5 Modules

Marketing 4.0

Delivering value

Developing pricing strategies

and communicating value

Creating value

Developing marketing strategies

and creating customer loyalty

Concepts of Marketing (MM- I)

1
KRISHNA KOPPA 21-23 Batch MM - II
 Designing and managing integrated marketing channels -
Channel management decisions,

Delivering value
Managing retailing,
Wholesaling and logistics

2
KRISHNA KOPPA 21-23 Batch MM - II
 Delivering Value =
Distribution
Channels

KRISHNA KOPPA 21-23 Batch MM - II

 Companies rarely work alone in creating value for customers

Company’s success depends

• not only on how well it performs
• but also on how well its entire distribution channel performs !

KRISHNA KOPPA 21-23 Batch MM - II

 How Marketing channels add value?

KRISHNA KOPPA 21-23 Batch MM - II

 How Marketing Channels add Value?

KRISHNA KOPPA 21-23 Batch MM - II

 How Marketing Channels add Value?

5 important marketing flows…

Producer Distributor Retailer Customer

Physical
Title

Promotion
Information

Negotiation
Financing
Risking

Ordering

KRISHNA KOPPA 21-23 Batch MM - II

 Channel Levels

 Each layer of marketing intermediaries that perform some work to bring the product and its ownership closer to buyer is Channel Level
 Number of Channel Levels is Length Of Channel

KRISHNA KOPPA 21-23 Batch MM - II

 Channel Integration Systems =
Integrated Marketing Channels

KRISHNA KOPPA 21-23 Batch MM - II

 Integrated Marketing Channels
= is one in which the strategies and tactics of selling through one channel reflect the strategies and tactics of selling
through one or more of the other channels

Channel Integration and Systems

 VMS (Vertical Marketing System)
 HMS (Horizontal Marketing System)
 Multichannel Marketing (Hybrid System)

KRISHNA KOPPA 21-23 Batch MM - II

 Vertical Marketing System (VMS)
= In VMS, Producers, wholesalers and retailers act as a unified system – they have so much power that they all cooperate”

VMS Types
 Corporate VMS
 Contractual VMS
 Administered VMS

KRISHNA KOPPA 21-23 Batch MM - II

 Vertical Marketing System (VMS)

Corporate VMS Contractual VMS Administered VMS

VMS that integrates successive stages of VMS where independent firms at VMS where where leadership is
production and distribution under single different levels who join together assumed not through common
ownership through contracts to obtain more ownership or contracts but through
economies or sales impact size and power of dominant channel
= Common type is Franchisee.. member/members

Manufacturer-sponsored
1 retailer franchise system

Manufacturer-sponsored
2
wholesaler franchise system

3 Service firm-sponsored
retailer franchise system

KRISHNA KOPPA 21-23 Batch MM - II

 Horizontal Marketing System (HMS)
= In HMS, two or more companies at one level join together to follow new marketing opportunity

 with competitors or non-competitors

 temporary or long-term
 create separate company or not

& & &

KRISHNA KOPPA 21-23 Batch MM - II

 Multichannel Marketing System (Hybrid)
In HYBRID channel – Company sets two or more marketing channels to reach one or more customer segments. Also
called as Multichannel Marketing

Producer Producer
Producer Producer

Wholesaler
Catalogs/ Sales Force
Telemarketing
Retailer Retailer

Customer Customer Customer Customer

Latest trends : Disintermediation of Channels and Re-

intermediation of Channels

KRISHNA KOPPA 21-23 Batch MM - II

 Multichannel VS Omnichannel

KRISHNA KOPPA 21-23 Batch MM - II

 Channel Design &
Management
Decisions

KRISHNA KOPPA 21-23 Batch MM - II

 Important Channel Decisions

1 2 3 4 5 6 7
Analyzing Identify Selecting Evaluating their
Customer Channel Channel performance
Needs Alternatives Members
Setting Evaluate Managing &
Channel Channel Motivating
Objectives Alternatives them

Channel Design Channel Management

Decisions Decisions

KRISHNA KOPPA 21-23 Batch MM - II

 Channel Design Decisions Steps

1 2 3 4
Analyzing Customer Setting Channel Identify Channel Evaluate Channel
Needs Objectives Alternatives Alternatives

 Number of Intermediaries The Evaluation is done on 3

near by stores / willing to  Objectives in terms of
 Intensive Distribution - criteria
travel to buy? Targeted Levels of Customer Stocking products in as
 in person / over phone / mail many outlets as possible  Economic : Sales, Costs,
Service
Profitability, Investment
/ internet?  Nature of required by channel
 breadth of company/products/budgets  Exclusive Distribution - members, etc
Exclusive distribution
assortments/specialization?  Competition/Competitive rights with limited  Control : More/Less/No
 add-on services – dealers control to intermediaries
Channel Design?
here/elsewhere?  Along Competition/ Away  Adaptive : flexible /
from it?  Selective Distribution - inflexible to face changes
>1 but not all
intermediaries willing to
sell company products

KRISHNA KOPPA 21-23 Batch MM - II

 Channel Management Decisions Steps

1 2 3
Selecting Channel Managing and Evaluating performance
Members Motivating them of them

Criteria…..  Companies must sell not only through the  Channel members’ performance has to
• No of years in business intermediaries but to them and with them be evaluated – regularly
• Finance/Investment Ability  Convincing distributors that they can succeed
• Growth and Profits record by working together as a part of more  Against set standards (targets)
• Other lines/business carried cohesive Value Delivery System  Sales
• Cooperativeness  Inventory levels/ stocks
• Reputation  PRM (Partner Relationship Management)  Customer delivery time
• Customer relationship  CRM Vs PRM  Damaged goods
• Quality of sales/other staff  Customer Responsiveness
• Location  Jointly plan pricing, inventory levels, display,  Etc
• etc training, goals, strategies, advertising
campaigns, promotional plans etc  Key Decisions: Maintain, Prune or
Expand

KRISHNA KOPPA 21-23 Batch MM - II

 Marketing Logistics &
Supply Chain
Management

KRISHNA KOPPA 21-23 Batch MM - II

 Retailing &
Wholesaling

KRISHNA KOPPA 21-23 Batch MM - II

 Retailing

KRISHNA KOPPA 21-23 Batch MM - II

KRISHNA KOPPA 21-23 Batch MM - II
KRISHNA KOPPA 21-23 Batch MM - II
 Retailing
= All activities involved in selling goods or services directly to final consumers for their personal, non-business
use

Retailer Retailers
A business whose sales come primarily from retailing

Non-Store Retailers /
Store Retailers
E-tailers (Website)
Store Retailers are classified based
on …
1. Amount of service they offer
2. Breadth and depth of the
product lines they offer
3. Relative prices they charge
4. Organizational Approach

KRISHNA KOPPA 21-23 Batch MM - II

 Types of Retailers
Amount of Breadth and depth of
the product lines they Relative prices
service they Organizational Adoption of E-
offer they charge
1 offer 2 3 4 Approach 5 retailing

 Self Service  Specialty Stores  Discount Store  Chain Stores  Pure-Play E-tailers
retailer
 Department Stores  Off-Price retailer  Corporate Chain  Brick and Click
 Limited  Independent stores
Service  Supermarkets Off-price retailer
retailer  Factory outlets  Voluntary Chains
 Convenience Store  Wholesale clubs
 Retailer
 Superstore Cooperatives
 Supercenters
 Category Killer  Franchise
 Hypermarket Organizations

 Merchandising
Conglomerates

KRISHNA KOPPA 21-23 Batch MM - II

 Wheel-of-retailing Concept

Wheel-of-retailing Concept: New types of retailers start as low-price, low-margin shops but later
move to high-price, high-service operations.
KRISHNA KOPPA 21-23 Batch MM - II
 Concept of Private Labels
= A private label product is manufactured by a third-party manufacturer and sold under a retailer's
brand name; Private Labels are exclusive labels that a particular retailer owns

Why Private Label

 Low cost, High margins

 Access to customer & competition data
 Empowers retailers, reduces dependence on suppliers
 Market Reach
 Filling the gap

KRISHNA KOPPA 21-23 Batch MM - II

 Wholesaling

KRISHNA KOPPA 21-23 Batch MM - II

 Wholesaling (Distribution)
= All activities involved in selling goods and services to those buying for resale or business use ”

Wholesaler (Distributor)
A firm engaged in wholesaling activity ”

 Selling and Promoting

 Buying and Assortment building
 Bulk-breaking

FOR
 Warehousing
Why Wholesaler is needed?
 Transportation
 Financing
 Risk-bearing
 Market information
 Management services and advice

KRISHNA KOPPA 21-23 Batch MM - II

 Types of Wholesalers
Merchant Brokers and Manufacture’s Sales
1 Wholesalers 2 Agents 3 branches and Offices

 Full Service Wholesalers  Brokers  Sales Branches

 Wholesale Merchants  Sales Offices
 General  Agents  Purchasing Officers
merchandise WS  Manufacturer’s
 General line WS Agents
 Specialty line WS  Selling Agents
 Industrial Distributors  Purchase Agents
 Commission Agents
 Limited Service Wholesalers
 Cash-Carry Wholesaler
 Truck Wholesalers
(Truck Jobbers)
 Drop Shippers
 Rack Jobbers
 Producers’ Co-
operatives
 Mail-Order
Wholesalers
KRISHNA KOPPA 21-23 Batch MM - II
 Retailing Vs Wholesaling

Retailing Wholesaling
“All activities involved in selling goods or “All activities involved in selling goods and
services directly to final consumers for their services to those buying for resale or business
personal, non-business use ” use ”

Producer Producer

Wholesaler Wholesaler

Retailer Retailer

Customer Customer

Ex : Self Service retailer, limited service or Ex : Limited service or full service Wholesaler,
full service retailer, Specialty store, Cash & Carry WS, Truck jobbers, rack Jobbers,
discount store, Supermarket, Supercenters, drop Shippers, Brokers, Agents, Manufacturer’s
hypermarkets, Chain stores, Franchisee, etc Branch and Sales offices, Commission agents etc

KRISHNA KOPPA 21-23 Batch MM - II

5 Modules

Marketing 4.0

Delivering value

Developing pricing strategies

and communicating value

Creating value

Developing marketing strategies

and creating customer loyalty

Concepts of Marketing (MM- I)

58
KRISHNA KOPPA 21-23 Batch MM - II