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Mkting Fund 6 Place.doc

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MANA 298
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Marketing Mix ‘Place’ Place refers not only the location in which products/services are offered, but also channels of distribution through which products/services move from producer/supplier to end user and the methods used to achieve this. (Stokes, 1997) Ensure that products and services are available to target customers in the ‘right place’ and at the ‘right time’(CIM, 1997) Equivalent to physical distribution channel or logistic in marketing Role and importance of place in marketing • Product and services need to be available in the right:- - quantities - condition with the right advice, installation procedures and after sales service Scenarios: stock – out of/too much, damage in transit, direct delivery by competitors, warehousing, distribution and delivery too high • A heightened and changed role for place – development of new approaches and techniques: Marketing Fundamentals - PLACE 1 • Cost of distribution/logistics - potential for savings, 30% or more of total product costs. • Potential for competitive advantage – effective distribution and logistics customer satisfaction, effect on sales and market share. OPTIONS • Distributing through company’s own sales outlets. • Selling through franchised outlets. • Using the services of manufacturer’s agents to market the product through specialised or non-specialised wholesalers and/or retailers. • Distributing through mail or parcel delivery services on the basis of orders from catalogues or coupon advertisement placed in the mass media. • Selling through the Internet. Some considerations for distribution :  The maintenance of distribution outlets.  The position of products on the shelves- in front or at the back, at eye level, at the top or the bottom, etc.  The extent of provision of after sales service/technical facilities. Marketing Fundamentals - PLACE 2  The size and physical set up of retail units (Small shops / corner shops/ developed – retail chains/ supermarkets/ hyper markets etc). Marketing channels Individuals or organizations that together ensure the flow of products and services from producer to customers Elements of channel of distribution : • Supplier/s – manufacturer or marketer • Customer/s • Intermediaries – retailer • Outward flows - goods and services • Inward flows – payments and information Channel length/level 0 Level R 1 Level W R 2 Levels Marketing Fundamentals - PLACE 3 M =Manufacturer C = Consumer (end users) R = Retailer (directly to final users) W=Wholesaler (Buys from producers or their agents and then resell to retailers) • Longer the channel, lesser the control of marketer • Each channel would wish to make a profit – therefore final prices increased or profit margins at each level decreased. • Decreased, therefore shorter the channel the better Advantages of using intermediaries in distributing products and services • Reduced investment – shift amount of funds tied in stocks, minimize investment on premises, transport, systems and other distribution infrastructure. • Custom in the industry • Economies of scale – retailer or distributor selling more than one manufacturer’s products spreads distribution costs • Intermediaries control customer contact • Intermediary has superior skills, expertise and resources • Too many customers for marketer to reach Marketing Fundamentals - PLACE 4 • Transactional efficiency – consolidating a no. of producers’ products in one place, cuts down no. of transactions Disadvantages • Loss of contact with market place – reliant on intermediaries on info about developments • Les control over marketing methods and effort
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