Module 5
Distribution &
Promotion
Dr. Anupamaa Chavan
Objectives
• Place • Promotion
• Nature and importance of distribution • The Role of Marketing Communications
channels • Managing Integrated Marketing
• Types and functions of distribution middlemen Communications
• Channel management decisions • Advertising
• Online Communications
• Social Media
• Mobile Communications
• Events and experiences
• Word of Mouth
• Publicity and Public Relations
• Packaging
Marketing Channels
• Marketing channels are sets of interdependent organizations
participating in the process of making a product or service available
for use or consumption.
• They are the set of pathways a product or service follows after
production, culminating in purchase and consumption by the final
end user
Place : Marketing Channels
• Wholesalers and Retailers—buy, take title to, and resell the merchandise;
they are called merchants/traders
• Agents are brokers are manufacturers’ representatives, sales agents—
search for customers and may negotiate on the producer’s behalf but do
not take title to the goods; they are called agents
• Facilitators are transportation companies, independent warehouses,
banks, advertising agencies—assist in the distribution process but neither
take title to goods nor negotiate purchases or sales; they are called
facilitators.
• The Importance of Channels
• Marketing channels must not just serve markets, they must also make them; the channels
chosen affect all other marketing decisions
• Pricing depends on whether it uses online discounters or high-quality boutiques
• Sales force and advertising decisions depend on how much training and motivation dealers
need
• Holistic marketers ensure that marketing decisions in all these different areas are made to
maximize value overall.
• A push strategy uses the manufacturer’s sales force, trade promotion money, or other
means to induce intermediaries to carry, promote, and sell the product to end users.
• A pull strategy uses advertising, promotion, and other forms of communication to
persuade consumers to demand the product from intermediaries, thus inducing the
intermediaries to order it.
Five
Marketing
Flows in the
Marketing
Channel
Hybrid Channels OR Multichannel Marketing
• Today’s successful companies typically employ multichannel marketing, using two
or more marketing channels to reach customer segments in one market area.
• Eg. When a marketer uses more than one channel i.e. stores, website, mobile
phones, bill boards, newspaper, social media etc to sell goods
• • Benefits
• Increased market coverage
• Lower channel cost
• Customized selling options
• Tradeoffs
• Potential for conflict and issues with control and cooperation
Channel Levels
• Zero-level channel (direct marketing channel)
• Single-level channel
• Dual-level channel
• Reverse-flow channel
Channel-Management Decisions
Establishing Channel Objectives
Selecting Channel Members
Channel-Management Decisions
(1)Establishing Channel Objectives:
• Marketers should state their channel objectives in terms of the customers they aim to reach,
the service output levels they want to provide, and the associated cost and support levels.
• Consumers may choose the channels they prefer based on price, product assortment, and
convenience, as well as their own shopping goals (economic, social, or experiential).
• However, the same consumer may choose different channels for different reasons
• Channel objectives vary with product characteristics
• Perishable products requires more direct marketing.
• Bulky products, such as building materials, require channels that minimize the shipping distance and
amount of handling
• High- unit- value products such as generators and turbines are often sold through a company sales force
rather than intermediaries.
• FMCG products may require maximum channels
• (2)Selecting Channel Members
• To customers, the channels are the company. Channel alternatives differ in three ways: type, number, franchising
• To facilitate channel member selection, producers should determine what characteristics distinguish the better
intermediaries—number of years in business, other lines carried, growth and profit record, financial strength,
cooperativeness, and service reputation.
• TYPE
• Each channel has unique strengths and weaknesses
• Sales forces can handle complex products and transactions, but they are expensive.
• Online retailing is inexpensive but may not be as effective for complex products.
• Distributors can create sales, but the company loses direct contact with customers.
• Several clients can share the cost of manufacturers’ reps, but the selling effort is less intense
than company reps provide.
• NUMBER of intermediaries, there are three core distribution strategies: exclusive, selective, and intensive distribution.
• FRANCHISING
• Exclusive distribution severely limits the number of intermediaries. It’s appropriate
when the producer wants to ensure more knowledgeable and dedicated efforts by
the resellers, and it often requires a closer partnership with them. Exclusive
distribution is used for new automobiles, some major appliances, and luxury apparel
and accessories.
• Selective distribution relies on some but not all of the intermediaries willing to carry
a particular product. Unlike exclusive distribution, in which individual retailers do
not directly compete with one another (for example, because they are assigned non-
overlapping geographic areas), selective distribution might include retailers that
compete for the same customers.
• Intensive distribution places the goods or services in as many outlets as possible.
This strategy works well for snack foods, soft drinks, newspapers, candies, and
gum—products that consumers buy frequently or in a variety of locations.
Promotion
• The Role of
Marketing
Communications:
• The means by which firms
attempt to inform, persuade,
and remind consumers
about the products and
brands they sell
Managing Integrated Marketing Communications
–An approach to managing a communication campaign through a coordinated use of different communication tools
that work in concert and reinforce one another to enable the company to achieve its strategic goals
Horizontal integration
Vertical integration
Internal integration
External integration
Criteria that can help ensure that
communications are truly
integrated.
Ensuring communications integration
• –Coverage
• –Contribution
• –Commonality
• –Complementarity
• –Conformability
• –Cost
Advertising
• Advertising
• Any presentation and promotion of ideas, goods, services, and brands by an
identified sponsor using paid media
Television Advertising (1 of 2)
• Strengths:
• Vividly demonstrate product attributes and consumer
benefits
• Portray user and usage imagery, brand personality, etc.
• Tap a captive audience during live programming
Television Advertising (2 of 2)
• Drawbacks:
• Message and brand may be overlooked
• Lots of clutter
• Cost
Print Advertising
• Print media is passive
• Newspapers
• Magazines
• Picture
• Headline
• Copy
Radio Advertising
• Pervasive medium
• Flexible
• Lacks visual images
Online Advertising (1 of 3)
• Advantages:
• Can trace effects by UVs clicks on a page/ad
• Contextual placement
• Can place advertising based on search engine keywords
• Disadvantages
• Consumers can screen out most messages
• Ads can be less effective than they appear (bogus clicks)
• Lost control over online messages via hacking/vandalism
Online Advertising (3 of 3)
• Native advertising
• Involves materials resembling the publication’s editorial content but is intended
to promote the advertiser’s product
Place Advertising
• Billboards
• Public spaces
• Product placement
• Point of purchase
Online Communication (1 of 2)
• Company websites
• Ease of use
• Physical attractiveness
• Microsites
Online Communication (2 of 2)
• Driving online traffic
• Search engine optimization
• Search engine marketing
Social Media (1 of 2)
• Means for consumers to share text, images, audio, and video information with each
other and with companies, and vice versa
• Online communities/forums
• Blogs
• Social networks
• Customer reviews
Social Media (2 of 2)
• Social media are rarely the sole source of marketing communications for a brand
• Only some consumers want to engage with some brands, and, even then, only
some of the time
Social Media Platforms
• Online communities and forums
• Blogs
• Social networks
• Influencer marketing
• Customer reviews
Mobile Communication
• Uniquely tied to one user
• Virtually always “on”
• Allows for immediate consumption
• Highly interactive
Events and Experiences
• Managing events
• Creating experiences
Managing Events (1 of 2)
• Managing Events
• To identify with a particular target market or lifestyle
• To increase the salience of a company or product name
• To create or reinforce perceptions of key brand image associations
Managing Events (2 of 2)
• To enhance corporate image
• To create experiences and evoke feelings
• To express commitment to the community or on social
issues
• To entertain key clients or reward key employees
• To permit merchandising or promotional opportunities
Creating Experiences
• Let customers experience how the company’s offering fits in their life
• Event sponsorship
Word of Mouth
• Power of word of mouth
• Viral marketing
Publicity and Public Relations
• Goal of publicity:
• Attract attention to the company or its offerings
• Goal of public relations:
• Manage the overall reputation of the company and its offering, while building
relationships with the community
Publicity (1 of 3)
• Publicity
• Involves securing editorial space—as opposed to paid
space—in the media to promote a product, service, idea,
place, person, or organization
Publicity (2 of 3)
• Advantage of publicity
• Free
• More credible
• Downside of publicity
• Lack of predictable outcome
Publicity (3 of 3)
• Publicity
• Builds awareness
• Builds credibility
• Boosts enthusiasm
• Minimizes promotion cost
Public Relations (1 of 3)
• Public relations (PR)
• A variety of programs to promote or protect a company’s image among the
relevant stakeholders
Public Relations (2 of 3)
• PR functions:
• Provide press coverage
• Manage corporate communications
• Engage in lobbying
Public Relations (3 of 3)
• Popular media formats
• Publications
• Events
• News
• Speeches
• Public service activities
• Identity media
Packaging
• Core principles:
• Visibility
• Differentiation
• Transparency