers.
Wholesaler
in turn mark up the price and sell
products to consumers
Retailers
TYPES OF VERTICAL MARKETING SYSTEM
Corporate Vertical Marketing System
Administered Vertical Marketing System
Contractual Vertical Marketing System
All stages within the production and distribution of a
product are owned by one organization.
Corporate Vertical Marketing System
The dominance of either the producer or the distributor exists. There is no formal contract, but their behavior is influenced by the size and power of the owner.
Administered Vertical Marketing System
the independent owners at each level are under contract with the higher level. The
_____________ is like endorsing a particular product in their shop having any other products as well.
Contractual Vertical Marketing System
Key Reasons Behind the Importance of
Vertical Marketing Systems
- Economies of Scale
- Profit margins increase
- Brand image expansion
- Enhanced customer base and satisfaction
- Tracking becomes easier.
- Less fuel consumption
making things in bulk could always be a profitable thing. It could be economical for the clubbed entity as all the middle-men costs involved are now removed. There is only one chain.
Economies of Scale
when three independent workers club into one, the _________ which was earlier at the cost of one another shrinks
to the firm as a whole.
Profit margins increase
It creates a feeling of security, and authenticity and builds a sense of trust among the customers.
Brand image expansion
Every customer wants to buy at the cheapest rate possible. Even they are smarter to know that buying from the clubbed entities could cost them less.
Enhanced customer base and satisfaction
when there is a single system working it is easy to keep things organized. This, in turn, makes tracking easy for the main owner. This also leads to settling disputes if any.
Tracking becomes easier
this is so that the customers will contact the retailers about the product and since the information would be accurate, they will visit the store only after the availability of the product.
Less fuel consumption
firms to acquire smaller and middle-level firms into wholesaling or retailing. This enables them to keep track and make things simpler. It also chucks away the competition found at the lower channels of the market.
Large firms
there are those intermediary firms that are neither too big nor too small. They may have efficient manpower who adorns excellent communication skills.
Firms with efficient manpower
Advantages of Vertical Marketing System
- An administered system with efficient control.
- Consistent marketing message
- Combining resources.
- Competitive pricing
Disadvantages of Vertical Marketing Systems
- Bad firms.
- Focus hazed out.
- Personality issues.
