Effective Marketing Strategies - Research Paper Example

Running Head: Marketing Marketing [Institute's Marketing "Marketing is not an event, but a process . . . It has a beginning, a middle, but never an end, for it is a process. You improve it, perfect it, change it, even pause it. But you never stop it completely." Marketing is a continuous process of planning and implementing the four P's of marketing (product, place, price and promotion) for all goods and services as well as creative ideas between organizations and the general public. Marketing has always been considered to be a creative progression which consists of distribution, advertising and selling. It is also involved of foresee customer's needs and wants or create a need for their product which is often done through extensive market research and sometimes pure instincts. Mainly marketing is a process which is concerned in making the organization successful by affectively selling its product. Distribution is one of the four and most integral parts of marketing. A distributor is also middle, an intermediary between manufacturers and retailers, after the production of a good it may be stored or passed down to the next level of the supply chain. Many times there may be a chain of middlemen passing a particular product down the chain or an organization, before eventually reaching the consumer. This process is commonly known as the distribution chain or the channel of distribution. Each component of this chain has their own requirements, which producers must take into account by producers. (Brassington & Pettitt, 2003, pp.21-98) It is important to note that distribution cannels may not include physical products only. It might be equally important to transport a service from the manufacturer to the consumer, for which both direct and indirect modes may be used. For example hotels may sell their services through travel agents or a centralized reservation policy. The channels of distributions have experienced many innovations in the service industry. Examples f this may be a steady increase in franchising and renting services. The renting services may include televisions through cars. There has also been an increase in the integration of services like travel and tourism. In this age links between airlines, hotels tourist guides and car rentals exist. Many services now include many service outlets like consultancies and estate agencies in competition with many grocery stores. Distributions channels are divided in quite a few levels, some gurus have defined that a level with no intermediaries can be considered as zero level. The next obvious level, level one consists of one intermediary in consumer goods being a retailer and distributor for industrial goods. In a smaller economy where markets are small distribution can be achieved at zero or one-level channels. On the other hand in larger countries where markets are substantial, the use of a wholesaler is used to extend distribution to smaller retailers throughout a country. In countries like Japan the channel is quite complex and many levels are used even for the simplest consumer goods; whereas, in a country like Bangladesh, telecommunication operators use second level distribution for consumer goods to. In the field of information technology levels are termed as tiers. In a one tier channel publishers work directly with dealerships. In the case of a one/two tier channel means that the vendors will work with dealers and the distributors who will eventually sell the product or service. In this case the distributor and wholesaler play the most important role. (Ross, 2004, pp.101-155) Many of the theoretical principles that are applied to the external customers of an organization can be successfully applied to every internal customer of the same. In designated parts of an organization this rule may be formalized, as when a good is transfer at a particular price between different departments of an organization. Except of the usual economic price mechanism this procedure must definitely be viewed as a normal relationship between buyer and seller. The fact that this is a captive market and may result in monopoly pricing, should not act as a discouragement for participants. Not as obvious as the marketing strategy by the service or administration department; to optimize the level of contribution to their end users (in this case the rest of the organization). In this method the use of principles like non-profit organization acts as a useful benchmark. The channel chosen is a very important decision, in theoretical terms there is an important trade-off.: the cost incurred by the use of intermediaries to achieve greater volumes of distribution geographically are now considerably lower. In many cases manufacturer of consumer goods can never justify the selling of goods directly to their end consumer, with the exception of direct mail order. Many manufactures are of the notion that one the product is passed onto the first stage of the distribution, their job is finished. The chain itself is just taking on board part of the manufacturer's responsibility and only if he intends to be market oriented he would indulge in taking care of all the process related to the distribution process until the goods have reached their destination. There are many managerial considerations in the whole distribution process. Firstly being the membership of the channel. Intensive distribution takes place, where the bulk of resellers of stock the competition of price may be very evident. In the case of selective distribution prevalent in both consumer and industrial markets where resellers take responsibility of stocking the product. When exclusive distribution takes place, only specified resellers or only authorized dealers will be allowed to sell. (Dickersbach, 2005, pp.98-125) The second managerial implication is that there needs to be channel motivation. It is already a challenge to motivate current direct employees to provide the desired results of efficient sales and customer support. To motivate all the leaders and employees of independent distribution organization does in fact require great effort. There are many modes of achieving such motivation levels, most frequently used is incentive plans, the supplier may attempt this by providing the distributor with better margins as in to influence owners of distribution channels to push a particular good rather tan that of a competitor. Or various competitions are offered to sales agents to push the products. And lastly monitoring the channels as in to keep a check if certain avenues are effectively met. As a firm would attempt t monitor their own sales and other distribution actives it is imperative that they attempt to monitor the activities of distribution chains as well. A more practical method is used which is the employment of different mix of channels , what this particularly does is complement a direct sales force, acquiring he larger accounts with agents and covering the smaller customers and prospects. (Ross, 2004, pp.101-155) When a layer of middlemen perform the same tasks of bring the product to the end user are channels. A marketing channel consists of firms that have collaborated for a common goal. When a ford dealership depends on the company to design a car that would meet consumer, in return the ford manufactures depend on the dealers to sell the car and provide after sales services. Each dealer is invariably dependent on other dealer to maintain standards and create brand recognition. Therefore we can deduce that the success of every ford dealer depends on the overall marketing channel. In hindsight we know that if overall channel success depends on every individual channel then all proceedings should go by smoothly. Everyone is expected to understand and accept their roles and coordinate strategic activities to achieve the overall success of the channel. In reality channels do not look at the broader perspective, cooperation can mean forgoing company goals. This firstly results in two types of conflicts, horizontal conflict among firms that belong to the same level of the channel, for example dealers of Ford in Illinois may complain of other deals to engage in unethical practices to steal sales like low penetrative pricing or advertising in areas out of allocated territories. Vertical conflicts take place between two different levels in the channel. As an example a furniture manufacturer Herma Miller had a conflict with his deals at the initiation of an online store. He owner believed that only a small number of customers were being catered for in this channel that could not access the current channels. And with the protest from the dealers the company closed down its online operations. (Dickersbach, 2005, pp.98-125) Designing a channel is a very important decision. Manufacturers usually find themselves making decisions between the ideal and the most practical solutions. A firm with limited finance will generally cell to a limited area. Deciding on a channel may not pose such a problem. The only problem may be to convince good middlemen to handle the product. If success is experienced the company may decide to branch out to new markets through existing intermediaries. If the firms operating in smaller markets then direct selling can be opted for or in larger markets to sell directly to retailers. In certain segments, the manufacturer may grant exclusive rights and sell openly in others. It may also add an online store for extension of markets. For optimum effectiveness channel decision making and analysis should be purposeful. Designing a channel process for analyzing the needs, setting objectives and identifying all available alternatives and minute evaluating them. The first task is to analyze the consumer needs, as mentioned earlier, marketing channels are an integral part of the overall customer value in delivery network. Each channel member is expected to add value. Therefore designing the channel firstly begins by identifying the target customers from the channel. Are customers competent to travel long distance or would they prefer buying from nearby locations , would they like to buy in person or over the phone, mail , or even online, do customers prefer variations or would they settle for standardized products, do customers want delivery credit and after sales services or will they use someone else's services. The faster the delivery and the better add on the greater will be the channel service level. The second important task would be is to set channel objectives, usually companies se objectives in terms of targeted customer service, many times firms target the segmented market willing to obtain deferent services. The companies need to decide with markets to cater for and which are the best channel to employ. The aim of the company is to reduce channel cost and cater maximum amount of customers. The objectives sometimes can be affected by the type of company, the products, the intermediaries and the competitors in the environment. An example would be the size of the company and its financial strength will determine which marketing aspects it can handle. Companies that sell perishable products may require to market directly avoiding delays. If a company wishes to compete near the outlets that carry competitors products, they may have to avoid the channels used my competitors, and finally environmental factors like economic stability and legal constraints affect the design, in a recession producers would like to find the most economic channel to market their goods. (Dickersbach, 2005, pp.98-125) The next stage is to identify some if not all alternative; firstly the type of intermediaries, the firm should find all the channels that can be used to market the good, like if a manufacturer develops a new product and it has viability in many markets, the current distributor may not have the sales force to handle it and therefore alternatives are needed. There are abut three alternatives, company sales force can be expanded and help increase the sales or create separate forces for separate segments, or develop telesales department for better monitoring. Hiring manufacturing agency can be an option, dedicated agency with sales forces that handle sales for related products. And lastly industrial distributors in various localities ho will buy and sell new line. It is also important to know the number of intermediaries when designing a channel. In this three strategies are available, intensive distribution, "which is stocking the product in many outlets as possible. Exclusive distribution giving limited number of dealers the right to market the company products in territories. And lastly selective distribution the use more than one but less then the overall number is used to carry the company's goods". (Ross, 2004, pp.101-155) Selective distribution lies between intensive and exclusive the aim is to use more then one but fewer then all. And lastly inducting responsibility in the members of the channel. The manufacture and middlemen need to agree on mutual terms. It is imperative to agree on items like price, conditions of sale, policies, territorial rights and specific sales. The producer should establish a fixed price and give considerable margins of the middlemen also each intermediary needs to be given particular territory. Manufacturer need to carefully assign mutual duties and ensure quality levels are kept high. (Ross, 2004, pp.101-155) It is important that all alternatives are evaluated, if a company has recognized many alternatives and needs to choose one careful evaluation will "against economic factors, control and adaptive criteria. By using the economic criteria the company uses its sales, costs and profitability figures of the different alternatives". (Brassington & Pettitt, 2003, pp.21-98) What capital will be required for investment by each channel The company must also consider control issues, using middlemen means giving some control to them of your product and marketing issues some tend to take more control then others, the company must try to keep maximum control in their own hands. Finally the company must see to its adaptive criteria, channel commitments are usually long term but if firms want to keep this arrangement flexible to economic changes. Designing international distribution channels follow the same steps but with a little more complexity. (Brassington & Pettitt, 2003, pp.21-98) Each country posses their own distribution chain over a long period of time, distribution in developing countries tends to be disorganized and scattered it is for this reason that international markets enjoy range of alternatives although the designing f channels between countries is always difficult. Management of channel decisions is also a very important aspect. Once a country has sought all alternatives and decided on the best channel it needs to implement its decision and manage the channel efficiently. Management of channels includes selecting channel members, management and motivation of individual channels and evaluation over a period of time. Firstly selecting the members for a channel, many manufactures will vary in their capability to attract experienced intermediaries; some producers won't face any difficulties while others will have to go through great ordeals. Toyota's Lexus's had no problems acquiring deals throughout the country. The other end of the spectrum manufacturers have to wait for experienced middlemen, when Polaroid started their business they could not convince shops to carry their cameras. When selecting the appropriate members, the company should first distinguish the better ones from the rest. It will want to consider each members experience, amount of growth and profit made its competitiveness and reputation in the Market. Secondly managing and motivating each and every intermediary member. Once a channel is implemented it needs to be consistently managed. The company needs to definitely sell through them but also with and to them, should learn to make them the first customers of the firm. The strong partner relationship will help them create trust and long term ties. To develop a marketing system that incorporates the company and its marketing partners. The company should manage the intermediaries in a way to make them think that working together will lead to eventual success. Many companies in this age are incorporating a highly sophisticated system of partner relation. Just like the implementation of customer relation software's similar software's are developed to recruit analyze motivate channel partners. (Brassington & Pettitt, 2003, pp.21-98) The last step is to evaluate channel members, firms need to check up on middlemen's performance with inventory levels, sales quotas, and deliver times and services to the end user. Rewarding intermediaries is also important, poor performers should be assisted or replaced, in time the company should se assess the intermediates and prune the weaklings. A degree of sensitivity needs to be shown to the intermediaries; ill treatment may cost the loss of support from dealer and legal problems. Other avenues to be explored are marketing logistics, these include the tasks involved in planning and successfully implementing the flow of goods and information to the original points of consumption to meet customer requirements and profit for the firm. Managing the upstream and downstream value addition of goods and information from suppliers to end users is called supply chain management. "Marketing channels are sets of interdependent organizations involved in the process of making a product or service available for use or consumption" some members have that aura about them where some need them more than they need them. For example if we see Wal-Mart has a lot of power due to its dealings in volumes, more than its suppliers. "There are several sources of power. Reward power engrosses a channel member being able to certainly reinforce another's performance-e.g., Coca Cola may be able to give a price break or pay a cost for supplementary shelf space. A retailer that meets a certain target-e.g., the sale of 50,000 cases per month-may collect a additional benefit. In contrast, coercive power involves the threat of castigation. A large retailer, for example, may tell a minor manufacturer that no further orders will be impending unless a price discount is offered. Expert power consists of facts. Wal-Mart, for example, because of its arduous venture in information technology, can influentially argue about likely sales volumes at different price levels. "Legitimate" power involves management or other regulations-e.g., auto dealers have a great deal of strength over auto makers because only they are allowed to sell to end customers in the continental U.S. under most state of affairs. Finally, referent power involves the desire of the other side to be associated-most manufacturers of upscale merchandise are highly motivated to make certain their accessibility at Nordstrom's". (Dickersbach, 2005, pp.98-125) In conclusion, a firms objectives need to be highly associated some will form cartel while some will compete, we has mentioned earlier that more exclusivity and higher distribution will generally entail lower levels of intensity and lesser span. It is imperative that cost needs to have a trade off with the swiftness of delivery. Markets need to be balanced, but this strategy won't work for all firms. The question arises what strategy should be used, it might not always be obvious where higher margins in selective distribution will ever compensate for smaller sales units. Various researches told can be used to asses what consumers demand. Data from scanner can indicate the frequency of how often a product is purchased from which proper placement strategies can be defined. Observable factors, how much time is dedicated in selecting a product, and what complementing goods are available making distribution decision isn't easy, its important from designing to managing. (Brassington & Pettitt, 2003, pp.21-98) References Brassington, F. & Pettitt, S.(2003), Principles of Marketing, 3rd ed, FT Prentice Hall, Cohen, S. & Roussel, J. (2004), Strategic Supply Chain Management: The Five Disciplines for Top Performance, McGraw-Hill Professional, Dickersbach, J. T. (2005), Supply Chain Management with APO: Structures, Modelling Approaches and Implementation of MySAP SCM 4.1, Springer, Illinois. Jespersen, B. D. & Skjott-larsen, T. (2005), Supply Chain Management: In Theory and Practice, Copenhagen Business School Press, Copenhagen. Kotler, P. & Armstrong, G.(2007), Principles of Marketing, 12th ed, Prentice Hall, . Ross, D. F. (2004), Distribution: Planning and Control : Managing in the Era of Supply Chain Management, 4th ed, Springer, . Read More