Integrated Marketing Communication? Marketing Communication Mix

 An approach to achieving the objectives of a marketing campaign, through a well-coordinated use of different promotional methods that are intended to reinforce each other.

As defined by the American Association of Advertising Agencies, integrated marketing communications " ... recognizes the value of a comprehensive plan that evaluates the strategic roles of a variety of communication disciplines advertising, public relations, personal selling, and sales promotion and combines them to provide clarity, consistency, and maximum communication impact."

                Integrated marketing communication refers to integrating all the methods of brand promotion to promote a particular product or service among target customers. In integrated marketing communication, all aspects of marketing communication work together for increased sales and maximum cost effectiveness. Let us go through various components of Integrated Marketing Communication:

The Foundation - As the name suggests, foundation stage involves detailed analysis of both the product as well as target market. It is essential for marketers to understand the brand, its offerings and end-users. You need to know the needs, attitudes and expectations of the target customers. Keep a close watch on competitor’s activities.

The Corporate Culture - The features of products and services ought to be in line with the work culture of the organization. Every organization has a vision and it’s important for the marketers to keep in mind the same before designing products and services. Let us understand it with the help of an example.

Brand Focus - Brand Focus represents the corporate identity of the brand.

Consumer Experience - Marketers need to focus on consumer experience which refers to what the customers feel about the product. A consumer is likely to pick up a product which has good packaging and looks attractive. Products need to meet and exceed customer expectations.

Communication Tools - Communication tools include various modes of promoting a particular brand such as advertising, direct selling, promoting through social media such as facebook, twitter, orkut and so on.

Promotional Tools - Brands are promoted through various promotional tools such as trade promotions, personal selling and so on. Organizations need to strengthen their relationship with customers and external clients.

1.       Integration Tools - Organizations need to keep a regular track on customer feedbacks and reviews. You need to have specific software like customer relationship management (CRM), which helps in measuring the effectiveness of various integrated marketing communications tools.

 

Marketing Mix: A marketing communication mix is a combination of marketing variables for a specific product/service, arrived at by choosing the best mix from the 4 Ps of marketing. It defines how you will position your product in the market. The four Ps are - Product: brand name, styling, etc. Place: distribution channels, warehousing, etc. Price: retail price, seasonal pricing, etc. Promotion: advertising, sales promotion, etc.
1.Advertisement:  Any paid form of non-personal presentation and promotion of ideas, goods, or services by identified sponsor.

2. Sales Promotion:  A variety of shot-term incentives to encourage trial or purchase of a product or services.
3. Public Relation And Publicity: A variety of programs designed to promote or protect a company's image or its individual products.

4. Personal Selling: Face-to-face interaction with one or more prospective purchasers for the purpose of making presentations, answering questions, and procuring orders.

5. Direct Marketing: Use of mail, telephone, fax, e-mail, or internet to communicate directly with or solicit a direct response for specific customers and prospects.

Define Advertising? Role

Advertising or advertising is a form of communication for marketing and used to encourage, persuade, or manipulate an audience (viewers, readers or listeners; sometimes a specific group) to continue or take some new action. Most commonly, the desired result is to drive consumer behavior with respect to a commercial offering, although political and ideological advertising is also common. This type of work belongs to a category called affective labor

 “Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.” Philip Kotler

“Advertising not only plays a vital role in promoting our economic growth but it is a colorful and diverting aspect of life.” Peter Drucker

Characteristics of Advertising:

It is a mass non personal communication.

It is a matter of record

It is a marketing tool.

It persuades buyers to purchase the goods advertised

Functions of Advertising:

Promotion  of sale

To create awareness about introduction of new product

  Facilitate mass production.

Creation of good public image

Education of people

 

 

Types of Advertising:

PRODUCT Advertising

PROFESSIONAL ADVERTISING

TRADE ADVERTISING

INDUSTRIAL ADVERTISING

CONSUMER ADVERTISING

Role of Advertising:

Advertising consists of four different roles:

The marketing role
The communication role
The economic role
The societal role

A marketing role within advertising will focus on satisfying general consumers and seeing to their requirements through services and goods. It will not be directed at all the public but only at certain customers that are termed a ‘target market’.

A communication role in advertising will refer to a mass communication intention that advertising will be capable of fulfilling. This is an impressive way in which to inform customers and let them know about the services and goods they wish to buy.

With regards to an economical role in advertising, this will directly deal with the objectives of the advertiser. Normally, the objectives of an advertiser are to be able to generate sales from an advertisement. It will also help a consumer to appraise both the value as well as the benefits of any of the products, which are advertised against their prices that the products are being offered at so as to make the most economic and efficient choice.

Finally, a societal role within advertising is quite a fascinating role. On the one hand, an advertisement will help to generate the trends within a certain society. In contrast, it is the cause of breaking a norm that has been a part of society for a while so as to generate a truly unique impact. It tends to have a somewhat tentative nature, which some people will like while some will resent it.

 

Define Marketing Communication

 Marketing Communications: All strategies, tactics, and activities involved in getting the desired marketing messages to intended target markets, regardless of the media used.

Marketing communications (or marcom) consists of the messages and related media used to communicate with a market. Those who practice advertising, branding, direct marketing, graphic design, marketing, packaging, promotion, publicity, public relations, sales, and sales promotion are termed marketing communicators, marketing communications managers, or more briefly as marcom managers.

Objective/ Characteristics: Marketing communications serve five key objectives: 1) the provision of information, 2) the stimulation of demand, 3) differentiating the product or service, 4) underlining the product's value, 5) regulating sales.

Elements of Marketing Communications

 Corporate Image :  A company's corporate image sums up the publicly established characteristics of the business. This includes what the company claims it does best (known as core competencies), logos, policies and company culture

Branding: Brands are the names generally associated with a product, group of products or a company. A brand name is meant to evoke a certain set of thoughts and feelings in consumers, and businesses can charge more for successful brand-name products. IMC creates branding and is aided by existing branding.

Market Segmentation: Market segments are sets of consumers grouped together because of similar needs, demographics, behaviors or characteristics. Marketers research segments to determine what types of products and messages appeal to them.

 

 

Advertising: Crafting advertising messages to reach the target segment is essential to IMC plans. Different types of messages match up with the corporate image, branding and market segment preferences. Advertising may use elements such as humor, fear and taste to appeal to audiences.

Media Selection: Markets must select the type of advertising mediums that will best feature the IMC and brand messages. Possible mediums include magazines, websites, radio and television. Media selection also involves determining the market segment's preferred mediums.

Promotional Tools: IMC uses consumer promotional tools to enhance branding and attract market segments. Coupons, rebates, sales and bonus packs are examples of promotional tools. Other promotional tools include contests, sweepstakes and free samples.

Customer Relationship Management: Customer relationship management (CRM) programs are designed to instill long-term loyalty in existing customers. CRM tactics include commitment to excellent customer service and keeping a record of current customers .

Public Relations: Public relations protects the brand and corporate image by creating publicity that builds a positive impression of the company and by reducing the impact of negative events related to the business.

Define Process of Marketing Communication

 Marketing communications is essentially a part of the marketing mix. The marketing mix defines the 4Ps of marketing and Promotion is what marketing communications is all about. It is the message your organization is going to convey to your market. You need to be very particular about different messages you are going to convey through different mediums.

People controlling the marketing communication process are very important for the company. These executives make it an integrated marketing communication process. You would now understand why it has to be ‘integrated’. The reason is that the messages to be conveyed through different mediums should be the same.

Marketing communication process: It is very important to have a process in place because then your advertising will reap proper benefits. The marketing communication process puts a tab on advertising because companies cannot bear to lose money on wrong type of advertising. Things have to be well-defined and integrated to get maximum revenues.

Marketing communication process would look like:

The process begins at the strategic development stage. Next stage is determined by the response of customers. These responses are then recorded and maintained as advertising data. The executives then analyze and evaluate the collected data. They generate the all important reports which will help to allocate the integrated marketing and communications budget.

The integrated marketing communications is a data-driven approach which identifies the consumer insights and develops a strategy with the right combination of offline and online channels which should result in a stronger brand-consumer relationship. It has grown manifolds in recent years due to several shifts in the advertising and media industry. This is the reason why it has developed into a primary strategy for the developers. Some examples of shifts are from media advertising to the multiple forms of communication, from general focus advertising to data based marketing and so on.

Selecting the most important communications elements is crucial for the success of company’s business. The advertising campaign should be effective across all platforms. Once the integrated marketing process is set, the company can reap rich dividends from it.

Types of Publicity

 Publicity is the deliberate attempt to manage the public's perception of a subject. The subjects of publicity include people (for example, politicians and performing artists), goods and services, organizations of all kinds, and works of art or entertainment.

The following sections list numerous means by which you can publicize
events. One of these ideas will be familiar to you while others will hopefully
provide you with insight into innovative and more creative ways of effectively
publicizing programs.

Inexpensive Publicity Techniques:

POSTERS: The essential purpose of a poster is the rapid telling of a single simple message using a limited number of elements. Posters are viewed more rapidly than other methods of advertisement. Their message must be strong, simple, and brief.

TABLE TENTS: Table tents should be made of thick or heavy grade of paper that will stand firm. Table tents can be placed in visible locations including lounges, lobby, dining hall, and on desk tops.

INVITATION: A personal touch can be added to your publicity by distributing invitations for your program. These can be placed in mailboxes or handed out or slipped under room doors.

CALENDAR:  A large calendar of activities located on your bulletin board or distributed individually is a particularly effective technique. Students will have at least one consistently identifiable source for information and activities. The smaller calendars of activities can be copied and put into mailboxes or slid under doors.

BALLOONS: You can write a message on the balloon or put the message on a piece of paper inside the balloon. Balloons can be tied with string to student’s door knobs, handed out at the entrance of the building or handed out in dining hall lines.

TICKETS: You can purchase printed tickets or make your own. Free tickets, and invitations, can be placed in mailboxes, handed out, or slipped under doors. A variation of the ticket concept is to distribute coupons. The coupon might entitle the person to a prize or free refreshment item. Coupons can be included on flyers or on printed schedules and this may prevent your advertisement from falling victim to the trashcan.

BILLBOARDS: Place a large poster in the central lobby of Goodwin Hall. For a more unusual effect, make a human billboard by hanging posters on the front and back of someone and have them walk around.

BANNERS: A large extension of the poster, these can be hung outside the hall or in the mailroom or in a lobby. A bed sheet or old shower curtain will make a good size banner.

WORD OF MOUTH: And of course, there is the time-honored word-of-mouth technique. This is perhaps the oldest, yet most effective way to get the word out. Its effectiveness should not be underestimated. Go door to door and personally inform people of the activity; and remind them frequently, so that they don’t forget.

OTHER PUBLICITY TECHNIQUES:

1.       Networking sites,          2.  Mass e-mails,                 

2.       3.  Bags,                         4.  Bookmarks

5.    Bull Horns,                    6.  Bumper Stickers,           

7.  Computer Letters           8.  Door Hanger

9.    Door Prizes,                   10. Footprints,                     

11. Fortune Cookies,           12. Free Tickets to events

13.  Lawn Signs,                   14. Logos,                            

15. Painted Windows,         16. Audix Message

17.  Puzzle Pieces 18. Sneak Previews,           

19.  Stickers,                         20. Teasers

21.  Bathroom stalls,           22. T-shirts,                          

23. Visors,                             24.Sidewalk Chalk Writing

25. Mirror Signs,                   26. Lollipops with messages

What are the factors to be considered to open a new banking branch

1.   Excellent communication facility
2.   Business oriented place
3.   Side of the big road
4.   Security or secured place
5.   Good arrangement of Car parking
6.   Facility of technology establishment
7.   Modern location
8.   Good structured building
9.   Fire extinguishing facility
10.   Surrounding nature
11.   Clean place
12.  Place for ATM Booth installation
13.  Good arrangement for customer gathering far away from political area
14.  Branding/Image/Advertisement

Define logistic Management and its importance & Functions. Explain an effective logistics management operation

 Logistics management is a supply chain management component that is used to meet customer demands through the planning, control and implementation of the effective movement and storage of related information, goods and services from origin to destination. Logistics management helps companies reduce expenses and enhance customer service.

The logistics management process begins with raw material accumulation to the final stage of delivering goods to the destination.

By adhering to customer needs and industry standards, logistics management facilitates process strategy, planning and implementation.

 Q:  An effective logistics management operation should yield 4 key results

• Increase revenue
• Improve operating cost structure
• Reduce overall transportation costs
• Improve customer service

Importance:

• Logistics management deals with the coordination of resources in an organization. Logistics management focuses on the organization as a whole and not on individual units and departments while deciding about the allocation of resources The resources may be in the form of men, machines, materials, money and time. Logistics management helps in the efficient use and deployment of the scarce resources. In absence of effective logistics management, there will be a depletion of various meager resources.
• In case a problem arises, logistics management would investigate the problem and resolve the same on the basis of costs and benefits to the organization as a whole and not to any particular department or unit.

·         Logistics management does away with the ambiguity in the definition of the responsibilities of individuals, Units and departments in an organization. It focuses on areas of possible inefficiency and ensures that all areas are effectively managed. It brings about co-ordination between units and departments.

 Q: Major logistic Function?

Ans: Customer service

Customer service has been defined as "a customer-oriented philosophy which integrates and manages all elements of the customer interlace within a predetermined optimum cost-service mix. Customer service is the output of the logistics system. It involves getting the right product to the right customer at the right place, in the right condition and at the right time, at the lowest total cost possible, Good customer service supports customer satisfaction.

Demand forecasting/planning

There are many types of demand forecasts. Marketing forecasts customer demand based on promotions, pricing, competition, and so on. Manufacturing forecasts production requirements based on marketing's sales demand forecasts and current inventory levels. Logistics usually becomes involved in forecasting in terms of ho\v much should be ordered from its suppliers (through purchasing), and how much of finished product should be transported or held in each market that the organization serves.

Inventory management

Inventory management involves trading off the level of inventory held to achieve high customer service levels with the cost of holding inventory, including capital tied up in inventory, variable storage costs, and obsolescence. These costs can range from 14 to over 50 percent of the value of inventory on an annual basis! With high costs for items such as high-tech merchandise, automobiles, and seasonal items that rapidly be come/obsolete, many organizations, including Hewlett Packard. Xerox, and Sears, are giving inventory management much more attention.

Logistics communications

Communications are becoming increasingly automated, complex, and rapid. Logistics interfaces with a wide array of functions and organizations in its communication processes. Communication must occur between:

   1. The organization and its suppliers and customers.

   2. The major functions within the organization, such as logistics, engineering, accounting, marketing, and production.

   3. The various logistics activities listed previously.

   4. The various aspects of each logistics activity, such as coordinating warehousing of material, work in process, and finished goods.

   5. Various members of the supply chain, such as intermediaries and secondary customers or suppliers who may not be directly linked to the firm.

 

Material handling

Materials handling is a broad area that encompasses virtually all aspects of all movements of raw materials, work in process, or finished goods within a plant or warehouse. Because an organization incurs costs without adding value each time an item moves or is handled, a primary objective of materials management is to eliminate handling wherever possible. That includes minimizing travel distance, bottlenecks, inventory levels, and loss due to waste, mishandling, pilferage, and damage.

 Order processing

Order processing entails the systems that an organization has for getting orders from customers, checking on the status of orders and communicating to customers about them, and actually filling the order and making it available lo the customer. Part of the order processing includes checking inventory status, customer credit, invoicing, and accounts receivable. Thus, order processing is a broad, highly automated area.

Packaging

Packaging is valuable both as a form of advertising/marketing, and for protection and storage from a logistical perspective. Packaging can convey important information to inform the consumer. Aesthetically pleasing packaging also can attract the consumer's attention. Logistically, packaging provides protection during storage and transport. This is especially important for long distances over multiple transportation modes such as international shipping.

Parts and service support

In addition to supporting production through the movement of materials, work in process and finished goods, logistics also is responsible for providing after-sale service support. This may include delivery of repair parts to dealers, stocking adequate spares, picking up defective or malfunctioning products from customers, and responding quickly to demands for repairs.

Traffic and transportation

A key logistics activity is to actually provide for the movement of materials and goods from point of origin to point of consumption, and perhaps to its ultimate point of disposal as well. Transportation involves selection of the mode (e.g., air, rail, water, truck, or pipeline), the routing of the shipment, assuring of compliance with regulations in the region of the country where shipment is occurring, and selection of the carrier. It is frequently the largest single cost among logistics activities.

Multi-Channel Marketing System

 Multichannel marketing is an efficient and productive system used by businesses to reach potential customers. This marketing system uses different methods to promote and sell products. Specifically, multichannel marketing uses research and analysis to reach specific target audiences. Additionally, this system aims to use distribution methods to create a return on investment for the business in a shorter period..

                An advantage of multi-channel marketing systems is that they create reliable distribution channels that concentrate on different demographic populations. The target audience is the marketing term used to describe these demographic populations. Further, multi-channel marketing systems contribute to the rapid growth of revenue and branding. The plethora of new channels available to businesses, such as the Internet, has drastically changed the infrastructure of multi-channel marketing. For example, email, text messages, e-commerce services and technology in general create new and innovative multi-channel opportunities for business.

Horizontal Marketing System

 Horizontal marketing system is a distribution channel arrangement whereby two or more organizations at the same level join together for marketing purposes to capitalize on a new opportunity. For example: a bank and a supermarket agree to have the bank’s ATMs located at the supermarket’s locations, two manufacturers combining to achieve economies of scale, otherwise not possible with each acting alone, in meeting the needs and demands of a very large retailer, or two wholesalers joining together to serve a particular region at a certain time of year.

According to business dictionary.com:  Horizontal Marketing System is a merger of firms on the same level in order to pursue marketing opportunities. The firms combine their resources such as production capabilities and distribution in order to maximize their earnings potential.

Example: A real time example is of Apple and Starbucks announced music partnership in 2007. The purpose of this partnership was to allow Starbucks customers to wirelessly browse, search for, preview, buy, and download music from iTunes Music Store onto their iPod touch, iPhone, or PC or Mac running iTunes. Apple’s leadership in digital music together with the unique Starbucks experience synergized a partnership to offer customers a world class digital music experience.

Q: Distinguish between Horizontal and Vertical Marketing System

In conventional marketing systems, businesses can run into conflicts, as each of the firms in the supply chain aims to maximize its profits on the expense of the others. This can subsequently reduce profits for the entire sector. Vertical and horizontal marketing systems help to address this problem. In the horizontal marketing system, members at the same level in the supply chain come together in alliances or joint ventures to pursue a new marketing opportunity

Marketing System v/s Vertical Marketing System

 Conventional marketing channel have been loose connections of independent companies, each showing little concern for overall channel performance. They have lacked strong leadership and have been troubled by damaging conflict and poor performance. A conventional marketing channel consists of one or more independent producers, wholesalers and retailers. Each is a separated business seeking to maximize its own profits, even at the expense of profits for the network as a whole. No channel members has much control over the other members, and no formal means exist for assigning roles and resolving channel conflict.

Producer -------- Wholesaler-------- Retailer -------- Consumer

Vertical marketing system

A distribution channel structure in which producers, wholesalers and retailers act as a unified network - either one channel member owns the others, has contracts with them, or wield so much power that they all cooperate.

Explain Vertical, Horizontal, Conventional and Multi-Channel Marketing System. Advantage and disadvantages of VMS. Distinguish between- 1) Conventional Marketing System and Vertical Marketing System and 2) Horizontal and Vertical Marketing System

 Explain Vertical, Horizontal, Conventional and Multi-Channel Marketing System. Advantage and disadvantages of VMS. Distinguish between- 1) Conventional Marketing System and Vertical Marketing System and 2) Horizontal and Vertical Marketing System

A vertical marketing system, also called a VMS, is a business system in which suppliers in a product chain work in a cooperative arrangement designed for all businesses to receive the maximum benefit. Systems like these are in contrast with conventional marketing systems in which each business in the supply chain is independent. Vertical systems are often used by businesses to lower the cost of producing a product or to better control the production of the product.

This type of marketing system can be used by both small and large businesses. In the system, how much of the supply chain is owned by one business entity is its level of vertical integration. For example, if a writer owns the publishing company that prints his books and also owns the website where the books are sold, she would have a high degree of vertical integration in her writing business. When a writer uses vertical marketing to self-publish and sell a product, she will lose less profit in commissions paid to printers, agents or booksellers. Vertical marketing systems generally come in three forms.

Corporate

A corporate vertical marketing system involves the ownership of all levels of the production or distribution chain by a single company. An example of a corporate vertical marketing system would be a company such as Apple, which has its own retail stores as well as designing and creating the products to be sold in those retail stores.

Contractual

A contractual vertical marketing system involves a formal agreement between the various levels of the distribution or production channel to coordinate the overall process. Franchising is a common form of a contractual vertical marketing system.

Administered

An administered vertical marketing system is one in which one member of the production and distribution chain is dominant and organizes the nature of the vertical marketing system informally, due to its sheer size. An example of this type of system could include a large retailer such as Wal-Mart dictating conditions to smaller product makers, such as producers of a generic type of laundry detergent.

Vertical Marketing System:            Producer  + wholesaler + Retailer -------- Consumer.

Advantage of VMS: A vertical marketing system, or VMS, is a business system that aims to achieve better efficiency and economies of scale. In the vertical marketing system, independent companies within related industries work together and eliminate conflict. Horizontal marketing systems, on the other hand, represent agreements across different industries.

Disadvantage Of VMS: One disadvantage to this type of system is that owning multiple businesses can be fairly complicated. Large businesses with a built-in management structured for multiple operations can usually handle the complications involved with running a vertical supply chain, but small business owners can sometimes become overwhelmed by the commitments involved with supervising many interoperating businesses. Running multiple businesses with too little management power to provide adequate supervision can introduce production problems that may end up worse than buying from an unconnected wholesaler.

Define distribution channel? Nature of distribution channel

 Distribution Channel: The path through which goods and services travel from the vendor to the consumer or payments for those products travel from the consumer to the vendor. A distribution channel can be as short as a direct transaction from the vendor to the consumer, or may include several interconnected intermediaries along the way such as wholesalers, distributers, agents and retailers. Each intermediary receives the item at one pricing point and movies it to the next higher pricing point until it reaches the final buyer. Coffee does not reach the consumer before first going through a channel involving the farmer, exporter, importer, distributor and the retailer. Also called the channel of distribution.

 Philip Kotler & Gary Armstrong: Marketing channel or distribution channel is a set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user.

Evans & Berman: Channel of distribution is all the organizations or people involved the distribution process.

William j. Stanton: A distribution channel consists of the set of people and firms involved in the transfer of title to a product, as the product moves from producer to ultimate consumer or business user.

Nature of distribution channel:

A distribution channel can have several stages depending on how many organizations are involved in it:

Looking at the diagram above:

Channel 1 contains two stages between producer and consumer - a wholesaler and a retailer. A wholesaler typically buys and stores large quantities of several producers’ goods and then breaks into bulk deliveries to supply retailers with smaller quantities. For small retailers with limited order quantities, the use of wholesalers makes economic sense.

Channel 2 contains one intermediary. In consumer markets, this is typically a retailer. The consumer electrical goods market in the UK is typical of this arrangement whereby producers such as Sony, Panasonic, Canon etc. sell their goods directly to large retailers such as Comet, Tesco and Amazon which then sell onto the final consumers.

Channel 3 is called a "direct-marketing" channel, since it has no intermediary levels. In this case the manufacturer sells directly to customers. An example of a direct marketing channel would be a factory outlet store. Many holiday companies also market direct to consumers, bypassing a traditional retail intermediary - the travel agent.

Functions of Distribution Channel?

Ans: Marketing consists of four key P's: product, price, promotion and placement. The fourth P, placement, is the distribution channel, which consists of all organizations between production and consumption. It is the bridge between producers and consumers, creating cost efficiencies and multiplying selling opportunities through networks of intermediaries (wholesalers and retailers). A distribution channel serves eight major functions as follows:

 1.  Information

A distribution channel collects and analyzes market intelligence on current and potential customers, competitors, suppliers, regulators and on the general political and business environment. For example, a multinational company's Chinese distributor can potentially tap into his government sources and provide timely information about impending regulatory changes that could prove valuable in adjusting strategies ahead of the competition.

 

 

2.  Promotion

A channel develops marketing strategies, including preparing the marketing budget, designing the promotional and advertising material, recruiting and training sales representatives and organizing trade shows and other networking events. The channels can adjust their marketing efforts faster than the head office because they are closer to their customers.

3.  Contact

Distribution channels find and establish contact with prospective buyers. For example, a computer wholesaler's job would be to find computer retailers, while a retailer's job would be to find customers. This can be done through promotions that pull in customers--including attracting them directly to the company's online store--and also through old-fashioned telephone calls and door knocking that push products to customers.

4.  Matching

Once contact is made, the channel partner's job changes to a matching role, which involves tailoring the product to fit customer needs. For example, if a retailer only wants to sell laptops with word-processing software included, the distributor needs to contact her company's nearest manufacturing facility to ensure the laptops are properly configured prior to shipment.

5.  Negotiation

Closing the sale is part of a channel's negotiation function. For a computer wholesaler, it could mean negotiating price and minimum quantity levels with the retailer. For a master franchise operator (an experienced franchisee with exclusive rights in a region), it could mean negotiating the franchise agreement with a new franchisee and providing training and mentoring services.

6.  Transportation

A distributor often transports products from the manufacturer to retailers and customers. For example, a potato chip distributor may have one or more delivery vans departing every day to different retailers (chains and convenience stores) to drop off their merchandise.

7.  Financing

A distribution channel partner finances his costs, including buying and storing inventory. For example, a car dealership may arrange financing through the car manufacturer or the local banks or a combination.

8.  Risk

A distribution channel shares in some of the business risks. For example, if a new product launch does not go well, the distributor may get stuck with excess inventory. There also is the risk of unpaid bills and damaged inventory. Foreign distributors also bear the risk of political and economic uncertainty in their respective countries.

Distribution Channel Management:

•  Economics requires us to recognize where costs are being spent and profits being made, or should be made, in a channel to maximize our return on investment;

•  Coverage is about maximizing the amount of contact and benefits for the customer in terms of making the product available. This satisfies the marketer’s desire to have the product available to the largest number of customers, in as many locations as possible, at the widest range of times. 

•  Control refers to achieving the optimum distribution costs without losing decision-making authority over the product and the way it is marketed and supported in the delivery channel. This includes decisions about the product, its pricing, promotion, and delivery in the distribution channel.

Maslows Needs Hierarchy

 Psychologist Abraham Maslows Needs Hierarchy is the popular theory of human needs that helps us understand motivation. Maslow believed that people’s behavior was motivated by their desire to fulfill needs. These needs were arranged in a hierarchy from the most basic several needs at the bottom to self-fulfilling needs at the top.

Maslow identify five basic needs that explain the internal motivation process: a) Physiological need, b) Safety need, c) Social need, d) Esteem need, e) Self-actualization need.

a)       Physiological need: The starting point for understanding motivation is physiological need. Physiological need is biological need such as for food, air, water etc. But once physiological needs are fulfilled they lose their power to motivate.

b)       Safety need: After fulfill their physiological need they want safety need. It is very important needs for an employee or workers. Safety need is security need such as the need to be financially secure and protected against job loss. Safety needs can be satisfied by the creation of seniority  systems, pensions and insurance plans.

c)       Social need: Social need is the need to belong and to interact with other people, i.e. friendship, group membership,. Once social needs have been largely satisfied, they also begin to lose their power to motivate.

d)       Esteem need: Esteem need is the need for self-respect and for respect from others. When the need for esteem is strong the individual will often set difficult goals, work hard to achieve the goals, and expect to receive recognition for these efforts. Goal accomplishment and the resulting recognition lead to feelings of self-esteem and self-confidence.

e)       Self-actualization need: The top of the need hierarchy is self-actualization. Self-actualization is the need to use and display one’s full range of skills and competence. Maslow noted that self-actualizing people display certain characteristics:

·         They tend to be serious and thoughtful.

·         They focus on problems outside themselves

·         They are strongly ethical

Their behavior is unaffected and natural.