Placement strategies

Principles of Marketing

Placement

A channel of distribution comprises a set of institutions which perform all of the activities

Utilised to move a product and its title from production to consumption

Principles of Marketing

Principles of Marketing

Channel intermediaries – Wholesalers Break down ‘bulk’ Buys from producers and sell small quantities to retailers Provides storage facilities reduces contact cost between producer and consumer Wholesaler takes some of the marketing responsibility e.g

sales force, promotions

Channel intermediaries – Agents Mainly used in international markets Commission agent - does not take title of the goods. Secures

orders. Control is difficult due to cultural differences Training, motivation, etc are expensive

Principles of Marketing

Channel intermediaries – Retailer Much stronger personal relationship with the consumer Hold a variety of products Offer consumers credit Promote and merchandise products Price the final product

Principles of Marketing

Channel intermediaries – Internet Sell to a geographically disperse market Able to target and focus on specific segments Relatively low set-up costs Use of e-commerce technology (for payment, shopping

software, etc)

Principles of Marketing

Importance of Marketing Channels

Intermediaries offer producers greater efficiency in making goods available to target markets. Through their contacts, experience, specialization, and scale of operations, intermediaries usually offer the firm more than it can achieve on its own.

Principles of Marketing

How Channel Members Add Value

From an economic view, intermediaries transform the assortment of products into assortments wanted by consumers.

Channel members add value by bridging the major time, place, and possession gaps that separate goods and services from those who would use them

Principles of Marketing

Principles of Marketing

How Channel Members Add Value

Basic channel decisions Direct or indirect channels Single or multiple channels Types of intermediaries Number of intermediaries at each level

Principles of Marketing

Principles of Marketing

Number of Channel Levels

Principles of Marketing

Intensive distribution

• Candy and toothpaste

Exclusive distribution

• Luxury automobiles and prestige clothing

Selective distribution

• Television and home appliance

Identifying Major Alternatives

Intermediaries Selection consideration Market segment - must know the specific segment and target

customer Changes during plc - different channels are exploited at

various stages of plc Producer-distributor fit - their policies, strategies and image Qualification assessment - experience and track record must

be established Training and support

Principles of Marketing

Supply Chain Management &

Logistics

Principles of Marketing

Supply chain management is the process of managing upstream and downstream value-added flows

of materials, final goods, and related information among suppliers, the company,

resellers, and final consumers

Principles of Marketing

Logistics (physical distribution) involves planning, implementing, and controlling the

physical flow of goods, services, and related information from points of origin to points of consumption to meet

consumer requirements at a profit

Principles of Marketing

End of Topic

Principles of Marketing