Marketing Mix: Place PDF
Document Details
Uploaded by AstoundingChrysanthemum
Tags
Summary
This document discusses the marketing mix element of place, focusing on availability, distribution strategies, the importance of availability, supply chains, and value delivery networks. It also outlines different channel levels and types, conventional and vertical marketing systems, and channel conflicts.
Full Transcript
Marketing Mix: Place. 1. Availability/Place in the marketing mix ensures that products or services are accessible to customers: This means: Purchasing is easy for the target group. Customers find / can acquire products at the right time and right place. Products can be acquired in...
Marketing Mix: Place. 1. Availability/Place in the marketing mix ensures that products or services are accessible to customers: This means: Purchasing is easy for the target group. Customers find / can acquire products at the right time and right place. Products can be acquired in suitable quantities. Delivery is quick and smooth. Availability also affects the product’s price. If the goal is to compete with low prices, note that each distribution level takes its own share from the chain. 2. Place/Distribution Strategies. Distribution strategies include supply chain management, channel behaviour, and organization, which are essential for effective marketing channels. Marketing channels can be direct or indirect, and understanding channel conflict is crucial for managing relationships within the distribution network. 3. Importance of Availability. Products & services needs to be in the right place, at the right time, in right quantities Ensure smooth delivery of products to potential customers Quick delivery (distribution) can be critical for example perishable products. Having the products displayed well can be crucial to reach sales (wrong place in store = customer can never find the product) Location is especially important in the service business Where the product is sold (digitally) determines who owns customer data (data/cookies), which enables the company to build a successful customer relationship using behavioural & purchasing data (personalized messages) Using a distributor reduces the number of channel transactions. Manufacturer→ Customer→ Distributor. 4. Supply Chain and Value Delivery Network. Value delivery network: A network composed of the company, suppliers, distributors, and ultimately, customers who partner with each other to improve the performance of the entire system in delivering customer value. Marketing channels (distribution channel): A set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user. 5. The Role of Marketing Channels. A marketing channel performs the work of moving goods from producers to consumers. It overcomes the time, place and possession gaps that separate goods and services from those who need or want them. 6. Channel Levels and Types. Channels can be classified as direct (no intermediaries) or indirect (with intermediaries), each having its pros and cons. DIRECT CHANNELS INDIRECT CHANNELS Channel that has no intermediary level. A marketing channel containing one or Customers buy directly from brick-and- more intermediary levels. mortar or online store. Consumers buy product from a Pros: wholesaler, retailer or dealer. Control of decision. Pros: Products direct to customers. Might be easier reach potential No need to share the profit. customers. Data on the customers. Takes benefit of retailer’s salesforce, Possible build strong relationship infrastructure and experience. with the customers. Shared costs. Possible to better respond to Cons: customers’ needs. Someone else is in control of the Cons: customer relationship & has contact Difficult to reach potential with the distributor. customers. Profits are shared. It is imperative to define & agree in detail at least on roles, terms, responsibilities, training, customer support, reporting and monitoring 7. Conventional vs Vertical Marketing Systems (VMS). Conventional distribution channel: A channel consisting of one or more independent producers, wholesalers, and retailers, each a separate business seeking to maximize its own profits, perhaps even at the expense of profits for the system as a whole. Examples: Coca-Cola, Unilever, P&G, Whirlpool. Vertical marketing system (VMS): A channel structure in which producers, wholesalers and retailers act as a unified system. One channel member owns the others, has contracts with them, or has so much power they all cooperate. Examples: Apple, Sherwin-Williams (paints), Luxottica 8. Corporate Vertical Marketing System. A vertical marketing system that combines successive stages of production and distribution under single ownership – channel leadership is established through common ownership. 9. Contractual Vertical Marketing Systems. A vertical marketing system in which independent companies at different levels of production and distribution join together through contracts. This is to obtain greater impact & purchasing power – economies of scale Examples: Franchise: McDonalds, Pizza Hut, R-kioski, Holiday Inn Retailer co-operatives: Vero Moda, Citymarket, K-rauta (member owned, joint purchasing and advertising) Wholesaler-sponsored voluntary chains: Do it best, independent grocers’ alliance IGA (wholesaler initiates relationships with independent retailers offering them support in return for consistent supply chain agreements) 10. Administrative Vertical Marketing System. A VMS that coordinates successive stages of production and distribution through the size and power of one of the parties. The activities of companies involved in the production and distribution channel are affected by the size and power of one of them, although there’s no contract. Simply put, a large company that has the most influence dominates the activities of others. For example: Procter & Gamble and Unilever. Resellers need to adhere to P&G’s demands of high level of cooperation in promotions, prices, shelf space, displays in return they benefit of large-scale operations, cost savings, negotiation power, and customer satisfaction. 11. Horizontal Marketing Systems (HMS). A channel arrangement in which two or more companies at one level join to follow a new marketing opportunity. Can be competitors or non-competitors. Key features: Combine financial, marketing & production capabilities -> joint marketing, lower risks, joint production as pooled resources. Use of partnerships to grow industry appeal. Examples: H&M designer collaborations, One world, Uniqlo&Marimekko, GoPro&Redbull, Uber&Spotify. 12. Multichannel Distribution Systems (Multichannel marketing). A distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments. Used by companies to ensure that the channel, which is used fit the customers’ demands and behaviour -> maximizing the customer satisfaction. The company expands sales & market coverage, gaining more opportunities and turnover. Examples: Nike: Sells through its own stores, website, and third-party retailers. Amazon: Uses its website, physical stores, and partnerships with other retailers. Sephora: physical stores, online stores, mobile App Zara: physical stores, online stores, mobile App 13. Channel Conflicts. Disagreements among marketing channel members on strategy, goals, roles, and rewards – who should do what and for what rewards? Horizonal conflict Vertical conflict Multichannel conflict Conflict among companies Conflict between different Conflict between different at the same level of the levels of the same channel. levels of the same channel. channel. Example: Disagreement Example: Online vs instore Example: Hotels in same within pricing: Nike promotions chain in the same city products in Nike stores or in charging differently a retailer store (Budget Sport) Example: Service differs under same brand in different locations 14. Channel Behaviour and Organization. Disintermediation: The elimination of marketing channel intermediaries (middlemen). This allows companies to sell directly to consumers Examples: Ecommerce: (Amazon, Ebay) D2C: Warby Parker, Dollar Shave Club Digital content: Amazon Kindle Subscription services: Spotify, Netflix Travel industry: airb’n’b 15. Channel Decisions. Intensive distribution Selective distribution Exclusive distribution Stocking the product in as Producer chooses to sell its Producer grants exclusive many outlets as possible. products through limited rights to a single retailer Increased brand awareness number of retailers. within a specific geographic and sales. Helps maintain control over area or market segment. the brand identity. Used for high end or luxury Example: Coca- Cola. Typically apply to products products. that are not mass-market Allows producers to items but still require more maintain tight control over that one retailer. brand identity and pricing. Example: Volvo. Example: Louis Vuitton.