💼Intro to Business Unit 12 – Distributing and Promoting Products

Key Concepts

• Distribution involves moving products from manufacturers to end consumers through various intermediaries (wholesalers, retailers)
• Promotion encompasses activities that communicate product benefits and persuade target customers to buy
  • Includes advertising, personal selling, sales promotions, and public relations
• Marketing mix consists of the 4 Ps: product, price, place (distribution), and promotion
• Placement strategies determine where products are sold and how they are displayed to attract customers
• Digital marketing leverages online channels (websites, social media, email) to reach and engage customers
• E-commerce enables buying and selling of goods and services over the internet
• Logistics manages the flow of goods, information, and finances across the supply chain
  • Involves transportation, warehousing, inventory management, and order fulfillment
• Key performance indicators (KPIs) measure the effectiveness of distribution and promotion efforts (sales volume, market share, customer acquisition cost)

Distribution Channels

• Distribution channels are the paths products take from manufacturers to end consumers
• Direct distribution involves selling directly to consumers without intermediaries (manufacturer-owned stores, e-commerce)
• Indirect distribution uses intermediaries (wholesalers, retailers) to reach end consumers
  • Wholesalers buy in bulk from manufacturers and sell to retailers
  • Retailers sell directly to end consumers in smaller quantities
• Intensive distribution aims to make products widely available through many outlets (convenience goods like soft drinks)
• Selective distribution limits the number of intermediaries to maintain brand image and control (luxury goods, high-end electronics)
• Exclusive distribution grants a single retailer the right to sell a product in a specific geographic area (luxury car dealerships)
• Multichannel distribution uses a combination of direct and indirect channels to reach customers through various touchpoints
• Vertical marketing systems (VMS) integrate manufacturers, wholesalers, and retailers to streamline distribution and improve efficiency

Product Promotion Strategies

• Advertising uses paid media to communicate product benefits and build brand awareness (television, radio, print, online)
• Personal selling involves face-to-face interactions between salespeople and potential customers to generate sales
• Sales promotions offer short-term incentives to encourage product trials and purchases (discounts, coupons, contests)
• Public relations manages the spread of information and the company's image through media relations and community involvement
• Influencer marketing partners with individuals who have a strong online following to promote products to their audience
• Content marketing creates and distributes valuable, relevant content to attract and retain a clearly defined audience
• Experiential marketing creates immersive, memorable experiences that engage customers with the brand (pop-up stores, product demonstrations)
• Cause marketing aligns a company's products or services with a social or charitable cause to appeal to socially conscious consumers

Marketing Mix and Placement

• Marketing mix (4 Ps) is a framework for making strategic marketing decisions
  • Product: features, quality, packaging, branding
  • Price: list price, discounts, payment terms
  • Place: distribution channels, locations, inventory management
  • Promotion: advertising, sales promotions, public relations
• Placement strategies determine where products are sold and how they are displayed to attract customers
• In-store placement techniques include eye-level shelving, end-cap displays, and point-of-purchase (POP) materials
• Online placement strategies optimize product visibility and discoverability through search engine optimization (SEO), paid search advertising, and product recommendations
• Omnichannel placement integrates online and offline channels to provide a seamless customer experience across touchpoints
• Geographic placement considers factors such as population density, income levels, and competition when selecting store locations
• Demographic placement targets specific customer segments based on age, gender, income, or lifestyle preferences

Digital Marketing and E-commerce

• Digital marketing uses digital channels to reach and engage customers (websites, social media, email, mobile apps)
• Search engine marketing (SEM) increases a website's visibility in search engine results pages through paid advertising and SEO
• Social media marketing promotes products and engages customers on platforms like Facebook, Instagram, and Twitter
• Email marketing sends targeted, personalized messages to subscribers to nurture leads and drive sales
• Mobile marketing reaches customers through SMS, mobile apps, and location-based advertising
• E-commerce enables buying and selling of goods and services over the internet
  • Business-to-consumer (B2C) e-commerce sells directly to end consumers (Amazon, eBay)
  • Business-to-business (B2B) e-commerce facilitates transactions between businesses (Alibaba, Global Sources)
• E-commerce platforms provide the infrastructure for online transactions (shopping carts, payment processing, order management)
• Omnichannel retailing integrates online and offline channels to provide a seamless customer experience

Logistics and Supply Chain Management

• Logistics manages the flow of goods, information, and finances across the supply chain
• Transportation moves products from manufacturers to warehouses and retailers (trucking, rail, air, ocean)
• Warehousing stores products until they are needed for distribution to retailers or customers
• Inventory management ensures the right products are available in the right quantities at the right time
  • Just-in-time (JIT) inventory minimizes stock on hand by synchronizing supply with demand
  • Safety stock is extra inventory held to prevent stockouts due to unexpected demand or supply disruptions
• Order fulfillment processes customer orders from receipt to delivery, including picking, packing, and shipping
• Reverse logistics handles product returns, repairs, and recycling to minimize waste and improve customer satisfaction
• Supply chain management (SCM) oversees the entire network of organizations involved in producing and delivering a product
  • Includes suppliers, manufacturers, distributors, and retailers
• SCM aims to optimize the flow of goods, information, and finances to reduce costs, improve efficiency, and enhance customer value

Measuring Distribution and Promotion Success

• Key performance indicators (KPIs) measure the effectiveness of distribution and promotion efforts
• Sales volume measures the total number of units sold over a specific period
• Market share represents a company's sales relative to total industry sales
• Customer acquisition cost (CAC) measures the cost of acquiring a new customer through marketing and sales efforts
• Return on advertising spend (ROAS) measures the revenue generated for each dollar spent on advertising
• Conversion rate measures the percentage of website visitors or ad clicks that result in a desired action (purchase, sign-up)
• Net Promoter Score (NPS) measures customer loyalty and likelihood to recommend a product or brand
• Inventory turnover measures how quickly inventory is sold and replaced, indicating the efficiency of supply chain management
• On-time delivery rate measures the percentage of orders delivered to customers within the promised timeframe

Emerging Trends and Future Outlook

• Personalization uses data analytics to tailor product recommendations, promotions, and experiences to individual customers
• Artificial intelligence (AI) and machine learning enhance marketing automation, predictive analytics, and chatbots for customer service
• Voice commerce enables customers to make purchases using voice-activated assistants like Amazon Alexa and Google Home
• Augmented reality (AR) and virtual reality (VR) create immersive product experiences and virtual try-ons
• Subscription-based models offer recurring product or service deliveries for a fixed fee (Dollar Shave Club, Netflix)
• Direct-to-consumer (DTC) brands bypass traditional retail channels to sell directly to customers online
• Sustainability and eco-friendly practices gain importance as consumers demand environmentally responsible products and packaging
• Blockchain technology enables secure, transparent supply chain tracking and authentication of products
• Omnichannel integration blurs the lines between online and offline channels, providing a seamless customer experience across touchpoints