Principles of Marketing, first 13 chapters, Sintesi del corso di Marketing

Scarica Principles of Marketing, first 13 chapters e più Sintesi del corso in PDF di Marketing solo su Docsity! Bianca Ciatti Chapter 1 — Marketing Five core concepts in Marketing: 1. Needs, wants and demands 2. Products and services 3. Value, satisfaction and quality 4. Exchanges, transactions and relationships 5. Markets Definition of marketing: A social and managerial process whereby individuals and groups obtain what they need and want through creating and exchanging products and value with others. Simpler definition: deliver customer satisfaction at a profit by attracting new customers by promising superior value and keep current customers by delivering satisfaction. The marketing process: A simple, five step model of the marketing process for creating and capturing customer value. In the first four steps, companies work to understand consumers, create customer value and build strong customer relationships. In the fifth and final step, companies collect the rewards of creating superior customer value. There are five core concepts of a marketplace: needs wants and demands, products and services, customer value and satisfaction, exchanges and relationships, and lastly, markets. 1. Needs, wants and demands: needs are states of felt deprivation, they can be physical or social. Wants are the form needs take, and they are shaped by culture and personality. Demands are what wants become when supported by buying power. 2. Product and services: Services are just one of a kind product. Products are anything that can be offered to satisfy a need or a want. Ex: “smoking is bad” idea is a product, a person can be a product in a political election. 3. Customer value and satisfaction: customer value is the difference between value gained by owning and using a product and cost of obtaining the product. Customer satisfaction is the perceived performance relative to expectations. 4. Exchanges and relationships: exchange is obtaining a desired object from someone by offering something in return (offerings could be money, product, service…) 5. Markets: market, two definitions. Economist’s definition: “place where buyers and sellers meet”, Marketer’s definition: “the set of actual and potential buyers of a product”. The sellers of a product are labelled as the “industry”. Once we have understood the marketplace, marketing management can design a customer value-driven marketing strategy. Pagina di 1 23 Marketing management definition: the art and science of choosing target markets and building profitable relationships with them. Its aim is to engage, keep and grow target customers by creating, delivering and communicating superior customer value. In order to design a winning marketing strategy, the marketing manager must answer 2 questions: 1. What customers will we serve? 2. How can we serve these customers best? Five marketing concepts: 1. Production concept: The consumer wants a product that is available and affordable, the goal is to improve production and distribution efficiency. 2. Product concept: The consumer wants a product that has the best quality, the goal is to always improve the quality of it. 3. Selling concept: The consumer will not buy enough products unless sellers undertake large-scale promotion and selling effort, the goal is to promote the product and to persuade people into buying it. 4. Marketing concept: The consumer buys a product that best satisfies needs and wants, the goal is to determine needs and wants of target markets, deliver the satisfaction better than competitors. 5. Societal marketing concept: the marketing strategy should deliver value to consumers in a way that maintains or improves both the consumers and society’s well-being. Pagina di 2 23 Marketing planning addresses what and why of marketing activities. Marketing Implementation Turning marketing plans into marketing actions to accomplish strategic marketing objectives. Marketing implementation addresses who, when, where and how of marketing activities. Marketing department organisation As a company expands, it will need to have many specialists, therefore many companies have created several roles, for instance: CMO (Chief marketing officer): heads up the company’s entire marketing operation COO (Chief operating officer) CFO (Chief financial officer) Marketing Control Measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that the objectives are achieved. Pagina di 5 23 Chapter 3 — The Marketing Environment Marketing environment: actors and forces outside marketing that affect marketing management’s ability to develop and maintain successful relationships with its target customers. The marketing environment is formed by microenvironment and microenvironment. Microenvironment The actors close to the company that affect its ability to serve its customers. - The company itself - Suppliers: must watch supply availability, must monitor prices of key inputs - Marketing intermediaries: resellers, physical distribution firms, marketing services agencies, financial intermediaries - Customers - Competitors - Publics: any group that has an actual or potential interest in or impact on an organisation’s ability to achieve its objectives. Financial publics, media publics, government publics, citizen action publics, local publics, general publics, internal publics. Macroenvironment The larger societal forces affecting the microenvironment - Demographic: demography is the study of human populations in terms of size, density, location, age, gender, race, occupation, etc. (US age structure: hourglass figure). Generational difference: Baby boomers: people born after WWII until 1964, one of the most powerful forces shaping the marketing environment. Generation X: born between 1965 and 1976, they are more skeptical, sensible shoppers who research a product in detail before buying it, preferring quality to quantity. Millennials/Generation Y/Echo Boomers: born between 1977 and 2000, they are comfortable with technology, considerable buying power. - Economic: factors that affect buying power and spending patterns. - Natural: the physical environment and the natural resources that are needed as inputs by marketers or that are affected by marketing activities. Trends are three: growing shortages of raw materials, increased pollution and increased government intervention in natural resource management. The best companies created environmentally sustainable strategies. - Technological: perhaps the most dramatic force now shaping our destiny. New technologies create new markets and opportunities. Challenge is to refine technology into practical and affordable. - Political: laws, government agencies, pressure groups that influence and limit how a company may operate. Legislations regulates businesses and sees if something of the following happens: unfair competition, unfair business practices, etc. - Cultural: institutions and other forces that affect society’s basic values, perceptions, preferences and behaviours. Core beliefs are highly persistent, while secondary beliefs are subject to change. For instance, getting married is a core belief, but getting married early in life is a secondary belief. Major cultural values: people’s views of: themselves, others, organizations, society, nature, the universe. Responding to the marketing environment: 3 kinds of companies: who make things happen, who watch things happen, who wonder what’s happened. Some companies think that the marketing environment is uncontrollable and passively adapt to it. Other companies react, taking a proactive stance/attitude towards the marketing environment. (Ex: hiring lobbyists to influence legislations affecting their company and stage media events to gain favourable press coverage. They take to social media and run blogs to shape public opinion. They press lawsuits and file complaints with regulators to keep competitors in line, and they form contractual agreements to better control their distribution channels. Pagina di 6 23 Chapter 4 — Customer Insights Marketing relies on good customer information. Customer insights are fresh understanding of customers and the marketplace derived from marketing information that become the basis for creating customer value and relationships. To gain this information, companies must design marketing information systems (MIS), which are people and procedures for assessing information needs, developing the needed information and helping decision makers to use the information to generate and validate actionable customer and market insights. A MIS helps to assess information needs, develop needed information and analyse the right information to form customer insights. Internal databases are electronic collections of consumer and market information obtained from data sources within the company network. Internal data can be a strong base for a competitive advantage, because of the potential of this information. Competitive marketing intelligence is the systematic collection and analysis of publicly available information about consumers, competitors and developments in the marketing environment. Good marketing intelligence helps gain insights in how consumers think of and connect with the brand. Marketing Research Marketing research is the systematic design, collection, analysis and reporting of data relevant to a specific marketing situation facing an organisation. The process of marketing research has four steps: 1. Defining the problem and research objectives. The objective of exploratory research is to gather preliminary information that will help define problems and suggest hypotheses. The objective of descriptive research is to better describe marketing problems, situations or markets. Causal research aims to test hypotheses about cause-and-effect relationships. 2. Developing the research plan on how the information will be gathered. Secondary data is information that already exists somewhere, having been collected for another purpose. Secondary data can be accessed by using commercial online databases, which are collections of information available from online commercial sources or accessible via the Internet. Internet search engines can be used to locate secondary data, but the research must verify that the found information is relevant, accurate, current and impartial. Primary data is information collected for the specific purpose at hand. It can be collected via observational research, which gathers primary data by observing relevant people, actions and situations. Ethnographic research is a form of observational research that involves sending trained observers to watch and interact with consumers in their “natural environments”. Primary data can also be collected via survey research, which gathers information by asking people questions about their knowledge, attitudes, preferences and buying behaviour. Experimental research gathers primary data by selecting matched groups of subjects, giving them different treatments, controlling related factors and checking for differences in group responses. Information can be collected via mail, telephone, personal interviews or online. Mail questionnaires can be quite massive, while telephone information is also quickly gathered. Personal interviewing can be individual or group interviews. Online marketing research collects primary data online through Internet surveys, online focus groups, web- based experiments or tracking consumer’s behaviour online. Online focus groups gather a small group of people online with a trained moderator to chat about a product, service or organisation and gain qualitative insights about consumer attitudes and behaviour. It is often impossible to collect information from the entire population, so marketers often base conclusions on samples. A sample is a segment of the population selected for marketing research to represent the population as a whole. Three decisions regarding the sample need to be made: the sampling unit (who), sampling size (how many) and sampling Pagina di 7 23 The buyer decision process After looking at the influences that affect buyers, let’s look at how consumers make buying decisions: five steps. 1. Need recognition: when the buyer recognises a problem or need 2. Information search: when the buyer is motivated to search for more information. The buyer so starts to inform themselves by paying more attention to ads, talking to friends, etc. 3. Evaluation of alternatives: when the buyer uses information to evaluate alternative brands in the choice set. 4. Purchase decision: the buyer’s decision about which brand to purchase from. Two factors can change the choice: first is attitude of others: a person important to the buyer tells them they do not approve. The second factor is unexpected situations occurring, for instance losing a job and therefore not having the economic possibility to make the most expensive purchase happen. 5. Post-purchase behaviour: when the buyer takes further action after purchase, based on their satisfaction or dissatisfaction. What determines is a buyer is satisfied or dissatisfied? The answer is the relationship between the buyer’s expectations and the product’s perceived performance. Cognitive dissonance always present after a major purchase. The buyer decision process for new products This is how buyers approach the purchase of a new product. New product: a good, service or idea that is perceived by some potential buyers as new. Adoption process: the mental process through which an individual passes from first learning about an innovation to the final adoption. Adoption is the decision of the buyer to become a regular user of the product. Stages in the adoption process: 1. Awareness: buyer aware of the new product with no info 2. Interest: buyer seeks info about the product 3. Evaluation: buyer considers if trying this new product is worth it and makes sense 4. Trial: buyer tries the product on a small scale 5. Adoption: the buyer decides to make full and regular use of the new product Pagina di 10 23 Chapter 6 — Business Markets and Business Buyer Behaviour Business market is huge, far huger than consumer market. Business buy behaviour of organisations that buy goods and services for use in the production of other products and services that are sold, rented or supplied to others. The business buying process is the decision process by which business buyers determine which products and services their organisations need to purchase and then find, evaluate and choose among alternative suppliers and brands. The business market is bigger than the consumer markets, and differs in many ways. The business markets consist normally with less, but larger buyers than consumer markets. Business demand is derived demand: business demand ultimately derives from the demand for consumer goods. Business markets’ demand is more inelastic and is less affected by short-term price changes, while demand also fluctuates more quickly. The nature of the buying unit involves more decision participants and a more professional purchasing effort. The business buyers’ decisions are often more complex and formalized. Finally, buyer and seller often work on long-term relationships. Supplier development is the systematic development of networks of supplier-partners to ensure an appropriate and dependable supply of products and materials for use in making products or reselling them to others. There are three types of business buying situations. A straight rebuy is a business buying situation in which the buyer routinely reorders something without any modifications. A modified rebuy is when the buyer wants to modify the product specifications, prices, terms or suppliers. A new task is a business buying situation in which the buyer purchases a product or service for the first time. Systems selling (or solutions selling) is buying a packaged solution to a problem from a single seller, thus avoiding all the separate decisions involved in a complex buying situation. There are multiple participants in the business buying process. The buying centre are all the individuals and units that play a role in the purchase decision-making process. - Users are members of the buying organisation who will actually use the purchased product or service. - Influencers are people in an organisation’s buying centre who affect the buying decision, they often help define specifications and also provide information for evaluating alternatives. - Buyers are the people in an organisation’s buying centre who make an actual purchase. - Deciders are people who have formal or informal power to select or approve the final suppliers. - Gatekeepers are people in an organisation’s buyer centre who control the flow of information to others. The buying centre is a set of buying roles assumed by different people. There are a lot of things that can influence the business buyer, such as environmental factors. These can include the economic environment, the supply of key materials and culture and customs. Organisational factors such as objectives, systems and policies can also have an influence. Also interpersonal factors, such as authority, status and persuasiveness can exercise their influence. Lastly individual factors, such as age, income, education and risk attitudes can play a role in the decision of the business buyer. The business buying process The business buying process has eight stages. 1. Problem recognition: someone in the company recognises a problem or need that can be met by acquiring a good or a service. 2. General need description is the stage in the business buying process in which a buyer describes the general characteristics and quantity of a needed item. 3. Product specification is the stage in the business buying process in which the buying organisation decides on and specifies the best technical product characteristics for a needed item. 4. Supplier search is the stage in which the buyer tries to find the best vendors. Pagina di 11 23 5. Proposal solicitation is the stage in which the buyer invites qualified suppliers to submit proposals. 6. Supplier selection is the stage in which the buyer reviews proposals and select a supplier or suppliers. 7. Order-routine specification is the stage in which the buyer writes the final order with the chosen supplier(s), listing the technical specifications, quantity needed, expected time of delivery, return policies and warranties. 8. Performance review is the stage in which the buyer assesses the performance of the supplier and decided to continue, modify or drop the arrangement. E-procurement involves purchasing through electronic connections between buyers and sellers, usually online. This can be via reverse auctions, trading exchanges, company buying sites and extranet links. Benefits of e-procurement are lower transaction costs and efficient purchasing. The institutional market consists of schools, hospitals, nursing homes, prisons and other institutions that provide goods and services to people in their care. These markets can be extensive and are often characterized by low budgets. Government markets consist of governmental units (federal, state and local) that purchase or rent goods and services for carrying out the main functions of government. Pagina di 12 23 Chapter 8 — Building customer value A product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. A service is an activity, benefit or satisfaction offered for sale that is essentially intangible and does not result in the ownership of anything. Products are key in the overall market offering. The market offer might exist of only pure tangible goods, pure services and everything in between. Product planners need to consider three levels when deciding on services and products. The first one is the core customer value level. Secondly, the core benefit must be turned into an actual product. Finally, an augmented product must be built around the actual product by offering services. Consumer and industrial products Products and services fall into two broad classes: consumer products and industrial products. Consumer products are products bought by final consumers for personal consumption. - Convenience products are a type of consumer product that consumers usually buy frequently, immediately and with minimal comparison and buyer effort. - Shopping products are consumer products that the customer, in the process of selecting and purchasing, usually compares on such attributes as suitability, quality, price and style. - Speciality products are a type of consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort. - Unsought products are consumer products that the consumer either doesn’t know about, or knows about but does not normally consider buying. - Industrial products are products bought by individuals and organisations for further processing or for use in conducting a business. Materials and parts include raw materials (farm products, natural products) and manufactured parts (component materials and parts). Organisation marketing consists of activities to create, maintain or change the attitudes and the behaviour of target customers. Corporate image advertising campaigns can be used to improve the image of a firm. Person marketing consists of activities to change attitudes of specific people. Place marketing involves activities to create, maintain or change attitudes towards particular places. Social marketing is the use of commercial marketing concepts and tools in programmes designed to influence individuals’ behaviour to improve their well- being and that of society. Decisions regarding products and services are made at three levels: 1. Individual product and service decisions Developing a product or service involves defining the benefits. Product quality are the characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs. Total quality management (TQM) is an approach where the whole company is involved in constantly improving the overall quality. Product quality is based on the quality level and consistency. Other product and service attributes are product features and the product style (appearance) and the design (heart of the product). A brand is a name, term, sign, symbol, design or a combination of these that identifies the products or services of one sell or group of sellers and differentiates them from those of competitors. Packaging involves the activities of designing and producing the container or wrapper for a product. Innovative packaging can give a competitive advantage. The final product and service decisions include labels that help identifying a product or brand and supporting services of the product. 2. Product line decisions A product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets or fall within given price ranges. Major decisions include the product line length, which can be adjusted by product line filling (adding more items within present range) and line stretching (lengthen beyond current range). 3. Product mix decisions Pagina di 15 23 A product mix (product portfolio) is the set of all product lines and items that a particular seller offers for sale. Product mix width is the number of different product lines, while length refers to the total number of items within the product lines. The product mix depth refers to the number of versions offered for each product in the line. Services marketing Firms must decide upon four service characteristics when designing marketing programmes. Service intangibility: services cannot be seen, tasted, felt, heard or smelled before they are bought. Service inseparability: service are produced and consumed at the same time and cannot be separated from their providers. Service variability: the quality of services may greatly vary depending on who provides them and when, where and how. Service perishability: services cannot be stored for later sale or use. The service profit chain is the chain that links service firm profits with employee and customer satisfaction. This chain consists of five links: internal service quality, satisfied and productive service employees, greater service value, satisfied and loyal customers and ultimately healthy service profits and growth. Service marketing is more than traditional external marketing, it also consists of internal and interactive marketing. Internal marketing involves orienting and motivating customer contact employees and supporting service people to work as a team to provide customer satisfaction. Interactive marketing involves training services employees in the fine art of interacting with customers to satisfy their needs. Service marketers need to manage service differentiation, making sure that they stand out amongst competitors. They also need to manage service quality, which can be harder to define than product quality. Lastly, they need to manage service productivity by ensuring employees are skilful and implementing the powers of technology. Branding Brand equity is the differential effect that knowing the brand name has on customer response to the product or its marketing. Brand equity can be a powerful asset. Brand valuation is the process of estimating the total financial value of a brand. In order to build a strong brand, there are some major brand strategy decisions to be made. Brand positioning involves positioning the brand in the mind of the consumer. Brand name selection is important in order to select a good name. The brand name should say something about the service benefits and should be easy to pronounce and remember. It needs to be distinctive and extendable, easily translated and should be capable of legal protection. Brand sponsorship can be done via four ways. A product can be launched as a national (manufacturer) brand or as a private brand or store brand. Another way is via licensed brands or a co-brand with another company. A store brand is a brand created and owned by a reseller of a product or service. Licensing involves lending the brand name to other manufacturers. Co-branding is the practice of using the established brand names of two different companies on the same product. When developing brands, companies have four choices. Line extensions occur when extending an existing brand name to new forms, colours, sizes, ingredients or flavours of an existing product category. A brand extension extends a current brand name to new product categories. Multibrands means offering more than one brand in the same category. New brands can be created when believed that the power of existing brands is fading. Pagina di 16 23 Chapter 9 — The product life cycle New product development is the development of original products, product improvements, product modifications and new brands through the firm’s own product development efforts. New products are essential for the continuation of the company. New products aren’t easy to find. There are eight major steps in the product development process. 1. Idea generation: the systematic search for new-product ideas. Ideas can be found via internal sources, but also external idea sources. These can be distributors, suppliers, but also competitors. Crowdsourcing means inviting broad communities of people – customers, employees, independent scientists and researchers and even the public at large – into the new-product innovation process. 2. Idea screening: screening new-product ideas to spot good ideas and drop poor ones as soon as possible. 3. Concept development and testing. Product concept is a detailed version of the new product idea stated in meaningful consumer terms. Concept testing means testing new product concepts with a group of target consumers to find out if the concepts have strong consumer appeal. 4. Marketing strategy development: designing an initial marketing strategy for a new product based on the product concept. It consists of three parts: describing the target market and value proposition, outlining the budgets and lastly describing the long-term marketing mix strategy. 5. Business analysis is a review of the sales, cost and profit projections for a new product to find out whether these factors satisfy the company’s objectives. 6. Product development: developing the product concept into a physical product to ensure that the product idea can be turned into a workable market offering. 7. Test marketing: the stage of new product development in which the product and its proposed marketing programme are tested in realistic market settings. This can be done in both controlled test markets and simulated test markets. 8. Commercialisation: introducing a new product into the market. Customer-centred new product development: new product development that focuses on finding new ways to solve customer problems and create more customer satisfying experiences. Team-based new product development is an approach to developing new products in which various company departments work closely together, overlapping the steps in the product development process to save time and increase effectiveness. Systematic new product development is preferred over haphazard and compartmentalised development. Innovation can be messy and difficult to manage, especially in turbulent times. The product life cycle (PLC) is the course of product’s sales and profits over its lifetime. It involves five distinct stages: 1. Product development: development of the idea without any sales. 2. Introduction: slow sales growth when the product is introduced. 3. Growth: period of rapid acceptance. 4. Maturity: period of sale slowdown because of acceptance by most potential buyers. 5. Decline: the period when sales fall and the profit drops. The PLC concept can also be applied to styles, fashions and fads. A style is a basic and distinctive mode of expression. Fashion is a currently accepted or popular style in a given field. Fad is temporary period of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity. Companies must continually innovate to keep up with the cycle. There are different strategies for each stage. The introduction stage is the PLC stage in which a new product is first distributed and made available for purchase. Profits are generally low and the initial strategy must be consistent with product positioning. The growth stage is the stage in which a product’s sales start climbing quickly. Profits increase and the firm faces a trade-off between high market share and high current profit. In the maturity stage, products sales are growing slowly or level off. The company tries to increase consumption by finding new consumers, also known as modifying the market. The company might also try to modify the product by changing characteristics. Pagina di 17 23 Chapter 12 — Marketing channels In order to produce a product, relationships with others in the supply chain are necessary. The term demand chain might be better, because it suggests a sense-and-respond view of the market. A value delivery network is composed of the company, suppliers, distributors and ultimately the customers, who partner with each other to improve the performance of the entire system in delivering customer value. The marketing channel (distribution channel) is a set of interdependent organisations that help make a product or service available for use or consumption by the consumer or business user. Channel members can add value by providing more efficiency and specialization in making goods. Some of the key function channel members do are: information gathering, promotion, contacting buyers, matching products and needs and negotiating agreements. But also physical distribution, financing and taking over risks of carrying out the work. A channel level is a layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer. Channel 1 is a direct marketing channel: a marketing channel that has no intermediary levels. Indirect marketing channels are channels containing one or more intermediary levels. Channels are behavioural systems composed of real companies and people, who interact to accomplish goals. Each channel member depends on others and they behave differently, which can lead to channel conflict: disagreement among marketing channel members on goals, roles and rewards, who should do what and for what rewards. Horizontal conflict occurs among firms at the same channel level. Vertical conflict is between different levels of the same channel. For channels to work well, the role of the channel members must be specified. A conventional distribution channel is a channel consisting of one or more independent producers, wholesalers and retailers, each is a separate business seeking to maximise its own profits, even at the expense of profits for the system as a whole. In contrast with this is the vertical marketing system (VMS), a distribution channel in which producers, wholesalers and retailers act as a unified system. One channel member owns the others, has contracts with them or wields so much power that they all cooperate. There are three major types of VMSs: 1. Corporate VMS is a vertical marketing system that combines successive stages of production and distribution under single ownership. Channel leadership is accomplished through common ownership. 2. Contractual VMS is a vertical marketing system in which independent firms at different levels of production and distribution join together through contracts. The most common example of a contractual VMS is the franchise organisation: a contractual marketing system in which a channel member (franchisor) links several stages in the production-distribution process. There are also three types of franchises: manufacturer- sponsored retailer franchise systems, manufacturer-sponsored wholesaler franchise systems and service-firm-sponsored retailer franchise systems. 3. Administered VMS is a vertical marketing system that coordinates successive stages of production and distribution through the size and power of one of the parties. Another development regarding channels is the horizontal marketing system: a channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity. This can be with competitors, but also with non-competitors. A multi-channel distribution system is a distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments. This occurs when a company sets up multiple marketing channels to reach multiple customer segments and is most beneficial in complex markets, but also brings additional risks. Current changes in the channel organisation include disintermediation, which is the cutting out of marketing channel intermediaries by product or service producers or the displacement of traditional resellers by radical new types of intermediaries. Channel design: means designing effective marketing channels by analysing customer needs, setting channel objectives, identifying major channel alternatives and evaluating those alternatives. The base is analysing consumer needs, since marketing channels are actually customer value delivery networks. Next comes setting the channel objectives. Pagina di 20 23 When identifying major channel alternatives, the company should look at three things: 1. Types of intermediaries. The company should identify the different types of channel members that can be involved in the channel. 2. The number of marketing intermediaries. Intensive distribution means stocking the product in as many outlets as possible. Exclusive distribution means giving a limited number of dealers the exclusive right to distribute the company’s products in their territories. Selective distribution involves the use of more than one, but fewer than all, intermediaries who are willing to carry the company’s products. 3. The responsibilities of the intermediaries. Finally, the firm should evaluate all of the alternatives using economic criteria, control issues and adaptability criteria. Marketing channel management means selecting, managing and motivating individual channel members and evaluating their performance over time. Managing and motivating other channel members means practicing partner relationship management to build long- term partnerships with other channel members. Marketing logistics, or physical distribution, is the planning, implementing and controlling the physical flow of materials, final goods and related information from points of origin to points of consumption to meet customer requirements at a profit. It basically means getting the right product to the right customer at the right place and time. It includes both outbound (from company to customer) and inbound distribution (within the channel) and reverse distribution (moving returned products). It involves the entire supply chain management: managing upstream and downstream value-added flows of materials, final goods and related information among suppliers, the company, resellers and final consumers. Logistics can be a source of competitive advantage and efficient ones can cut cost drastically. There is however a trade-off between minimal distribution costs and maximum customer service. Logistics include some major functions: 1. Warehousing. Distribution centres are large, highly automated warehouses designed to receive goods from various plants and suppliers, take orders, fill them efficiently and deliver goods to customers as quickly as possible. 2. Stock management involves deciding on the balance between too little and too much stock. Just-in-time logistic systems involve small stocks, while new stock arrives exactly when needed. 3. Transportation affects the pricing of products, delivery times and the condition of the goods. It can be via road, but also via railways, waterways and air carriers. Intermodal transportation means combining two or more modes of transportation. Integrated logistics management is the logistics concept that emphasises teamwork, both inside the company and among all the marketing channel organisations, to maximise the performance of the entire distribution system. Cross- functional teamwork inside the company means an integrated and harmonized system. Companies should not only improve their logistics, but also their logistic partnerships. Third-party logistics (3PL) provider is an independent logistics provider that performs any or all of the functions required to get a client’s product to the market. They often do this at a lower cost and more efficiently, while the company can focus on its core business. Pagina di 21 23 Chapter 13 — Retailing and wholesaling Retailing includes all the activities involved in selling goods or services directly to final consumer for their personal, non-business use. Retailers are businesses whose sales come primarily from retailing. Retailing connects brands to consumers in the final steps (“last mile” of buying process). Shopper marketing means using in-store promotions and advertising to extend brand equity to the “last mile” and encourage favourable hi-store purchase decisions. There are different types of retailers. Self-service retailers serve customers who are willing to perform part of the service. Limited- service retailers provide some assistance in the service process, while full-service retailers assist customers in every step of the buying process. Retailers can also be classified by the length and breadth of their product line. - Speciality store: a retail store that carries a narrow product line with a deep assortment within that line. - Department store: a retail organisation that carries a wide variety of product lines. Each line is operated as a separate department managed by specialist buyers or merchandisers. - Supermarkets are large, low-cost, low-margin, high-volume and self-service stores that carry a wide variety of grocery and household products. - Convenience stores are mall stores, located near residential areas and that carry a limited line of high-turnover convenience goods. - Superstore: a store much larger than a regular supermarket that offers a large assortment of routinely purchased food products, non-food items and services. - Category killer: a giant speciality store that carries a very deep assortment of a particular line and is staffed by knowledgeable employees. - Service retailers: a retailer whose product line is actually a service. Retailers can also be classified according to the price they charge for their goods and services. Discount store: a retail operation that sells standard merchandise at lower prices by accepting lower margins and selling at higher volume. Off-price retailers are retailers that buy at less-than-regular wholesale price and sell at less than retail. Independent off-price retailers are off-price retailers who are either independently owned or is a division of a larger retail corporation. Factory outlet: an off-price retailing operation that is owned and operated by a manufacturer and normally carries the manufacturer’s surplus discontinued or irregular goods. Warehouse clubs: an off-price retailer that sells a limited selection of brand name grocery items, appliances, clothing and a hodgepodge of other goods at deep discounts to members who pay annual membership fees. Chain stores are two or more outlets that are commonly owned and controlled. Their size allows for buying in large quantities at lower prices. A franchise is a contractual association between a manufacturer, wholesaler or service organisation and independent businesspeople, who buy the right to own and operate one or more units in the franchise system. Retailers must first segment and define their target market, before deciding upon how to differentiate and position themselves in these target markets. Retailers must decide upon three major product variables: product assortment, services mix and store atmosphere. The product assortment should differentiate the retailer from competitors. The services mix can help differentiate, while the store’s atmosphere is another unique element to distinguish the retailer. The price a retailer asks for its product must fit the target market and position of the retailer. Retailers can use all of the five promotion tools to reach their customers, namely: advertising, personal selling, sales promotion, public relations and direct marketing. The place of the products, or location, is vital in retailing success. A shopping centre is a group of retail businesses built on a site that is planned, developed, owned and managed as a unit. A regional shopping centre is large, containing more than 50 to 100 stores. A community shopping centre contains between 15 and 50 retailers. A neighbourhood shopping centre or strip mall generally holds 5 to 15 stores. Power centres are huge unenclosed shopping centres consisting of long strips of retail stores. A lifestyle centre is a smaller open-air mall with upmarket stores. Pagina di 22 23