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1. D r . Aurobindo Kiriyakere MBA 2035: Sales and Marketing Management (4-0-4)

2. iPlanet Reliance Digital

3. PLACE & PROMOTION Sales & Marketing Management Module 3 Dr. Aurobindo Kiriyakere

4. OUR AIM!!! OUR PRODUCT/SERVICE TO BECOME AVAILABLE TO OUR TARGET CUSTOMERS IN THE TIME , QUANTITY , QUALITY , COST, FORM, AND LOCATION THAT THEY WANT Easier said than done !

5. What is a Marketing Channel? A marketing channel system is the particular set of interdependent organizations involved in the process of making a product or service available for use or consumption.

6. What is a Marketing Channel? A marketing channel is a structure that links a group of individuals or organizations through which products/services are made available to the consumer or industrial user The structure of channels can vary depending on the type of market, the needs of the end consumer, and the type of product.

7. CHANNEL

8. Consumer Marketing Channels Eureka Forbes Aqua Guard Clothes, Shoes, Accessories Convenience goods: milk, tea, soft drinks, soaps Pharmaceuticals & Appliances

9. Distribution Channel Functions Ordering Payments Communication Transfer Negotiation Financing Risk Taking Physical Distribution Information

10. Channel Member Functions Gather information Develop and disseminate persuasive communications Reach agreements on price and terms Acquire funds to finance inventories Assume risks Provide for storage Provide for buyers’ payment of their bills Oversee actual transfer of ownership

11. Designing a Marketing Channel System Analyze customer needs Evaluate major channel alternatives Identify major channel alternatives Establish channel objectives

12. Channel Design Decisions Step 1: Analyzing Consumer Needs Cost and feasibility of meeting needs must be considered Step 2: Setting Channel Objectives Set channel objectives in terms of targeted level of customer service Many factors influence channel objectives

13. Channel objectives State in terms of targeted service output levels Minimize total cost and still provide desired levels of service output Channel Objectives vary with product characteristics Perishable products – more direct marketing Bulky products – minimize shipping distance Non-standard products – sold directly by sales representatives Products requiring installation or maintenance service – sold and maintained by company or franchised dealers

14. Channel Design Decisions Step 3: Identifying Major Alternatives Types of intermediaries Company sales force, manufacturer’s agency, industrial distributors Number of marketing intermediaries Intensive, selective, and exclusive distribution Responsibilities of channel members

15. Degrees of Distribution Intensive Distribution Use of all acceptable retail outlets for the product. Selective Distribution Use of a limited number of outlets in an area to handle a product Exclusive Distribution Use of a single outlet or chain in an area to handle a product From a manufacturers’ perspective, consider how these issues impact Cost? Leverage with retailers? Consumer shopping behaviors?

16. There are elements which must be achieved in any channel design Logistical Functions Assorting (building up an assortment) Sorting (breaking down quantities) Storing Transporting Facilitating Functions Financing inventories Grading (based on inspection) Marketing research and information Transactional Functions Buying products for resale Selling products/locating clients Risk taking (inventory) Some functions are transferred onto intermediaries; Some are absorbed; Some can be passed on to clients

17. Channel-Management Decisions Selecting channel members Training channel members Motivating channel members Evaluating channel members Modifying channel members

18. CHANNEL CONTROL Selecting Channel Members Identify characteristics that distinguish the best channel members Managing and Motivating Channel Members Partner relationship management (PRM) is key

19. Channel Power Coercive  Threat Reward  Extra benefit Legitimate  Contract Expert  K nowledge Referent  Proud to be associated

20. What is Channel Conflict? Channel conflict occurs when one member’s actions prevent another channel from achieving its goal. Occurs when channel members disagree on roles, activities, or rewards. Types of channel conflict Vertical - occurs among firms at different channel levels Horizontal - occurs among firms at the same channel level Multichannel - occurs among firms at different channel

21. Causes of Channel Conflict Goal incompatibility —manufacturer want rapid penetration with low prices but dealers want high margins and pursue short-run profitability Unclear roles and rights —company’s sales force competing with dealers Differences in perception —manufacturers optimistic about short-term economic outlook and want dealers to carry higher inventory than dealers want to carry because they are pessimistic Intermediaries’ dependence on manufacturer —dealers affected by manufacturer’s product and pricing decisions Lack of Communication —If any partner is not informed / communicated about any change on lead time, it may hamper the distribution process result in a conflict

22. Managing Channel Conflict Adoption of super ordinate goals —jointly seeking goals Cooptation --efforts by one organization to win the support of the leaders of another organization by including them in advisory councils, boards of directors, etc. Diplomacy- -each side sends a person or group to meet with its counterpart to resolve a conflict Mediation --resorting to a neutral third party to conciliate two parties interest Arbitration --two parties agree to present arguments to one or more arbitrators and accept the arbitration decision

23. Managing Channel Conflict Exchanging employees —swap employees between different levels – dealer level to manufacturer level; wholesaler level to retailer level etc., so everyone can have a clear understanding of different role/responsibilities to avoid ambiguity Trade Associations —form an association between two channel partners. Membership among intermediaries. Legal Recourse —when everything else fails, the channel partners may file a legal lawsuit and let the respective courts decide the matter.

24. D r . Aurobindo Kiriyakere

25. D r . Aurobindo Kiriyakere Take any existing type of good or product of your choice Create a flowchart (hand-drawn or computer-generated) highlighting various indirect channel(s) till it reaches the consumer (with examples) Your flowchart should contain visual representations of: 4 constituent elements of the traditional channel of distribution The pathway that your chosen good/product follows from one element to the next Your chosen company logo Your chosen company slogan (USP) 4. Get as creative as possible

26. PROMOTION

27. An ad promoting Louis Philippe during festival season

28. Elements in the Communications Process

29. Source—the sender of a message Encoding—the source deciding what to say and translating it into words or symbols that convey meaning Message channel—the carrier of the message Noise—any distraction that reduces the effectiveness of the communication process Decoding—the receiver translating the message Receiver— the potential customer Elements in the Communications Process

30. Response – the reactions of the receiver after being exposed to the message Feedback – the part of receiver’s response communicated back to the sender Noise – the unplanned static or distortion during the communication process which results in the receiver's getting a different message than the one the sender sent

31. What are Marketing Communications? Marketing communications are the means by which firms attempt to inform, persuade, and remind consumers, directly or indirectly, about the products and brands they sell.

32. Modes of Marketing Communications / Communication Mix

33. The Promotion Mix

34. Advertising Advertising-any paid form of non personal presentation and promotion of ideas, goods, or services by an identified sponsor

35. Sales promotion - short term incentives to encourage trail or purchase of a product or service. Sales promotion done by RIN washing powder to increase the sales by attracting more and more customers

36. Communication Platforms Advertising Print and broadcast ads Packaging inserts Motion pictures Brochures and booklets Posters Billboards POP displays Logos Videotapes Sales Promotion Contests, games, Lotteries Premiums Sampling Trade shows, exhibits Coupons Rebates Entertainment Continuity programs

37. Modes of Marketing Communications Events and experiences — sponsored activities and programs design to create daily or special brand-related interactions

38. Special events to promote Scorpio during its launch campaign

39. Modes of Marketing Communications Public relations and publicity: P romotion or protect a company’s image or its individual products Building good relations with company's various publics by obtaining favorable publicity, building up a good “corporate image” and handling or heading off unfavorable rumors, stories, and events.

40. Communication Platforms Events / Experiences Sports Entertainment Festivals Arts Causes Factory tours Company museums Street activities Sponsorships - Awards Public Relations Press kits Speeches Seminars Annual reports Charitable donations Publications Community relations Lobbying Company magazine

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42. Modes of Marketing Communications Direct marketing —use of mail, telephone, fax, e-mail, or Internet to communicate directly with or solicit response or dialogue from specific customers and prospects Interactive marketing —online activities and programs designed to engage customers or prospects and directly or indirectly to raise awareness, improve image, or elicit sales of products and services

43. Personal selling Personal selling —face-to-face interaction with one or more prospective purchases for the purpose of making presentations, answering questions, and procuring orders Personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships

44. Communication Platforms Personal Selling Sales presentations Sales meetings Incentive programs Samples Fairs and trade shows Direct Marketing Catalogs Mailings Telemarketing Electronic shopping TV shopping Fax mail E-mail Voice mail Blogs Websites

45. Modes of Marketing Communications Word-of-mouth marketing —people-to-people oral, written, or electronic communications that relate to the merits or experiences of purchasing or using products or service

46. Integrated marketing communications (IMC) The concept under which a company carefully integrates and coordinates its many communications channels to deliver a clear, consistent, and compelling message about the organization and its products. Used to avoid the confusion generated by conflicting messages from various sources

47. https://www.youtube.com/watch?v=K9vFWA1rnWc

48. Steps in Developing Effective Communications

49. Steps in developing effective communication Identify the target audience -what to say, when to say, where to say, how to say Determining the communication objectives -the communicator must know where exactly the customer is standing and accordingly design the message so as to get a positive response (i.e., decision to purchase the product or service)

50. Designing a message: developing an effective message The marketing communicator must decide what to say (message content) and how to say it (message structure and its format ( color, size, shape, movement, sound, position ) Message content has 3 appeals namely rational (benefits of the product), emotional (positive and negative emotions, humor appeals) and moral (what is right and wrong) Message structure includes Whether to draw conclusion to leave to audience Whether to present the strongest argument last or first Whether to present one sided or two sided argument

51. Choosing media - the communicator must select channels of communication There are two broad types of communication channels ( personal & non- personal ) Personal Communication Channels- channels through which two or more people communicate directly with each other, including face to face, person to audience, over the telephone, or through mail

52. Selecting the message source -messages delivered by highly credible sources are more persuasive Many food companies promote to doctors, dentist, and other health care providers to motivate these professionals to recommend their products to patients Also actors, sports persons are good credible sources Collecting feedback-communicator has to check the effect of communication on target audience: Done by asking the target audience how they felt about the message? Whether they remember the message? what points they recall? How many bought the product and shared about the product to others?

53. Setting the total promotion budget One of the hardest decision How much to spend on promotion?

54. Advertising Can reach masses of geographically dispersed buyers at low sot of exposure Enables the seller to repeat a message many times Large scale advertising says something positive about the seller’s size, popularity, and success It is also very expressive Can be used to build long term image for a product Can trigger quick sales It is impersonal One way communication TV advertising is very costly compared to newspaper and radio advertising

55. Sales promotion techniques or tools Coupon-certificate that gives buyers a saving when they purchase a specified product Cash refund offer (rebate)-offer to refund part of the purchase price of a product to consumers who send a proof of purchase to the manufacturer Price packs (cents-off-deal)-reduced price that is marked by the producer directly on the label or package Premium-goods offered either free or at low cost as an incentive to buy a product Advertising specialty-using article imprinted with an advertiser’s name, given as a gift to consumers Patronage reward-cash or other award for the regular use of a certain company’s products or services Point of purchase (POP) promotion-display and demonstration that takes place at the point of purchase or sale Contests, sweepstakes, games-promotional events that give consumers the chance to win something such as cash, or goods by luck or through extra effort

56. Sales promotion Short-term incentives to encourage the purchase or sales of a product or service Attracts consumer attention, offer strong incentives to purchase and can be used to boost sales Invites quick response Effects are often short lived And not as effective as advertising and personal selling for long term brand building

57. Trade promotion tools Discount - a straight reduction in price on purchase during a stated period of time Allowance - promotional money paid by manufactures to retailers in return for an agreement to feature the manufacture’s products in some way

58. Public relations Is very believable Sponsorship, news stories, features seems more real and believable to readers than ads do Can reach many prospects who avoid sales people and advertisements The message gets to the buyers as news rather than as a sales directed communication It is very effective and economical

59. Personal selling Most effective tool at certain stages of the buying process Needs personal interaction between two or more people Can build long term relationships Used more with expensive and risky goods Most expensive promotional tool Requires long term, commitment (all time sales)

60. Salespeople represent whole company Sales force provides market information Sales force provides market information Salespeople represent whole company Helping to buy is good selling Requires strategy decisions Requires strategy decisions Helping to buy is good selling The Importance and Role of Personal Selling Salespeople can be strategy planners Personal Selling Is Important

61. Direct marketing Telephonic marketing, direct mail, online marketing, and others Is non public - directed to one particular person Is immediate and customized Is interactive Can be altered based on the consumer responses

62. Promotion mix strategies Basically two strategies Push strategies Pull strategies Push strategy - a promotion strategy that calls for using the sales force and trade promotion to push the product through channels The producer promotes the product to wholesalers, promote to retailers, and the retailers promote to consumers The producer directs its marketing activities toward channel members to induce them to carry the product and to promote it to final consumers

63. Pull strategy -a promotion strategy that calls for spending a lot on advertising and consumer promotion to build up consumer demand If the strategy is successful consumers will ask their retailers for the product, the retailers will ask the wholesalers, and the wholesalers will ask the producers Company has to consider many factors when designing their promotion mix strategies including type of product/market and the stage of the product life cycle B2B uses normally push strategy B2C uses normally pull strategy

64. Manufacturer Retailers and wholesalers consumers consumers Retailers and wholesalers manufacturer Consumer advertising and sales promotion demand demand push strategy pull strategy

65. Digital Marketing- Introduction Digital Marketing (also Online Marketing, Internet Marketing or Web Marketing) is a collective name for marketing activity carried out online, as opposed to traditional marketing through Print media, live Promotions, TV and Radio advertisement.

66. What is Digital Marketing? The marketing of products or services using digital channels to reach consumers. The major objective is to promote brands through various forms of digital media.

67. D r . Aurobindo Kiriyakere