Distribution: Customer Service Marketing

REVIEW Channel Structure/Design Setting distribution objectives Meeting customer needs is the ultimate goal Specifying distribution tasks who does what along the supply chain (channel of distribution) Considering alternative channel structures Three dimensions: Length/Intensity/Types of intermediaries Choosing optimal channel structures Each participant in the marketing channel focuses on performing those activities at which it is most efficient. This results in much greater efficiency and higher output.

Intensity of Channel Structure Channel intensity: the number of intermediaries at each level of the marketing channel. Intensive Selective Exclusive Intensive: Used when convenience products are sold through virtually every available retail outlet in a particular market, e.g. soft drinks, candy, gum, cigarettes Selective: Selectively distributed bands are available in multiple retail outlets in a particular market. Shopping products, or those that consumers seek out, are sold through selective distribution. Exclusive: Practiced when a manufacturer restricts product distribution to a single retailer in a particular market or just a relatively few retailers. Products that are expensive, infrequently purchased, are sought after by consumers (i.e. specialty goods), or which require considerable after-sale servicing are the most likely candidates for exclusive distribution All Possible Intermediaries Relatively Few Intermediaries Just One Intermediary

Intensive Distribution = the use of all suitable outlets to sell a product. The objective is complete market coverage and the ultimate goal is to sell to as many customers as possible, wherever they choose to shop. Ex. Motor oil is sold in quick-lube shops, farm stores, auto parts retailers, supermarkets, drugstores, hardware stores, warehouse clubs, and other mass merchandisers.

Selective Distribution = a limited number of outlets in a given geographical area are used to sell the product. Very important to select channel members that maintain the image of the product & are good credit risks, aggressive marketers & good inventory planners. Ex. Armani & Lucky Brand sell their clothing only through top department stores that appeal to the affluent customers who buy its merchandise. It does not sell in a chain megastore or a variety store.

Exclusive Distribution = protected territories for distribution of a product in a given geographic area; business maintains tight control over a product Ex. Franchisor legally requires a franchisee to sell only the franchisor’s products

Integrated Distribution Manufacturer acts as wholesaler and retailer for its own products. EX. Sherwin-Williams Paint, Merle Norman Ex. The Gap or Ann Taylor sells its clothing in company-owned retail stores.

OBJECTIVE TWO: Explain the relationship between customer service and channel management

Explain how customer service facilitates order processing Ensures timely delivery of products Effective communication is important Order processing Correct shipping information Correct products Handling complaints Reducing the probability of complaints Nice and friendly people

Identify actions that customer service can take to facilitate order processing EX. In retail selling Bag the merchandise with care. Products such as glassware may require individual wrapping before bagging. Work quickly to bag your customer’s merchandise and complete the payment process. EX. In business-to-business sales Complete the paperwork quickly and leave a business card.

Actions to Facilitate Order Processing Customer Call Center Online Order Warehouse Actions to Facilitate Order Processing Inventory Check No, Customer Notified of Backorder Items in Stock? Yes, Item Packed for Shipment Accounts Receivable Processes Payment Item Shipped

Describe the role of customer service in following up on orders Following up with your customers after the sale is an important part of providing good customer service. Should customer have questions or problems it is your duty to make sure they have a positive experience with your company.

Use of Technology in Distribution Some businesses have the capacity to distribute most or all of their products through the internet e-commerce: Products are sold to customers and industrial buyers through the Internet. Satellite tracking = a dispatcher has current knowledge of a delivery truck’s location and destination

Use of Technology in Distribution (cont.) Tracking of package Bar coding on package Package scanned at transition points in distribution chain Customer uses internet to follow package along distribution chain; e-mail may be used Global distribution: in some countries the postal service is not reliable; package tracking facilitates global trade

Use of Technology in Distribution (cont.) Problems Cost of technology Changing technology = updating equipment Need for compatible systems within and between businesses & countries

Video http://channel.nationalgeographic.com/channel/ultimate- factories/videos/ups/

Unit 3 Test 3.1: Product Packaging & Life Cycle 3.3: Product Mix 3.4: Branding 3.6: Pricing 3.7: Distribution http://quizlet.com/31499624/flashcards