1. Distributing and Promoting Products and Services CHAPTER 12 The Future of Business The Essentials 4 th Edition Gitman & McDaniel Prepared by Deborah Baker © BananaStock / Jupiterimages Chapter 12 Copyright ©2009 by South-Western, a division of Cengage Learning. All rights reserved

2. 2 Learning Goals CHAPTER 12 1 What is the nature and function of distribution? 2 What is wholesaling, and what are the types of wholesalers? 3 What are the different kinds of retail operations? 4How can supply chain management increase efficiency and customer satisfaction? 5 What is promotion, and what are the key elements of a promotional mix?

3. 3 Learning Goals (continued) CHAPTER 12 6 How are advertising media selected? 7 What is personal selling? 8 What are the goals of sales promotion, and what are several types of sales promotion? 9 How does public relations fit into the promotional mix? 10What are the trends in promotion and distribution?

4. 4 The Nature and Functions of Distribution 1 What is the nature and function of distribution? 1

5. 5 distribution Efficiently managing the acquisition of raw material to the factory and the movement of products from the producer to industrial users and consumers. 1 The Nature and Functions of Distribution

6. 6 Supply Chain 1 Suppliers of Raw Materials Suppliers of Raw Materials CD Factory CD Factory Wholesale or Distribution Center Wholesale or Distribution Center Retailers, Wholesalers, Distribution Centers Retailers, Wholesalers, Distribution Centers Customers Finished CDs Exhibit 12.1

7. 7 distribution channel The series of marketing entities through which goods and services pass on their way from producers to end users. marketing intermediaries Organizations that assist in moving goods and services from producers to end users. 1 Distribution

8. 8 Agents and Brokers Agents are sales representatives of manufacturers and wholesalers, and brokers are entities that bring buyers and sellers together. Industrial Distributors Industrial Distributors Independent wholesalers that buy related product lines from manufacturers and sell them to industrial users. Wholesalers Firms that sell finished goods to retailers, manufacturers, and institutions. Retailers Firms that sell goods to consumers and to industrial users for their own consumption. Marketing Intermediaries 1

9. 9 1 Nontraditional Distribution Channels  Internet  Mail-order  Infomercials  Kiosks  Shopping networks © AP Images / Mark Lennihan

10. 10 1 Functions of Distribution Channels Ease the flow of goods Reduce the number of transactions

11. 11 1 Distribution Channels Ease the Flow of Goods Accumulating Sorting out Allocating Locating Buyers Storing merchandise

12. 12 CONCEPT check 1 List and define the marketing intermediaries that make up a distribution channel. Provide an example of a strategic channel alliance. How do channels reduce the number of transactions?

13. 13 2 What is wholesaling, and what are the types of wholesalers? 2 Wholesaling

14. 14 Types of Wholesale Intermediaries Manufacturers’ representatives Salespeople who represent noncompeting manufacturers and wholesalers. Function as independent agents rather than as salaried employees of the manufacturers. Brokers Salespeople who bring buyers and sellers together. Do not take title to merchandise. Merchant Wholesalers An institution that buys goods from manufacturers (take ownership) and resells them to businesses, government agencies, other wholesalers, or retailers. 2

15. 15 CONCEPT check Define wholesaling and describe what wholesalers do. Describe merchant wholesalers. Explain the difference between agents and brokers. 2

16. 16 3 What are the different kinds of retail operations? 3 Retailing

17. 17 In-Store Retailing Nonstore Retailing Department store Specialty store Convenience store Supermarket Discount store Off-price retailer Factory outlet Catalog store Hypermart Vending machine Direct selling Direct-response marketing Home shopping networks Internet retailing Types of Retail Operations 3 Exhibit 12.4

18. 18 3 Fixture type and density Merchandise type and density Employee type and density Sound Odors Creating a Store’s Atmosphere © AP Images / David Zalubowski

19. 19 CONCEPT check Describe at least five types of in-store retailing and four forms of nonstore retailing. What factors most influence a retail store’s atmosphere? 3

20. 20 4 How can supply chain management increase efficiency and customer satisfaction? 4 Using Supply Chain Management

21. 21 Physical flow process Communicator Role of Supply Chain Management 4

22. 22 CONCEPT check What is the goal of supply chain management? What does it mean for a supply chain to be customer driven? 4

23. 23 5 What is promotion, and what are the key elements of a promotional mix? 5 Promotional Goals

24. 24 Promotional Goals promotion The attempt by marketers to inform, persuade, or remind consumers and industrial users to engage in the exchange process. 5

25. 25 2. Getting consumers to try products 3. Providing information 4. Keeping loyal customers 6. Identifying target customers 1. Creating awareness 5. Increasing the amount and frequency of use Promotional Goals 5

26. 26 The Promotional Mix Promotional Mix Advertising Public Relations Personal Selling Sales Promotion 5

27. 27 integrated marketing communications The careful coordination of all promotional activities—media advertising, sales promotion, personal selling, and public relations, as well as direct marketing, packaging, and other forms of promotion—to produce a consistent, unified message that is customer focused. 5 Integrated Marketing Communications

28. 28 CONCEPT check What is the objective of a promotional campaign? What is the promotional mix? What are the features of an integrated marketing communications campaign? 5

29. 29 6 How are advertising media selected? 6 The Huge Impact of Advertising

30. 30 advertising Any paid form of nonpersonal presentation by an identified sponsor. The Huge Impact of Advertising 6

31. 31 audience selectivity An advertising medium’s ability to reach a precisely defined market. 6 Advertising Costs and Market Penetration

32. 32 CONCEPT check How is technology impacting the way advertisers reach their markets? What are the two main factors that should be considered when selecting advertising media? 6

33. 33 7 What is personal selling? 7 Personal Selling

34. 34  Provides a detailed explanation or demonstration of the product  Message can be varied according to the motivations and interests of each prospective customer  Can be directed only to qualified prospects  Costs can be controlled by adjusting the size of the sales force in one-person increments  Considerably more effective than other forms of promotion in obtaining a sale and gaining a satisfied customer Advantages of Personal Selling 7

35. 35 6. Following up sale 5. Closing sale 4. Handling objections 3. Presenting & demonstrating 2. Approaching customers 1. Prospecting and qualifying Satisfied customer The Selling Process 7

36. 36  Does the prospect have a need for our product?  Can the prospect make the buying decision?  Can the prospect afford our product? Qualifying Questions 7

37. 37 CONCEPT check What are the advantages of personal selling? Explain the selling process. 7

38. 38 8 What are the goals of sales promotion, and what are several types of sales promotion? 8 Sales Promotion

39. 39 sales promotions Marketing events or sales efforts—not including advertising, personal selling, and public relations—that stimulate buying. point-of-purchase display A strategically placed visual display or product display that informs potential customers about a product or service. Sales Promotion 8 © AP Images / Mark J. Terrill

40. 40 CONCEPT check How does sales promotion differ from advertising? Describe several types of sales promotion. 8

41. 41 9 How does public relations fit into the promotional mix? 9 Public Relations

42. 42 public relations Any communication or activity designed to win goodwill or prestige for a company or person. publicity Information about a company or product that appears in the news media and is not directly paid for by the company. Public Relations 9

43. 43 Functions of Public Relations 9  Press relations  Product publicity  Corporate communications  Public affairs  Lobbying  Employee and investor relations  Crisis management © Steve Helber-Pool / Getty Images

44. 44 CONCEPT check What is the role of public relations? Explain the concept of buzz marketing. 9

45. 45 10 What are the trends in promotion and distribution? 10 Trends in Promotion and Distribution

46. 46 10 Why Companies Blog 1.Real-time input from customers and prospects 2.Create and maintain relationships 3.Dialogue with clients and prospects 4.Focus on specific marketing goals

47. 47 CONCEPT check Why would a company such as Apple set up a blog? What factors contribute to the Internet’s soaring growth in retailing? 10