Promotion and Distribution © 2014 Pearson Education, Inc.14-1 chapter 14 Better Business 3rd Edition Solomon (Contributing Editor) · Poatsy · Martin

What Is Promotion? © 2014 Pearson Education, Inc.14-2 Promotion –Communication about an organization and its products that is intended to inform, persuade, or remind target market members –There are several ways in companies can communicate to target market members –Promotion is NOT just advertising!!! The Promotion Mix –The particular combination of promotion methods a firm uses to reach a target market 1) Advertising 3) Public Relations 4) Personal Selling 5) Sales Promotion Integrated Marketing Communications (IMC) –Coordination of all promotion efforts for maximum informational and persuasive impact on customers, and to communicate a unified impression about a product –Goal = Consistent Messages to Customers

The Promotional Mix © 2014 Pearson Education, Inc. 14-3

Integrated Marketing Communication A strategy to deliver a clear, consistent, and unified message about the company and its products to customers at all contact points. © 2014 Pearson Education, Inc. 14-4

The Role of Advertising Businesses use Advertising to: –Build brand awareness and brand association –Emphasize product differentiation –Build brand loyalty and brand equity –Inform and educate consumers –Increase sales and lower prices © 2014 Pearson Education, Inc Advertising is paid, nonpersonal communication, designed to influence a target audience. Television remains the #1 advertising media. But it is fragmenting….

Some Common (Not All) Types of Advertising © 2014 Pearson Education, Inc Institutional (or corporate) advertising Advertising that focuses on creating a positive image toward an organization or an entire industry as opposed to a specific product. Ex. “Beef, It’s What’s for Dinner,” sponsored by the Cattlemen’s Beef Board and National Cattlemen’s Beef Association or “Got Milk” by California Milk Processing Board Produce (brand) advertising Used to promote a specific product’s uses, features, and benefits. This is the type of advertising we most often see. Comparative advertising Advertising that compares a brand’s characteristics with those of other established brands. You have probably seen toothpaste, pain relievers, and detergents compared. Retail (or local) advertising Advertising that focuses on attracting customers to a fixed location like a department store or a grocery store.

Types of Advertising Appeals © 2014 Pearson Education, Inc.7 The 5 Appeals of Product Advertisements 1)Humor 2)Informational 3)Sex 4)Emotional (ex. Fear/Heartfelt) 5)Celebrity

Types of Advertising Media © 2014 Pearson Education, Inc.14-8

Advertising Trends Online advertising Social media Mobile marketing Product placement Infomercials Global advertising © 2014 Pearson Education, Inc. 14-9

Public Relations Public Relations is the ongoing effort to create “non- sales”, positive relationships with all of a firm’s different stakeholders. The management function that establishes and maintains mutually beneficial relationships between an organization and its stakeholders. © 2014 Pearson Education, Inc.14-10

Public Relations Tools Controlled messages –Corporate, advocacy, and public service advertising and corporate reports publishing Semicontrolled messages –Messages are placed on Web sites, in chat rooms, and on blogs –Sponsorships Uncontrolled messages - Publicity © 2014 Pearson Education, Inc

Publicity Information about an individual, organization, or product transmitted through mass media at no charge. Advantages –Free –Often more believable as it is presented as a news story Disadvantages –Actual message and timing controlled by the media, not the seller –Bad news gets shared too © 2014 Pearson Education, Inc

Personal Selling Personal selling is paid, personal communication between buyer and seller. Direct communication between a firm’s sales force and potential buyers to make a sale and to build good customer relationships. –Most expensive part of the promotional mix as a salesperson deals with one buyer at a time –Preferred with high-value, custom-made, or technically complex products © 2014 Pearson Education, Inc.14-13

Types of Salespeople Order getters Order takers Order influencers Support personnel © 2014 Pearson Education, Inc

© 2014 Pearson Education, Inc The Personal Selling Process

Sales Promotion © 2014 Pearson Education, Inc. 16 Consumer Sales Promotion Stimulate immediate sales Premiums Contests/Games/Promo Items Samples Coupons Rebates Point of Purchase Displays Trade Sales Promotion Stimulate wholesalers and retailers to push specific products Special Deals Allowances Trade Shows Contests Sweepstakes Special Events

Sales Promotion: Tools © 2014 Pearson Education, Inc.14-17

Trade Sales Promotions © 2014 Pearson Education, Inc

Advantages & Disadvantages of Promotional Tools © 2014 Pearson Education, Inc

What is the Distribution (Place) Element of the Marketing Mix? The process that makes products available to consumers when and where consumers want them. © 2014 Pearson Education, Inc

Distribution: Getting the Product to the Consumer © 2014 Pearson Education, Inc. 21 ProducerWholesaler Channel of Distribution – the path that a product takes from the producer to the consumer Distribution Strategy: getting the right product to the right person at the right place, at the right time Consumer

Elements of a Distribution Strategy © 2014 Pearson Education, Inc. 22 Physical Distribution – the actual movement of products to consumers (i.e. by what means do products get to marketing channels/consumers, like trucking, railroad, air, etc.) Direct Channel – producers who sell products directly to consumers (ex. Producer->Consumer) Channel Intermediaries (aka Middlemen, Marketing Channels) – help products move from factories to consumers efficiently (ex. Retailers and Wholesalers) Question: Are Sam’s Club and Costco Wholesale acting as a retailer or wholesaler?

© 2014 Pearson Education, Inc Types of Distribution Channels

Marketing Intermediaries © 2014 Pearson Education, Inc Merchant Wholesalers (ex. PYA/Monarch, IFH) – Full-service merchant wholesalers – Limited-service merchant wholesalers – Drop Shippers – Cash and Carry Wholesalers – Truck (rack) Jobbers Agents/Brokers (ex. The Match Maker, Inc. – my company!) – Connect Buyers and Sellers

Retailers and Wholesalers © 2014 Pearson Education, Inc.25 Retailers – the distributors that sell products directly to the ultimate users Wholesalers – distributors that buy products from producers and sell them to other businesses or Non-final users (i.e. other retailers or wholesalers)

The Role of Marketing Intermediaries © 2014 Pearson Education, Inc.26  Justifications for marketing intermediaries Intermediaries perform essential marketing services (promotion of products, help sell product) Intermediaries provide important market information to producers (what’s selling, who’s buying, customer feedback) Intermediaries help store products (producers won’t be burdened with storage costs) Intermediaries provide customers with convenience and choice selection Intermediaries accept risk for customer non- payment or non-sold products Intermediaries create efficiency and utility Intermediaries help REDUCE COSTS and provide VALUE! How?

Why Are Intermediaries Needed? © 2014 Pearson Education, Inc

Types of Retailers © 2014 Pearson Education, Inc.14-28

Non-Store Retailers Electronic shopping Telemarketers Direct sellers Direct marketers © 2014 Pearson Education, Inc

Retail Strategies: Market Coverage Intensity © 2014 Pearson Education, Inc  Intensity of market coverage Intensive distribution – The use of all available outlets for a product to saturate the market – Convenience Products Selective distribution – The use of only a portion of the available outlets for a product in each geographic area – Shopping Products Exclusive distribution – The use of only a single retail outlet for a product in a larger geographic area – Specialty Products

Distribution Logistics © 2014 Pearson Education, Inc

Benefits & Costs of Transportation Modes © 2014 Pearson Education, Inc

Warehousing & Inventory Control Storage warehouses store goods from moderate to long periods of time Distribution warehouses (or distribution centers) are designed to gather and move goods quickly to consumers © 2014 Pearson Education, Inc

© 2014 Pearson Education, Inc