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Marketing Mix:

PLACE

Chapter 9

Prepared by: Manfred Evanz M. Palcatwww.facebook.com/IamEvanz

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PLACEMarketing Mix

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PLACE

• Place - refers to providing the product at a place which is convenient for consumers to access. Place is synonymous with distribution channel. Various strategies such as intensive distribution, selective distribution, exclusive distribution and franchising can be used by the marketer to complement the other aspects of the marketing mix.

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Distribution Channel

• Distribution Channel is a medium by which goods and services are made available to the consumers for use or consumption. It is a means by which goods move from producers or manufacturers to consumers. Speed in product and service delivery and physical location significantly affects the efficiency of a distribution channel.

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Any marketing distribution channel can perform functions like:

• Conducting Market Research• Undertaking Product and Service Promotion• Establishing Contacts• Bringing About Negotiations to Complete

Transactions• Physical Distributions• Financing Distribution Activities• Minimizing Risk-taking

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Marketing Intermediaries

• Marketing Intermediaries are persons and firms that operate between the producers and customers or industrial users.

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Two Main Categories of Marketing Intermediaries:

• Wholesaling Intermediaries are persons and firms that sell primarily to retailers and other wholesalers or industrial users. They do not sell significant amounts to consumers.

• Retailers are persons and firms that sell goods and services to final consumers for personal consumption rather than for resale. The most common marketing intermediary.

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Functions of Marketing Intermediaries:

• Buying• Selling• Storing• Transporting

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Types of Distribution Channels

• Direct Marketing Channel. This channel has no middlemen and intermediary levels. Good and services are directly sold to consumers or customers.

ConsumerManufacturer

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Types of Distribution Channels

• Retailer Marketing Channel. This channel has middlemen and one intermediary level. The intermediary is the retailer.

RetailerManufacturer Consumer

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Types of Distribution Channels

• Wholesaler-Retailer Marketing Channel. This channel has middlemen and two intermediary levels. The intermediaries are the wholesaler and the retailer.

WholesalerManufacturer

RetailerConsumer

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Types of Distribution Channels

• Wholesaler-Jobber-Retailer Marketing Channel. This channel has middlemen and three intermediary levels. The intermediaries are the wholesaler, the jobber and the retailer.

WholesalerManufacturer

RetailerConsumer

Jobber

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Types of Distribution Channels

• Marketing Channel of Pepsico. This channel has middlemen and many intermediary levels.

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Convenience Stores

Bars, Lounges

Vending Machines

RestaurantsGrocery Stores

Snack Shops

Syrup Jobbers

Syrup for Fountains

Cans and Bottles

Bottling Plant

Consumer

PepsiCo.

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• The conventional distribution channel is the most common distribution channel. It comprises of a producer, wholesalers and retailers, all acting independently.

• In this structure, various channel members make little or no effort to cooperate with each other. They simply buy and sell from each other…that is all!

• Channel conflicts are very common, leading to disruptions in distribution.

Types of Distribution Systems

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• A vertical marketing system (VMS) is one in which the main members of a distribution channel—producer, wholesaler, and retailer—work together as a unified group in order to meet consumer needs. There are channel systems wherein the whole channel focuses at the end of the channel on the same target markets.

Types of Distribution Systems

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• Corporate vertical marketing system involves the ownership of all levels of the production or distribution chain by a single company. An example of a corporate vertical marketing system would be a company such as Apple, which has its own retail stores as well as designing and creating the products to be sold in those retail stores.

Types of Vertical Marketing System

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• Contractual vertical marketing system involves a formal agreement between the various levels of the distribution or production channel to coordinate the overall process. Franchising is a common form of a contractual vertical marketing system.

Types of Vertical Marketing System

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• Administered vertical marketing system is one in which one member of the production and distribution chain is dominant and organizes the nature of the vertical marketing system informally, due to its sheer size. An example of this type of system could include a large retailer such as Wal-Mart dictating conditions to smaller product makers, such as producers of a generic type of laundry detergent.

Types of Vertical Marketing System

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• 1. Analysis of Customers Desired service needs

• 2. Establishing channel objectives• 3. Identifying Major channel Alternatives• 4. Evaluating major channel alternatives• 5. Selecting Suitable Channel members• 6. Training & Motivating Channel Members

Steps in Designing Channels in Marketing

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Thank you for listening!!!