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Lecture 7

MGMA01H3 Lecture Notes - Lecture 7: Qr Code, New Product Development, Marketing Mix

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Sam J Maglio

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Lecture 7
- Place is often the least talked aout of the four P’s
- E.g. Tesco (Home Plus) used a new approach to increase their market share in South
Korea by placing images of the shelves in the subway and allowing shoppers to buy
online by scanning the ite’s QR ode ad addig to the art, the ites are deliered to
the osuer’s hoe.
- Why Distribution?
o Transactional function: for people to come together for buying, selling, and
negotiating needs
o Logistical function: products are placed in a way that is accessible to consumers
to buy and are sorted and stored in way for it to ensure it is fresh
o Facilitating function: it is easier to make a purchase by looking and learning
about the product first
- Without an intermediary (e.g. supermarket), there would be much more transactions
and time and resources wasted due to the need to travel to the manufacturers directly
by households
- The more intermediaries there are, the more expensive the good, due to the
intermediaries needing to make some money along each stage
- Types of distribution systems:
o Direct: from the manufacturer to the consumer, through own sales force
o Indirect: from manufacturer to other intermediaries (e.g. wholesalers, retailers,
etc.) to the consumer
- Why are channels important? They impact all long term relationships between
- Advantages of direct:
o The manufacturer would be able to have more control over distribution and be
able to change how the distribution would be
o The manufacturer would also be able to communicate to consumers directly and
identify and satisfy any consumer needs
o Could be cost effective if the consumer base is high
- Ways for going indirect:
o Corporate systems: by having a manufacturer open a shop that would sell only
the products of the manufacturer and allows more control and would be able to
get closer to consumers, however it is costlier and require more investment
forard approah; if a retailer is sellig oly other aufaturers’ produts ad
deides to also aufature their o produts akards approah
o Contractual system: through the use of independent intermediaries (franchises),
it will allow people to start a business with no experience and the company will
help and be able to control the franchisee, however, it is likely for overcharging
of products due to the franchisee unable to change anything/ have no control,
the company may also suffer if the franchisee decides to leave quickly after
making a quick buck, which messes with company strategy
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