Place & Promotion Mix Exam Notes PDF

Place (Physical Distribution) & Promotion Mix - Exam Notes MODULE 1: PLACE / PHYSICAL DISTRIBUTION 1. CHANNELS OF DISTRIBUTION Definition: A channel of distribution refers to the various intermediaries through which goods and services pass until they reach the final consumer. Types of Distributi...

Place (Physical Distribution) & Promotion Mix - Exam Notes MODULE 1: PLACE / PHYSICAL DISTRIBUTION 1. CHANNELS OF DISTRIBUTION Definition: A channel of distribution refers to the various intermediaries through which goods and services pass until they reach the final consumer. Types of Distribution Channels: 1. Direct Channel (Zero-Level) - The manufacturer sells directly to the consumer. Example: A bakery selling its cakes directly to customers. 2. Indirect Channels: - One-Level: Manufacturer to Retailer to Consumer Example: Apple selling phones through Apple stores. - Two-Level: Manufacturer to Wholesaler to Retailer to Consumer Example: Pepsi distributes soft drinks via wholesalers and retailers. - Three-Level: Manufacturer to Agent to Wholesaler to Retailer to Consumer Example: Imported cars reaching customers through various intermediaries. Functions of Distribution Channels: - Bridge the gap between producer and consumer. - Ensure goods are available at the right time and place. - Reduce cost and effort for producers. Factors Affecting Channel Selection: - Nature of the product (Perishable or durable goods) - Market demand (Urban vs. Rural market) - Cost and profitability of the channel - Level of control the producer wants over distribution 2. PHYSICAL DISTRIBUTION Definition: Physical distribution refers to the movement of goods from the manufacturer to the consumer, including transportation, warehousing, and inventory control. Importance: - Ensures efficient product availability in the market. - Reduces wastage of perishable goods. - Helps in cost-effective distribution and competitive pricing. Role of Middlemen: - Middlemen like wholesalers and retailers help in marketing, storage, and selling. Example: Farmers selling their produce to wholesalers. Types of Physical Distribution: 1. Road Transport - Used for short distances and fast deliveries. 2. Rail Transport - Cost-effective for bulk goods over long distances. 3. Air Transport - Used for urgent deliveries (Example: Medicines). 4. Water Transport - Used for international trade and heavy goods. MODULE 2: PROMOTION MIX 1. PROMOTION - MEANING AND IMPORTANCE Definition: Promotion is the process of communicating with potential customers to influence their purchase decisions. Types of Promotion: 1. Advertising - Paid communication through TV, newspapers, and digital media. Example: Coca-Cola's brand advertisements. 2. Sales Promotion - Short-term incentives to increase sales. Example: "Buy One Get One Free" offers. 3. Public Relations - Building a positive company image. Example: Companies engaging in charity work. 4. Direct Marketing - Direct communication with customers. Example: Amazon sending discount coupons via email. 5. Personal Selling - Face-to-face sales interaction. Example: Car dealerships using sales representatives. 2. PROMOTION MIX - COMPONENTS AND FACTORS Components of the Promotion Mix: - Product Promotion: Creating awareness about the product. - Price Promotion: Discounts and special offers. - Place Promotion: Ensuring product availability. - People Promotion: Using brand ambassadors or influencers. Factors Affecting the Promotion Mix: - Product Type: Luxury products require personal selling. - Target Audience: Younger audiences prefer digital marketing. - Budget: Small businesses rely more on social media than TV ads. - Competition: Influences the choice of promotional strategies. 3. SALES PROMOTION - MEANING AND TYPES Definition: Sales promotion refers to short-term incentives designed to encourage customers to purchase a product. Types of Sales Promotion: 1. Discounts - Offering price reductions. Example: Flipkart's "Big Billion Days" sales. 2. Coupons & Vouchers - Providing redeemable offers. Example: McDonald's free meal vouchers. 3. Free Samples - Distributing trial products. Example: Cosmetic brands giving sample packs. 4. Loyalty Programs - Rewarding repeat customers. Example: Amazon Prime benefits. 5. Buy One Get One Free - Increasing sales volume. Example: Supermarket offers on groceries. CONCLUSION - Physical Distribution ensures timely and efficient product delivery. - Promotion Mix helps attract, engage, and retain customers. - Sales Promotion is an essential strategy to boost short-term sales. EXAM TIP: Use real-world examples to enhance your answers and score better marks.