Flashcards in Chapter 13: Distribution Strategy Deck (38):
What is DISTRIBUTION STRATEGY?
Selecting marketing channels to get products to customers (deliver value) in a way that maximizes sales and profits. (Right product provided to the right customer at the right time and place.)
When will manufacturers use intermediaries (marketing channels) to distribute goods?
When intermediaries are more efficient at:
1. Transporting goods to consumers less expensively.
2. Selling the goods to retailers more easily.
3. Selling the goods to a large group of consumers that already purchase them.
How can channel members add value?
1. Increasing customer benefits (product, service, image)
2. Reducing costs (price and non-price costs)
How can channel members increase PRODUCT BENEFITS?
Channel members increase product benefits by enhancing product quality and breaking bulk. (Variety)
How can channel members increase SERVICE BENEFITS?
Channel members can increase service benefits by providing a variety of added-value activities. (Tech support, repair, warranty, credit, delivery, etc)
How can channel members build IMAGE BENEFITS?
Channel members can build the brand image by selecting channel partners that reflect or enhance the brand. (Brioni only @ Neiman Marcus, Saks, etc)
How can channel members lower NON-PRICE COSTS?
Channel members can create increased efficiency, and thus lower costs of exchange, by reducing the number of transactions between producers and consumers.
What should you keep in mind when selecting marketing channels?
Go with alternatives that highlight what your product and company do best.
What should you avoid when selecting marketing channels?
Avoid marketing channels that uncover or accentuate product or company vulnerabilities. (Don't choose a huge distributor if you're not ready for mass production)
What are the 3 types of marketing channels?
What is DIRECT distribution?
Selling products directly to consumers (no intermediaries). (L.L. Bean)
What is INDIRECT distribution?
Selling products through intermediaries (Wholesalers, retailers) when that is more efficient.
Why is MIXED distribution being used more frequently today?
Because of the Internet.
What are the 3 types of DISTRIBUTION?
What are 3 factors that play a role in selecting a distribution method?
1. Product Life Cycle
2. Product Positioning
3. Brand Personality
What is INTENSIVE distribution method?
Selling through as many retailers as possible. (Trade promotions may be involved)
What is SELECTIVE distribution method?
Selling through a limited number of qualified retailers. (Requires vetting and more involved decision-making.) Generally prices are higher than intensive.
What is EXCLUSIVE distribution method?
Selling through only a few retailers.
Retailers have exclusive rights in the geographic area.
Limited availability supports super-premium prices.
Exclusive distributors create matching/enhancing selling environments.
In what ways is e-commerce the best choice for a marketing channel?
Payment comes when the product is purchased, not when the retailer decides to pay.
No need to deliver huge quantities.
Set its own return policy.
*Online marketing requires a unique product backed by an engaging sales pitch.
What are the 3 main challenges of e-commerce sites?
1. No Traffic
2. Lots of Traffic (but few interested buyers)
3. Abandoned shopping carts
What makes internet buyers hard customers?
They are restless, skeptical. (Website design must get out of the way of the purchase.)
What difficult decisions need to be made in competitive retail marketing?
1. Which products to stock
2. Where to locate stores and hours
3. How to price products and services
4. How to promote store patronage and loyalty
5. How to configure brick and mortar as well as online stores
6. Whom to hire and how to engage employees.
What are the 6 P's of retail marketing?
Define PRESENTATION (6 P'S of retail marketing).
Atmospherics consist of elements in the store's design that appeal to customers' emotions and encourage buying. (Signage, lighting, deco, color, layout)
Define PERSONNEL (6 P's of retail marketing)
Frontline employees set the tone for retailers.
How should we recruit, train, and engage the type of employees consistent with the products and services offered?
Responsiveness, communication style, knowledge, competency, courtesy, clean & appropriate attire.
What is "the first moment of truth?"
The first 3-7 seconds it takes shoppers to make up their minds about which product to take from the shelf.
How do you WIN the first moment of truth?
In-Store Advertising & Packaging
True or false? The best channel system should achieve ideal market exposure?
How can one measure market channel performance?
1. Customer Reach (volume)
2. Operating Efficiency (cost to serve)
3. Service Quality (retention)
What is the primary cause of conflict among channel members?
Distribution of profits
What are ATMOSPHERICS?
Elements in the store's design that appeal to consumers' emotions and encourage buying.
What have we learned from SIGNS STUDIES?
1. Price influences sales more than signs
2. If the product is on sale, pricing signage increases sales over no signs.
3. Benefit signs dominate at both regular and sale prices.
True or false? Special display shelf space increases sales?
Warm colors vs Cool colors
Drawn to warm colors (entrances and impulse buys)
Cool colors are more pleasant (involved decision making)
What is PRODUCT ASSORTMENT?
The breadth and depth of the product line.
What is PRODUCT LINE BREADTH?
Number of different product lines.
What is PRODUCT LINE DEPTH?
Number of different products within a line.