SDM G1 Presentation

Improve Distribution With Your
Promotional Mix
Group 01
• Shahrukh Khan– MBA/07/048

• Arpit Rajpoot– MBA/07/072
• Kartik Mathur– MBA/07/140
• Abhishek Modhave– MBA/07/180
• Mohit – MBA/07/214
01 Crux of the
Article
• The control of their distribution channels is one of the most frustrating challenges for
many marketers
• How to garner support from their dealers and distributors is the question
• In this article, the author demonstrates how corporations can move their
merchandise through the distribution pipeline by utilising various sales promotional
techniques
• Astute use of promotional mix makes it possible accomplish goals at minimum
expense
• Each level of the channel and each product requires its own assortment of
promotional tools and devices
• The increase in sales promotion spending in the consumer products industry is bigger
than that of advertising promotion, and a significant portion of this money is being
misspent, in part due to ineffective planning
• Industrial marketers typically rely on personal selling rather than advertising. For
most businesses, sales promotion expenses are numerous times more than
advertising expenses.
• Thus it is essential to study promotional mix
02
Distribution
Channels
• The channels of distribution can be amazingly complex
• In the automobile aftermarket, for instance, it is not unusual for car parts and supplies to pass
through more than five or six wholesalers and retailers before reaching the end consumer
• They normally include a mix of company employees such as district sales manager, independent
outsiders (ex manufacturer representatives)
• Many of the members of the distribution channel are large, complex organizations, such as
chain stores and multi brand wholesalers
Channel Functions
• Manufacturers frequently receive some or all of the following services from distributors:
• Inventory Support & Physical

• Selling Effort
Distribution
• Accounts Receivable
• Post Sales Service
Financing
• In some industries distributor provides all the four functions like the medical instrument
industry whereas in some they may provide some and not all the services
Structure Development
• In the same way that a company must organize itself in order to fulfil various responsibilities,
the manufacturer must manage his distribution channels
• The organization process includes :
• Determining the task to be • Designing a structure to accomplish the tasks • Implementing the structure
performed
• Tasks to be performed depends on marketing needs, nature of product, consumers,

competition and company’s goals Ex: Frozen goods require special handling
• Company’s position and strategy help to design the ideal structure. In fact the distribution
strategy can become a crucial part of total corporate strategy. For ex: toiletry companies
typically use retailers to bring their products to the consumer
• The company's capacity to adopt a certain structure is dependent on the channel members'
availability and requirements Ex: Food manufacturers can depend on wholesalers as they are
well developed in that industry
• The channel structure must be implemented and maintained after it is designed which is
generally done by the sales force
• The function of the product managers is to develop and maintain the consumer franchise
whereas that of the sales force is to develop and maintain the trade or distribution franchise
03 Promotional Mix
• The promotional mix is not limited to advertising and personal selling but it includes many other
promotional devices
• There are two general kinds of Promotional Devices :
Sell in : Designed to Sell-out: Designed to

improve the improve the movement
manufacturer’s sales to of merchandise from the
the institutions in the channel of distribution
channel of distribution to the ultimate
consumer
• In general, the promotional devices are short term, and thus do not involve large commitments
of staff or money. They tend to have specific goals and must be judged by clear cut goals
Competing for Support
• Competition for distribution channel support is often more intense than for end-user purchase
• When competing for the distributor's support, he faces competition from all other
manufacturers whose products are carried by that distributor
• While there is not easy solution for this problem, but using promotions can help
• Each promotion can be designed to accomplish a specific objective, and implementation can be
temporary, thus not leaving long-term unwanted side effects
Working With Channels
• The manufacturer must understand and respond to the needs of channel partners
• Each channel participant's primary purpose is to create profits through a mix of revenue and
gross margin.
• For instance, supermarkets typically have a low gross margin but a high turnover rate. In
contrast, specialty retailers typically operate with large margins and minimal turnover.
• Some pointers to keep in mind while working with channels are :
• The manufacturer should not request impossible tasks from channel partners. Ex Asking
channel partners to generate primary demand for the product
• The manufacturer should try to undertake things that are important to channel partners
but difficult for them to perform on their own. Ex : Creating Product Literature
Selling Through Channels & Field Activated Promotions
• It is essential for the manufacturer to distinguish between selling to the channels and selling
through the channels
• The sale should not be considered consummated unless and until the product moves from the
last element of the distribution channel to the consumer
• Field-activated promotions allow larger national corporations to compete locally more
effectively. Regional Managers can utilize the budget allocated to them to do promotions
04 Using The Mix
The concept of using the promotional mix to manage the distribution channels can be applied to
a wide range of products and situations.
• The consumer goods manufacturer can use advertising to “pull” the product through the
channel and to create turnover, excitement, and positive momentum.
• The industrial goods manufacturer can use his own sales force or independent
representatives to generate end user sales and bring them to the dealer in an equivalent
strategy.
• A carefully organized program works better than the traditional mixture of a little promotion.
• It uses each promotion at the point in the channel at which it can be most effective in the
complex route from manufacturer to retailer.
• It has a focused scope that is highly cost effective. The manufacturer does not have to pay
for the kind of he doesn’t need.
• It follows a step-by-step process of setting product objectives, developing a program for

each, and allocating the budget.
05 Promotional
Techniques
Consumer Promotions
Consumer Promotions are designed to attract the ultimate consumer to a specific product
• Free Samples might be mailed, delivered door-to-door, or inserted in another package.
• Coupons can be redeemed at a retail store.
• Money-refund offers are propositions in which a sum of money is returned by mail to

participants who mail in proof of purchase such as a box top.
• Price-off deals offer consumers a certain amount of money off the regular price of a product.
• Premiums are items of merchandise offered free or at a low cost as a bonus to purchasers of
a particular product.
• Contests and sweepstakes are also major consumer-oriented promotion devices.
• Demonstration is another common consumer promotion device.
• Point of Purchase, often called POS displays, is another very frequently used consumer
promotion device.
Trade Promotions
Trade Promotions are devices designed to obtain special short-term merchandising and sales
support from distributors.
• The first category consist of deals or merchandising devices designed to encourage a

wholesaler or a retailer to carry a particular product. One such technique is buying allowance
and another such deal is count and recount.
• Another buy-back-allowance and also free-goods deal.
• The second category of trade promotions consists of deals used to induce retailers to promote
a product through advertising and display. The first of these is merchandise allowance. The
second device in this category is cooperative advertising, and the last one is dealer-listing
promotions.
• The final category of trade promotions is aimed at stimulating retailers and their sales-clerks to
“push” a certain manufacturer’s product rather than that of a competitor. The first of these is
push money, second one is sales contest, and the last one is dealer loader.
Salesperson Promotions
Salesperson promotions are techniques aimed at motivating a manufacturer’s salespeople by
supplementing their regular compensation plan.
• Sales incentive plans bestow on all participants who achieve sales performance goals.
• Sales contests are the awarding of prizes set up for the salespeople who achieve the best
performance.
• Sweepstakes are occasionally used as supplementary activities in a sales incentive program.
• Recognition programs usually take the form of titles, trophies, certificates, and so on.
• Sales aids include a wide range of devices and activities designed to assist salespeople in
actual selling situation.
THANK YOU!

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Improve Distribution With Your

• Shahrukh Khan– MBA/07/048

• Inventory Support & Physical

• Tasks to be performed depends on marketing needs, nature of product, consumers,

Sell in : Designed to Sell-out: Designed to

Competing for Support

• It follows a step-by-step process of setting product objectives, developing a program for

• Free Samples might be mailed, delivered door-to-door, or inserted in another package.

• Coupons can be redeemed at a retail store.

• Money-refund offers are propositions in which a sum of money is returned by mail to

• Contests and sweepstakes are also major consumer-oriented promotion devices.

• Demonstration is another common consumer promotion device.

• The first category consist of deals or merchandising devices designed to encourage a

• Another buy-back-allowance and also free-goods deal.

• Sweepstakes are occasionally used as supplementary activities in a sales incentive program.

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