Unit 5 (Part 2)(1) human resourse development.pptx

HRD

1. Unit 5 Designing the work place, Inventory control, material handling and quality control. Marketing functions, market segmentation, market research and channels of distribution, Sales promotion and product pricing.

2. - Important marketing f unctions Int r oduct i on What i s Mar k et i ng?  M a r ket i ng i s id e nt i fy in g a n d m ee t ing hu m an and s oc i al ne e d s . T hus, i t is “ m ee t ing nee d s p r o f i t a b l y . ” ( Sh i v e ndu Mish r a : 2009 ) .  M ar ket i ng m ust b e und er s t ood not i n the o l d s e n s e o f m a k i n g a s a l e ' s e l l in g ' - bu t i n the new sense o f s a t i sfying customer needs ( A n tha r j a na m , 2012) .  I t t h e n re f e r s t o t h e i d e nt i f i ca t i o n, se l ec t i on a n d de v e l o p m ent o f a pr o duc t , det e r m inat i on o f t he p r i c e, ch a nnel t o reach c u s t o m ers place and the de v e l o p m ent and the i m ple m enta t ion o f p r o m otional stra t eg y .  I n o th e r wo rd s i t i s t he pro ce s s o f pl a n n i ng, pr i c in g, pr o m ot i n g, se l l i ng, a nd distribu t i n g ideas, good s o r ser v i c es t o c r eate exc h an g es that sa t isfy custo m er s .  Thus ev e ry t hing t h a t happ e ns betw e en g e n e r a t e d i d e a, p r oduc e d goods and the s a le

3. Important marketing f unctions Mar k eting Funct i o n s … Ma rk et i ng Fu n ct i ons  I t i s of t e n a s s ert e d that m a r ket i ng s e r ve a s a bri d ge b e t ween p r o d uc e rs a nd con s umers .  This p r o p erty o f m ar k e t ing i s achieved thr o ugh m ar k e t ing fun ctions  Th u s, m ar k et f u nction i s a l i nk between p r o d ucers and co n s u m ers Mar k eting B r id g es the Gap! Mar k eting Funct i o n s P r o d uce r s Co n s u me r s

4. Important marketing f unctions Mar k eting Funct i o n s … V ario u s o f marke t ing f u nctio n s  There are several c o m pon e n ts o f m arket i ng f u nct i ons. These inc l u d e  T h e f u l fil l m e n t o f t hese funct i ons i n a p a rti c ul a r pla c e / cul t ure / c om m o d i t y va r i e s widel y , bu t a l l the f u nctions are nee d ed i n any m acr o - m ar k e t ing sys t e m .  R e searchi n g  Pric i ng  Buy i ng  P r o m otion  Dis t rib u t i on  Sto r age  P r ocessi n g  P r o d uct de v e l o p m ent a n d m ana g e m ent  St a n d ard i za t i o n and g r ading  Market I n f o r m a t ion  Fina n c i ng  Se l l i ng  R i sk B e aring  A f t e r sa l es - serv i ce

5. Important marketing Mar k eting Funct i o n s … f unctions Re s ea r ch func t io n :  The c olle c t i o n , an a l y si s , a nd d i s t ri b ut i on of a l l t he i nf or m a t i o n the m a r ket e r ne e ds to pl a n, i m ple m e nt, and c o n tr ol ne e d - sa t i s fy i ng m ar k e t ing ac t ivi t i e s . that fu nct i on o f m arke t i n g that m akes it poss i ble for a dequate i nf or m a t ion r e g a r d i ng a pa r t i cular m ar k et o f t a r get t o b e ge n erate d . R e sear c h m u s t b e c a r ri e d out t o id e nt i fy the s i ze, b e h a vi ou r , c ul t u r e , bel i e ve, g en de r s e t c . o f t he t a r get m ar k et s e g m ent, the n e e d s a nd wa n t . E f fect i ve p r oduct i s t h e n d e ve l o p e d t o m eet and sa t isfy the m ar k et nee d s and wa n t .   

6. Important marketing f unctions Mar k eting Funct i o n s … Pric i ng Fu n ct i on  The pr o cess of co m ing up with an a m o u nt to cha r ge each custo m er f o r a p r o d u c e / pr o duc t / ser v i c e.  Pric e s m ust be se e n by custo m ers as fai r , i. e . n o t too high or too low b u t it m u s t a l so a l low the m ar k e t er/p r odu c er to m ake a fair p r o f i t .  B a sic q u es t io n s to co n sider in deciding the p r i c e f o r g o o d s and ser v i c es  W hat wi l l custo m ers pay?  H o w m uch d o es it cost us to p r o d uc e ?  H o w m uch do co m peti t o r s se l l f o r ?

7. Important marketing f unctions Mar k eting Funct i o n s … B u ying f unct i on  The f u n c t i on o f buy i ng i s p e rfor m ed i n o r d e r t o a c q u i re q u a l i t y m a t eria l s f or p r o d u c t i o n .  W h e n a go od p ro d uct c o n c ept i s des i g n e d, i t m ust a l s o b e e n su red th a t essent i al m a t eria l s are p u rc h ased f o r the p r o d uc t .  This f u nction i s carried ou t b y the pu r cha s e a n d supply dep a rtmen t ,  The s pec i fic a t i ons o f m a t eri a ls g oes a l o ng way i n as s i s t i ng t he p ur c h a s i ng de p art m ent t o acq u ire the necessary m a t eria l s nee d ed f o r p r o d u c t i o n .

8. Important marketing f unctions Mar k eting Funct i o n s … P r omo t ion  The e f f ort t o i nf o rm o r p e r s ua d e c u s t o m ers a bout a bu s ine ss ’ s pr o duc t s or servic e s.  Desi g n i ng e f f ec t ive co m m u n i c a t i on s tr a t e gies t o i nf o r m , p e r s u a de, o r r e m ind consu m e r s/ t a r g e t / pot e ntial m a r ket p r o d u c t. a bout t he ava i l a b i l i ty a n d fea t ures of a  S o m e o f the st r ate g ies includ e ;  adver t i se m en t ,  per s onal se l li ng,  pub l i c r el a t i on e t c.

9. Important marketing f unctions Mar k eting Funct i o n s … Storage  H o lding an in v ento r y o f good s u n t i l nee d ed b y custo m er s .  p r o d u c ts m u s t b e st or ed and p r otec t ed un til they are nee d e d .  This f u n c t i o n i s e s pecia l ly i m port a nt f or p er ish a ble pr o du c ts ve g e t ables. s uch as fr ui t s a n d P r ocessi n g  Proce s s i ng i n v o l ves t urn i ng a raw p r oduct in t o co m m o d i t i e s t hat p r efer r ed o r ca n ea s i l y b e used b y co n su m e r . a re m o r e  F o r exa m ple, l i ke c o nv e r ting w h eat into b r ead/ pa d dy into r ice

10. Important marketing f unctions Mar k eting Funct i o n s … Dis t ribu t ion  I t i s t he p r oc e ss o f e n sur i ng that pr o duce / pr o duct i s ea s i l y a n d e f fec t i vely m o v ed from the p o i nt o f p ro d uct i o n t o t he t a r get m a r ket t o en a ble the p r o d u c e / pr o duct t o b e eas i ly acc e ssed b y co n s u m er s .  Thus i t i s the proc e ss o f e ns u r i ng t h at produce / goods co n s u m ers/cu s t o m er s . get in t he h a nds of  I t in v ol v es co n side r ing:  t he k i nd of t rans p orta t i on sy st em t o e m p l oy e . g. Road, ra i l , w a t er or a i r ,  Involv e s the s y stems th a t tr a ck produ c ts  t he k i nd of mi dd l e m en t o en g age i n t he c h ann e l of d i s t r i butio n , t he i r i nce nti ves a nd m o ti va ti ons e t c.

11. Important marketing Mar k eting Funct i o n s … f unctions Ri s k Bearing:  R i sk i s t he pro b a bi l i t y o r t h reat o f da m age, i n j u r y , l i a b i l i t y , lo s s o r a ny ot h e r ne g a t i ve oc c urr e nce that i s c aus e d b y e x t e r nal o r i nt e r n a l vu l n e r a bil i t i e s a nd that m ay b e av o ided thr o u g h preventive ac t io n .  The p r oce s s o f m ar k e t i n g i s ch a ract e riz e d with lo t s o f ri s ks, s u c h ri s ks as p r o d u c e da m aging, pi l ferag e , p r i c e fluctua t i on s, s t o r age loss e t c .  Th u s risk bea r ing i s assu m ing res p o n s ib i l i ty f o r u n certa i nties  He n ce m ar k e t ers s h ou ld ha v e the capac i ty t o bear risk s u ch as:  e f fec t i ve packag i ng sy st em t o pro t ect produce,  good w arehou s e for t he s t orage of your produce un ti l t hey are needed,  e f fec t i ve t ran s por t a ti on sy st em t o speed i l y de li ver produce on tim e.  E f fec t i ve prod u c ti on sy st em ( e . g . D i ver si f i ca ti on, m e r g i ng, i nsu r a nc e, i n t egra t i on) t o ca t er for pr i ce f l uc t ua ti ons, na t ural d i sa st er s , t hef t , e t c

12. Important marketing f unctions Mar k eting Funct i o n s … P r od u ct development and management I t i s a proce s s w h e re b y t h e m a r ket n e e d s o r w a n ts are id e n t ifi e d w hi c h a r e l a t e r o n f ac t ored i n t o the pr o duce / p r oduct du r i n g t he p r odu c t d e s i gn t o e n ha n ce p r o d u c e o r p r o d uct q u a l i t y o r ac c ept a nce i n the m arke t .  Product de v e l o p m ent m ar k e t ers t o de v e l op a p a ss e s t hr ough s o m e b a sic st a ges ca r ri e d out b y t he t a r geted m ar k et s p ec i fied p r o d u c t.  Produce/ Pr oducts can b e m ana g e d b y e va l uat i ng i t s per f o r m ance a n d c hang i ng  them t o fit the cur r ent m arket tren d . I n a nut s h el l , i t i s obt a i n i ng, d e ve l o p i ng, m a i nta i n i ng a nd i m p r ovi n g a product or a p r o d u c t m ix i n res p o n se t o m ar k et o p p o rt u n i t i es o r de m an d s   M a r k e t ing research helps y ou kno w w h at c u sto m ers want

13. Important marketing f unctions Mar k eting Funct i o n s … Standardi z at i on and Grad i ng  The funct i on o f st a nda r diz a t i on i s t o es t a bli s h s p e c i f i e d ch a ract e ri s t i c s pr o duc e / pro duct m ust c o nf or m to, s u c h s t a n d a r d a s i n h a v i ng a spec i f i c in g re d i e nt e tc . That m akes the p r o d uct b r and so u n iq ue . t h at t e s t ,  G r a d i ng c o m es i n w h e n yo u s ort a n d c l a s s i f y your pr o duct i nto d e f e r e n t s i z es or q u anti t i e s f o r di f fe r e n t m ar k et seg m ent w h i l e m a i ntaining the p r o d uct st a n d ar d .

14. Important marketing f unctions Mar k eting Funct i o n s … Mar k et Informa t ion  In f or m a t ion f r o m a r ound the w or l d a bout ma r k e t con d i t i ons , w e a t h er , p r ice m oveme n t s , a n d p ol i ti c al cha n ge s , can a f fect the m a rk eting p r oces s .  M ar ket i nf or m a t ion i s pr o v i d e d by a l l f or m s of tel e c o m mun i c at io n , s u c h a s t e l e v i s i on, t h e in t e r net, a n d phon e.

15. Important marketing f unctions Mar k eting Funct i o n s … Financing  I t re f ers t o rais i ng f u n d s/ c a p i t al t o st a rt o p erat i on and re m a i ni n g i n o p erat i o n .  I t a l so r e f e rs t o t he m o d es o f pay m ent f or t he g o ods a nd s e r vices t r a nsf e r red costu m er s . to  Thus i t i s pr o v i ding t he ne c ess a ry ca s h o r cr e dit t o pr o duce, t r a n s port, st o r e , p r o m ote, se l l, and bu y p r o d uc t s .  I n s i m ple w or d s i t r ef e r s t o g e t t i n g m o n ey t h at and runn ing a b u siness.  Loa n s, se l l i ng stock, et c .  Also in v ol v es ways that custo m ers can pay  C redit cards  B i l l ing  Pay m ent o n delivery is ne c ess a ry to p ay f or se t t i ng up

16. Important marketing f unctions Mar k eting Funct i o n s … Sell i ng  Prov i d i ng c u s t o m ers wi t h the goods a n d s e r vices they ne e d a nd e duca t i ng t hem o n those good s and servic e s so they ca n m ake a n inf o r m ed bu y i n g dec i s i o n .  P r o v ides custo m ers with the good s and  I n reta i l stores  B usiness - to - bus i ne s s ( B -2- B) ser v i c es they wa n t  I n v o l v e s :  Deter m ining c l i e nt nee d s  Persua d i n g and in f luencing dec i s i o n s  R e s p o n ding t o r eactio n s  F o r m ing rela t io n s hips

17. Important marketing f unctions Mar k eting Funct i o n s … After sale s - service I n a m o r e c o m pl e x a n d t e c h n i c al p r oduct, m ar k e t e r s s h o u l d m ake pr o v i si o n o r der t o ass i st custo m ers aft e r they ha v e p u rchased p r o d uc t . I n t e r m s o f m ach i nes o r he a vy e q u i p m ent pr o duct t hat r e quir e s i n s t a l l a t i o n in  or  m a i ntena n c e , m o s t m ar k e t i ng o r g a niz a t i on r e n d e rs s u c h s e r vices l i ke i ns t a l l i n g the m achine o r m a i ntai n i n g i t f or st i pul a t e d p e r i ods o n t i m e f o r f ree o r b y a littl e ser v i c e cha r g e . A f t e r s a l e s se r vices i s a n e f f e c t ive m ar k e t i ng s t rat e gy t o bui l d i ng a l ong l a s t i ng custo m er rela t io n sh i p, st a y i ng ahead o f your co m peti t o r s w h i l e m aking p r o f i t .  A f t e r sa l e s s e r vice en a bl e s a m ar k e t er t o k n ow w h a t i s r e qu i red t o b e done to hav in g a n e f f e c t ive t r a n s f e r o f own e r s hip t o c o s t u m er s , c rea t i n g a b i g p i c t u re, w h i l e a l so m aking prof it 

18. Important marketing f unctions Im p ort a nce o f mar k eting f u ncti o ns M ar ket f unc t i ons h e l p th e m acr o - m a r ket i ng sy s t e m t o o v e r c o m e s e p a rat i ons and discre p ancies b etw e en th o se wis h ing t o pa r t i c i pate i n an exc h an g e .  Set t i ng a nd c om m u n i c a t i ng the va l ue o f pr o duc t s a nd se r vic e s. E . g . pr i ce se t t i ng at rig h t l e vel  Desi g n i ng, d e ve l o p i ng, m a i nta i n i ng, i m p rovi n g a nd a c quir i ng pr o d u c t s a nd ser v i c es that m eet c o n s u m er nee ds .  Deter m ine th e qua l i ty m anners for c onsu m ers t o l ocate a n d use s e rv i ces & p r o d u c ts o f the ent i t y .  They care f o r o r ga n i z a t i on ’ s b u d g e t i n g,  O b t a i n i ng, m anag i ng a n d us i ng i nf or m a t ion a bout w h a t c ons u m ers wa n t s , i m p r o v e enti t y decis i on m aking ac t ivi t i e s, and deter m ining wh at will se ll .  Goo d co m m u n i c a t ion with the custo m ers deter m ine and sa t isfy their nee d s 

19. into H o m o ge n eous Su b - Un i ts T he ma r k et f or a p r o d uct is n o thi n g b u t t he a g g r egate of • • Ma r k ets b r eak u p the hete r o ge n eous ma r k e t f or p r od u ct • Ma r k ets a r e He t e r o ge n eou s ; Segmenta t ion d i vides the con s umer of that p r o d uct into se v eral s u b u nit s , or sub ma r k ets, eac h r ela t i v e l y m o r e h o m o ge n eo u s within itsel f , com p a r ed t o ma r k e t i n t o a n um b er of s u b ma r k ets/ d i stin c t su b un i ts o f b u y er , each wi t h r ela t i v e l y mo r e h o m o ge n eous chara c teri s tics, is k n o w n as ma r k et se g ment a tion.

20. What i s market segme n tatio n ?

21. Ex a mp l e of m a rk e t s e g m e ntat i on? F or the y o u th /the o u tdoor Ti t an W at c hes A r r i v es in t h r ee b r oad S egments • • • T he T he T he Rich Mid d le L o w er F or the Gold l o v e r s: F or C h il d r en Segment • . ~ 79 1 7Y M 4 =:J F or the y o u th /the ou l o v e r s: F or Des i g n er S e gm e nt

22. F acilit a tes F acilit a tes Ma k es the Rig h t C h oice of T arget Ma r k et E f fect iv e T ap p ing of the C h o s en Ma r k et Ma r k eting E f f o r t Mo r e E f f i cient and Econ o mic Helps Iden t ify Less Sa t is f ied Se g ments and C o ncentrate on T hem

23. • A ma r k et/ consum e r p o p ulati o n f or a p r o d uct can be se g ment e d using i n clu d e: Ge o g raph i c Dem o g raph i cs Soci o - cultural Ps y ch o g raph i c B u ying Be h a vior se v e r al r ele v ant ba s es. T he major o n e s • • • • •

24. Bases f or segme n ta tion

25. Bases f or segment a tion Segm e nta t i on of consumer ba s ed on f ac t o r s li k e climate z o n e, conti n ents/ cou n t r y , r e gi o n, sta t e, di s tri c t, and ur b an / r ural a r ea, con s ti t utes ge o g raph i c se g ment a tion Ma r k et e r , who o p era t e g lo b al l y , o f ten seg m ent the ma r k e t se g ments the ma r k e t b y conti n ents / cou n t r y / r egi o n i n the fi r st in s tanc e , and then g o f or se g ment a tion on o t her ba s es. N a tional ma r k e ts wit h in a cou n t r y li k e In d ia, o f ten s e gm e nt the ma r k et b y r egi o n, s t at e , di s tri c t and ur b an / r ural a r ea, in the fi r st in s tanc e , and then g o f or segm e nt a t ion on other ba s es.

26. Bases f or segment a tion

27. Bases f or segment a tion Segm e nta t i on of consumer ba s ed on v ari a bles s u ch a s race, r elig i o n , c ommu n it y , lan g u a ge, a ge, si z e, st a g e in f ami l y c y cle, ge n de r , m ari t al sta t u s, f ami l y occu p ation, e c o n omic p o siti o n /i n come/p u rchasing c a pa c i t y l e v el, a nd s o cial sta t us ,of the consum e r dem o g raph i c se g ment a tion Age : Ba s ed on a ge on can h a v e t h e 1) In f ants 2 ) Child Ma r k et Ma r k e t T een Ma r k et 3 ) Y ou t h Ma r k et 4 ) Mid d le Aged 5 )Elde r s Ma r k et Gende r s : O n the ba s is of gende r , the con s u m er ma r k et class i fied into male ma r k et female ma r k e t . may be Social Cla s s : C o mpanion de s ign their p r o d ucts and se r vic e s f or pa r ticular s o cial c l asse s . T he r e a r e th r ee s o c i al classe s : 1 Up p er classes 2 . Mi d dle classes 3 . L o w er class Demographical

28. Bases f or segment a tion C u ltu r e and s o cial class a r e the t w o main bases of se g me n ta t ion he r e . C u ltu r e : Cul t u r e in f lu e nce con s u mer be h a v i o r , deep l y . A g i v en cultu r e bri n gs i n its o wn u n i que pat t e r n of s o cial c o n d uc t . A pe r s o n us u al l y a c qui r es his cu l tural at t ri b utes rig h t at his chil d hood. C u ltu r e incl u des r elig i o u s, cast e , tra d itio n al, lan g u a ge, pat t e r n of s o cial be h a vior . Social F acto r : Social g r o u p o f v a r ying types e x e r t in f lu e nced on the con s u me r . So c ial g r oup in c lu d e f ami l y , peer g r ou p , close colleges. T hey ado p t their common li f e styl e .

29. • Zee T ele v is i o n s deals w ith v arie t y o f cha n nels r egi o nal ch a nnel, • McDo n ald has b o th v eg and non v eg b u rge r . McD o na l d h a s Bases f or segment a tion E x a m p l e : s p o r ts chan n el, m o vie chan n el. v eg b u rger f or v eget a rian and no n v eg b u rger f or n o n v eget a rian.

30. • Zee T ele v is i o n s • McDo n ald has deals w ith v arie t y o f cha n nels r egi o nal ch a nnel, b o th v eg and non v eg b u rge r . McD o na l d h a s mPOifl!Jll Bases f or segment a tion E x a m p l e : s p o r ts chan n el, m o vie chan n el. v eg b u rger f or v eget a rian and no n v eg b u rger f or n o n v eget a rian. •

31. . . \ UN \ l t - K Bases f or segment a tion

32. • T he cu s tom e r ca n al s o b e d i vided into ce r ta i n Occasi o ns : (Ma r raiges, fe s t i v al occasasio n s) • se g ments on the • User St a t u s: ( Ex- u s e r s, fi r st u s e r s, r eg u lar u s e r s, P o ten t ial Us a ge ra t e : (Lig h t, Me d ium, and he a vyu u s er se g ments) • • At t itu d e : C u stome r s a r e d i vided into f i v e g r o u p s (En t hu s iasti c , Bases f or segment a tion Behavior segmentation ba s is of th e ir k n o wled g e, attitu d e, u s e, or r esp o n s e t o a p r oduc t . S u ch be h a vio u ral v ari a bles a r e d i sc u s s ed bel o w Be n efits soug h t : (Colga t e - W hite te e th sto p s bad b r ea t h, C i baca P r o vides T herapeutic be n efits, V ic c o v ajr a da n t h i and neem g i v es ayu r v ed i c be n ef i t) u s e r s) Lo y ality s ta tu s : (Hard co r e lo y a l s, S p lit Lo y als ( T w o r T h r ee bran s ), Shifting Lo y als (Shi f t f r om o n e b rand t o another), Swi t che r s (No lo y al t y t o a n y bran d )) P o s it i v e, I n d i f fe r ent, Negt i v e and Ho s tile)

33. • Hel p s d i s tin g u i sh o n e cu s tomer g r o u p f r om a n other with i n F acilit a tes p r o p er c h o ice of ta r get ma r k et. • a • Hel p s d i vide t he ma r k ets and co n q u er them. Helps c r ystalli z e the needs of the t arget b u y e r s Ma k es the ma r k eting e f f o r t m o r e e f ficie n t a nd economic • Helps s p ot the less s atisf i ed se g ments and succeed by satis f ying Ma k es the ma r k eting e f f o r t m o r e e f ficie n t a nd economic • • Br i n g s bene f its not o n l y to the ma r k eter b u t also t o the cu s tomer Ad v ant a ges of Segmentation V ar i ous ad v a n t a ges of m a r k et segment a tion a r e : - g i v en ma r k et F acilit a tes e f fect iv e tappi n g of the ma r k et. • s u ch segme n ts. Helps s p ot the less s atisf i ed se g ments and succeed by satis f ying s u ch se g ments as w ell.

34. Market Research

35. Definition Market research, which includes social and opinion research, is the systematic gathering and interpretation of information about individuals or organisations using the statistical and analytical methods and techniques of the applied sciences to gain insight or support decision making. The identity of respondents will not be revealed to the user of the information without explicit consent and no sales approach will be made to them as a direct result of their having provided information. Source – ICC/ESOMAR International Code on Market and Social Research

36. Types of Market Research

37. Steps in Market Research Planning Developing Questionnaire Research – Data collection Analysing – Data Using the data – Strategic Decision Making

38. Planning – Why What When How

39. Developing Questionnaire

40. Research – Data Collection Perquisite for good data collection

41. Analysing the Data

42. Make Strategic Business Decisions

43. Channel Management / Distribution 45

44. A channel of distribution perform all of the activities utilized to move a product and its title from production to consumption 46

45. 47 Physical distribution is… Organizing and moving products through the channels (Logistics = ordering, transporting, storing, handling and inventory control) The 3 rd largest expense for most businesses (#1 Materials #2 Labor)

46. Explain how channel members add value Right PLACE Right TIME Place UTILITY Location – having the product where customers can buy it Time UTILITY Having the product available when the customer wants/needs it 48

47. Information Promotion Contact Matching Negotiation physical distribution Financing Risk taking 49 CHANNEL FUNCTIONS

48. 50 CHANNEL FUNCTIONS (cont.) Providing marketing information: Companies rely on market research to determine their target markets’ needs and wants Ex: small business producing handmade greeting cards Promoting products: Can be expensive Retailers often take a large portion of promotion responsibilities Ex: local supermarkets/discount stores

49. CHANNEL FUNCTIONS (cont.) Contact Matching Negotiating with the customers: Different prices are paid by the wholesaler, retailer and consumers based on negotiation Physical distribution Financing and risk taking: Moving products through a channel costs money When channel members work together to finance activities and to assume financial risks, channels will be more effective 51

50. Explain key channel tasks Marketing Packaging Financing Storage Delivery Merchandising Personal selling 52

51. 53 Explain key channel tasks (cont.) Providing marketing information Rely on market research to determine their target markets’ needs and wants Promoting products Costs and responsibilities can be shared Negotiating with customers Offering to deliver and install products Reducing discrepancies Selling large quantities of products to wholesalers and retailers Financing and risk-taking Work together to finance activities to become more effective

52. Length of Channel Channel length = number of levels in a distribution channel. 54 Manufacturer Manufacturer Manufacturer Manufacturer Consumer Consumer Consumer Consumer Retailer Retailer Retailer Wholesaler Wholesaler Agent 2 level 3 level 4 level 5 level

53. Tasks of Intermediaries - Wholesalers Break down ‘bulk’ Buys from producers and sell small quantities to retailers Provides storage facilities Reduces contact cost between producer and consumer Wholesaler takes some of the marketing responsibility e.g sales force, promotions 55

54. Tasks of Intermediaries - Retailer Much stronger personal relationship with the consumer Hold a variety of products Offer consumers credit Promote and merchandise products Price the final product Build retailer ‘brand’ in the high street 56

55. Tasks of Intermediaries - Internet Sell to a geographically disperse market Able to target and focus on specific segments Relatively low set-up costs Use of e-commerce technology (for payment, shopping software, etc) Paradigm shift in commerce and consumption 57

56. Tasks of a Logistics Manager plans the flow of materials in a manufacturing organization (beginning with raw materials and ending with delivery of finished products to channel intermediaries or end customers) and coordinates the work of departments involved in the process, such as procurement, transportation, manufacturing, finance, legal, and marketing. 58

57. Describe channel management decisions Decisions about a product’s physical movement and transfer of ownership from producer to consumer. FIRST - Setting channel objectives Determine what the company is trying to achieve Meet the needs and wants of their target market Give their product a competitive edge SECOND - Channel members: Selection Management Motivation Evaluation 59

58. 1. Selecting Channel Members Determine the types of members the belong in the channel, as well as the channel length (total number of channel members) Usually based on the nature of the product Factors to consider: Create product value that others cannot or are not willing to provide Channel the product to its desired market Have a pricing and promotion strategy compatible with the product’s needs Offer customer service compatible with the products needs Be willing and able to work cooperatively with other members within the product’s channel 60

59. 1. Selecting Channel Members (cont.) Involves determining the characteristics that distinguish the better ones by evaluating channel members Do they: Provide value? Perform a function? Expect an economic return ? Years in business Lines carried Profit record Policies, strategies, & image Experience & track record 61

60. 1. Selecting Channel Members (cont.) Selecting intermediaries that are sales agents involves evaluating Number and character of other lines carried Size and quality of sales force 62

61. 1. Selecting Channel Members (cont.) Market segment - must know the specific segment and target customer Selecting intermediates that are retail stores that want exclusive or selective distribution involves evaluating Store’s customers Store locations Growth potential 63

62. 3. Motivating Channel Members Develop a cooperative/collaborative and balanced relationship with the partner Understand the partner’s customers – their needs, wants, and demands Understand the partner’s business – operationally and financially and what’s really important to them Look at the partner’s needs in terms of customer support, technical support, and training Establish clear and agreed upon expectations and goals Develop recognition programs focusing on the partner’s contributions Build internal support systems and dedicate resources to the partner 64

63. 4. Evaluating Channel Members Produces must evaluate intermediaries performance against such standards as: Sales quota attainment Average inventory levels Customer delivery time Treatment of damaged and lost goods Cooperation in promotional and training programs. 65

64. 4. Evaluating Channel Members (cont.) Should constantly evaluate the channel: What is working? What is not working? What can be improved? 66

65. 4. Evaluating Channel Members (cont.) Risks & Dangers of Distribution Decisions Transaction costs both apparent & hidden Risks include loss in transit, destruction, negligence, non-payment and so on. So, careful choice & evaluation of each & every channel partner is a necessity. 67

66. S ales Promotional For an entrepreneur, immediate sales are extremely important. For increasing the sales, there are various kinds of promotional campaigns an entrepreneur can consider. 68

67. Contests: Contests are used to call attention to a product when there is nothing new to announce about the product. It is important that the product should tie in with the contest. A photography shop will gain more by having a ‘best photo’ contest than by organizing a tug-of-war between its customers. A contest can also be a good way to build data on customers. An instant win situation, such as a scratch card, has a greater impact than a long-winded contest. It is always better to have lots of prizes than to have one big prize. 69

68. Coupons: Coupons entitle their bearers to an immediate discount when presented to a partici­pating business. The world over, coupons have been seen as the greatest influencer among all promos. P&G had a bad experience when people went to court after it stopped issuing coupons. Coupons can be issued by the manufacturer or the retailer or both. A coupon can be on the product itself, or it can be off site such as in a newspaper rebate coupon. 70

69. Discounts Discounts are given to stimulate demand in periods of low sales. Sometimes, a firm might discover that its discounted sales are much more than their normal sales. Discounting does result in increased sales, but it can also promote new kinds of cons­umption such as buying for gifting purposes. On some occasions, a discount only serves to prepone purchase and can result in postponing purchase in anticipation of a discount. A discount is easy to implement as price reductions are simple and easy to communicate. 71

70. Point of Purchase: Point of purchase, also known as point of sale, is a display tactic where some inducements are given to dealers to prominently display your product. It is not very useful if used all by itself and can yield good results if used in combination with some other promotion. The display unit must be able to communicate the message within three seconds. There are many new attractive self-shipping display units that are easy to set up. 72

71. Sampling Sampling is a very easy way to draw in customers. Some customers will buy because they liked the product and a few will also buy because they feel obliged to, after having sampled the product. Sampling has been used effectively in selling ice creams, cookies, perfumes, video games, and a host of other products. 73

72. Organizing Events: It is very expensive to be officially tied in with an event that draws attention to itself. A better way to associate with the event is to do it unofficially. For example, Pepsi’s ‘Nothing official about it’ campaign during the Cricket World Cup stole the thunder from Coca-Cola, the official sponsor. A new hair salon had a Dhoni look-alike contest during the India-Australia cricket series. 74

73. Free Gift: Retailers in India hold that nothing motivates a shopper more than a free gift. There are a number of opportunities to add a free gift as given here: i . Packed along with the product ii. As the container itself iii. Charging a small cost for it iv. Free gift can be given with a long-term commitment (subscription) Some of the most memorable campaigns of iconic brands such as Binaca Toothpaste, Uncle Chipps , Gold Spot, etc., have been built around free gifts. 75

74. Trade Promotions: Trade promotions are targeted at distributors and retailers and are done with the objective of getting new distributors, exploit seasonality, or secure their services for regionally focused marketing activities. Good performance by dealers is also rewarded by bonuses. 76