CHAPTER 15

DISTRIBUTING
PRODUCT
The Emergence of Marketing
Intermediaries
Marketing Intermediaries (midlemen) : organization
that assist in moving goods and services from
producers to business (B2B) and from business to
consumers (B2C)

Channel Distribution :
Consist of a whole set
of marketing
intermediaries that join
together to transport
and store goods in their
path/channel from
producers to consumers
The Emergence of Marketing
Intermediaries
Agents (Brokers) : marketing intermediaries who bring
buyers and sellers together and assist
in negotiating an exchange but dont
take title to the goods

Wholesaler : marketing intermediary that sells to

other organizations, such as retailers,
manufacturers, and hospitals

Retailers : Organization that sell to ultimate

consumers
The Emergence of Marketing
Intermediaries

Why marketing needs intermediaries?

Create The Value

efficiency than the cost

Intermediaries perform certain marketing tasks, such as

transporting, storing, selling, advertising, and relationship
building faster and more cheaply than most manufacture could
 Form Time
Utility Utility
The
Utilites
Created Place
Posessi
on
Utility
By Utility

Interme-
diaries Inform
ationUt
Service
Utility
ility
 Wholesale Intermediaries
Rack jobbers :
Limited function : furnish racks or shelves full of
Perform only merchandise to retailers,
select display products and sell
ed on consignment
functi
on Cash and Carry Wholesalers :
Serve mostly smaller retailers with
Full Service : a limited assorment of product
perform all
distribution
Drop Shippers :
Solicity orders from retailers and
other wholesalers and have the
merchandise shipped directly from
producer to consumer
 Usually not
carry Never own the
inventory products they
distribute

Agents /
Brokers

No continous
relationship
Earn
with the buyer
comission or
or seller
fee
 Retail
Intermediaries
Retail distribution strategy
Non Store Retailing
 BUILDING COOPERATION IN CHANNEL
SYSTEM
Manufacturers, wholesalers, and retailers must work closely
to form a unified system.

HOW??
BUILDING COOPERATION IN CHANNEL
SYSTEM
Four systems have emerged to tie firms together:
Corporate Distribution System
A distribution system in which all of the organizations in
the channel of distribution are owned by one firm
Contractual Distribution System
A distribution system in which members are bound to
cooperate through contractual agreement. Three forms of
contractual system:
Franchise system
Wholesaler-sponsored chains
Retail cooperative
BUILDING COOPERATION IN CHANNEL
SYSTEM
Administered Distribution System

A distribution system in which producers manage all of

the marketing functions at the retail level
Supply Chains (Value Chain)
The sequence of linked activities that must be
performed by various organizations to move good
from the sources of raw materials to ultimate
consumers.
 Supply Chains (Value Chain)
Supply Chain Management
Is the process of managing the movement of raw
materials, part, work in progress, finished goods, and
related information through all the organizations in
the supply chains; managing the return of such goods
necessary; and recycling materials when appropriate
Logistics
The marketing activity that involves planning, implementing,
and controlling the physical flow of materials, final goods and
related information from points of origin to points of
consumption to meet customer requirements at a profit.
Inbound logistics
The area of logistics that involves bringing raw
materials, packaging, other goods and services, and
information from suppliers to producers

MATERIALS HANDLING
The movement of goods within a warehouse, from
warehouses to the factory floor, and from the
factory floor to various workstations
Outbound logistics
The area of logistics that involves managing the
flow of finished products and information to
business buyers and ultimate consumers (people
like you and me)

REVERSE LOGISTICS
The area of logistics that involves bringing goods
back to the manufacturer because of defects or for
recycling material.
MODE
COST
Railroad Medium

Trucks High

Pipeline Low

Ships (water) Lowest

Airplane Highest

SPEED
Railroad Slow

Trucks Fast

Pipeline Medium

Ships (water) Slowest

Airplane Fastest
On-time dependability
Railroad Medium

Trucks High

Pipeline Highest

Ships (water) Lowest

Airplane Low

FLEXIBILITY HANDLING PRODUCTS

Railroad High

Trucks Medium

Pipeline Lowest

Ships (water) Highest

Airplane Low
Frequency of shipments
Railroad Low

Trucks High

Pipeline Highest

Ships (water) Lowest

Airplane Medium

REACH
Railroad High

Trucks Highest

Pipeline Lowest

Ships (water) Low

Airplane Medium
Storage warehouse
Holds products for a relatively long time.
Example: Seasonal goods

DISTRIBUTION WAREHOUSE
Facilities used to gather and redistribute product.
Example: FedEx
Tracking goods

Universal product codes

Radio frequency identification
CHAPTER 16
EFFECTIVE PROMOTIONS
 PROMOTION AND THE
PROMOTION MIX
Promotion
All the techniques sellers use to motivate people to buy
their products or services
Promotion mix
Combination of organization uses
Integrated Marketing Communication (IMC)
A technique that combines all the promotional tools into
one comprehensive unified promotional strategy
 STEPS IN A PROMOTIONAL
CAMPAIGN

1. Identify a target market

2. Define the objective for each element of the
promotion mix
3. Determine a promotional budget
4. Develop a unifying message
5. Implement the plan
6. Evaluate effectiveness
Promotional Strategies

Push Strategy :
The producer uses Pull Strategy :
advertising, personal heavy advertising and
selling, sales sales promotion
promotion and all efforts are directed
other promotional toward consumers. So
tools to convince that theyll request
whole salers and the products from
retailers to stock and retailers
sell merchandise
 Advertisement
Advertising is the non personal communication,usually
paid for and usually persuasive in nature about
products, services or ideas by identified sponsors
through the various media."(Bovee, 1992, p. 7)
Propaganda non personal communication does not have
identified sponsor.
magazine internet newspape Yellow
rs pages

radio television Outdoor

Product Placement
Putting products into TV
shows/programs where
it will be seen.

Infomercial
Full length TV program devoted
exclusively to promoting
particular good or service.
Online advertising

Advertisement on web site or search engine that allow

potential customers to learn more about their products.
Enable marketers to know their potential customers
Interactive promotion happens (from monologue to
dialogue)
Global advertising

Develop a single product and promotional strategy that

can be implemented world widely.
Sometimes not effective , so it changes from global to
regional.
PERSONAL SELLING: PROVIDING PERSONAL
ATTENTION

Personal selling
The face-to-face presentation and promotion of good and
service, including the salespersons
search for new prospects and follow-up
service after the sale.

What is the benefit?

Having a person help you complete a transaction
 PERSONAL SELLING: PROVIDING PERSONAL
ATTENTION
Steps in the selling process:

Prospect
Preapproach Approach
and qualify

Close the Answer Make a

Sale Objections Presentation

Follow up
PERSONAL SELLING: PROVIDING PERSONAL
ATTENTION
The Bussines-to-Consumer Sales Process
PUBLIC RELATION: BUILDING A
RELATIONSHIP
Public Relation
Is the management function that evaluates public attitudes,
change policies and procedures in response
to the publics requests, and execute a
program of action and information to earn
public understanding and acceptance

Three Steps of PR:

Listen to the Public
Change Policies and Procedures
Inform peoper youre responsive to their
needs
PUBLIC RELATION: BUILDING A
RELATIONSHIP
Publicity
Any information about an individual, product, or
organization thats distributed to the
public through the media and thats not
paid for or controlled by the seller
Sales promotion

The promotional tool that stimulates consumer

purchasing and dealer interest by means of short-term
activities
Types of promotion
Word of mouth
A promotional tool that involves people telling other people
about products they have purchased
Viral Marketing
Paying customers to say positive things on the Internet to
setting up multilevel selling schemes whereby consumers get
commissions for directing friends to specific website
Blog
Posting text, photos, or links to other sites
Podcasting
Distributing audio and video via the Internet
Promotions mix

Push Strategy
Uses promotional tools to convince wholesalers and
retailers to stock and sell merchandise
Pull Strategy
Directed promotion to consumers so that they will
request from retailers
Thank you