Distribution and promotion Half the money | spend on advertising is waster: the trouble is! dan’t know which half Juln Wanamaker (1838-1922), American businessman Distribution Distribution is the final link in a company’s supply chain. and involves geting the right products to the eustouer a the right time. It includes the physical handling of goods, warehousing, choice of uisteibution channel (eg wholesaler, retailer, direct to consumer), choice of retail outlet, and ‘order fultiment (= doing something that is promised). ‘The usd miap vpposite lists te main options for retaling, ‘The main trend has heen to move away from small family. ‘owned stores (AME mom and pop stores) to large shopping, contros (AmE malls). A variation, common in the US, c a large out-of-town mall where giant ‘big box stores surround a central car park (AmE parking lot). Future trends may include otfering more entertainment to attract customers, and developing private label (in-house) brands as cheaper competition to name-brand goods. The promotional mix | The term ‘promotion’ is very broad. Louk at the mind map to.590 diffrent alomante of the promotional mis. The frst item in the bubble, sales promotions, is covered in more | otal on another branch ofthe map. The other items are covered in more detail below: ‘© Personal selling (= sales): this is the direct face-to-face ‘communication between salesperson and customer. The sales process has various stages: 11 Prospecting: identifying a potential customer (= a prospect) who has tho ability and authority to buy. 2 Approach: contacting the prospect and preparing tor the sales interview. 3 Presentation: describing the features of the product, highlighting the advantages over competing products, and giving examples of satisfiod customers. 4 Demonstration: if possible, the customer is piven @ chance to see the product in use. Answering objections: customers should be given a hanes to eepross thoir daub, as thay are unkilaly to buy unless these are dealt with. At this stage the salesperson stresses benofits rather than features © Closing: the salesperson asks the prospect to buy. Ifthe ‘customer still as doubts then options inchade offering ‘an alternative product, offering a special incentive, ot restating the product benefit 7 Follow-up: processing the order quickly and efficiently, and reassuring the customer about their chase dorision during further conversation | 8 Long-term relationship: going on to establish regular contact with the customer 4 Further information wai consimeraychalogitcom © © Advertising: the use of different media such as television commercials, advertisements in newspapers and magazines, direct mail, entdanr(hillhoards, posters on bbuseatupy), flyers given to people on the street, Internet. (© Priblc relations: managing ‘publicity’ (information that ‘makes people notice a company). The PR function in a company needs to extablich good relatione with the ews mecha in order to control this information, and PR people issue pross releases and hold press conferences. © Events: memorable occasions (in-store, onthe street. in ‘an unustal location). © Sponsorship of sports teams. mu theatre / opera / ballet ete: (© Endorsements hy celerities eg ‘the face of LOréal’, rap artists wearing a clothing brand). {© Trade promotions to retailers, og financial incentives to stock a new product or to give more space/ visibility to existing products (eg shelf height and aisle position). © Other: product placement in films, word-of-mouth (= personal recommendation), viral marketing (online through social networking websites and friends emailing video clips). The term ‘guerrilla masketing’ covers all unconventional techniques ~ from viral marketing ta the Aistribution of free products on the beach. Building customer relationships ‘Today, a major part of promotion is developing long-term relationships with customers 5o that they make repeat purchases and are open to crose-selling of related products 10018 tor developing customer relationships include: ‘© Building a brand identity thatthe customer will relate to (6g through sponsorship and endorsements). © Frequency programmes (eg trequent-flyer programmes on airlines) © Forming communities of buyers (eg consumer chat rooms on the Intermet, or meetings of owners of Hatley Davidson motorbikes) © Alfinity marketing (= attracting customers on the basis of their other interests, for example linking a credit card toa favourite charity) © Individualized advertising based on previous purchases (eg Amazon's book suggestions) © Co-mmarketing with another company (eg giving away a toy at McDonalds that links to a new Disney film). © Using CRM software to give the customer a more ‘personal experience when they contact the company. gromps, ui [Link]/promixhim © ww marketingteachercom5 DISTRIBUTION AND PROMOTION Direct distribution: from the waducer or service srovider Araight to the consumer or business wes Internal ate enthusiasm amongel salespengle BIB products se ‘Trade shows (> trade fairs / exhibitions) Portfolios of products for salespeople Deals Gey price redactions? Use of an intermediary CG middlanuan: one or were of L broker distriLintory wholesaler, retailer See eee Customer ser vie ¢> order falfilment, | warranty and repair issues) Logistics: the work of planning and enppniting the movement of materiale, qpods and people Consumer products Special utter, 10% oft Tor & limites tine Bonus: buy one, on hi get one Wee ae tear tan eared Coupons to cut ont refer to shies? of a magating Free samples Incstore dieglaye Catalnquee /herchuree Games and contests Promational items with an imprinted logo Leal award DISTRIBUTION AND PROMOTION Sales promotions Personal selling Non-store retailing Direct-ressonse retailing: home TESS Gt ele omy catalogues, ete Internet retailing: online selling “ireagh virtual storefronts Automatic merchandising: sales through vending machina Direct sening: salespeople ge door-to-door Store retailing ‘Advertising Aine Ridlions ¢PRY Specialty store (eq bookstore, Flower shop? Fate Convenience store Cbasic goods, eee he store eqn until Icke, higher prices) Endorsements Discount store Goery low prices, eq Aldi, Walmart) Sugarmarket / Hypermarket Department store (eq Harrods) ~ aimed at more upmareet CAmE upscale) customers Trade promotions +0 retailers Dither: peedurt qlaronent, word of mouth, ral mareating, etc Quicklinks Marketing Mic > place or promotion) © [Link].ubdmediastore10_minute_guides!10_min Promotional Mix pdf 5Distribution and promotion: Exercises 8.1 Till in the missing letters. 11 Making sure that the customer gets the right goods at the right time fs called ‘order fu____ment 2 Aleve wirere gouds are sold to consumers is called 2 ‘retail ou__t 3A potential customer is a ‘pro__ect. 4 A large uldvor sign used for advertising is called a “bi___oara’ 5 tis important to develop lona-term relationships wrth customers so that they make ‘rep_ and are ‘open to ‘c__ss-seliing’ of other related products. 6 A synonym for intermediary’ is ‘the mi____man 7 Areteller has @ shop (AmE store), while © wholesoler has ‘w___ une! '8 The process of selling products connected with ¢ popular film, person or event is called ‘mer_ ing’ In ‘American Enalsh this word is also used for ‘selling goods in general 8.2. Complete each explanation with a pair of words from the box. The words may not be in the right order chic ee gent / broker brochure / catalogue ] clint /eustomer commercial / spat | ‘promotion /adverting Sponsorship endorsement 1 To refer to a buyer, the word is more common where there i a standard product, and in snops ‘and restaurants. The word —— is more ‘common in the service sector and where there is a dearee of personalization 2. A list of everything that 2 company sells i called a _____. it has lots of colour pictures and looks like a small magazine itis more likely to be called 2 ‘The former may have prices as well, the latter would not. 3. A general word that means ‘the process of attracting people attention to product is aa One specific example of tis is which refers to text and Images and sound in media such 35 tclevzion, newspaper, billboards and the Internat 4. An advertisement on television, radio or fim is called a ‘An informal word with the same meaning is ________ 1s wnen a celeorny uses a certain product as a way of promoting it. the activity of aiving tinancal suoport toa sports or cultural event 6 Both worde mean ‘2 person who does business an behalf ‘of another company’. The word is used ‘where there isa long-term relationship, whereas the word _. § more common for individual ‘transactions (eg stocks) nz by matching a word from column. 1 brand channel 2 convenience mail 2 direct relation 4 distribution release 5 in-store placement 6 press identity 7 product display 8 public store 8.4 Match each stage in the sales process with its explanatian 1-7 elow. | ~ answering ebectons” Approach lang Demonstration” Folowun Presentation Pespctng identifying a potential customer 2 = nntacting tha prospect and preparing for the sales interview 3 —____________ describing the features of the product 4 —— = ging te customer 4 chanics to see the product in use asking the prospect to buy dealing with any doubts that the customer hae. processing the order quickly ‘and mainteining long-term contact 8.5 The sequence 1-7 in exercise 8.4 is probably not ‘the best. change the order of two terns so tat the prospect is more likely to buy. 8.6 Match these advertising media to the advantages (+) and disadvantages (-) below: direct mail, Internet, ‘magazines, newspapers, outdoor, radio, television. 1 (4) good coverage of local markets; ads can be placed ‘ulckly; ade can he cut cust and caved © ads compete with utter text, aus yet Uhnown away (short life span) (7) can target very specific audiences in specialist publications; long lfe of ad (usually several weeks): ads, ‘can be cut out and saved ©) ads must often be plared months in advance; cost is relatively high(4) uses sight, sound anu motion, reacties @ wide audience; high attention with no competition from other material Overy high cost 4 (+) low cost; can target specific audiences; very flexible; (goad for lacal marketing (Ormiay have low attention because itis @ background medium; audianca may not remember ad (only ana’ physical sense involved and nothing to keep) 5 high visibility and repeat exposure; relatively low cost strony love! focus {Dlimted message: ficult gt attention af uence for any one specific ad 6 (4) if linked to a customer database can be targeted at, very specific markets; very flexible; ad can be saved (high cost: consumers may reject ad as ‘unk’ 7 (9) connects a company with its customers at the precise moment they are looking tor a product; global coverage at a relatively inexpensive price; interactive (many ‘eyeballs’ but few ‘clck-throughs': dick fraud (clicks on your advert arranged by dishonest companies or rampetitors, not mare by pntential customers) 6.7 Find a word from the previous exercise which 1 how widoly information is ditributedl 2 put somewhere, especially na caretul or deliberate way 3 try to influence a particular group of people 4 something that is not wanted or not healthy (collocates with ‘mai’ and ‘food’) 5 Intenet term retrring to those occasions when someone looks at something 8 DISTRIBUTION AND PROMOTION 8.8 Complete the toxt with the phrases in the box. ‘inboundlogistes outbound logistics materials handling | retail outlets warehouses customer retums end user | ersworks fob hee on board) of (cost, insurance, freight) 2 panes of planning ant contain the physical ‘tow of materaisn me supply chain's calle logis. ‘There re four stages Fret," inbound logics is. concered with bringing raw materials, packaging. at rom sup to produce, Seco, ig the movement of goods within a warehouse. ftom ‘the warehouse to the factory floor. and fru Ue faciory Nour Ue vals wexkSaluns, Ti, 8 manages the flow of finished products through intermediaries tote tinal consumer. Finally reverse logistics involves bringing goods back to the promises ofthe erginl manufacturer hocauce of defects or other 4 ‘The whole process isa shared responsibilty between marketing ancl operations, bul clearly marketing is mare concerned witn these areas that impact directy on ‘wholesalers, retailers and the §____ A key issue in logistics is choosing the right means of transport. Options includ ral road (using trucks with tulle), ehipe and air. Combinations ofthese are common Another key area of logistics is the storage function. Marketers rus have goous available in a all over the country, ready to restock 7. of be delivered to stoners when dered ifimport and export are involved, then thea is an important issue: who pays fr which pars of te transportation? Contracts have to specif this clear, and use Inenterms (Intemational commercial terms) to do so. ‘There are many Incoterms, but the most commen are: othe buyer picks up tho ood atthe sellers premises and arranges all the vransport ana insurance. © %______ the eeller dolivere the goods onto a ship at a named port: from here all responsibility noting the sea journey) passes to te buyer @ 0. - the seller has: responsibilty to a named port of destination, and so pays forthe cost and risk of the sea journey as well. “Discussion tones es 1 "Sales: sometimes nas @ baa reputation (seling used cars. 3 Everyone Knows that celebrities in thelr private lve don But this is wrong, Infact itis creative, challenging and fun. actualy use the products they advertise, You must be a Qaaree © Disaaree ‘oo! it you are persuaded by endorsements. 2 Advertsing isnot so important. A good product with te «Agree Disagree | fight rice and the right distrbution wil sell itself 4 Contemporery tends in advertising, communication and O Agree 3 Disagree promationincude 7