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Place Slides

  1. 1. PLACE Marketing
  2. 2. Place <ul><li>Refers to how product is taken from the production line and made available to consumers. </li></ul><ul><li>Two parts: </li></ul><ul><ul><li>Channel of distribution </li></ul></ul><ul><ul><li>Type of retailer or outlet that will sell product to customer </li></ul></ul><ul><li>Important influence on public perception of the product </li></ul><ul><li>Not an easy decision and failure to choose most appropriate channel will damage sales . </li></ul>
  3. 3. CHANNELS OF DISTRIBUTION How the product gets to the market
  4. 4. Methods of distribution <ul><li>Direct selling </li></ul><ul><li>Retailer </li></ul><ul><li>Wholesaler </li></ul><ul><li>Agent </li></ul><ul><li>Importer/Exporter </li></ul>
  5. 5. Direct Selling <ul><li>Principle: by cutting out middle-men, organisation can sell goods at competitive prices. </li></ul><ul><li>Manufacturer sells directly to public e.g. bakers </li></ul><ul><li>Mail order e.g. ordering through catalogues, i.e. GUS. </li></ul><ul><li>Direct response advertising e.g. ads in papers or mags </li></ul><ul><li>Telephone selling e.g. double glazing, insurance </li></ul><ul><li>Television selling </li></ul><ul><li>Where products are highly technical e.g. machines made for another manufacturer. </li></ul><ul><li>Growth of internet made it easier e.g. Dell </li></ul>
  6. 6. Marketing Task 1 <ul><li>Describe different forms of direct selling available to organisations. </li></ul><ul><li>(4 marks) </li></ul>
  7. 7. Solution
  8. 8. Retailer <ul><li>Local outlet for business’s products. </li></ul><ul><li>Perform 4 functions: </li></ul><ul><ul><li>breaks down bulk supplies for sale to public </li></ul></ul><ul><ul><li>provides information to consumers through advertising, displays and trained sales personnel </li></ul></ul><ul><ul><li>stores goods and prepares them for sale by displaying and pricing </li></ul></ul><ul><ul><li>physically sells goods to consumers and offers range of related services - credit, HP, delivery </li></ul></ul>
  9. 9. Types of retailer <ul><li>Independent retailer </li></ul><ul><ul><li>E.g. local corner shop. Almost 80% of all retailers. </li></ul></ul><ul><li>Multiple chain stores </li></ul><ul><ul><li>Specialist e.g. River Island or variety e.g. Boots, M&S etc. </li></ul></ul><ul><li>Supermarkets/Hypermarkets/Superstores </li></ul><ul><ul><li>Tescos, Sainsburys, Asda </li></ul></ul><ul><li>Consumer Cooperatives </li></ul><ul><ul><li>Owned by ‘members’ </li></ul></ul><ul><li>Department stores </li></ul><ul><ul><li>House of Fraser, John Lewis, Selfridges, Jenners </li></ul></ul><ul><li>Specialist Stores </li></ul><ul><ul><li>Comet, B&Q, IKEA </li></ul></ul><ul><li>Franchises </li></ul><ul><ul><li>McDonalds, Body Shop etc. </li></ul></ul>
  10. 10. Wholesaler <ul><li>General function is to buy goods from the manufacturer and sell them on to the retailer. </li></ul><ul><li>Good source of market research, marketing information and services for retailer to improve sales. </li></ul><ul><li>Wholesaler has to make a profit </li></ul><ul><li>Has to play a part in marketing strategy </li></ul>
  11. 11. Advantages of using a wholesaler <ul><li>Buys in bulk which relieves manufacturer of cost of making large number of small deliveries - cuts costs of transportation, sales staff and paperwork </li></ul><ul><li>Bears risk of holding large stocks. No need to tie up capital in holding stocks. </li></ul><ul><li>Breaks down bulk supplies and offers smaller quantities to retailer. </li></ul><ul><li>May finish off packaging and labelling </li></ul><ul><li>Provides advice to manufacture - what is selling, what to produce, what not to produce etc. </li></ul><ul><li>Provides advice to retailer - what to buy, what not to buy </li></ul>
  12. 12. Advantages of NOT using a wholesaler <ul><li>Manufacturer can maintain greater control over marketing of products. </li></ul><ul><li>Going direct to retailer allows manufacturer to coordinate the efforts of sales force with advertising, promotion and in-store merchandising </li></ul><ul><li>Growth in large supermarket chains and improvement in road haulage make it easier to deliver direct to retailer. </li></ul>
  13. 13. Marketing Task <ul><li>Wholesalers buy goods in large quantities directly from manufacturers. Discuss the advantages and disadvantages to a manufacturer of using a wholesaler. </li></ul><ul><li>5 marks </li></ul><ul><li>HBM Exam 2008 </li></ul>
  14. 14. Solution
  15. 15. Agent <ul><li>Provide link between buyer and seller in exchange for commission. </li></ul><ul><li>E.g. estate agents, travel agents etc. </li></ul><ul><li>Often used to enter a foreign market - knowledge of markets inc. local customs or legal requirements </li></ul>Importer/Exporter Identify new/potential markets around the world Good knowledge of markets inc. legal requirements Similar to agent
  16. 16. Factors affecting choice of distribution channel <ul><li>The product </li></ul><ul><ul><li>Probably most important factor - is it perishable, new, premium? </li></ul></ul><ul><li>The market </li></ul><ul><ul><li>Is the market large and spread throughout country or small and local? </li></ul></ul><ul><li>Legal requirements </li></ul><ul><ul><li>Goods sold through licensed premises or authorised outlets e.g. alcohol, drugs, Post Office </li></ul></ul><ul><li>Buying habits </li></ul><ul><ul><li>Growth in out-of-town shopping centres, freezer ownership </li></ul></ul>
  17. 17. Factors affecting choice of distribution channel <ul><li>The business </li></ul><ul><ul><li>Own distribution networks, mail order, television shopping, door-to-door selling </li></ul></ul><ul><li>Cost and speed of transport available </li></ul><ul><ul><li>If product is perishable, may be cost-effective to use air transport </li></ul></ul><ul><li>Projected level of demand </li></ul><ul><li>Seasonal fluctuations </li></ul>
  18. 18. Marketing Task <ul><li>Explain the factors that an organisation should consider when deciding on a channel of distribution for its finished stock. </li></ul><ul><li>(5 marks) </li></ul>
  19. 19. Solution