Distribution, Promotion, and Selling 6 Distribution, Promotion, and Selling 6.1 The Marketing Mix─Distribution 6.2 The Marketing Mix─Promotion 6.3 Selling and Promotion

Ideas in Action Turning a Bad Experience Into a Million Dollars After loosing most of her hair at age 11 from a harsh chemical treatment, Jasmine Lawrence began to research treatments that promoted healthy hair. Jasmine began to manufacture her own line of hair care products. Chapter 6

By age 15, Jasmine was the CEO of her own company. Jasmine initially sold her products directly to customers, including website based sales. As her business developed, Jasmine starting selling to retailers and chain stores. By age 15, Jasmine was the CEO of her own company. Chapter 6

Lesson 6.1 The Marketing Mix─Distribution Goals Describe the four basic options of channels of distribution. Apply channels of distribution to the specific needs of various types of businesses. List factors to consider in the physical distribution of products. Chapter 6

Terms distribution channels of distribution direct channel indirect channel physical distribution Chapter 6

Channels of Distribution determining the locations and methods that will be used to make products available to customers channels of distribution the routes that products and services take from the time they are produced to the time they are consumed Chapter 6

Direct and Indirect Channels moves product directly from the manufacturer to the consumer indirect channel uses intermediaries people or businesses that move products between the manufacturer and the consumer Chapter 6

Channel Options Chapter 6

Manufacturer to Consumer Sales channels may include: the Internet direct mail television shopping channels most cost-effective limited sales opportunities Chapter 6

Manufacturer to Retailer to Consumer sales force sells goods to retailers retailers sell goods to consumers more sales opportunities Chapter 6

Manufacturer to Wholesaler to Retailer to Consumer manufacturer sells large quantities to a wholesaler wholesaler stores product sells smaller quantities to many retailers lower production costs can lead to lower prices Chapter 6

Manufacturer to Agent to Wholesaler to Retailer to Consumer The manufacturer delegates the sales function to an agent. frequently used in international marketing Chapter 6

What are the four basic options of the channels of distribution? Chapter 6

Distribute Goods and Services Distribution channels will vary based on the industry needs. Customer satisfaction is an important factor to consider when planning a distribution strategy. Chapter 6

Retail Businesses Retail businesses can distribute products in a variety of ways. offer the product at a convenient location during convenient times use advertising to reach customers allow for phone or fax ordering develop a website for online purchases Chapter 6

Service Businesses Most service businesses sell directly to the consumer. production and consumption of the service happens at the same time the service needs to be provided to the customer when the customer needs it some service providers sell through retail outlets Chapter 6

Manufacturing Businesses Manufacturers usually sell products to other businesses. The other businesses sell to the final consumer. Chapter 6

Why are channels of distribution different for different types of businesses? Chapter 6

Physical Distribution Physical distribution of products includes: transportation storage handling packaging Chapter 6

Transportation The best and most cost efficient transportation method should be determined. The type of product and the destination of the product will help guide the decision-making process. Chapter 6

Product Storage and Handling Benefits of efficient storage include: helps balance supply and demand of products Other considerations of storage include: adds to the cost of products increases the risk of theft or damage Chapter 6

Packaging The purpose of packaging is to protect the product from the time between production and consumption. Effective packaging provides value by minimizing product damage. Chapter 6

Receiving Goods to Sell All types of businesses must receive goods from suppliers. Chapter 6

What factors are important to consider in the physical distribution of products? Chapter 6

Lesson 6.2 The Marketing Mix─Promotion Goals List the many forms of advertising and discuss advantages and disadvantages of each. Define publicity and describe ways to use publicity as a promotional tool. Chapter 6

Terms advertising publicity press release public relations Chapter 6

Promotion Strategies promotional mix advertising publicity personal selling sales promotion Chapter 6

Advertising advertising a paid form of communication sent out by a business about a product or service Advertising is critically important for new and/or small businesses. Advertising should clearly communicate the intended message. Chapter 6

Online Advertising Online advertising has increased as Internet usage has grown. Chapter 6

Common types of online advertising include the following: Banner Ad Floating Ad Wallpaper Ad Trick Banner Pop-Up Ad Pop-Under Ad Chapter 6

As it is easier to determine the effectiveness of online advertising than traditional advertising, new methods to charge for online advertising have been developed. Chapter 6

Three common ways to charge for online advertising include: Cost per Mil (CPM) the advertiser is charged based on the exposure of the message to a specific audience priced per thousand viewers reached with the message Chapter 6

Cost per Click (CPC) Cost per Action (CPA) the advertiser is charged based on the number of user clicks on the advertisement viewers need to actually respond to the ad by clicking on the hyperlink within the ad Cost per Action (CPA) the advertiser is charged when a user takes an action that leads to a sale the publisher of the ad assumes all the risk in running this type of ad advertisers prefer this type of charge for banner ads Chapter 6

Disadvantages of Online Advertising In an effort to combat excessive spamming, many Internet users now utilize software that blocks promotions from reaching their computers. Chapter 6

Television Advertising commercials last less than a minute infomercials last a half hour or more provide in-depth coverage about a specific product Chapter 6

Fees associated with television advertising include: the fee paid to the station for airing the commercial based on the length of time the commercial plays the costs of producing the commercial Chapter 6

Disadvantages of television advertising include: it is very expensive the audience is too broad to be effective for most businesses Chapter 6

Radio Advertising less expensive than television advertising listener demographics are more specific than television easier to reach target audience pay for air time pay for production costs Chapter 6

Disadvantages of radio advertising include: the message is purely audio a visual of the product is not shown listeners may forget what they hear listeners may “surf the airways” during commercials Chapter 6

Newspaper Advertising Historically, newspapers were the single largest form of advertising in the U.S. Advantages of newspaper advertising include: relatively inexpensive targets a limited geographic area reaches a large volume of people Chapter 6

Disadvantages of newspaper advertising include: Many people in the audience may not be interested in your business. Your ad faces a lot of competition from many other ads in the newspaper. Chapter 6

Telephone Directory Advertising Consumers use telephone directories repeatedly. Ads usually appear close to the listing and phone number of the business placing the ad. Chapter 6

Disadvantages of telephone directory advertising include: People only look in the directory when they are already seeking a specific product or service. It is hard to persuade a potential customer to use your business instead of your competitor’s business. Chapter 6

Direct-Mail Advertising promotional materials sent to target customers through the mail Companies that specialize in maintaining targeted mailing lists can provide almost any type of list needed. Chapter 6

Disadvantages of direct-mail advertising include: Direct-mail is often considered to be “junk mail” and it gets discarded without being read. Chapter 6

Magazine Advertising Magazines are an excellent way to aim products and services at specific markets. Local magazines that target a limited geographic area are often the best choice for small businesses. Chapter 6

Disadvantages of magazine advertising include: National distribution can make some magazines an inappropriate way to advertise a local business. Chapter 6

Outdoor Advertising billboards and signs can be effective as the name of your business is located near where you want people to see it Chapter 6

Disadvantages of outdoor advertising include: limited information can be included may not project the image you wish to convey Chapter 6

Transit Advertising signs on public transportation can provide more information than a billboard effective if your target market includes consumers who use mass transit Chapter 6

Budgeting for Promotion Obtain cost estimates for all advertising that is under consideration. Calculate a projected budget. Determine whether the ratio of advertising expenses to sales is in line with industry averages. Chapter 6

Why is promotion important to a business? Chapter 6

Publicity publicity a nonpaid form of communication that calls attention to your business through media coverage can be positive or negative Publicity is free. Staging the events that generate publicity is usually not free. Chapter 6

press release a written statement meant to inform the media of an event or product Chapter 6

Chapter 6

Public Relations public relations the act of establishing a positive relationship with customers and the general public Chapter 6

Ways to support your community include: sponsoring a sports team donating to local charities supporting work-based programs at local educational institutions supporting Big Brothers or Big Sisters organizing community programs Chapter 6

Self-Promotion Self-promotion is a way to keep the name of your business visible and in the forefront of people’s minds. Self-promotion methods include the distribution of goods with your company’s identifying information on it. t-shirts office supplies Chapter 6

What are the advantages and disadvantages of publicity? Chapter 6

Lesson 6.3 Selling and Promoting Goals Explain the role of selling in a business. Determine how to meet customer needs and wants. Discuss other types of promotional activities. Chapter 6

Terms personal selling rational buying decisions emotional buying decisions sales promotion rebate telemarketing Chapter 6

Selling Entrepreneurs need selling skills for many reasons. It is necessary to sell business ideas to potential investors when selling a business. For many customers, the salesperson is the business. a positive image should be conveyed Chapter 6

personal selling a direct communication between a buyer and a sales person the sales person tries to influence the prospective buyer’s purchasing decision Chapter 6

Product Knowledge features benefits the physical characteristics or capabilities of the product or service benefits the advantages that could result from the use of those features Chapter 6

Why is selling important to a business? Chapter 6

Determine Customer Needs and Wants A salesperson must determine what need the customer is seeking to satisfy. lower-level needs usually do not require personal selling upper-level needs often require personal selling Chapter 6

Needs Assessment need satisfying problem resolution fulfilling the needs of a customer who knows exactly what they want problem resolution helping the customer find products or services when they are not quite sure what they want Chapter 6

Buying Decisions rational buying decisions based on the logical reasoning of customers customers evaluate alternatives purchase after careful thought Chapter 6

emotional buying decisions based on the desire to have a specific product or service little time or thought is used when making the buying decision Chapter 6

Customer Decision-Making Process A problem-solving approach for helping customers includes the following steps: define the problem gather information Chapter 6

identify various solutions evaluate alternatives select the best option take action evaluate the action Chapter 6

Why is it important to meet customer needs and wants in the selling process? Chapter 6

Other Types of Promotion sales promotion an incentive offered to customers in order to increase sales rebate a refund offered to people who buy a product telemarketing using the phone to market your product or service Chapter 6

What is the purpose of sales promotions? Chapter 6

PERFORMANCE INDICATORS EVALUATED Demonstrate knowledge and understanding of entrepreneurship. Engage in activities that clarify and enhance understanding of entrepreneurship. Plan and implement presentation/activities to educate and promote entrepreneurship to targeted groups. Chapter 6

Demonstrate critical-thinking skills. Derive facts from data, findings from facts, conclusions from findings, and recommendations from conclusions. Demonstrate critical-thinking skills. Develop a concept from an idea to reality. Plan, organize, and conduct a group project. Chapter 6

Determine priorities and set deadlines. Evaluate group presentations. Chapter 6

THINK CRITICALLY What are the benefits of presenting this project to elementary or middle-school students? Why is it important to explain risks associated with entrepreneurship? Chapter 6

Who are popular examples of entrepreneurs? What are three characteristics of successful entrepreneurs? Chapter 6