Transcript Lecture 22- Marketing Mix - Place.ppt

MGT-519
STRATEGIC MARKETING
AAMER SIDDIQI
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LECTURE 22
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RECAP
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Price
Setting Prices
Pricing activity
What is a price
Price Vs Cost
Pricing as Marketing activity
Three categories of pricing issues
Buyer–seller interactivity in determining prices
Price structure
Price format
Pricing matrix
Pricing strategies
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PLACE
• Definition: Place in the marketing mix refers to the channel,
or the route, through which goods move from the source to
the final user. Place could be the intermediaries, distributors,
wholesalers and retailers
• It’s the method used to get the product or service through
various distribution channels to the ultimate purchaser or
end-user
• In other words, how and where the consumer buys the
product or service.
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REACHING THE TARGET MARKET
• It is a vitally important activity that focuses on how to reach
your target market and the:
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location of your business
location of your target market
how to reach your target market
warehousing of your stock
transportation of your stock
• The right place means greater chances of sales over a longer
period of time.
• This translates into greater market share, more profits and
better ability to track the changes in the marketplace in
thinking, styles, fashion and needs.
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LOCATION
• The location of business depends on a number of factors as
outlined below:
– are you retailing direct to the public or working through an
intermediary?
– is it convenient for customers to visit you?
– where is your target market located?
– how important is exposure to your business?
– where are your major competitors located?
– what is the occupancy cost?
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CHANNELS OF DISTRIBUTION
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Players that make up the 'place' aspect of the marketing mix: Retailers,
Wholesalers,
Distributors,
Warehouses
The Internet
All of these move, stock and sell goods.
Retailers may brand themselves, and in fact, some of the
largest companies in the world are retailers like Wal- Mart.
• As retailers consolidate and become bigger in the channel,
their power for margins and goods also grows.
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RETAILERS
• The final step in the chain- deal directly with customer
• Focused on consumer markets
• Various kinds of retailer:
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Multiples- chains of shops owned by a single company
Specialist chains (Scentatization)
Department stores (Alfatah)
Convenience stores
Independents
Franchises
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KEY TRENDS IN RETAILING
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Trend towards out-of-town stores
Decline in independents
Growth of retailer “own label” brands
Continued growth in franchising
Increase in international retailing within Europe
Increasing technology in retailing
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WHOLESALERS
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BREAK BULK
Buy in large quantities from producers
Break into smaller quantities to sell to retailers
ADVANTAGES
– Reduce the producer’s transport costs
– Retailers can order smaller amounts from wholesalers
• Wholesalers makes money buying at a lower price from the
producer and adding a profit margin onto the price paid by
the retailer
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DISTRIBUTORS
• Distribute products and serve as a local sales point
• Usually specialise in a particular industry e.g building supplies,
industrial clothing
• Offer products from many producers=greater choice
• Different from agents- distributor holds stock
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AGENT
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Specialist type of distributor
Does not hold stock
Tend to operate in tertiary sector- services
Travel
Insurance
Publishing
Earn commission based on Sales achieved
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FUNCTIONS OF A DISTRIBUTOR CHANNEL
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Provide a link between production and consumption
To gather market information
Communicate promotional offers
Find and communicate with prospective buyers
Physical distribution- transporting and storing
Financing- other parties finance the stock
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CHANNEL STRATEGY DECISIONS
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Channel length- direct or indirect
Choice of intermediary
Use just one or several channels
How to move the goods through the channel
Control over the channel- e.g. who decides price,
promotion, packaging
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DIRECT OR INDIRECT CHANNELS
• A business faces a choice of using direct (short) or indirect
(long) channels
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– Channels where a producer and consumer deal directly
with each other without the involvement of an
intermediary
• INDIRECT
– Involves the use of intermediary between the producer
and consumer
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DIRECT CHANNELS
• Increasingly popular
• Various methods
• Direct mailing
• E-commerce
• Telemarketing
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FACTORS TO CONSIDER
• NATURE OF THE PRODUCT
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Perishable/fragile
Technical/complex
Customised
Type of product, e.g convenience, specialty
Desired image of the product
• THE MARKET
– Geographically spread
– Extent and nature of competition
• THE BUSINESS
– Its size
– Its nature
– Established distribution networks
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DETERMINING THE BEST STRUCTURE
• In determining the best structure (or structures) for the
business the following questions need to be considered :
• what is the most convenient means for customers to obtain
the products or services they want?
• what is the specific level of customer service standard
required?
• what is the most cost-efficient way of providing accessibility
and service?
• how many customers are there, where are they located, what
is their average transaction value?
• what structures do the competitors use and how efficient are
they?
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LOGISTICS
• Logistics: Planning, implementing and controlling the physical
flow of raw materials, final products or services and related
information from your business, or source of supply, to the
final end-user (or consumer).
• Need to consider:
– Planning and scheduling production
– To Order and receive raw materials or finished products from your suppliers
– how much of each finished product will be should carry in stock and what are
the re-order points
– how are the products stored to ensure they are ready for delivery to
customers in good condition
– how will the products delivered to customers
– what stock control, invoicing and transportation administration systems are
required
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SUMMARY
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Objective of distribution
Channels of distribution
Functions of a distributor channel
Channel strategy decisions
Direct and indirect channels
Determining the best structure
Logistics
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THANKYOU
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