Distribution Channels

• Distribution strategies are part of the marketing mix known as "place"
• Place is about making products available where customers wish to buy them
• Distribution options include:
• Direct Sales
• Retailers
• Wholesalers
• Agents

Major Distribution Channels

• In a distribution channel, goods and services move from the producer to the final consumer
• Intermediaries such as businesses or people help move the products

Direct Distribution: Producer to Consumer

• The producer sells directly to customers without intermediaries
• Benefits include full profit to the producer, control of marketing, and speed
• Drawbacks are high delivery, marketing, and storage costs

Retailer Distribution: Producer to Retailer to Consumer

• The producer sells to a retailer, who then sells to individual customers
• A producer can sell large quantities at once, and reduces costs
• Retailers take a cut of the sale
• There is a missed chance to perform research and have customer contact

Wholesaler Distribution: Producer to Wholesaler to Retailer to Consumer

• The producer sells to a wholesaler; then, retailers buy smaller quantities to sell to consumers
• Advantages are selling in bulk, promotion by wholesalers, reduced costs, increased availability, and wide distribution
• A disadvantage is higher consumer prices, longer distribution, and markups by wholesalers

Agent-Assisted Distribution

• Agents connect producers to the wholesalers in the new market
• Agents have export expertise and can enter global markets
• Agents may receive a commission or add a markup to cover their expenses
• The advantages are global reach and market expertise
• The disadvantages are another intermediary, lowers profit margins, and increases distribution costs

Product Factors Impacting 'Place' Decisions

• These include the type of product, its technicality, price range, and durability

Product Impacts on Place Decisions

• Direct distribution or wholesalers can be used for producer or consumer goods
• Direct distribution is preferable for products that require important technical information to be passed to the customer
• Limited retailers should be used for luxury goods that are sold through high-end, brand-owned retailers
• Retail distribution should be used for perishable products like fruit that need to be sold through many retailers

Other Factors Influencing 'Place'

• Purchase frequency: products bought often should be sold in more locations
• Where competitors sell
• Global customer base for e-commerce
• Meeting the customer where they are

Aims of Promotion

• Inform customers about new goods and services
• Persuade to convert interest into sales
• Increase sales and market share
• Shape brand image and increase loyalty

Promotion Methods

• Promotions consists of advertising above the line, and sales promotion below the line
• Advertising includes such as Television, Radio, Newpapers, Magazines
• Sales promotions includes such as samples, gifts and BOGOF
• Advertising is one process of setting objectives and evaluating effectiveness

Above-the-Line Promotion: Advertising

• Above-the-line promotion uses printed and visual media such as TV, internet, and billboards
• It generally seeks wide reach in order to boost reach and frequency
• The 2 types of communications are informative vs. persuasive

Informative Advertising

• It focuses on sharing facts, features, and benefits to educate consumers and build trust

Persuasive Advertising

• Uses Emotion, desire, influence as a advertising method
• Creates an emotional connection, make consumer feel a certain way
• Aims to change buying decisions, make customers relate and want to buy

Television Advertising

• Reaches wide audience
• Able to display products in a favorable way
• Can target adverts at audience types
• It is expensive
• Not often used by younger audiences

Radio Advertising

• Reaches a wide audience to listens
• Cheap Compared to other forms of avertising
• Adverts are often set to memorable songs
• Does not have a visual element
• Consumer has no copy of the avert to look back at

Newspaper Advertising

• Aims advertising at a customer segment
• The adverts can be cut out and kept
• Heavy Information can be displayed
• Not Eye catching as its in black and white print only
• Younger audiences do not read newspaper often

Magazines Advertising

• Aims advertising at a specific groups
• Adverts can be cut out and kept for future views
• Long lasting
• Slow pace of reach as its either monthly or weekly publishing
• More expensive then News Paper advertisements

Billboard/Posters Advertising

• Wide reach as can be easily be seen by a lot of people
• Eye catching visuals and colors
• Displayed for long periods of time, maximize reach
• Lacks information, focuses on images

Leafelts Advertising

• Geographical segmentation as its handed out to a reach audience in the area
• Chance to include voucher code offering for incentive
• Delivery directly through mail
• May not be read, and thrown out.

Internet/Social Media Advertising

• Very wide coverage, reaches a large amount of people
• Direct orders are able to be made through this advertising media
• Easy to edit, and quickly add and remove advertising
• Advanced algorithm's to target advertising's to the user
• A high competition to stand out from the advertisement
• Privacy concerns often discourage the purchase

Below-the-Line Promotion: Sales Promotions

• Below-The-Line promotion is where short-term incentives such as coupons, free gifts and promotional discounts are used
• This can reinforce the Above-The-line activities and support it
• Aim of sales promotions is to increase excitement and urgency to drive sudden purchases

Types of Sales Promotions

• After-sales service to reassure customers
• Price reductions with coupons or flash sales
• Gifts to create incentives
• Free samples to encourage trial
• Point-of-sale displays to incentivise purchases
• BOGOF (buy one get one free)
• PPL (product placement) in TV/movies
• Competition with potential customer to enter

Benefits of Sales Promotions

• Can increase off season sales
• Brings in new customers
• Builds brand loyalty

Factors Affecting Promotional Decisions

• Stage of product on the PLC as different stages require different strategies
• The nature of the product as to what sales it encourages
• The nature of the target market whether it be local or larger scale
• Cost-effectiveness of money put into promotion and whether it covers the marketing budget