The Marketing Mix Place INTRO Channels of distribution

The Marketing Mix: Place

INTRO

Channels of distribution

Channels of distribution (How to get to consumer/where to sell) • Channel 1: The manufacturer sells directly to the customer.

Channels of distribution

Channel 2: Involves selling to retailers. Common when the retailer is large or the product is expensive.

Channels of distribution

Channel 3: Involves the product going through wholesalers as well. Wholesalers break bulk so that retailers can buy them in smaller quantities. This is common for perishable items such as foods.

Channels of distribution

Channel 4: Involve selling the product overseas through an agent, who sells them to wholesalers on behalf of the company. This may be because he/she has better knowledge of the local conditions.

Channels of distribution

Direct distribution Pro’s • Product can be sold at lower price aiding competitiveness • Direct customer feedback • Direct relationship = increased loyalty Con’s • Physical location • Difficult to send internet orders by post (furniture) • Cost of distribution not shared

Retail distribution Pro’s Con’s • Wide distribution possible • Specialist retailers ensure product advice • Premium retailers help brand image • Wide choice in store = competition • Retailers add mark up = more expensive product • Loss of control of product

Wholesale distribution Pro’s Con’s • Ensure products are available to large and small retailers • Reduce distribution costs for producer • Wholesaler holds stock, reducing stock holding costs for seller • Wholesaler adds mark up = more expensive • Additional stage increases time to reach consumer • Increased handling may cause damage • Producer loses control over storage = mishandling/damage

Agent distribution Pro’s • Agents know best methods of transport/distribution • Understand the language, culture and markets • Understand laws and regulation involved with importing and selling Con’s • Producer loses some control over where and how product is sold – risk to brand image • Agents add their own mark ups

Selecting the channel of distribution to use • • • Type of product? Is the product very technical? How often is the product purchased How expensive is the product How perishable is it? Location of customers Where do competitors sell their products Marketing aims Cost considerations Product life cycle Customer expectations/brand image

Needs of the producer vs needs of the consumer Producer needs • Make profit • Reduce costs • Market share • Customer loyalty • Brand image • Degree of control • Specialist services Consumer needs • Convenient purchasing • clear/accurate info • Easy exchange • Effective complaints procedure • Special services to meet special needs

Recommend and justify appropriate distribution channel for the following: • New breakfast snack • New book • Vietnamese firm exporting Vietnamese art Include text EVALUATING the appropriate channel with reference to the NEEDS of the consumer and producer

Distribution channels • http: //www. youtube. com/watch? v=3 Iu. PC 82 y 4 u. Y