Marketing

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Marketing

  1. 1. ETITB Marketing Week 3 Place / Distribution
  2. 2. <ul><li>Objectives </li></ul><ul><li>Explain the role of marketing channels and the functions these channels perform. </li></ul><ul><li>Identify the major channel alternatives open to a company. </li></ul><ul><li>Explain how businesses select, motivate and evaluate channel members. </li></ul><ul><li>Isolate the key issues managers face when setting up marketing channel systems. </li></ul><ul><li>Explain how marketing channels are changing and the implications of these trends to marketers. </li></ul>
  3. 3. Place . <ul><li>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. </li></ul>
  4. 4. Physical Distribution The tasks involved in planning, implementing, and controlling the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet customer requirements at a profit (Kotler and Armstrong, 2001)
  5. 5. Defining marketing channels <ul><ul><li>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. </li></ul></ul><ul><ul><li>The structure of channels can vary depending on the type of market, the needs of the end consumer, and the type of product. </li></ul></ul>
  6. 6. WHERE? HOW? ACCESS NOT JUST BUT THE WHOLE EXPERIENCE !!!
  7. 7. OUR AIM!!! OUR PRODUCT/SERVICE TO BECOME AVAILABLE TO OUR TARGET CUSTOMERS IN THE TIME , QUANTITY , QUALITY , COST, FORM, AND LOCATION THAT THEY WANT Easier said than done!
  8. 10. Structure of Marketing Channels Producer Consumer Consumer Consumer Retailer Retailer Whole. Consumer Goods Marketing Channels Producer Producer Provider Consumer Provider Agent Consumer
  9. 11. Structure of Marketing Channels Producer User User User Distr. Distr. Agent Industrial Goods Marketing Channels Producer Producer Provider Agent User
  10. 12. Distribution channels for services Service provider Channel Intermediaries Consumer or industrial customer Service provider Consumer or industrial customer
  11. 13. Characteristics of Services Intangibility - 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.
  12. 14. Inseparability <ul><li>The customer becomes part of the service </li></ul><ul><li>The employee becomes part of the service </li></ul><ul><li>The customer and the employee interact with the service delivery system </li></ul>
  13. 15. Some Thoughts on Place <ul><li>Premises: Actual or Virtual </li></ul><ul><ul><li>Atmosphere </li></ul></ul><ul><ul><li>Convenience </li></ul></ul><ul><ul><li>Accessibility </li></ul></ul><ul><ul><li>Service </li></ul></ul><ul><ul><li>Variety </li></ul></ul><ul><li>Distribution/Logistics </li></ul><ul><ul><li>Flow from A to B </li></ul></ul><ul><li>Point of Transaction </li></ul>
  14. 16. Intermediaries <ul><li>Play an important role in increasing efficiency and reducing costs. </li></ul><ul><li>There are several different types of intermediary who come together to create different kinds of distribution channels between manufacturer and consumer. </li></ul><ul><li>Each intermediary adds a margin to the price of the goods handled. </li></ul><ul><li>Different functions are performed by the different intermediaries. </li></ul><ul><li>Not all intermediaries necessarily take legal title or physical possession of the goods. </li></ul>
  15. 17. Intermediaries <ul><li>Retailers </li></ul><ul><li>Wholesalers </li></ul><ul><li>Distributors and Dealers </li></ul><ul><li>Franchisees </li></ul><ul><li>Agents and Brokers </li></ul><ul><ul><li>In Retailing of Services </li></ul></ul><ul><ul><li>In Wholesaling of everything! </li></ul></ul>
  16. 18. Why Intermediaries? <ul><li>Transactional Value </li></ul><ul><ul><li>Risk </li></ul></ul><ul><ul><li>Marketing </li></ul></ul><ul><ul><li>Administration </li></ul></ul><ul><li>Logistical Value </li></ul><ul><ul><li>Assortment </li></ul></ul><ul><ul><li>Storage </li></ul></ul><ul><ul><li>Sorting </li></ul></ul><ul><ul><li>Bulk Breaking </li></ul></ul><ul><ul><li>Transportation </li></ul></ul><ul><li>Facilitating Value </li></ul><ul><ul><li>Financing </li></ul></ul><ul><ul><li>Training </li></ul></ul><ul><ul><li>Information </li></ul></ul><ul><ul><li>After sales </li></ul></ul>
  17. 19. So why…?
  18. 20. Factors Affecting Channel Strategy <ul><li>Internal Analysis </li></ul><ul><ul><li>Objectives </li></ul></ul><ul><ul><li>Resources </li></ul></ul><ul><ul><li>Capabilities </li></ul></ul><ul><ul><li>Product </li></ul></ul><ul><li>External Analysis </li></ul><ul><ul><li>Market characteristics </li></ul></ul><ul><ul><li>Consumer behaviour </li></ul></ul><ul><ul><li>Changing environment </li></ul></ul>
  19. 21. Market Coverage INTENSIVE Penetration Mass Market Low Involvement Low Price SELECTIVE Penetr./Skimming Differentiated Av. Involvement Average Price EXCLUSIVE Skimming Niche High Involvement High Price
  20. 22. Channel Management <ul><li>Selecting Channel Members (years in business, other lines carried, growth and profit record, cooperativeness and reputation) </li></ul><ul><li>Motivating Channel Members (positive and negative motivators) </li></ul><ul><li>Evaluating Channel Members </li></ul>(Kotler and Armstrong, 2001)
  21. 23. Retail Strategy <ul><li>Location-Location-Location!!! </li></ul><ul><li>Product/Service Range </li></ul><ul><li>Retail Competitive Positioning </li></ul><ul><li>Store Image and Atmosphere </li></ul><ul><li>Merchandising Strategy </li></ul><ul><li>Technology </li></ul><ul><li>Retailer’s Own Brands </li></ul>
  22. 24. <ul><li>Superdrug </li></ul><ul><li>Lloyds Pharmacy </li></ul><ul><li>Safeway </li></ul><ul><li>Debenhams </li></ul><ul><li>Holland and Barrett </li></ul><ul><li>Lunch Stop! </li></ul>Competition
  23. 25. What about web sites and services? Navigation, Design, Information, Security, Feedback, Range Interaction Points, Actual Premises
  24. 27. Value added services
  25. 28. Example - Selling a CD   <ul><li>Place is simply where your fans buy your CD.  You can also call it distribution.  </li></ul><ul><li>There are many ways to distribute your CD.  </li></ul><ul><li>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.  </li></ul><ul><li>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.  </li></ul><ul><li>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.  </li></ul><ul><li>In Home   There is nothing wrong with telephone orders! </li></ul>
  26. 29. Exercise : <ul><li>Consider a can of tuna. </li></ul><ul><li>How many different dealers has it passed through? </li></ul><ul><li>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? </li></ul>
  27. 30. <ul><li>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. </li></ul><ul><li>The double-glazing will have gone from producer to consumer direct. </li></ul>

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