schoolings.

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SS1 THIRD TERM MARKETING LESSON NOTE

ADVERTISING

ADVERTISING CONT.

ADVERTISING CONT.

PROMOTION

PROMOTION CONT.

MARKETING SSS1 THIRD TERM MID-TERM ASSESSMENT

- TEST

PROMOTION (CONTD)

MERCHANDIZING

MERCHANDIZING CONT.

MERCHANDIZING CONT.

TYPES AND FUNCTIONS OF DISTRIBUTION

CONSUMER BEHAVIOUR AND ORGANISATIONAL BEHAVIOUR

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MARKETING SSS1 THIRD TERM FINAL EXAM

WEEK 1

Advertising

Performance Objectives

Students should be able to know:

1. Advertising media
2. Print
3. Electronics

Advertising Media

Advertising media refer to vehicles or channels through which the massage of

advertisement reaches the target audience.

The media can be grouped into

(a) Print media

(b) Electronic media

Print Media

Print media are publication materials, e.g. Newspapers, magazines, periodicals and
journals.

In 1854, Rev. Henry Townsend, a Presbyterian Church missionary, established the

first printing press in Nigeria. Five years later, it would publish the country’s first
newspaper known as "Iwe Irohin Fun Awon Ara Egba Ati Yoruba."
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"His objective is to get the people to read and to beget the habit of seeking
information by reading." -- Rev. Henry Townsend.

Although, it is the opinion of many that, in contrast to his purported objective, the
purpose of Rev. Henry Townsend newspaper was to foster the outreach of Christian
religion at the time; it cannot be denied, however, that the "Iwe Irohin" played a very
significant role in the history of Nigerian newspaper.

History has it that the first edition of Nigeria’s first newspaper, "Iwe Irohin," came out
on November 23, 1859. The newspaper was published every fifteen days and sold for
120 cowries, which is equivalent to a penny.

It would be highly patronized by the few literates in Yoruba land. And the circulation
of the paper was around 3,000 as at that time.

The content of the newspaper was news of church activities, arrival and departure of
religious dignitaries, ordinations etc.

It would be broadened by introducing stories that revolve around Abeokuta, as well as

cotton and cocoa statistics.

The newspaper would also include advertisements from local firms and government
agencies from 1860.

Eight years later, "Iwe Irohin" was printed in two versions, one in English and the
other in Yoruba.

However, due to cultural and political clashes that occurred between the Egbas and
the British which resulted in the expulsion of all Europeans in Egbaland, the printing
press was razed in 1867.

And as a result, Nigeria’s first-ever newspaper met with its end.

Be that as it may, the purpose for which the newspaper was formed has been fulfilled:
The reading habit of the people has developed to a point whereby they now yearn for
news after the demise of the “Iwe Irohin.”

The second Nigerian newspaper was Anglo-African.

It was established in 1863 by Robert Campbell and was the first paper published in
Lagos. In those days, the newspaper can be said to be the paper of its times.

And just as the title indicated, it was purposed for African self-improvement through
the utilization of Western and African systems of knowledge.

It would take another seventeen years before the establishment of the third Nigerian
newspaper, known as The Lagos Times and Gold Coast Colony Advertiser.
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Established on 10th November 1880 by Mr Richard Olamilege Beale Blaize and was
edited by Mr Andrew M. Thomas and Mojola Agbebi, The Lagos Times and Gold
Coast Advertiser was sold for sixpence newspaper was printed every fifteen days.

Unlike Rev. Henry Townsend “Iwe Irohin,” it is said that the newspaper was mainly
concerned with the critical issues and matters of the period.

Records even have it that The Lagos Times and Gold Coast Colony Advertiser was
actually the first to publicly denounce the extravagance of the colonial government in
one of its editions published in 1881.

However, the newspaper would go out of circulation on October 24, 1883; only to
reappear seven years later with little or no success.

Another newspaper that played a very important role in the history of Nigerian
newspaper is the West African Pilot.

With a motto that reads: "Show the light and the people will find the way," the West
African Pilot was launched in Nigeria by Nnamdi Azikiwe ("Zik") in 1937. And it
was dedicated to the fighting for independence from British colonial rule.

It is said that from 1937-1947, Nnamdi Azikiwe edited the West African Pilot,
personally.

Importance of Print Media

It can be targeted

Printed media can be tailored to your target market, both in terms of the style of
design as well as in how you distribute the material. This means you can focus your
marketing budget on reaching the audience you want and make the material relevant
and appealing to them.

It can create credibility

Another reason why print media is important is that it creates credibility. Investing in
printed material signals to customers that you are serious about your business and that
you offer a worthwhile product or service.

It can create engagement

Printed materials can also create engagement between the customer and the brand. By
providing interesting articles to read, special offers or amusing copy there is the
opportunity to provide a connection between the reader and the product that can lead
to brand awareness and sales.

It can be kept
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Unlike webpages, print media has a longer lifespan. Rather than spending a few
seconds on a site and then moving on, brochures and leaflets can be picked up and put
down and referred back to. They can also be passed onto friends or colleagues,
maximising the reach of your campaign.

It can link to digital campaigns

Finally, print media offers the chance to link a paper with online content. Examples
here include the use of a QR code or referral to a website for more information or to
make an online order.

The positive impact of Print Media

1. Advertisement: The ancient Babylonians got it right where the print media was concerned; it
is indeed an effective tool for mass communication. That’s why companies often spend in
millions each year to advertise their products and services across various forms of print
media. To put it in perspective, Vogue magazine, which is often touted as one of the most
fashionable magazines of the world, had clocked impressive ad revenue of $500 million in
2013 alone. The fact remains that showcasing ads on these magazines and other forms of
print media ensures that your targeted demographic sees the ad and gets the message. And
the best part is that as an advertiser, you would have to pay only once and the recipients can
view the ad again and again, at no extra cost.
2. Mass communication: One of the effective ways to communicate with the masses was
through the print media. That’s why the US government ran several ads on various print
media to entice young men and women to enlist with the army during the Second World War.
Print media remains to date one of the most effective ways to communicate with the general
population.
3. Entertainment and news: While we do get both instant variations of both news and
entertainment through the various television programs, the fact remains that the print
media such as newspapers still holds out a special allure to many. This is why, despite being
in the digital age, most newspapers reported in an incremental increase in the total number
of subscribers

The negative impact of Print Media

1. Negative body image: One of the things that print media had been accused of in the recent
past is of stereotyping of what it considers to be the perfect body image. As a result, most of
the pictures posted in the print media reflect the same, thin unreasonable waistlines and this
is having an impact on the younger generation. As a result, several have opted to starve
themselves to achieve that body image, resulting in both severe health complications and
fatalities.
2. Psychological effect and fake news: The print media needs to understand that it plays an
influential role in today’s society. But sadly, some of the companies often rile their audiences
while paying little attention to fact and even go to the extent of distorting the truth so that
they can make a quick sale. Many a riot had started with less and the costs of such
manufactured news are just rising.
3. Hidden agenda: Many a news story planted in the print media has often led to governments
being dismissed, presidents impeached and in one case, a king to abdicate. It is clear from
the outset that the particular news firm had an agenda, but that should not have prevented
the firm from exercising their journalistic ethics and objectivity when preparing the news.
Sadly, few chose to exercise this at their discretion which is why the next time you read a
loaded news item, you may want to keep the salt shaker close by.
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Electronic Media

Electronic media are the broadcast media, e.g. Radio, television, cinema, billboards
etc.

Electronic media are media that use electronics or electromechanical audience to

access the content. This is in contrast to static media (mainly print media), which
today are most often created electronically, but do not require electronics to be
accessed by the end-user in the printed form. The primary electronic media sources
familiar to the general public are video recordings, audio recordings, multimedia
presentations, slide presentations, CD-ROM and online content. Most new media are
in the form of digital media. However, electronic media may be in either analogue
electronics data or digital electronic data format.

Although the term is usually associated with content recorded on a storage medium,
recordings are not required for live broadcasting and online networking.

The positive impact of Electronic Media

1. Information: Electronic media is one of the effective methods by which you can disseminate
information within seconds. So if you wanted certain information including information
about an impending tsunami, then electronic media is your best bet to get that information
out there, within a short space of time. That’s why most politicians utilize all forms of
electronic media to publicize themselves and to enable them to reach out to brand new
voters.
2. Educational: Electronic media provides you with a host of information and certain agencies
have started using the same to educate their young students. With the help of electronic
media young students can learn more about the news, about the process and how reporters
often have to report on it while facing a lot of stress and pressure. Some institutions also
feature educational modules based on electronic media which can prove to be invaluable for
those seeking to establish a career in the same.
3. Behavioral: various studies have already established that television and other forms of
electronic media do continue to influence behavioural patterns in young children. And this
can be a positive thing as it helps them to relate to the context and as a result, modify their
behaviour, As a –parent, you would be required to monitor all their electronic media
interaction to ensure that they are not led astray

The negative impact of Electronic Media

1. Psychological: Again various studies have established the fact that the more young children
are exposed to scenes of gratuitous violence in television programs, the more likely they are,
to act it out. And moreover, television, as well as social media, can have a psychological
effect on young viewers and cause them to become more reclusive, and to become addicted
to select programs. As a result, this can impact their health in the long run.
2. Behavioral: Young children often tend to imagine that television programs are for real and
naturally when they see explicit scenes and even violent ones, this can have a direct impact
on their behaviour. This is why it is important for parents to regulate all forms of electronic
media; after all, it is for their own benefit. And remember, all it takes is for one show to alter
your little one forever.
3. Health: Being exposed to electronic media 24/7 is not good, not in any sense of the word. For
one, binge-watching television programs can impair your vision and even affect your hearing.
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If that wasn’t enough, you would most likely put on more weight as a result of all that
inactivity and this can even play a causative role in you developing diabetes.
4. Social interaction: As a result of being obsessed with electronic media and communication
devices, you are more likely to lead a life of a recluse with little or no interaction with others.
Soon, you would feel comfortable only when you are sitting in front of your laptop or
television which is indicative that you have a major problem.

WEEK 2

Advertising Cont.

Performance Objectives

Students should be able to explain:

1. Advantages and disadvantages of each medium

(Electronic media)

Advantages and Disadvantages of Electronic Media

Medium Advantages Disadvantages

- Very expensive
- Dramatic presentation &
demonstrative ability.
- Needs electricity which is not
guaranteed/stable.
- High reach potential
- Requires full attention
- Attain rapid awareness
- Non-retrieval of message
Television - Relatively efficient
- High product cost
- Non-literate compliance
- Control of time
- Audio and visual advantage

- Provides a form of
entertainment.
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- High frequency
- Message on the product could not
- High level of efficiency
be seen
- Ability to integrate with
- Prone to wrong interpretation.
television
- sometimes ambiguous &
- Portable & personal medium
Radio misleading.
- Low production cost
- Fractionalization of audience.
'- Use of local personalities
- Time limitation
- Reach a wider audience at once
- Commercial clutter, etc.
- Not limited to literate

WEEK 3

Advertising Cont.

Performance Objectives

Students should be able to explain:

Advantages and disadvantages of each medium (Print media)

Advantages and Disadvantages of Print Media

Medium Advantages Disadvantages

- It offers excellent local market
- Limited target selectivity
Newspapers & penetration
Periodicals - Significant different between
- It enhances rapid audience
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communication national and local rates

- Ability to reach a large number - Not intrusive

of people in a single day
- Not for illiterate
- Excellent geographical
flexibility - Very expensive

- Timeliness - Poor quality in packaging and

production when handled non-
- Ability to convey a detailed professional
copy

- Could be retrieved for future

use
- Efficient reach to the target
audience
- Uneven distribution
- Flexibility in target market
coverage - Very expensive
Magazines &
- Non-seasonal of readership - Geographical limitation
Journal
- Ability to deliver a complex - Not meant for illiterates
copy
- Slow audience accumulation
- Could be retrieved for future
use

WEEK 4

Promotion

Performance Objectives

Students should be able to explain:

1. Meaning of promotion
2. Forms of promotion
3. Pricing - off
4. Coupon
5. Salesman competition
6. Loyalty scheme
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Meaning of Promotion

Promotion could be described as the use of any incentive by a manufacturer to induce

the trade ( wholesaler and retailer) or consumer to buy brand and to encourage the
sales force to aggressively sell it. It must be noted that sales promotion even though
can influence but may not be able to compensate for a poorly trained sales force, give
the trade or consumer any compelling long-term reason to continuing purchasing a
brand, permanently stop as established brand's declining sales trend or change the
basic non-acceptance of an undesirable brand.

Promotion is an effort by the marketing manager to convince potential customers that

the "right" product is available at the "right" price often through publicity,
advertisement, sales promotion and other promotion techniques ".

Forms of Promotion

The following among others are the forms of promotion that are employed in
marketing management:

1. Pricing - off

This is a strategy that involves temporary price reductions to retailers with the intent
that savings will be passed along to consumers. Another consumer-oriented
promotion technique is the direct price-off deal, which reduces the price of the brand.
Price-off reductions are typically offered right on the package through specially
marked price packs. Typically, price-offs range from 10 to 25 per cent off the regular
price, with the reduction coming out of the manufacturer's profit margin, not the
retailer's. Keeping the retailer's margin during a price-off promotion maintains its
support and cooperation.

Marketers use price-off promotions for several reasons. First, since price-offs are
controlled by the manufacturer, it can make sure the promotional discount reaches the
consumer rather than being kept by the trade. Like bonus packs, price-off deals
usually present a readily apparent value to shoppers, especially when they have a
reference price point for the brand and thus recognize the value of the discount. So
price-offs can be a strong influence at the point of purchase when price comparisons
are being made. Price-off promotions can also encourage consumers to purchase
larger quantities, preempting competitors' promotions and leading to greater trade
support.

Price-off promotions may not be favourably received by retailers, since they can
create pricing and inventory problems. Most retailers will not accept packages with a
specific price shown, so the familiar X amount off the regular price must be used.

1. Coupon

In marketing, a coupon is a ticket or document that can be redeemed for a financial

discount or rebate when purchasing a product.
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Customarily, coupons are issued by manufacturers of consumer packaged goods or by

retailers, to be used in retail stores as a part of sales promotions. They are often
widely distributed through the mail, coupon envelopes, magazines, newspapers, the
Internet (social media, email newsletter), directly from the retailer, and mobile
devices such as cell phones. Since only price conscious consumers are likely to spend
the time to claim the savings, coupons function as a form of price discrimination,
enabling retailers to offer a lower price only to those consumers who would otherwise
go elsewhere. In addition, coupons can also be targeted selectively to regional markets
in which price competition is great.

In government, a coupon is a paper certificate used to administer a benefit or

permission.

iii. Salesman competition

This is a contest that brings in reward for salesmen and the company they represent. It
is said to occur when companies equipped their sales representatives and aspiring for
a large customer base.

1. Loyalty scheme

A loyalty program is a marketing strategy designed to encourage customers to

continue to shop at or use the services of a business associated with the program.
Today, such programs cover most types of commerce, each having varying features
and rewards schemes, including in banking, entertainment, hospitality, retailing and
travel.

The loyalty scheme is just a way to show appreciation by rewarding loyal customers,
but how to do it is very important. It goes a long way in determining the relationship
with customers moving forward. For a business to retain those customers, it is very
imperative to initiate effective customer loyalty scheme.

Reasons for the Loyalty Scheme

Data Generation

The business stands the chance of generating good data that will help in repositioning
it in the long run. Generating data pertaining to customers will give room for strategy
and planning. It could be used to improve the business bottom line but all depends on
how it effectively use those data.

The fact remains that customer loyalty schemes give the business an opportunity to
really know it real customers, which can be used to separate the good eggs from the
bad ones.

The scheme actually put the spotlight on customer behaviour. They can show the best
clients and also underscore the worst customers.

Serves as a comeback avenue

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While the best customers may be bringing in the lion’s share of business profit, worst
customers are the bargain-hunters that spend little and only buy discounted goods.
However, the loyalty schemes there could be used to win back those lapsed customers.

These customers are much easier to win over than cold prospects. They know the
business and it knows them, their buying history and where and how to reach them. It
could be more profitable to lose bad customers than to gain new ones.

Allow the business to focus on Good Customers

Knowing good and bad customers worth it, hence business need a customer loyalty
programme. Customer loyalty scheme serves as an avenue for business to focus on
best customers and allows it to focus on improving satisfaction.

The thing is that loyal customers buy more and are often willing to pay more, which
boosts business cash flow. Remember, by increasing loyalty, a business can increase
profitability and extend the time they place their business with it.

The long-run effect of that is that loyal customers are also good customers in one way
or the other helps you to advertise your products and service.

1. Bonuses

This relates to financial and non- financial rewards given to customers in appreciation
and recognition for purchasing one brand rather than another. i.e. sweepstakes,
coupons, premium, display allowance etc.

1. Trade allowances

This relates to financial and non- financial rewards given to consumers for performing
one activity or the other in support of the manufacturer's brand.

WEEK 5

Promotion Cont.

Performance Objectives

Students should be able to know:

Forms of promotion

Premium offers

Words of mouth
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Trade-in-allowance

Sampling

Merchandising incentives

Training schemes

Content

Forms of Promotion

1. Premium offers
2. Word of mouth

iii. Trade-in- allowance

1. Sampling
2. Merchandising
3. Training schemes

Forms of Promotion

1. Premium Offer

Traditionally premium offer is defined as a sales promotion technique where the

customers are given two or more products and they pay lower than the price of the
combined products. It is an inducement for the customers to buy more products. In
premium offers the customers get prizes, gifts, coupons, and vouchers etc. as
incentives when purchasing products. At times, Premium is designed for loyal
customers and sometimes to attract more customers. Premium offers also help
generate a lead for the products as many customers are deal hunters.

Types of Premium Offer

Premium offers are of following types:

1. Free premium: - These are the premium offers for which customers don’t have to pay
anything they just have to purchase the product and they get the offer. The objective of
these premiums is to reward loyal customers, increase brand awareness, make brands more
user friendly.
2. Self-liquidating premium: - In, self-liquidating promotion premium offers, the token amount
needs to be paid to avail the offer as a gift or voucher. The objective is to attract more
customers at a lower price. This helps generate more revenue for the company.

iii. On Package premiums: - These premium offers are small toys or gifts inside the
packs. These offers help a brand revitalize itself and explain a different usage for the
same product. It also helps improve the visibility of the product.
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1. Word of Mouth

This is an unpaid form of promotion in which satisfied customers tell other people
how much they like a business, product or service.

Word-of-mouth advertising is important for every business, as each happy customer

can steer dozens of new ones your way. And it's one of the most credible forms of
advertising because a person puts their reputation on the line every time they make a
recommendation and that person has nothing to gain but the appreciation of those who
are listening.

Here are some tips to help you generate word-of-mouth:

Word-of-mouth is triggered when a customer experiences something far beyond what

was expected. Slightly exceeding their expectations just won't do it. You've got to go
above and beyond the call of duty if you want your customers to talk about you.

Don't depend on your staff to trigger word-of-mouth by delivering "exceptional

customer experience." Good customer service is sporadic, even in the best
establishments. The customer who receives exceptional service today can't be sure
their friends will receive the same tomorrow, so even the most well-served are
unlikely to put their necks on the line and make a recommendation. Deep down,
customers know service comes from an individual, not from an establishment. And
even the best people have bad days.

Physical, nonverbal statements are the most dependable in triggering word-of-mouth.

These statements can be architectural, kinetic or generous, but they must go far
beyond the boundaries of what's normal.

1. Trade-in Allowance

It is a reduction in the price of a new item when an old item is given as part of the
deal. It is also the sales promotion technique in which the buyers are offered a fixed
discount (called trade-in allowance) on the price of a new model or item in exchange
for an older model or item.

1. Sampling

Sampling is a process used in statistical analysis in which a predetermined number of

observations are taken from a larger population. The methodology used to sample
from a larger population depends on the type of analysis being performed, but it may
include simple random sampling or systematic sampling.

1. Merchandising

Merchandising is the promotion of goods and/or services that are available for retail
sale. Merchandising includes the determination of quantities, setting prices for goods
and services, creating display designs, developing marketing strategies, and
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establishing discounts or coupons. More broadly, merchandising may refer to retail

sales itself, that is the provision of goods to end-user consumers.

1. Training Schemes

The Act defines a training scheme as “study and training that leads to qualification not,
of itself, lead to a qualification. The training scheme is for the pursuit of recreation,
pleasure or leisure (including in the nature of a hobby), and the skills gained are not
designed to lead to further or higher study, or entry into employment.

WEEK 6

Promotion (Contd)

Performance Objectives

Students should be able to know:

1. Functions of promotion

Functions of Promotion

1. It provides employment for thousands of people l.

2. It affords the society to enjoy and derive benefits which would not have otherwise been
possible.

iii. Promotion helps to influence consumer buying behaviour.

1. It helps to communicate the strength of a product over its rivals.

2. It helps to re-orientate old customers about other benefits of their valued/ choice products.
3. It helps to reinforce advertisement.

vii. It facilitates the introduction of new products to the trade.

viii. It enhances and stimulates salesforce enthusiasm.

1. It promotes sales of established products

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2. It enhances and increases product usage

WEEK 7

Merchandizing

Performance Objectives

Students should be able to explain:

1. Meaning Merchandising
2. Features of merchandising
3. Packaging
4. Branding
5. Labeling

Merchandising

Merchandise known as merchant wholesalers is regarded as independent firms that

purchase a product and resell it to other manufacturers, wholesalers or retailers but not
to the final consumer. They provide space for permanent showrooms and exhibit
goods and products.

Features of Merchandising

A merchandise marketing activity is characterized as the following:

1. Packaging: This is regarded as the most distinctive marketing effort performs by

merchandising.

Functions of Packaging

1.protection of products

1. Identification of products
2. Information source
3. Enhance disposal
4. Enhance channel acceptance.
5. Branding: This is one of the most essential information elements that consumers use to
simplify buying decisions and minimise purchase risk. It states the attributes and general
image of a product. Brands include the product name, logo, slogans, trademark etc.

Functions of branding
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1. It attracts attention
2. It aids memorability
3. Communicate the positioning of the product.
4. Distinguish the product from competing brands.

iii. Labelling: Labelling should be consumer/customer-friendly, hence, it must

perform the following functions.

Functions Labelling

1. Proper identification of the identity of the manufacturer

2. State the expiration of a product.
3. State the usage of the product
4. Provide detail instructions about other essential matters.

WEEK 7

Merchandizing

Performance Objectives

Students should be able to explain:

1. Meaning Merchandising
2. Features of merchandising
3. Packaging
4. Branding
5. Labeling

Merchandising

Merchandise known as merchant wholesalers is regarded as independent firms that

purchase a product and resell it to other manufacturers, wholesalers or retailers but not
to the final consumer. They provide space for permanent showrooms and exhibit
goods and products.

Features of Merchandising

A merchandise marketing activity is characterized as the following:

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1. Packaging: This is regarded as the most distinctive marketing effort performs by

merchandising.

Functions of Packaging

1. protection of products
2. Identification of products
3. Information source
4. Enhance disposal
5. Enhance channel acceptance.
6. Branding: This is one of the most essential information elements that consumers use to
simplify buying decisions and minimise purchase risk. It states the attributes and general
image of a product. Brands include the product name, logo, slogans, trademark etc.

Functions of branding

1. It attracts attention
2. It aids memorability
3. Communicate the positioning of the product.
4. Distinguish the product from competing brands.

iii. Labelling: Labelling should be consumer/customer-friendly, hence, it must

perform the following functions.

Functions Labelling

1. Proper identification of the identity of the manufacturer

2. State the expiration of a product.
3. State the usage of the product
4. Provide detail instructions about other essential matters.

WEEK 8

Merchandizing Cont.

Performance Objectives

Students should be able to explain:

1. Conditions in merchandizing
2. Warehousing cost
3. Cost resulting from a reduction in inventory value
4. Transportation cost etc
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Conditions in Merchandising

Conditions in merchandising include the following:

1. Warehousing cost:

This relates to who bears the cost of keeping the products, i.e. is it the manufacturer or
the wholesaler merchant. Both parties must agree so as to avoid unnecessary problems.

1. Cost resulting from a reduction in inventory value:

Cost reduction in inventory management is vital in an exploding market that is

continuously attracting more competition. As competition increases, logistics
businesses must take a few straightforward steps to reduce inventory costs to stay in
the game.

Here are five ways to do just that.

1. Slash supplier lead time

You can keep inventory levels (and therefore costs) lower by speeding up supplier
lead times. The median supplier lead time for purchased materials is eight days. If you
can shave two or three days off of that, it will have a major impact on your bottom
line.

Shop around for suppliers that can meet your needs, quickly. If you’re already
working with a supplier that isn’t moving as fast as you’d like, think about the costs
of staying with a slower supplier.

You need to keep more safety stock around for orders that need to be filled, and that
means you’re paying to warehouse stuff you wouldn’t need to have at all if your
supplier could deliver inventory to you more quickly.

Calculate how much you’re paying for that safety stock, and you’ll have an idea of
what kind of savings are possible if you find a better supplier.

1. Get rid of obsolete inventory

Safety stock isn’t the only product you’re carrying that you don’t need. Chances are
you’ve got obsolete inventory, too.

It’s tough to get rid of stuff when you’re in the inventory management business.
Those are products, after all—products that are theoretically worth real money. But if
they’re obsolete and not selling, they’re just taking up space. Take a deep breath, and
chuck ’em (or recycle).
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Resist the hoarder mentality. It’s easy to think that the additional space you’re
dedicating to that inventory is keeping the valuable product on hand and a good
financial decision, but you’re really just throwing good money after bad by paying to
store stuff on the hope that it’ll sell at some point.

Gather data on how much of your inventory consists of items that haven’t sold in the
past year. A full breakdown of what you’re spending on such products is almost
always eye-opening.

Once you’ve gotten rid of the obsolete stock, you need to prevent it from building
back up. Adjust your demand forecasting based on expected future sales so you’re
ordering the right quantities of merchandise. This is a fairly simple way to reduce
costs in inventory management, but most managers get so caught up in the day-to-day
demands that they never get around to it.

1. Choose better software

Quality logistics software can do incredible things for your business. And there are
dozens upon dozens of options out there—231 in our directory, to be exact.

You need to keep track of your inventory levels, or risk overstocking and seeing your
inventory costs balloon. If you’ve been relying on a simple spreadsheet or a basic
software solution with limited features to manage everything, you probably aren’t
getting the full picture of your inventory situation.

Find a software solution that keeps inventory info automatically up-to-date, so you
can quickly make decisions when necessary.

Logistics software also helps centralize control of your inventory, which cuts costs by
eliminating redundant effort. This is particularly important for complex logistics
operations that require a detailed inventory plan.

Centralizing supply chain models also helps you avoid the excess and obsolete stock.
Remember: it’s always better to be preventive than reactive.

1. Set up automatic re-orders when inventory gets low

Thanks to technological advancements, automation is accessible even to small

businesses. You must use this to your advantage.

When your inventory runs low, automatic re-orders ensure you aren’t left with
shortages. The software combined with a perpetual inventory system will help you
avoid those costly shortages.

A perpetual inventory management system provides real-time inventory updates by

tapping into a database that tracks all of your inventory to determine when supplies
are running low and when it’s time to re-order—all without any human input.

1. Monitor your SKUs

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Stock keeping units (SKUs) are identification codes for products that help you track
them through inventory. Relatively straightforward products may have just one SKU,
but items that come in multiple shapes, sizes, and colours (like clothing) have
multiple SKUs.

This can become an inventory headache, as products with multiple SKUs can send
confusing signals when it comes to demand. You might think that there is no interest
in a particular product, only to find that the reason people aren’t ordering that shirt is
that the size they want is never in stock.

For these products, you need to use software that can manage all of your SKU data in
one place so you know how these products are really performing on the market.

iii. Transportation cost:

The expenses involved in moving products or assets to a different place, which are
often passed on to consumers. For example, a business would generally incur a
transportation cost if it needs to bring its products to retailers in order to have them
offered for sale to consumers.

1. Distribution tasks:

The process of distribution refers to a series of activities which takes place between
the time of the production of goods and the time they reach the final consumers or put
it another way, the time taken up by the production unit of such activities are part of a
continuing process of productions.

After the distribution objectives are set, it is appropriate to determine the specific
distribution tasks (functions) to be performed in that channel system. The channel
manager must be far more specific in describing the tasks and must define how these
tasks will change depending upon the situation. An ability to do this requires the
channel manager to evaluate all phases of the distribution network. Tasks must be
identified fully, and costs must be assigned to these tasks. For example, a
manufacturer might delineate the following tasks as being necessary in order to
profitably reach the target market:

provide delivery within 48 hours after order placement

offer adequate storage space

provide credit to other intermediaries

facilitate a product return network

provide readily available inventory (quantity and type)

provide for absorption of size and grade obsolescence

1. Materials handling:
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Material handling involves short-distance movement within the confines of a building

or between a building and a transportation vehicle. It uses a wide range of manual,
semi-automated, and automated equipment and includes consideration of the
protection, storage, and control of materials throughout their manufacturing,
warehousing, distribution, consumption, and disposal. Material handling can be used
to create time and place utility through the handling, storage, and control of waste, as
distinct from manufacturing, which creates form utility by changing the shape, form,
and makeup of the material.

WEEK 9

Merchandizing Cont.

Performance Objectives

Students should be able to know:

1. Functions of merchandising
2. Scrambled merchandising

Functions of Merchandising

The following are the functions of merchandising:

1. Nearness to the population/target market.

2. It helps the producers of some perishable goods to have a rigid distribution control to avoid
spoilage.

iii. It affords products to have a high value per unit

1. It helps in spreading the cost of promotion.

2. It helps to create a job for thousands of unemployed.

vi.it helps in product packaging and serves as a source of information.

Scrambled Merchandising
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"This is the handling of merchandise lines based solely on the profitability criterion
and without regards to the consistency of a particular product line with other products
in retailer's product mix".

WEEK 10

Types and functions of Distribution

Performance Objectives

Students should be able to explain:

1. Meaning of Distribution
2. Types of distribution
3. Channels of distribution

Distribution

A distribution channel can be described "as an organized system of marketing

institutions and their interrelationships that promote the physical flow of goods and
services along with a title that confers ownership from producer to consumer or
business user. It also connotes the network of organizations that creates time, place
and possession utilities for consumers and business users.

Examples: movement of textbooks from publishers to bookshops, movement of

agricultural products from farm to the commodity market.

Types of Distribution

The distribution could be grouped into the following;

1. Dual Channel Distribution: This refers to the movement of products through more than one
distribution channel to reach the same target consumers.

Examples are:

(a) Manufacturer---> Wholesaler---> Consumers

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(b) Manufacturer---> Wholesaler---> Retailers

1. Reverse Channel Distribution: This relates to the backward movement of goods from users to
producers. This is the situation when consumers are expected to supply certain information
before goods and services could be distributed. For instance, registration of car owner allows
manufacturers to send a proper notification in the event of a recall.
2. Wholesaling Intermediaries: This is a broader term whereby firms sell products primarily to
retailers or to other wholesalers or business users and only in insignificant amounts to the
ultimate consumer. These include agents and brokers who perform important wholesaling
activities without taking title to goods which differentiates it from merchandising.
3. Sakes Channel: This is part of the distribution which involves the buying, selling and
transferring title. The participants in this marketing channel are the manufacturers, retailers,
consumers and transportation company.
4. Facilitating Channel: These include public storage firms, insurance companies, finance
companies, market research firms and several other types of firms also frequently participate
as facilitating organisations in various marketing channels. It is essential that both the sales
and facilitating channels are usually needed to create time, place and possession utilities.

Channels of Distribution

Channels of distribution connote the medium through which products pass from
manufacturers to consumers. Factors that inform the channel decision are:

1. The size of the customers base

2. Nature of the products

iii. Consumers behavioural pattern

1. Perishability of product
2. Technical complexity etc

Levels of Distribution Channels

(a) Two level: Manufacturer-->Consumers

(b) Three level: Manufacturer-->Retailer-->Consumers

(c) Four level: Manufacturer-->Wholesaler-->Retailer-->consumer

(d) Five level: Manufacturer-->Agent-->Wholesaler-->Retailer--->consumers.

WEEK 11

Consumer behaviour and Organisational behaviour

Performance Objectives
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Students should be able to explain:

1. Factors influencing consumer behaviour

2. Cultural factors
3. Social factors
4. Personal factors
5. Psychological factors

Factors influencing Consumer Behaviour

The following factors have been identified as those that influence the atypical
behaviour of an average consumer. The factors are:

1. Cultural Factors: First and foremost, the term culture can be defined as a set of values,
beliefs, preferences and tastes handed down from one generation to another. Invariably, the
culture where an individual comes or raised up may have a direct/indirect impact and
influence on his/her consumption or buying behaviour.
2. Social factors: This relates to a group or societal class. Every consumer belongs to a number
of social groups. The word social could be described as a relationship, fellowship or
interaction between people. Every group exhibits certain norms of behaviour as values,
attitudes and behaviours that a group deems appropriate for its members.
3. Personal Factors: These relate to taste, preference and choice that an individual has for a
particular product. Personal factors do influence consumption pattern of consumer, it can be
as a result of religious belief, educational attainment, exposure, taste etc. E.g. some people
may not be influenced to eat a particular kind of meat or food due to personal policy or
decision or religious belief.
4. Psychological factors: These include attitudes, perception, learning, motivation and
personality which have a direct or indirect influence on consumer behaviour.