I N T R O D U C T I O N

The 4Ps of Marketing

I N T R O D U C T I O N

MARKETING MIX Offering that the

business builds,
designs, or procures to
PRODUCT
The marketing mix theory, first coined by E. Jerome McCarthy in satisfy customers’
the 1960s, forms the foundation model for every business today. needs and wants.
Marketing mix is a set of tools and tactics a business use to pursue
its marketing objectives and sell its offerings to the target
audience. Is the amount the
business charges PRICING
This marketing mix concept derives its framework from the basic for its offering.
definition of marketing – identifying customer’s needs and satiating
those needs through offerings. So the business:
Location where the
Develops a product according to the customers’ needs and customers get, access,
wants PLACE
purchase, or use the
Make it available at a price that customers find reasonable offering.
Supply the offering using distribution channels (places) that are
convenient for the customer to buy from
Inform the customer about the offering and its characteristics Process of informing,
through various promotional channels persuading, and
influencing a customer PROMOTION
to buy’s the business’s
offering.
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DISTRIBUTION
Distribution is the process of making a product or service available
for the consumer or business user who needs it. This can be done
directly by the producer or service provider, or using indirect
channels with distributors or Intermediaries.

Developing a coherent distribution plan is a central component of

strategic planning.
Strategic planning
is a process in which an organization's leaders
define their vision for the future and identify
their organization's goals and objectives.

The process includes establishing the sequence

in which those goals should be realized so that
the organization can reach its stated vision.
 Distribution Management is an important part of the
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business cycle for distributors and wholesalers.

DISTRIBUTION MANAGEMENT
Distribution Management refers to the process of overseeing the
movement of goods from supplier or manufacturer to point of sale.

The more they sell, the more they earn, which means a better future
for the business. Having a successful distribution management
system is also important for businesses to remain competitive and
to keep customers satisfied.

| Warehousing | Sup
entory ply
Ch The profit margins of businesses depend on how quickly
Inv ain
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ng Lo
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MANUFACTURER/ POINT OF
SUPPLIER SALE
 I N T R O D U C T I O N Benefits
If distribution planning is done

DISTRIBUTION PLANNING correctly, it increases efficiency.

Distribution Planning is a systematic approach to ensure that the All goods shortages
process encompassing the delivery of goods to different are minimized as
distribution centers is done properly keeping in mind which goods demand is
are to be supplied in what quantity at what location in the desired accounted for during
time. the time of
distribution
Costs of ordering,
transporting and
holding goods is also
reduced
It is done keeping in mind the demand trends over the years considerably
accounting for seasonal variations and also the anticipated demand
according to this year’s prediction. If correct
distribution is done,
the major advantage
is that inventory can
also be kept under
control in the
desired level.
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CHANNEL DISTRIBUTION
Channels of distribution can be divided into the direct channel and the indirect channels. Indirect channels can further be divided
into one-level, two-level, and three-level channels based on the number of intermediaries between manufacturers and
customers.

DISTRIBUTION
CENTER 1 RETAILER 1

RETAILER 2

RETAILER 3

RETAILER 4

FACTORY/ WAREHOUSE RETAILER 5

MANUFACTURER

DISTRIBUTION RETAILER 6
CENTER 2
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CHANNEL DISTRIBUTION
BASIC TYPES OF CHANNEL DISTRIBUTION

1 DIRECT CHANNEL

Also known as the Zero-level (Manufacturer to Customer) which is one of the

oldest forms of selling products. It doesn’t involve the inclusion of an
Examples:
Peddling
Brand retail stores
intermediary and the manufacturer gets in direct contact with the customer
Company website orders
at the point of sale.
Bakeries, jewelries, etc.

2 INDIRECT CHANNEL

When a manufacturer involves a middleman/intermediary to sell its product

Classifications:
One-level channel
to the end customer, it is said to be using an indirect channel. Indirect Two-level channel
channels can be classified into three types. Three-level channel
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CHANNEL DISTRIBUTION

ACTORS OF DISTRIBUTION

DIRECT CHANNEL

ONE-LEVEL

TWO-LEVEL

THREE-LEVEL

MANUFACTURER AGENT WHOLESALER RETAILER CUSTOMER

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CHANNEL DISTRIBUTION

ACTORS OF DISTRIBUTION

DIRECT CHANNEL

Direct channels are usually used by manufacturers selling perishable goods, expensive
goods, and whose target audience is geographically concentrated.

MANUFACTURER AGENT WHOLESALER RETAILER CUSTOMER

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CHANNEL DISTRIBUTION

ACTORS OF DISTRIBUTION

ONE-LEVEL

Retailers buy the product from the manufacturer and then sell it to the customers. One level channel of
distribution works best for manufacturers dealing in shopping goods like clothes, shoes, furniture, toys, etc.

MANUFACTURER AGENT WHOLESALER RETAILER CUSTOMER

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CHANNEL DISTRIBUTION

ACTORS OF DISTRIBUTION

Wholesalers buy the bulk from the manufacturers, breaks it down into small packages and sells them to
retailers who eventually sell it to the end customers.

TWO-LEVEL

MANUFACTURER AGENT WHOLESALER RETAILER CUSTOMER

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CHANNEL DISTRIBUTION

ACTORS OF DISTRIBUTION
Three level channel of distribution involves an agent besides the wholesaler and retailer who assists in selling goods.
These agents come handy when goods need to move quickly into the market soon after the order is placed.

Super stockist: Keeps the stock on behalf of the
company. Super stockists buy the stock from
manufacturers and sell them to wholesalers and
retailers of their area.
THREE-LEVEL
Carrying and forwarding: Keeps the stock on behalf
of the company. Works on a commission basis and
provide their warehouses and shipment expertise for
order processing and last mile deliveries.

MANUFACTURER AGENT WHOLESALER RETAILER CUSTOMER

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INTENSITY OF CHANNEL COVERAGE

There are three different types of target market coverage every marketing
manager should know; Intensive Distribution, Exclusive Distribution, and
Selective Distribution.

The afore-mentioned options allow businesses to distribute their offerings in

many different and unique ways. Each of them has their strengths and
weakness’.

It is important for a business to place some emphasis on how they will

distribute products and/or services in order to reach their target market as it
can have an effect on a business’s brand image, sales, expenses, and
employees.
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INTENSITY OF CHANNEL COVERAGE

1 INTENSIVE

Occurs when a business manager is aiming to extend the reach of

Examples:

their offering through as many sales channels as possible.

Uses all the possible sources by utilizing different distribution

channels so that the customer gets the product at every possible In ecommerce, businesses
location for shopping like general store, health store, discount store, may sell products through
shopping malls etc. This method of distribution is for goods or its’ own business website,
commodities which are generic in nature. but they may also sell
through other online
marketplaces
One of Coca Cola’s
goals is to have their
product within arm’s
reach of its customers

Advantage:

Products are distributed across all geographies.

Goods are available in large quantities at multiple
outlets.
Brand visibility is very high as these products are
present at every store.
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INTENSITY OF CHANNEL COVERAGE

2 EXCLUSIVE

This method aims for exclusivity which can increase perceived

Examples:

value and quality of the transaction regarding placement and POS.

Exclusive distribution is a mechanism of distributing goods wherein

the manufacturer gives sole & special rights to one distributor to They pick and choose retailers
sell the goods. Exclusive distribution gives the single distributor who they will allow to sell their
authority to sell the goods in a particular region. In this, the role of products; they can set specific
wholesalers are minimized. terms for retailers to follow in
order to stock and sell Apple
products.
Rolex uses this strategy
to create an aura of
prestige and exclusivity
that sets their products
apart from
competitors.

Advantage:
The rationale behind granting exclusive rights to the distributor
are as follows:

1. To incentivize better promotion of the product.

2. Provide better customer service.
3. Maintain exclusivity of high quality products.
4. Helps in higher customer service & hence good brand loyalty.
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INTENSITY OF CHANNEL COVERAGE

3 SELECTIVE

A distribution method which lies between Intensive and Exclusive

Examples:

distribution strategies. Selective distribution includes selecting

retail locations based off of certain key factors such as geographic
location.
Whirlpool who sell its major You may find Dolce &
This can be beneficial to manufacturers because it will allow them appliances through dealer Gabbana products in
to get into franchise businesses and other business chains within networks and selected large stores like Neiman
specific locations where their target market most-heavily reside. retailers. Marcus but not at
Wal-Mart.

Advantage:

1. Good market coverage,

2. Increased control and
3. Reduced costs as compared to intensive distribution.
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PHYSICAL DISTRIBUTION LOGISTICS

MEANING, IMPORTANCE, COMPONENTS, FUNCTIONS,
RESPONSIBILITIES AND OTHER DETAILS
coordinating the flow of goods, services, and
is the set of activities concerned with efficient information among members of the supply
movement of finished goods from the end of the chain.
production operation to the consumer.
flow of information from the
It takes place within numerous wholesaling and individual customer or
retailing distribution channels, and includes such organizer to the producer
important decision areas as customer service,
inventory control, materials handling, protective
packaging, order procession, transportation, flow of materials from the
warehouse site selection, and warehousing. producer to the consumer or
the user.

In general, the function of physical supply attempts to

accomplish the delivery of goods at the right place, at the
right time and in the right quantity.
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PHYSICAL DISTRIBUTION
requires a distribution infrastructure that includes
transportation, warehousing, material handling, inventory
control, processing, customer services, which facilitate the
movement of goods.
IMPORTANCE
Planning - It can offer a feasible solution striking an optimum
balance between physical distribution costs (costs of
transport, storage, inventory and order processing) and the
customer service level that will be satisfactory to the
buyer and also profitable to the seller.
Heightened customer services - effective physical
distribution services give customers the service they
expect, i.e., putting the products within an arm’s length
of customer demand or desire.
Customers often give more importance to physical
distribution rather than price and promotion services.
They consider physical distribution second in
importance to product quality as a reason for buying
from a certain firm.
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PHYSICAL DISTRIBUTION

Customer service:
Customer service is a predefined standard of customer
satisfaction, which a retailer plans to provide to its customers.
Without defining and setting ‘standards of customer service’,
retailers cannot achieve competitive advantage over their
competitors.
Examples:
95% of the orders are delivered within 5 hours of receipt
100% are delivered within 24 hours.
Same day shipping
How?
By ensuring product availability all the time.
By improving order cycle time – it implies reducing the
gap between placing the order and its delivery time.
By providing proper training to sales persons and
employees engaged in transportation.
By having separate plans for:
Quick deliveries in case of urgent orders
In case of natural/unforeseen problems
Loss in transit etc.
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COMPONENTS OF PD

PHYSICAL DISTRIBUTION
1. Order processing
Order processing, alternatively known as order
fulfillment is the handling of customer orders within the
distribution center (may be warehouse, retail store
itself) involving the keying of customer and order details
into the computer system in order to produce the
invoices for picking.

The basic idea is to deliver the orders as per customers’

wants of place and timing.

Best practices?
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COMPONENTS OF PD

PHYSICAL DISTRIBUTION
2. Inventory Control
Inventory control is a major component of a retail
organization’s physical distribution system. It includes
money invested in inventory, wear and tear and
possible obsolescence of the goods with the passage of
time.

In a retail organization, where finance executives seek

inventory minimization, marketing executives advocate
large inventories to prevent stock outs.

For them, it is suggested to segregate patterns as:

a)Fast moving items, and
b)Slow moving items.
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COMPONENTS OF PD

PHYSICAL DISTRIBUTION
3. Warehousing
It involves all the activities required in storage of goods
between the time these are procured and the time
these are transported to the customer upon receipt of
order.

This function basically involves receiving the

merchandise, breaking bulk, storing and loading for
delivery to customers as per their details. Storage
warehouses usually keep goods for long periods while
distribution centers operate as central/middle locations
for quick movements of goods to retail stores.

Further, retail organizations use regional distribution

centers where wholesalers dump the products in high
volume - these consignments are broken down to small
loads that are then quickly transported to retail outlets
as per the outlet’s requirements.
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COMPONENTS OF PD

PHYSICAL DISTRIBUTION
4. Transportation
Transportation is indispensable for physical
distribution of goods and services. Transportation mode
enables channel members like producers, wholesalers
and retailers to make goods and services available at
the customers’ place of purchase or at his doorstep.
From cost point of view, transportation accounts nearly
25-40% of total distribution costs.

Quick and timely delivery, security of goods during

transit and proper handling results in customer
satisfaction.

Due to technological developments and variety of

transportation modes available, a retail
organization can use anyone or a combination of
what methods?
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PHYSICAL DISTRIBUTION

INVENTORY MANAGEMENT
refers to the process of ordering, storing and using a
company's inventory. This includes the management of raw
WHY MANAGE YOUR INVENTORY?
materials, components and finished products, as well as For these reasons, inventory management is important
warehousing and processing such items for companies with for businesses of any size. Knowing when to restock
complex supply chains and manufacturing processes, inventory, what amounts to purchase or produce,
balancing the risks of inventory gluts and shortages is what price to pay—as well as when to sell and at
especially difficult. what price.

JUST IN TIME (JIT) - MATERIALS REQUIREMENT PLANNING (MRP) HOW?

Small businesses will often keep track of stock manually

and determine the reorder points and quantities using
Excel formulas. Larger businesses will use specialized
enterprise resource planning (ERP) software. The largest
corporations use highly customized software as a service
(SaaS) application.
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Three Key Parts
Warehouse Management - it is the strategic day-to-day running
PHYSICAL DISTRIBUTION of operations in a warehouse to promote, improve, and ensure
operational excellence. Managing a warehouse means overseeing
all staff, training, inventory, equipment, safety and security,
WAREHOUSING relationships with shipping carriers, and other moving pieces.

Responsibilities include:
is the storing of physical goods before they are sold.
Forecasting and managing projected volume and labor
Warehouses safely and securely store products in an
Ensuring the proper safety gear is used and best safety practices
organized way to track where items are located, when
are followed at all times
they arrived, how long they have been there, and the
Obtaining the proper licenses and certifications for anyone
quantity on hand.
operating equipment
Maintaining compliance and requirements for regulatory agencies
In ecommerce, products are stored until an order is
Continuously planning and managing operations as the business
placed online, at which point the order is shipped
grows and becomes more complex
directly to the consumer from the facility in which it was
Keeping goods secure and accessible and performing warehouse
stored.
audits as needed
Providing clear instructions on how to receive, unpack, retrieve,
pack, and ship inventory
Setting up bins and other storage spots in optimal places to
minimize the effort required to move between destinations
Recording all inbound and outbound shipments and collecting the
proper documentation
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Three Key Parts
Warehouse Operations - refers to the processes that take place
PHYSICAL DISTRIBUTION in a warehouse revolving around the movement of goods and
Tracking Inventory. This includes functions such as receiving
inventory, then placing each SKU into a separate dedicated
WAREHOUSING storage location (e.g., in a shelf, bin, or on a pallet), and sending
product to its next destination.

is the storing of physical goods before they are sold.

Efficient warehousing operations help keep:
Warehouses safely and securely store products in an
Costs low
organized way to track where items are located, when
Inventory received and shipped on time
they arrived, how long they have been there, and the
Staff productive
quantity on hand.
Sufficient quantities of product on hand
Space below capacity
In ecommerce, products are stored until an order is
Storage optimized and aisles clear
placed online, at which point the order is shipped
Equipment used effectively
directly to the consumer from the facility in which it was
Customers happy
stored.
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Three Key Parts
Warehouse Operations - (WMS) is a type of software that
PHYSICAL DISTRIBUTION provides the tools necessary to manage warehouse operations
and inventory movement to save time and eliminate manual
processes. Warehouse management systems help optimize
WAREHOUSING inventory storage and tracking, warehousing operations, workload
distribution, and shipping.

is the storing of physical goods before they are sold.

Warehouses safely and securely store products in an
These types of warehousing solutions give you unprecedented
organized way to track where items are located, when
visibility and real-time insight into every action that’s happening in
they arrived, how long they have been there, and the
the warehouse. A good warehouse management system will even
quantity on hand.
help generate electronic picking lists based on orders that have
inventory stored close to one another to decrease inefficiencies.
In ecommerce, products are stored until an order is
placed online, at which point the order is shipped
directly to the consumer from the facility in which it was
stored.
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Merchant Wholesalers (FS, LS)
Independently owned businesses that take title to the
merchandise they handle. They are full-service and limited-
PHYSICAL DISTRIBUTION service jobbers, distributors, mill supply houses.

Brokers and Agents

Facilitate buying and selling, on commission of 2% to 6% of
WHOLESALING the selling price; limited functions; generally specialize by
product line or customer type. Brokers bring buyers and
Wholesalers are channel members that buy finished products sellers together and assist in negotiation; paid by the party
from manufacturers and sell them to retailers - includes all the hiring them. Agents represent buyers or sellers on a more
activities in selling goods or services to those who buy for permanent basis.
resale or business use
Manufacturers and Retailers Branches and Offices
Separate branches and offices are dedicated to sales or
Types of wholesalers purchasing. Many retailers set up purchasing offices in major
market centers
1. Merchant Wholesalers (FS, LS)
2. Brokers and Agents Specialized Wholesalers
3. Manufacturers and Retailers Branches and Offices Wholesalers specialized in one area. Agricultural, Petroleum,
4. Specialized Wholesalers etc.
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PHYSICAL DISTRIBUTION
RETAILING
Includes all the activities in selling goods or services directly to
final consumers for personal. Does not matter if the
organization is a manufacturer, wholesaler, or retailer; if it is
selling to final consumers, is doing retailing. Besides that, does
not matter how the goods or services are sold (in person, by
mail, telephone, vending machine, or on the Internet) or where
(in a store, on the street, or in the consumer’s home).
Types of wholesalers
Specialty Store: narrow product line.
Department Store: several product lines.
Supermarket: large, low-cost, low-margin, high-volume,
self-service store designed to meet total needs for food and
household products.
Convenience Store: small store in residential area, limited
line of high-turnover convenience products
Discount Store: standard or specialty merchandise; low-
price, low-margin, high-volume stores.
Off-price Retailer: leftover goods, overruns, irregular
merchandise sold at less than retail
Superstore: huge selling space, routinely purchased food
and household items, plus services.
Catalogue Showroom: broad selection of high-markup,
fast-moving, brand-name goods sold by catalogue at
discount. Customers pick up merchandise at the store.
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PHYSICAL DISTRIBUTION
STORE LOCATION
Having a good location for retail is one of the crucial impacts
in the case of the marketing strategy of retail because many
of the associated long-term decisions and commitments
depend on the location of the retail. Having a good location is
one of c primary element in attracting prospects and
customers.
At times a good location can also lead to an excellent
competitive advantage because in retail marketing mix
location is one of the crucial parameters and unique which
cannot be copied by competitors in any way.
IMPORTANCE OF A GOOD RETAIL
STORE LOCATION
A good retail location as a competitive advantage which
cannot be copied by the competition. One location can
occupy one retail store, and time also plays a crucial role
along with the location.
Customer proximity is another concern for most of the retail
businesses. Several stores can be opened away from the city
with a cheaper budget, but it won’t be possible for the
retailers to bring customers to that particular neighborhood.