marketing channel management target&position product place promo price distribution channels...
Post on 19-Dec-2015
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Marketing Channel Marketing Channel ManagementManagement
TargetTarget&&
PositionPosition
TargetTarget&&
PositionPosition
ProductProduct
PlacePlace PromoPromo
PricePrice
DistributiDistribution on
ChannelsChannelsthruthru SMCSMC
Supply Chain ManagementSupply Chain Management
Media Media ChannelsChannels
thruthru IMCIMC
Integrated Marketing Integrated Marketing CommunicationCommunication
The Changing Worlds of Distribution & Promotion
Channel IntegrationSupply Chain Mgt-
Shared Info replaces inventory
Integrated Marketing CommunicationDeveloping Creative & Media Strategy
The “New” Media & Advertising-Promotional techniques…
Marketer’s distribution decisions not extend much beyond level of
intensity- (Convenience, Selective
or Exclusive)
Marketer’s distribution decisions not extend much beyond level of
intensity- (Convenience, Selective
or Exclusive)
Changing World of Distribution
Old WorldOld World
When mfgr. restricts distribution to single/ select few retailer(s)
Specialty Products Expensive Infrequently purchased Sought after by consumers Require considerable after-
sale servicing
Exclusive Distribution
Mfgr. Channel Strategy
Mfgr. Channel StrategyLevels of
distributionintensity
Product available in multiple retail outlets
Shopping goodsBuy less frequentlyHigh-Mod. priceComparison shop i.e Clothing, appliances
Selective Distribution
Mfgr. Channel StrategyMfgr. Channel Strategy
Levels ofdistributionintensity
“Where ever fine brands
are sold”
Convenience products - sold thru virtually every available
retail outlet in a particular marketBuy frequently, immediately Low priced Mass advertising i.e Candy, soda, newspapers- anything in a
convenience store
Intensive Distribution
Mfgr. Channel Strategy
Mfgr. Channel StrategyLevels of
distributionintensity
Separate functions handled by separate
businesses
Separate functions handled by separate
businesses
Changing World of Distribution
Old World Independent Middlemen
New World Supply Chain Team
Focus only on your link in the chain
Focus only on your link in the chain
Coordinate supply-production-transportation & Distribution
Integrate all members of SC thru shared
info- system
Integrate all members of SC thru shared
info- system
Integrate all channels of promotional mix under one strategic umbrella
Communication Dominated by Advertising
& Ad Agencies
Communication Dominated by Advertising
& Ad Agencies
Separate functions handled by “experts” in separate departments
Separate functions handled by “experts” in separate departments
Changing World of Promotion
Old WorldOld WorldMass Media &Mass Media &
Mass MiddlemenMass Middlemen
New World New World Integrated Marketing Integrated Marketing
CommunicationCommunication
Mass media advertising serves supportive role in
overall Marketing Communications effort
Mass media advertising serves supportive role in
overall Marketing Communications effort
Focus on mass mediaFocus on mass mediaFocus on mass mediaFocus on mass media
SCM & IMCGetting the Right
Messagesto the Right peopleat the Right Timesw/ Minimum waste
& Maximum effect
Getting the Right Messages
to the Right peopleat the Right Timesw/ Minimum waste
& Maximum effect
Getting the Right Thingsto the Right Placesat the Right Times w/ Minimum cost & Maximum levels of Customer service
Getting the Right Thingsto the Right Placesat the Right Times w/ Minimum cost & Maximum levels of Customer service
Product & Message Distribution
Commonalities
To get Product out: Effective Communication w/
distributors Effective Distribution
Channel strategy & mgt.
To get the Message out: Effective Communication w/
consumers Effective Media Channel
strategy & mgt.
WebvertisingWebvertising
Events & Sponsorships
Events & Sponsorships
Public Relations
Public Relations
Sales Promotion
Sales Promotion
AdvertisingAdvertising Direct Marketing
Direct Marketing
PackagingPackaging Personal Selling
Personal Selling
InSync
TransportersTransporters
DistributorsDistributors
WarehousesWarehouses
SuppliersSuppliers
ManufacturersManufacturers ShippersShippers
RetailersRetailers
InSync
Sourcing & procurement
Production scheduling
Order processing
Inventory control
Warehouse & materials handling
TransportationLog
isti
cs in
form
ati
on
syste
mSupplychainteam
Free & Immediate movement of Information up & down supply chain
Information Distortions and the “Bullwhip Effect
Sales rate volatility Production rate volatility
The “Bullwhip Effect”1200
Customer Demand
900
600
300
0 4 8 12 16 20 24 Mo.
1200
Retailer Orders 900
To Distributor 600
300
0 4 8 12 16 20 24 Mo.
1200
Distributor Orders
900
To Manufacturer
600
300
0 4 8 12 16 20 24 Mo.
Inventory is insurance against supply chain uncertaintiesInventory is insurance against supply chain uncertainties
Supply chain management substitutes information for inventory
Supply chain management substitutes information for inventory
6%
8%
10%
12%
14%
16%
18%
20%
'68 '70 '72 '74 '76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04
Production Growth Volatility
Sales Growth Volatility
Standard Deviation, 10-yr Moving Average
Logistics Costs Continue to Fall
2
4
6
8
10
12
14
16
'81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03
Costs as a percent of GDP
Total Logistics Costs
Transportation Costs
Inventory Carrying Costs
Key Point: Distribution functions can be improved w/ INFO-integration (“compunication”,
Scanning & RFID technologies) Receiving Product storage/
“putaways” Order Fulfillment/ “Picks” Inventory Shipping
Wireless/Mobile IMS Increased productivity Increased accuracy Increased space
efficiencies – Better customer
service=satisfaction– order processing time & effort;
Better (fresher) product shipped; Less damage
Increased productivity Increased accuracy Increased space
efficiencies – Better customer
service=satisfaction– order processing time & effort;
Better (fresher) product shipped; Less damage
Integrated Marketing Communications
Wherein a Wherein a Company Company
Integrates & Integrates & Coordinates Coordinates
all its all its CommunicatiCommunicati
onsons
Co-ordinate, Synthesize, Orchestrate all Marketing
Communications…
Mass Media
PR
Cust. Service
In-store
New Media
Creative Concept
Execution of single strategy & concept
across all communication channels
Execution of single strategy & concept
across all communication channels
campaign strategy
Broader Perspective of Promotion
Conceptualize IMC in terms of
“All Contacts”
between customer &
brand
Integrated Marketing Communication
More Continuous
More Continuous
Maximum Impact!
More Consistent
More Consistent
IMC Strategy
IMC Strategy
IMC helps Cut Thru Message Clutter
More Impact
Integrate Comm. Across Time & Channels
Pre-purchase Purchase Post-purchase
Personal selling
Sales promotion
Advertising
ImportanceImportance
High
Low
Stage of consumer’s purchase decisionStage of consumer’s purchase decision
Direct Marketing
Public Relations
More Continuity & Impact
“IMC Simple in Concept
Need only
1.Have something interesting & compelling to say
2.Have an effective means of reaching logical prospects
Developing IMC Campaigns
Creative Strategy Campaign
Concept- “the big idea”
Message Execution- style & format
Need only
1. Have something interesting & compelling to say
2. Have an effective means of reaching logical prospects (Media Strategy)
Can’t be pulled out of a hat … …nor from of a book
The Creative Work-plan
The SituationThe Situation
The TargetThe Target
The ProductThe Product
The MessageThe Message
Developing the Communication Campaign
Concept
Director of Marketing
Creative Director
Copy Chief
Brand Manager
Art Director
Copywriter Artist
Ad Agency AE
Suits--Suits-- “Its not creative unless it sells”
Poets– Poets– Artistic; value
entertainment & originality
Key fact-Key fact- major problem / opportunity to emerge from sit. analysis
Marketing Goals-Marketing Goals- sales, votes, memberships…
Advertising Goals-Advertising Goals- communication based
The SituationThe Situation
Prospect Definition-Prospect Definition- all relevant descriptorsall relevant descriptors
Key Dimensions-Key Dimensions- most relevant most relevant descriptorsdescriptors
The TargetThe Target
The ProductThe Product
Benefits & Attributes-Benefits & Attributes- real, imagined, in-real, imagined, in-use,result-use, social, use,result-use, social, psycho…psycho…
CompetitionCompetition— — what/how what/how are they sellingare they selling
PositionPosition- - in consumer’s in consumer’s evoked setevoked set
-
-
-
The MessageThe Message
ConceptConcept- “The Big Idea”- “The Big Idea”
Promise / USPPromise / USP — what — what “really” offering“really” offering
SupportSupport- words, facts, - words, facts, reasons, images backing-reasons, images backing-up promiseup promise
SlogoSlogo- visual/verbal ID- visual/verbal ID
ConceptConcept- “The Big Idea”- “The Big Idea”
Promise / USPPromise / USP — what — what “really” offering“really” offering
SupportSupport- words, facts, - words, facts, reasons, images backing-reasons, images backing-up promiseup promise
SlogoSlogo- visual/verbal ID- visual/verbal ID
That’s whyThat’s why We’re #1We’re #1 in thein the #2 #2 BusinessBusiness
Johnny-on the Spot
We’re ready to go when you are…
Having developed WHAT your going to say– next decide HOW to say it
Having developed WHAT your going to say– next decide HOW to say it
User-TestimonialUser-Testimonial Celebrity EndorsementCelebrity Endorsement
Slice of LifeSlice of LifeScientific/Technical
ExpertScientific/Technical
Expert
FantasyFantasy
Music VideoMusic Video
Animated-PersonalityAnimated-Personality
DemonstrationDemonstration
FORMATSFORMATS
Unique Character, Image, Persona—that represents the Brand—
((Leo Burnett School: Tony the Tiger The Keebler Elf Jolly Green Giant Charlie the Tuna Morris the Cat
Creative BriefDel Monte
• The Objective – Increase awareness of the smaller-size cans with pull-top lid.
• Target Audience – senior citizens, especially those that live alone and suffer from arthritis.
• Message Theme – The new cans not only contain a smaller portion but are easier to open.
• Support – 30 cent introductory coupon to encourage usage.
• Constraints – copyright logo, toll free number, website address, legal requirements of a coupon and what is meant by a small serve
The message theme of this milk advertisement was that milk will provide calcium. The calcium will provide the customer with benefit of strong bones.
HumorHumorHumorHumor
HumorHumorHumorHumor
Communication Effects
Communication Effects
Two Measures of Success
Sales EffectsSales Effects
Evaluating Campaign
Demonstrates process of Communication Testing
Demonstrates process of Communication Testing
I don’t know
what they’re sellin
g
but it’s a damn good ad
What makes message Effective
Tell A Story
The Ultimate Evaluative Criteria:
You Know you have succeeded when:
You get people to buy things they don’t need…
With money they don’t have…
To impress people they don’t like!
Developing Marketing Communication Campaigns
Creative strategy– Campaign Concept
& Execution
Media Channel strategy– Media Planning
Basic Media Decisions
1.Deciding on Message Weight: Reach, Frequency, Continuity & Budget & Message Weight- GRP’s & CPM
2.Choosing Media Channels & Vehicles
FrequencyFrequencyFrequencyFrequency
ContinuityContinuityContinuityContinuity
CostCostCostCost
GRPGRPGRPGRP
What % of market –
target sees -reads, hears-
Message
ReachReachReachReach
Media-Plan MetricsMedia-Plan Metrics
CPMCPMCPMCPM
Media-Plan MetricsMedia-Plan Metrics
ReachReachReachReach
ContinuityContinuityContinuityContinuity
CostCostCostCost
GRPGRPGRPGRP
How often target
audience exposed
to message
FrequencyFrequencyFrequencyFrequency
CPMCPMCPMCPM
Media-Plan MetricsMedia-Plan Metrics
ReachReachReachReach
FrequencyFrequencyFrequencyFrequency
CostCostCostCost
GRPGRPGRPGRP
When are the best times to
reach the target
audience?
ContinuityContinuity ContinuityContinuity
CPMCPMCPMCPM
Media-Plan MetricsMedia-Plan Metrics
ReachReachReachReach
FrequencyFrequencyFrequencyFrequency
ContinuityContinuity ContinuityContinuity
GRPGRPGRPGRPCostCostCostCost
CPMCPMCPMCPM
-Spend1.What can
afford2.% of sales3.What need to
spend to achieve certain level R&F
4.What competitors spending
Media-Plan MetricsMedia-Plan Metrics
ReachReachReachReach
FrequencyFrequencyFrequencyFrequency
ContinuityContinuity ContinuityContinuity
CostCostCostCost
(Message Weight)
Gross Rating Points=
Reach x Frequency
GRPGRPGRPGRPCPMCPMCPMCPM
Media-Plan MetricsMedia-Plan Metrics
ReachReachReachReach
FrequencyFrequencyFrequencyFrequency
ContinuityContinuity ContinuityContinuity
CostCostCostCost
Cost- Per -Thousand
Cost * (x1000) (Audience size)
Statistic allows comparison of cost efficiency
of different media vehicles
CPMCPMCPMCPMGRPGRPGRPGRP
Basic Media Decisions
1. Deciding on Message Weight: Reach, Frequency, Continuity & Budget & Message Weight- GRP’s & CPM
2. Choosing Media Channels & Vehicles
Established Channels & Methods
There’s an old adage …
“Half of my $ spent on advertising is wasted- The only question is what half?”
w/ U.S. advertisers spending $200+ billion each year & Worldwide spending exceeding $400+ billion…that’s a lot a $$$$$
And it could be getting a whole lot worse…
And it could be getting a whole lot worse…
The “old & established” methods of promotion ain’t what they used to be….
“Mass reach” is giving way to a world of niches…
•Everybody has multi comm devices & consume what they want - when they want - where they want
Agents of Change are Everywhere:
DVRs , PDA’s & Smart- phones Wireless hot spots “Branded entertainment” Word-of-mouth, viral marketing Podcasts, online video Pervasive usage of GPS
assisted content delivery Rapid deployment of
addressable advertising technology
mfgrs. are losing their simple connection to the consumer...
In 1995 it took 3 TV commercials to reach 80% of 18- to 49-year-old women.
Today- takes > 10 times # Ads to reach the same group.
The media universe has shattered
Given increased consumer resistance to
and skepticism of advertising
Even if could reach w/ 1 ad…. …effectiveness is
questionable
Ads no longer secure customer attention
Source: Newspaper Association of America, Cabletelevision Advertising Bureau, and Nielsen Media Research
Adult evening TV viewers able to name, without prompting, a brand or product advertised in show just
seen
Beware of eroding TRUST!
Consumer trust in advertising has plunged 41% over the past three yearsOnly 10% of consumers say they “trust” ads today
76% don’t believe that companies tell the truth in advertisements
--Yankelovich, 2005
20th Cent. Media Business Model on Its Last Legs!
“Emerging digital technologies are wresting power from the hands
of the content provider and placing it with the consumer,
forever changing the traditional paid-media advertising model”
_____________
“Madison Ave. melds pitches and content,” Advertising Age ; Chicago; Oct 7, 2002; Hank Kim
The DVR: consumers control programming, content & time
• From 2000 –to date—
The % of HH’s w/ DVR’s gone from 0% to 40% (projected -2008)
Marketing Professionals Vary in Awareness
Media Investment Survey 2007
“SAW IT COMING”
“TOOK ME BY
SURPRISE”
77%23%
61%39%
51%49%
50%50%
48%52%
47%53%
46%54%
42%58%
35%65%
25%75%
23%77%
20%80%
14%86%
The Rush to Second Life
The Rise of YouTube
Popularization of “Mash-ups”
Newspapers Moving to Tabloid Format
Issue-Specific Print Audience Measures
TV Commercial Rating System
Growth of Free Daily Newspapers
Restructuring of Traditional Media
Explosion of Consumer Content
Emergence of Podcasting
Social Media in Communication Plans
Mass Adoption of Text Messaging
TV Programs on the Internet
New Communication technology has & continues
to alter Consumer preferences & patterns of
media consumptionAnd as a consequence- has &
will continue to render long established business methods & models
obsolete!
Mass Media Out - Mass Channel In
It's the Mass Channel…Not the It's the Mass Channel…Not the Mass MediaMass Media that is attracting bulk of that is attracting bulk of marketing dollarsmarketing dollars
10 biggest Mega-Retailers: account for ~ 80% of mfgrs biz vs. ~ 30% decade ago
~ 60% of mfgrs' marketing $$ go to retailers compared with 36% two decades ago
ManufacturerManufacturerpromotes to promotes to wholesalerwholesaler
ManufacturerManufacturerpromotes to promotes to wholesalerwholesaler
Wholesaler Wholesaler promotes to promotes to
retailerretailer
Wholesaler Wholesaler promotes to promotes to
retailerretailer
Retailer Retailer promotes topromotes toconsumerconsumer
Retailer Retailer promotes topromotes toconsumerconsumer
ConsumerConsumerbuys frombuys from
retailerretailer
ConsumerConsumerbuys frombuys from
retailerretailer
PUSH STRATEGYPUSH STRATEGY
Orders to manufacturer
ManufacturerManufacturerpromotes to promotes to
consumerconsumer
ManufacturerManufacturerpromotes to promotes to
consumerconsumer
Consumer Consumer demands demands productproduct
from retailerfrom retailer
Consumer Consumer demands demands productproduct
from retailerfrom retailer
Retailer Retailer demands demands productproduct
from wholesalerfrom wholesaler
Retailer Retailer demands demands productproduct
from wholesalerfrom wholesaler
Wholesaler Wholesaler demandsdemands
product fromproduct frommanufacturermanufacturer
Wholesaler Wholesaler demandsdemands
product fromproduct frommanufacturermanufacturer
Orders to manufacturer
PULL STRATEGYPULL STRATEGY
Protection Containment, storage,
recycling InformationIngredients, UPC,
Instructions, PromotionReadily noticed &
recognized (Brand ID)Facilitate, use &
convenience
Protection Containment, storage,
recycling InformationIngredients, UPC,
Instructions, PromotionReadily noticed &
recognized (Brand ID)Facilitate, use &
convenience
Thus Increased importance of Packaging
Two-way Dialogue With Consumers
Two-way Dialogue With Consumers
Focus on Building Long Term Relationships With
Consumers
Focus on Building Long Term Relationships With
Consumers
Marketers Use & Coordinate Many
Different Forms of Communication
Marketers Use & Coordinate Many
Different Forms of Communication
Two-way Dialogue W/ Consumers
Two-way Dialogue W/ Consumers
Focus - Building Long Term Relationships W/
Consumers
Focus - Building Long Term Relationships W/
Consumers
Changing World of Marketing Communication
Old WorldOld World New WorldNew World
“Talking At” Consumers“Talking At” Consumers
Focus on Winning New Customers
Focus on Winning New Customers
Marketers Relied Primarily on Advertising
and Promotions
Marketers Relied Primarily on Advertising
and Promotions
My network offriends/associates
One-to-One W3
Marketing
Many-to-Many Social Network
MarketingYour network of friends/associates
Their network offriends/associates
Mass MarketingOne-to-Many
IMC- Integrating the Buzz w/ other Marketing Comm. Vehicles
The New (and not so new) WOM Marketing Techniques
• Buzz Marketing• Brand Blogging• CGM- Consumer Generated Media
• Product Placement• Viral Marketing• Stealth Marketing• Guerilla Marketing• Conversation Marketing• Grassroots Marketing• Evangelist Marketing• Referral Marketing• Influencer Marketing• 2Step Flow Marketing• Many-to Many
• Buzz Marketing• Brand Blogging• CGM- Consumer Generated Media
• Product Placement• Viral Marketing• Stealth Marketing• Guerilla Marketing• Conversation Marketing• Grassroots Marketing• Evangelist Marketing• Referral Marketing• Influencer Marketing• 2Step Flow Marketing• Many-to Many
Viral Marketing
Creating entertaining / info-taining messages designed to be passed along …
Example:Go Elf Yourself- Stats
Example:Go Elf Yourself- Stats
Radian6
http://www.tremor.com/•250,000+ teen Connectors screened & opted in
http://www.tremor.com/•250,000+ teen Connectors screened & opted in
http://www.bzzagent.com/80,000 members
Cost: 1,000 agents -12 weeks ~$100K
http://www.bzzagent.com/80,000 members
Cost: 1,000 agents -12 weeks ~$100K
BUZZ Marketing: Using high
Profile entertainment or news to get people talking
about your product
Halo : WOM Campaign
Buzz Generator= On-line- Community interactive-immersive mystery story that allowed advance play of Halo2
600,000 full-time players 2.3 million participants 1million+ blog posts Media coverage w/ CNN, USA Today, NYT,
etc.
= $125 million opening day sales- biggest opening day revenue in entertainment history
Halo3=$170M vs. &151M Spiderman
Evangelist Marketing
Cultivating advocates volunteers who will
take a leadership role in actively spreading the good word about your product/service
Video - ClipList
V-8 Communication Test
Top Ten Super Bowl Ads 2009 – Best SB ad all time- Herding cats
V-8 Communication Test
Top Ten Super Bowl Ads 2009 – Best SB ad all time- Herding cats