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Learning ObjectivesUpon completion of the course, students will be able to:Examine how the choice of marketing strategy affects channel choice Explain channel marketing strategies used to appeal to c
Learning ObjectivesUpon completion of the course, students will be able to:
- Examine how the choice of marketing strategy affects channel choice
- Explain channel marketing strategies used to appeal to consumers
- Identify major channel options for companies
Module Reading and Resources
Presentation: Marketing Concept Glossary IVModule-related marketing concepts and terms are presented. Visit the glossary for a quick review of the key terms from this week. You can also look up words in the glossary found along the left-hand navigation bar.
Video: Pet Supply Shop ChannelsThis video is a supplement to the module overview and illustrates market channel concepts using the pet supply store. Transcript available here.
Module Overview
Companies have many different channels, or distribution options, to sell and promote their products and services. One of the key decisions a company needs to make is where its goods will be available for sale. This decision will inform channel marketing and distribution strategies. There are three overarching elements that a company uses to make the decision as to where to sell its products. The first is determined by the product price. Companies set prices based on the costs to make and distribute the product or goods and the percentage of profit the company chooses to make on that good. For example, an article on profit margins reports that iPhones have close to a 50% profit, Nike’s products yield about 43% profit, and 40% of every McDonald’s cheeseburger is profit (Sherman, 2013). The second element of consideration is the amount of sales support the product will need. For example, if the product is something like salad dressing purchased from the supermarket, it is considered to be self-service, whereas if the product is something more complex or the consumer needs additional information to use it, such as a car or a Mary Kay cosmetic product, then the product requires a sales force. Finally, a company needs to review who the consumers are in the target market(s) for its product and make decisions about where and how consumers in this target market prefer to shop. The company then aligns its marketing choices with those consumer preferences.
Companies can choose to sell their products through a variety of channels including retail, wholesale, e-commerce (online sales via the internet), and m-commerce, that is, commerce using hand-held wireless devices such as smartphones and tablets. Retail sales include in-store locations and direct marketing. Direct marketing includes door-to-door sales, direct mail, and catalog marketing.
Once a company has identified the channel(s) through which a product will be sold, it needs to make decisions about the market channel to promote the product. For example, for an item that will be sold in a retail store, the company needs to consider packaging and in-store signage. It also needs to understand the characteristics of the retailers selling their goods to identify opportunities for preferred product placement and possible situations for sales promotions or coupon or discount use.
The video Pet Supply Shop Channels will cover the marketing channel strategies that the pet supply store is considering as it rolls out the new product. It will provide additional details about how companies make these decisions.
Complete the assignment as follows:
4-1 Discussion: In-Store Marketing Experiences
This week, consider a recent purchase you made in a store. It could be a bottle of soda, a pack of gum, or a major purchase such as a TV or appliance. How was the product you purchased promoted in-store? Was it part of a separate display? Was there specific signage promoting the product? Did the in-store promotion influence your purchase? In your initial post, describe the product placement, packaging, signage, and competing products.
In your response to your classmates’ posts, contrast the in-store marketing of the product you discussed with those your classmates described. Make sure you explain the ways in which it was similar and the ways in which it was different.
n your response posts to your classmates, discuss how the company’s threats or weaknesses could affect your classmates’ proposed marketing activities.
For more information, view the following documents:
- Final Project Part I Guidelines and Rubric
- Final Project Part I Milestone One Guidelines and Rubric
For your response posts (2), you must do the following:
- Reply to at least two different classmates outside of your own initial post thread.
- Demonstrate more depth and thought than simply stating that “I agree” or “You are wrong.” Guidance is provided for you in each discussion prompt.
classmates Post #1:
I recently made a relatively small purchase of two Monster Energy drinks. This product was promoted in store using a large sign that read “Unleash the Beast”, which is the slogan for Monster. There was also a buy one get one half off sale at the supermarket, which was also used as a promotion strategy. The product was placed at the front of the drink section of the store, which did have a slight effect on my decision of which energy drink to choose. The slogan and boldness of the sign was very eye-catching, and it did factor into my decision making process.
classmates Post #2:
Last week while shopping at a military Post Exchange, my eyes were drawn to a display set up in the front of the store, view-able upon entry. The display was of wine bottles, decorated in red, white, and blue patriotic wrapping. It was independent of any other products, and lacked signage, but the decoration of the product itself was enough to peak my interest. Even though it was right in the entryway of the store, it had an opposite side, facing the cashiers which would also allow for it to be seen as you are checking out in hopes of an impulse buy, much like candy or knick knacks at Walmart. On both sides of the display the price was prominent with big black letters on a white background, while it was probably not on sale, the low price shown gave the impression that the item was either on sale or in a promotion. Regardless of the aforementioned, I bought it mainly because I like to try new wines and see how I like them. With there being no competing products in the close vicinity of the display, this probably was the main reason I bought it instead of a competitor.
