Marketing mix Place

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About marketing mix
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Marketing mix Place

  1. 1. Marketing Channelsand Distribution Manish Kumar Harcourt, Inc.
  2. 2. What is a Marketing Channel? Marketing channel (a.k.a. distribution channel) - network of organizations that create time, place, and possession utilities for consumers
  3. 3. Channel Structure Length of channelThree Dimensions els Ty s lev pe io u s at var of in sity te Inten rm ed ia rie s
  4. 4. Channel Structure Length of marketing channel 1 level 2 level 3 level 4 levelManufacturer Manufacturer Manufacturer Manufacturer Agent Wholesaler Wholesaler Retailer Retailer Retailer Consumer Consumer Consumer Consumer
  5. 5. Channel Structure Intensity at various levelsExclusive Distribution Selective Distribution Intensive Distribution
  6. 6. Channel StructureIntensity at various levels Exclusive Distribution
  7. 7. Channel Structure Intensity at various levels Selective DistributionSelectively distributed bands are available inmultiple retail outlets in a particular marketShopping products, or those that consumersseek out, are sold through selective distribution
  8. 8. Channel Structure Intensity at various levels Intensive DistributionUsed when convenience products are soldthrough virtually every available retail outlet ina particular market, e.g. soft drinks, candy,gum, cigarettes
  9. 9. Channel Structure Types of intermediariesMerchant FunctionalMiddlemen Middlemen
  10. 10. Channel Structure Types of intermediariesDo not take title to products;they simply facilitate theexchange process by performingbuying and/or selling functions. Functional Middlemen
  11. 11. Channel Structure Types of intermediaries Take title to products and resell them.MerchantMiddlemen
  12. 12. Channel StructureEconomics of distribution tasks Transaction efficiency Mfg. A Mfg. B Mfg. C Withoutintermediaries 1 2 3 4 5 6 7 8
  13. 13. Channel StructureEconomics of distribution tasks Transaction efficiency Mfg. A Mfg. B Mfg. C Withintermediaries Intermediary 1 2 3 4 5 6 7 8
  14. 14. Channel StructureManagement’s desire forcontrol The shorter the channel structure the higher the control Needed when a manufacturer must protect product image, etc.
  15. 15. Marketing Channel FlowsProduct Flow The movement of the product from manufacturer through all parties who take physical possessionNegotiation Flow Interplay of buying/selling tasks associated with title transfer
  16. 16. Marketing Channel FlowsOwnership Flow Movement of title of the productInformation Flow Information to and from the manufacturerPromotion Flow Flow of persuasive communication (advertising, personal selling, etc.)
  17. 17. Marketing Channel Flows
  18. 18. Marketing Channel ManagementFormulatingchannel strategy Realize only the place ‘P’Design channel provides protection fromstructure imitationSelect channelmembers Distribution strategies canMotivate channel provide sustainablemembers competitive advantageCoordinate withmarketing mixEvaluate memberperformance
  19. 19. Marketing Channel ManagementFormulatingchannel strategy Set distributionDesign objectiveschannel structure Specify tasks to beSelect channel performed by themembers channelMotivate channel Consider alternativemembers structuresCoordinate withmarketing mix Choose optimal structureEvaluate memberperformance
  20. 20. Marketing Channel ManagementFormulatingchannel strategy Optimal structure identified by considering:Designchannel structure Market variablesSelect channel Product variablesmembers Company variablesMotivate channel Intermediary variablesmembers Behavioral variablesCoordinate with External environment variablesmarketing mixEvaluate memberperformance
  21. 21. Marketing Channel ManagementFormulatingchannel strategy Develop selection criteria Credit andDesign channel Size Financialstructure Attitude Condition Sales StrengthSelectchannel members Management Prospectiv Ability e channel ProductMotivate channel Lines membermembers ManagementCoordinate with succession Reputationmarketing mix Sales Market PerformanceEvaluate member Coverageperformance
  22. 22. Marketing Channel ManagementFormulatingchannel strategy Find prospective channel membersDesign channelstructure Evaluate prospective channelSelect memberschannel members Convert prospectives intoMotivate channel actual channel membersmembersCoordinate withmarketing mixEvaluate memberperformance
  23. 23. Marketing Channel ManagementFormulatingchannel strategy Learn about the needs and problems of channel membersDesign channelstructure Advisory committeesSelect channel Offer supportmembers Informal supportMotivate Strategic alliances, partnershipschannel members Provide ongoing leadershipCoordinate withmarketing mix Continuing focusEvaluate memberperformance
  24. 24. Marketing Channel ManagementFormulatingchannel strategy Product and ChannelDesign channel Retailers (a channel member)structure play an important role in product positioningSelect channelmembers Personal sellingMotivate channelmembersCoordinatewith marketing mixEvaluate memberperformance
  25. 25. Marketing Channel ManagementFormulatingchannel strategy Pricing and ChannelDesign channel Relevant to channel members:structure • Profit margins available to channel membersSelect channel • Pricing policiesmembers • IncentivesMotivate channelmembersCoordinatewith marketing mixEvaluate memberperformance
  26. 26. Marketing Channel ManagementFormulatingchannel strategy Promotion and ChannelDesign channel Promotions interface withstructure channel membersSelect channel Point-of-purchase displaysmembers Inventory levelsMotivate channel Sales person trainingmembersCoordinatewith marketing mixEvaluate memberperformance
  27. 27. Marketing Channel ManagementFormulatingchannel strategy Assessment of success of channel members inDesign channelstructure implementing strategiesSelect channel Requires good informationmembers flows between membersMotivate channel Point-of-sale systemsmembersCoordinate withmarketing mixEvaluatemember performance

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