CHAPTER 9PLACE

part three: the marketing mix

an opening challenge

You are working for a French wine company. You know that Australian and American wine producers are seen as more technologically advanced and better value. How can you compete?

agenda• distribution• supply chains• intermediaries• channel design

– length– breadth

• overseas operations• marketing through the supply chain• e-channels

the secrets of place (distribution)

a supply chainAQ – re-set figure type

supply chain members

• sellers– manufacturers– resellers– wholesalers– retailers

• facilitators– agents and

distributors– logistics services

• buyers– customers– consumers– business users

key aspects of logistics management

• suitable storage facilities• the right amount of stock• good communications throughout the

distribution channel • suitable transport• packaging that will protect the product in transit

and storage (and be easy to lift and move)

(Fernie and Sparks, 2004)

choosing a retail location• is the right type of customer there?• transport and car parking?• costs? • competitive outlets?• complementary businesses?• a suitable building?• planning permission? Other legal restrictions?• has there been a similar business in the area? • (for chains) impact of new outlet on existing ones? • does the location have the right image?

PYO farm

consumer

0 level channel

0

channel design: length

(photo courtesy of Dave Pickton)

farm

fruit market

consumer

restaurant

2-level channel

1

2

channel design: length

channel design: breadthexclusive

selective

mass

multichannel distributionAQ – text missing

buyer-seller relationshipAQ – text missing

selling overseas: two options

make the products at homeand export them

ormake the products abroad

selling overseashome

country

targetcountry

overseasfacilities

level of involvement and risk

direct exportindirect export

indirect export direct exportleast effort more effort and resources

lowest risk option still low risk compared to overseas facilities

the easiest exit strategy depends on degree of involvement

little customer contact owns customer relationship

gains no direct market experience

builds up market experience

marketing functions along the supply chain

• stock holding– ensuring sufficient supply

• transportation• information gathering• communications• promotion

e-channels• electronic distribution• b2b

– order management– instant communication– supplier search

• b2c– e-tailing, bricks and clicks

• c2c– a different form of competition, e.g. eBay

summary• right products, right place, right time• place is concerned with the whole of the distribution

function– from order to delivery

• channel design– levels– exclusive, selective, mass

• different types of intermediaries– with different roles

• additional complexities of overseas distribution

reference

Fernie, J. and Sparks, L. (2004) ‘Retail logistics: changes and challenges’, in J. Fernie and L. Sparks (eds) Logistics and Retail Management: Insights into Current Practice and Trends from Leading Experts, 2nd edn. London: Kogan Page.