Marketing (PLACE)

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Marketing (PLACE)

  1. 1. (A TOOL 0F MARKETING MIX)
  2. 2. Place:-The fourth “P” in the Marketing Mix has been largely neglected But this is changing.... Marketing Channel Strategy Has Become Critically Important For Most Businesses Marketing Channel Strategy
  3. 3. Five Reasons:- (1) Search for Sustainable Competitive Advantage (2) Growing Power of Retailers in Marketing Channels (3) The Need to Reduce Distribution Costs (4) The Increased Role and Power of Technology (5) The New Stress on Growth Marketing Channel Strategy is Growing in Importance. Why?
  4. 4. 1.The Search for Sustainable Competitive Advantage  A competitive advantage that cannot be quickly and easily copied by competitors Superior Marketing Channel Strategy is More Difficult for Competitors to Copy Because: Channel Strategy is Long Term Requires a Channel Structure Depends on Relationships and People Requires Effective Interorganizational Management
  5. 5. 2.Growing Power of Retailers in Marketing Channels Retailers Retailers:-  Are Growing Larger  Enjoy Substantial Channel Power  Act as Buying Agents for Customers  Often Operate on Low Price / Low Margin Model  Operate in Saturated Markets and Fight for Market Share Retailers
  6. 6. 3.The Need to Reduce Distribution Costs Distribution Costs  Distribution Costs Often Account for a Significant Percentage of the Final Price of Products
  7. 7. 4.Increasing Role and Usefulness of Technology  Firms that make effective use of these technologies in their channel strategy can gain a substantial competitive advantage
  8. 8. 5.The New Stress on Growth Strategy
  9. 9. Place Decisions Are an Important Part of Marketing Strategy
  10. 10. Channels of Distribution
  11. 11. Internet Makes Direct Distribution Easier Greater Control Lower Cost Direct Contact with Customer Needs Quicker Response or Change in Marketing Mix Suitable Middlemen Not Available Channel System May Be Direct or Indirect Some Reasons For Choosing Direct Channels
  12. 12. Factors Related to the Use of Direct Distribution • Direct (producer to customer) distribution is more common when: – an aggressive personal selling effort is required and/or when customers need special technical service – the product is primarily a service rather than a physical good – when working with middlemen would make it difficult to maintain control of the marketing mix – the producer can perform marketing functions more efficiently (economically) by itself Manufacturer End User
  13. 13. Indirect Distribution  Goods may move through a set of intermediaries  Most FMCG companies follow this route  The intermediary has a far better reach than the company  The cost of operations of an intermediary like a wholesaler / retailer is shared with many businesses.
  14. 14. Indirect Distribution ManufacturerManufacturer Retailer End User Retailer End User Distributor/ wholesaler Two levelOne level Manufacturer Retailer Distributor/ wholesaler End User Agent Third level
  15. 15. Marketing Channel Systems Vertical: Corporate Administered Contractual Horizontal Multi-channel
  16. 16. Vertical Marketing System  Various parties like producers, wholesalers and retailers act as a unified system to avoid conflicts  Improves operating efficiency and marketing effectiveness  3 types: Corporate:- combine production and distribute under single ownership Administered:-Co-ordinates distribution activities and Gains market power by dominating a channel Contractual:-Independent producers, wholesalers and retailers operate on a contract
  17. 17. Horizontal Marketing System  Two or more unrelated companies join together to pool resources and exploit an emerging market opportunity In-store banking in hotels, big stores Retail outlets in petrol bunks Coffee Day outlets in airports
  18. 18. Retailer Retailer Retailer Horizontal Arrangements Limiting Market Exposure Producer Vertical Arrangements Wholesaler
  19. 19. Multi-channel Distribution  Company uses different channels to reach / same or different market segments  Most FMCG companies have separate networks for retail market and institutions  Pharma companies may use different channels to reach doctors, chemists and hospitals
  20. 20. By:- Mithilesh Trivedi Akshay Tiwari Suresh Yadav Dhruv Aggarwal Arun Patel Shrinath
  21. 21. Questions

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