chapter 14

Promotion and Distribution

Better Business 1st Edition
Poatsy Martin
Slide presentation prepared by Pam Janson Stark State College of Technology
2010 Pearson Education, Inc. 1

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.

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Learning Objectives
1. 2. 3. What is a promotional mix, and what is its function in a promotional campaign? What are the different categories of advertising, and what role do these categories play in business and society? How are the various public relations tools essential to the marketing mix? What are the six steps in the personal selling process? What are the two main types of sales promotions, and what types of tools are commonly used as incentives? Why are marketing intermediaries and distribution channels important elements in marketing? What types of services do agents/brokers and wholesalers provide? Why are retailing and physical distribution key aspects of distribution?
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4. 5.
6.

7.
8.

What Is Promotion?
All of the techniques marketers use to inform targeted customers of the benefits of a product and to persuade them to purchase the good, service, or idea Increases brand awareness, brand loyalty, and sales One of the most visible components of the marketing mix
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The Promotional Mix

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Promotional Campaign Steps

1. 2. 3. 4. 5. 6. Identify target market. Determine marketing objectives. Design the message. Determine the budget. Implement the promotional mix. Evaluate and adjust as needed.

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Integrated Marketing Communication

Strategy to deliver a clear, consistent, and unified message about the company and its products to customers at all contact points
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Advertising in Business and Society

Advertising is paid, impersonal mass communication from an identified sponsor to influence a targeted audience Effective advertising builds brand awareness, association, loyalty and equity Advertising informs consumers Advertising industry creates jobs
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Types of Advertising
Product Advocacy Corporate (or Interactive institutional) Internet Comparative Retail (or local) Business-to-business Nonprofit Public service
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Advantages and Disadvantages of Advertising Media: Part 1

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Advertising Trends
Internet advertising Product placement and infomercials Global advertising

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Public Relations
The management function that establishes and maintains mutually beneficial relationships between an organization and its stakeholders
o Stakeholders include all interested parties, including consumers, stockholders, employees, suppliers, the government, and the public in general

The purpose is to maintain a positive image of the organization in stakeholders minds

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Public Relations Tools

Controlled messages
o Corporate, advocacy, and public service advertising and corporate reports publishing

Semicontrolled messages
o Messages are placed on Web sites, in chat rooms, and on blogs o Sponsorships

Uncontrolled messages
o Publicity
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Publicity
Information about an individual, organization, or product transmitted through mass media at no charge Advantages
o Free o Often more believable as it is presented as a news story

Disadvantages
o Actual message and timing controlled by the media, not the seller o Bad news gets shared too
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Personal Selling
Direct communication between a firms 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

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Types of Salespeople
Order getters
o Creative selling

Order takers Support personnel

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The Personal Selling Process

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Consumer Sales Promotion Tools

Coupons Rebates Frequent-user incentives Point-of-purchase displays Free samples Contests and sweepstakes Advertising specialties Others: BOGO, catalogs, demonstrations, premiums, etc.
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Trade Sales Promotions

Trade shows and conventions Trade allowances Cooperative advertising Free merchandise Sales contests Dealer listings Catalogs and store demonstrations In-store displays Quantity discounts Training and support programs

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Advantages and Disadvantages of the Promotional Tools

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Distribution
The last of the 4 Ps (place) Makes products available to consumers when and where consumers want them Managing the entire process is called supply-chain management

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Marketing Intermediaries
A business firm that operates between producers and consumers or business users
o Wholesalers o Agents/brokers o Retailers

The distribution channel is the whole set of marketing intermediaries who get goods from manufacturers to final consumers

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Why Are Intermediaries Needed?

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Types of Distribution Channels

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Methods of Distribution: Wholesaling

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Types of Wholesalers
Merchant wholesalers
o Full-service wholesalers
Wholesale merchants Industrial distributors

o Limited-service wholesalers
Cash-and-carry wholesalers Truck wholesalers Drop shippers Rack jobbers
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Agents/Brokers
Facilitate buying and selling Do not take title to products Typically earn a commission on the sale Agents are hired on a more permanent basis than brokers are Types
o Manufacturers agents o Selling agents o Purchasing agents
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Retail Strategies
Intensive distribution
Convenience goods Example: Frito Lay chips

Selective distribution
Shopping goods Example: Sony HD televisions

Exclusive distribution
Specialty goods Example: Porsche cars

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Types of Retailers

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Non-Store Retailers
Electronic shopping Vending machines Kiosks and carts Telemarketing Direct selling Direct marketing
o Catalog sales, direct mail, telemarketing, infomercials 2010 Pearson Education, Inc.
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Retail Organization
Corporate chain stores
o Safeway, Sears, Wal-Mart

Wholesale groups
o Independent Grocers Alliance (IGA), Western Auto, True Value, Associated Grocers, and Ace

Franchises
o McDonalds, Subway, KFC, Pizza Hut, Jiffy Lube, and Holiday Inn
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Physical Distribution

Inbound logistics

Materials handling

Outbound logistics

Reverse logistics
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Warehousing and 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

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Benefits and Costs of Transportation Modes

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Chapter Summary
1. 2. 3. What is a promotional mix, and what is its function in a promotional campaign? What are the different categories of advertising, and what role do these categories play in business and society? How are the various public relations tools essential to the marketing mix? What are the six steps in the personal selling process? What are the two main types of sales promotions, and what types of tools are commonly used as incentives? Why are marketing intermediaries and distribution channels important elements in marketing? What types of services do agents/brokers and wholesalers provide? Why are retailing and physical distribution key aspects of distribution?
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4. 5.
6.

7.
8.

Beyond the Book

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Leading Media Companies

MEDIA COMPANY: 2006 % CHANGE NEWSPAPER MAGAZINE TV RADIO CABLE NETWORKS CABLE SYSTEMS DIGITAL MOVIE OTHER Time Warner $33,993 6 $0 $3,604 $397 $0 $6,970 Comcast $27,392 11.9 $0 $0 $0 $0 $1,053 Walt Disney $16,838 9 $0 $366 $5,394 $147 $6,757 News Corp.* $14,091 9.6 $249 $0 $5,121 $0 $3,848 DirecTV $13,744 12.5 $0 $0 $0 $0 $0

$11,738
$5,458 $2,909 $2,919

$26,339
$0 $0 $0

$0
$280 $2,671 $1,224

$0
$385 $2,954 $1,534

$13,744
$0 $0 $0

Note: Dollars in millions

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Product Placement Hall of Fame

Movie Cast Away I Am Legend Youve Got Mail Harold & Kumar Go to White Castle Men in Black II Product FedEx, Wilson Ford, Apple AOL, Starbucks White Castle Mountain Dew, Burger King, eBay

Talladega Nights: The Ballad of Ricky Bobby

Top Gun Transformers E.T. the Extra-Terrestrial

Wonder Bread
Department of the Navy, Ray-Ban GM Reeses Pieces

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NO-AD Suncare
NO-AD Suncare is manufactured by Solar Cosmetic Labs of Miami, Florida The NO-AD line was introduced in 1960 NO-ADs goal is to provide the best quality products at the lowest price NO-AD offers twice the size product for the same price as the national brands Products include sunscreen, sunless tanner, and face and lip sun block There is no advertising for this product line
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Tiffanys and Nelson Peltz, Activist Marketer

Nelson Peltz is a partner in Trian Trian has a 8.4% stake in Tiffany Peltz and his partners suggested that Tiffany: o Sell watches in stores other than Tiffanys o Focus on women buying jewelry for themselves Tiffany has implemented these ideas and others to improve its marketing mix
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