Place Mix ( A part of Marketing mix)


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Place Mix ( A part of Marketing mix)

  1. 1. • Important decision related to physical distribution of goods and services. • Make product available. • Channels of Distribution: It refers to people or middlemen who help in distributing of the goods. • Without these middlemen its impossible for producer to make goods available to customers. • Some Examples of middle men : whole seller, retailer etc…
  2. 2. Types of Distribution Channel: • Direct: In this type of channel goods/products are sold by producer directly to consumer. • Indirect: Here goods are sold with help of middle men. Types of Indirect Channel: 1. One level 2. Two level 3. Three level
  3. 3. Product Related Factors: • Value : Price is an essential component, if it is costly companies generally should follow Direct or one level channel of distribution. • Complexities: If product is complex, and requires high level of technical knowledge then direct level should be used. • Nature: Customised product requires direct channel. Standard product can be sold by indirect channel. • Perishable products require direct channel, while non perishable requires indirect channel.
  4. 4. Company Related Factors: • Finance: If company is financially sound then only they should try direct channel. If company is financially unsound they should try indirect channel. • Degree of Control: If company wants control over the selling and price of its product then, they should go for Direct Channel.
  5. 5. Competitive Factor: • The type of channel selected by competitor companies affects the selection of channel. As a company we may select the same channel as selected by competitor or sometimes the businessmen prefers not to select the channel selected by competitor. For example: if competitor has chosen to sell detergent using direct channel, businessmen can choose to sell it using indirect channel.
  6. 6. Market Related Factors: • Nature of market: In Industrial market direct selling is preferred. Whereas in consumer market distribution channels are appointed. • Size of the market: Large number of consumers require indirect channel, but if number of consumers are less direct channel is preferable. • Geographical : When buyers are concentrated in limited area direct selling is preferred. • Quantity Purchased: If order size is large then direct supply from firm is preferred.
  7. 7. Environmental Factors: • Other factors which affects this decision include environmental factors such as trade policy, economic policy etc… • During Boom period indirect channel is used. • During period of recession direct channel is used to make goods delivered to consumers in economical way.