Optimizing Distribution Strategy for Success: Key Factors and Considerations

1. KINE 4430 - 2009 Marketing Class # 3 *PLACE – Distribution Strategy *Social Marketing * Sponsorship

2. Marketing Mix Elements Pricing Place Promotion Product Reviewing the Outputs The outputs of the marketing plan process Marketing Objectives & Strategy • Product types • Product tangibility • Product lifecycle • New product development • Price Elasticity (Sensitivity) • Pricing strategies (lifecycle/product type) • Pricing policies • Types of distribution • Distribution strategies (consumer & business) • Types of promotion • Promotional strategies (consumer & business) • Analytic Tools: • Research • Balance & Gaps Assessment • Measurement, Monitoring & Evaluation

3. Business Location Decision • Two major factors: • What your customer believes is the “best location” • Your distribution channel—the method or way in which a producer makes a product or service available to the consumer

4. Distribution Channels Producer PRODUCER Distributors Retailers Dealers Consumer Segment #1 Business Segment #2 Consumer Segment #2 Business Segment #1

5. Distribution Strategy • Your distribution strategy will depend on a number of factors, such as: • Target Customer needs • Type of business • Product/service characteristics • Transportation costs • Competition

6. The “Best” Location • A location filter or checklist will help you zero in on the “perfect” location • Use a scale of 1 to 10 to rate the relative importance of each item on this list. When you finish scoring, go back and note the high numbers anything above 5. ___Local/municipal licensing ___Neighbourhood mix ___Competition ___Security, safety ___Labour pool ___Services ___Costs ___Ownership ___Property owner/landlord ___Past tenants ___Space ___Accessibility ___Professional advice ___Parking ___History of the property ___Physical visibility ___Life-cycle stage of the area ___Image ___Hours of operation ___Utilities ___Local zoning by-laws ___Taxes ___Approvals ___Transportation ___ Your target customers

7. Is Home the “Best” Place? Potential Advantages Potential Disadvantages • Low risk of expensive mistakes • Opportunity to use household resources • Low overhead • Gradual start-up and growth • No commuting time or expense • Tax advantages (with deductions allowed for part of the house) • Relatively inexpensive way to test a market • Reduced child-care costs • Increased quality time with family • Isolation and lack of contact with colleagues • Increased family stress • Need for self-discipline • Local by-laws and regulations • Less established or refined image • Conflict with neighbours • Parking problems

8. Escape clause • Option to renew • Right to transfer • Cost-of-living • Percentage lease • Floating rent sale • Start-up buffer • Improvement Before You Sign Checklist • Restrictive covenants • Maintenance

9. CAUSE OR SOCIAL MARKETING Strengthens business relationships- customers & general public Addresses social issues of concern to target market Increases sales Builds a Brand image

10. What you sell is important: both the mission and the product should be socially responsible Be proud to be in business: profit not a dirty word Make a solid commitment to change: business is natural outgrowth of social entrepreneur’s values Focus on two bottom lines: viable company + social mission Forget the hype: socially responsible companies lead by doing good deeds, not by promoting them Lessons for Socially Responsible Companies Source: Thea Singer, “Can Business Still Save the World?” Inc., April 30, 2001, pp58-71; and MEC website, www.mec.ca

11. Environmentalism: An organized movement of concerned citizens and government agencies To protect and improve people’s living environment Environmental sustainability: Management approach Develop strategies that both sustain the environment and produce Company ‘s profits Environmentalism

12. Enlightened marketing: A marketing philosophy that holds A company’s marketing should support the Best long-run performance of the marketing system Five principles: Consumer-oriented marketing Innovative marketing Value marketing Sense-of-mission marketing Societal marketing Socially Responsible Marketing

13. Marketing research: Invalid or unreliable research studies Invasion of consumer privacy, not respecting confidentiality Disguising sales as research Failure to secure voluntary and informed participation Competitive intelligence gathering Segmentation/target marketing: Redlining: discriminating against poor or disadvantaged consumers Targeting inappropriate products to vulnerable audiences Ethical Issues Associated with Marketing

14. Positioning: Making socially undesirable products more desirable Positioning on questionable benefits Product: Marketing unsafe products Product testing: on animals or insufficient testing Marketing socially controversial products Packaging and labeling: Actual versus apparent size Misleading or inadequate information Excessive or environmentally-unfriendly packaging Ethical Issues Associated with Marketing

15. Pricing: Collusion with competitors Negative option billing Prejudice in negotiated prices Price discrimination Advertising: Sex role stereotyping Dehumanizing images and portraying people as products Bait-and-switch advertising Ethical Issues Associated with Marketing

16. Sellers’ rights: To introduce products of different styles and sizes, provided they are not hazardous To set its own prices, provided no discrimination occurs To spend to promote the product To use any product message, provided it is not misleading To use buying incentives Consumers’ rights: To choose To be informed To safety To be heard To redress To consumer education To participate in marketplace decision making To have access to basic services To a sustainable environment Seller’s Versus Consumers’ Rights

17. Topics covered: Application and governing legislation Accuracy of representation Disclosure, comparisons, guarantees, and warranties Fulfillment practices Media-specific standards of practice Product safety Marketing to children Protection of the environment Protection of personal privacy Enforcement procedures Canadian Marketing Association Code of Ethics Table 4.4

18. SPONSORSHIP MEDIUM 1STAMPLIFY the Message 2ndAIM the Message • marketers zero in on a “captured” TM • minimizes inefficiencies of communication process

19. EFFECTIVE SPONSORSHIP Serves 4 constituent groups Business interestof Sponsoring Company Best interestsof Event & Participants • Positive impact on Sponsor’s direct customers(dealers & retailers) Benefit to Consumerswho buy those products.

20. BUSINESS STRATEGIES & Sponsorship 1. Communicating Sponsors communicate using sport as the communication medium 2. Targeting Sponsorship effective for targeting clusters of consumers 3. Differentiating “Image Enhancement” “Value Added” “Product Differentiation” Gives Brand a unique & memorable attribute so it’s different from competitors Villain Products – cigarette & alcohol use image enhancement

21. ADVANTAGES of SPONSORSHIP 1. CREATES IDENTITY 2. INCREASES SALES 3. PROMOTES business- to-business contacts 4. CONSTITUENT benefits 5. BUSINESS customers “Interacting with consumers on an Emotional level” Exposes people to product in environment encompassing their lifestyle or aspiring lifestyle

22. OLYMPIC GAMES SPONSORSHIP • One of world’s oldest & most respected Brands • Represents the best in amateur sport • Encourages global co-operation, peace & harmony • Captures spirit & enthusiasm of virtually every nation • Most recognized symbol (90% consumer awareness)

23. Corporate Interests in the Olympic Rings • Signature property • Community engagement • Employee engagement • Product/ service showcase • Media relations • Customer hospitality

24. Opportunities with Canadian-hosted Games As an emotional touch point, the Olympics creates a unique set of circumstances for companies to engage Canadians directly. Vancouver Olympics 2010 Challenge is creating & sustaining high level of awareness from the outset

25. Responsibilities of VANOC • To plan, organize, finance & stage the 2010 Winter Games • To protect the Olympic Brand in Canada Has custodianship of Olympic & Paralympic Brands

26. The Olympic and Paralympic Marks Act • Specifically protects Olympic Brand in Canada (obligation to IOC) • Enables VANOC to protect exclusive rights granted to its marketing partners • Ensures Canada is aligned with International Community in granting special protection for Olympic/Paralympic brand

27. THE EXCHANGE • Official sponsors, licensees & government partners significantly invest to ensure successful staging of 2010 Winter Games and funding to Canadian athletes • Exclusive right to access marks, images, & stories that make Olympic & Paralympic Brand a sought after marketing tool

28. Ambush Marketing Form of marketing used by certain commercial bodies to capitalize on “Goodwill of Olympic Movement” (+ the Games & Athletes) without making the financial investment required to secure official sponsorship rights.

29. Protecting the Olympic Brand in Canada • VANOC’s Infringement Assessment • Infringement of brand? • Misleading business association? • 6 factors –factually accurate use, relevant use, commercially neutral, undue prominence, use of Olympic or Paralympic visuals, unauthorized association