marketing
TRANSCRIPT
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ETITB
Marketing
Week 3
Place / Distribution
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Objectives Explain the role of marketing channels and the
functions these channels perform.Identify the major channel alternatives open to a
company.Explain how businesses select, motivate and
evaluate channel members.Isolate the key issues managers face when setting
up marketing channel systems.Explain how marketing channels are changing and
the implications of these trends to marketers.
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Place.
Place is also known as channel, distribution, or intermediary. It is the mechanism through which goods and/or services are moved from the manufacturer/ service provider to the user or consumer.
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Physical Distribution
The tasks involved in planning, implementing, and controlling the physical flowflow of materials,
final goods, and related information from points of origin to points of consumption to meet meet customer requirements at a profitcustomer requirements at a profit
(Kotler and Armstrong, 2001)
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Defining marketing channels
A marketing channel is a structure that links a group of individuals or organisations through which products/services are made available to the consumer or industrial user.
The structure of channels can vary depending on the type of market, the needs of the end consumer, and the type of product.
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WHERE?WHERE? HOW?HOW?
ACCESSACCESSNOT JUSTNOT JUST
BUT THE WHOLEBUT THE WHOLE EXPERIENCE EXPERIENCE!!!!!!
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OUR AIM!!!
OUROUR PRODUCT/SERVICE PRODUCT/SERVICE
TO BECOMETO BECOME AVAILABLEAVAILABLE TO OURTO OUR TARGETTARGET CUSTOMERSCUSTOMERS
IN THEIN THE TIMETIME, , QUANTITYQUANTITY, , QUALITYQUALITY,,
COST,COST,FORM,FORM, AND AND
LOCATIONLOCATION THAT THEYTHAT THEY WANT WANT
Easier said than done!Easier said than done!
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Structure of Marketing Channels
Producer
Consumer
Consumer
Consumer
Retailer
Retailer Whole.
Consumer Goods Marketing Channels
Producer
Producer
Provider Consumer
Provider Agent Consumer
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Structure of Marketing Channels
Producer
User
User
User
Distr.
Distr. Agent
Industrial Goods Marketing Channels
Producer
Producer
Provider Agent User
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Serviceprovider
Channel Intermediaries
Consumer or industrial customer
Distribution channels for services
Serviceprovider
Consumer or industrial customer
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Characteristics of ServicesIntangibility - Lack of tangible assets which can be seen, touched, or smelled prior to purchase.Perishability - Inability of a service to be inventoried or stored.Inseparability - Simultaneous production and consumption of a service.Variability - Unwanted or random levels of service quality customers receive when they patronize a service firm.
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Inseparability
The customer becomes part of the service
The employee becomes part of the service
The customer and the employee interact with the service delivery system
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Some Thoughts on Place
Premises: Actual or Virtual Atmosphere Convenience Accessibility Service Variety
Distribution/Logistics Flow from A to B
Point of Transaction
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Intermediaries
Play an important role in increasing efficiency and reducing costs.
There are several different types of intermediary who come together to create different kinds of distribution channels between manufacturer and consumer.
Each intermediary adds a margin to the price of the goods handled.
Different functions are performed by the different intermediaries.
Not all intermediaries necessarily take legal title or physical possession of the goods.
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Intermediaries
Retailers
Wholesalers
Distributors and Dealers
Franchisees
Agents and Brokers In Retailing of Services In Wholesaling of
everything!
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Why Intermediaries?
Transactional Value Risk Marketing Administration
Logistical Value Assortment Storage Sorting Bulk Breaking Transportation
Facilitating Value Financing Training Information After sales
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So why…?
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Factors Affecting Channel Strategy
Internal Analysis Objectives Resources Capabilities Product
External Analysis Market characteristics Consumer behaviour Changing environment
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Market Coverage
INTENSIVEINTENSIVE
PenetrationPenetrationMass MarketMass Market
Low Involvement Low Involvement Low PriceLow Price
SELECTIVESELECTIVE
Penetr./SkimmingPenetr./SkimmingDifferentiatedDifferentiated
Av. Involvement Av. Involvement Average PriceAverage Price
EXCLUSIVEEXCLUSIVE
SkimmingSkimmingNicheNiche
High Involvement High Involvement High PriceHigh Price
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Channel Management
Selecting Channel Members (years in business, other lines carried, growth and profit record, cooperativeness and reputation)
Motivating Channel Members (positive and negative motivators)
Evaluating Channel Members
(Kotler and Armstrong, 2001)
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Retail Strategy Location-Location-Location!!! Product/Service Range Retail Competitive Positioning Store Image and Atmosphere Merchandising Strategy Technology Retailer’s Own Brands
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Superdrug Lloyds Pharmacy Safeway Debenhams Holland and Barrett Lunch Stop!
Competition
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What about web sites and services?
Navigation, Design, Information, Security, Navigation, Design, Information, Security, Feedback, RangeFeedback, Range
Interaction Points, Actual Premises Interaction Points, Actual Premises
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Value added services
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Example - Selling a CD
Place is simply where your fans buy your CD. You can also call it distribution.
There are many ways to distribute your CD. Retail
Probably the most difficult is retail (selling your CD in music stores). This is difficult for independent musicians or bands because you usually need to have a relationship with a distributor.
Online Isn't the Web wonderful? You can easily and cheaply set up a web page with your information, sample audio files, show dates, and how to order your CD.
In Person Whenever you perform, you should sell your CDs. You can mention that you are selling CDs and where to buy them while you are performing. It is easier if you have a friend to help you. This person can collect the money, hand out the CDs, etc. so you don't have to worry about it during a show.
In Home There is nothing wrong with telephone orders!
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Exercise:
Consider a can of tuna. How many different dealers has it
passed through? Now consider double-glazing. How
many distributors are involved here? What accounts for the difference in price between a 24p can of tuna and a £6,000 double-glazing installation?
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The can of tuna will have gone from fisherman to cannery, to exporter, to importer, to food broker, to wholesaler (perhaps also an agent), to retailer and to consumer.
The double-glazing will have gone from producer to consumer direct.