(A TOOL 0F

MARKETING MIX)
Vikash, sakshi, tanmay, shalini
 Marketing mix ; place

Place : in the marketing sense refer to the Distribution of the product.

Place consideration involve decision that effect ;

• How you will get the product where it belongs?

• How will you manage inventory ?
• How warehouse operation will be carried out and if distribution centres
will be established ?
• When you consider place , you also must consider where you percive the
product will be sell best.
Marketing Mix : Place
 • Place (or Placement ) decisions are those associated with channels of distributions that
serve as the means for getting the product to the Target Customers.

 Channel Distribution System Performs :

1. Transactional
2. Logistical
3. Facilitating functions

 Distribution Decisions include Location , Market Coverage, Channel member Selection,

Logistics and Levels of Service.
Marketing mix: place

 The objective is to make product available in the

right place at the right time in the right quantites
at least cost
Objectives of Distribution
• Movement of goods:- The major objective of distribution is to effectively move the product from the place of production to the place
of consumption through the marketing channel system. Products move from manufacture to wholesaler to retailer and finally moved to
consumer from retailer.

• Safety of product:- Distribution facilities safety of the product. Distribution makes the channel members responsible to the proper
storage and handling of the product, so that the product reaches to the buyer in proper condition.

• Cost reduction:- Distribution involves several channel members. They assist in delivering goods and services to the end consumer. So,
manufacture do not need to reach to the door step of every consumer. Distribution helps in minimizing the cost of manufacture's
transportation and travelling

• Availability of goods: Effective distribution channels facilities easy availability of goods. Distribution channel also helps consumers to
assort the required products. Any product demanded by consumers becomes available at any place and any time. Different products in
different countries and continents are assorted at the same place by channel members. It ensures right goods at reasonable price at right
place

• Customer satisfaction:- Distribution is often termed as other halves of marketing. It fulfill the customer's satisfaction by delivering
right product at the right place at right time. Thus, distribution channel sets objectives to render crucial services of regular supply of
goods.
Marketing Channel Strategy
Place:-The fourth “P” in the
Marketing Mix has been largely
neglected
But this is changing....
Marketing Channel Strategy Has Become
Critically Important For Most Businesses
 Marketing Channel Strategy is Growing
in Importance. Why?

Five Reasons:-
(1) Search for Sustainable Competitive Advantage
(2) Growing Power of Retailers in Marketing Channels
(3) The Need to Reduce Distribution Costs
(4) The Increased Role and Power of Technology
(5) The New Stress on Growth
1.The Search for Sustainable
Competitive Advantage
 A competitive advantage that cannot be quickly and easily
copied by competitors

 Superior Marketing Channel Strategy is More Difficult for

Competitors to Copy Because:
Channel Strategy is Long Term Requires
a Channel Structure Depends on
Relationships and People Requires
Effective Interorganizational
Management
2.Growing Power of Retailers in
Marketing Channels
Retailers

Retailers:-
 Are Growing Larger Retailers
 Enjoy Substantial Channel Power
 Act as Buying Agents for Customers
 Often Operate on Low Price / Low
Margin Model
 Operate in Saturated Markets and Fight
for Market Share
3.The Need to Reduce
Distribution Costs

Distribution
Costs
 Distribution Costs
Often Account for a
Significant Percentage
of the Final Price of
Products
4.Increasing Role and Usefulness of
Technology
 Firms that make effective use of these
technologies in their channel strategy
can gain a substantial competitive
advantage
5.The New Stress on Growth Strategy
Place Decisions Are an Important Part of
Marketing Strategy
Channels of
Distribution
Marketing Channels
Most Producers do not sell their goods directly to the Final Users!

Marketing Channels ;are sets of interdependent organizations participating in the process of

making a product or service available for use or consumption.

They are set of pathways a product or service follows after production,

Culminating in Purchase & Consumption by the final end user.

• The importance of Channels : In the United States, channel members collectively

have earned margins that account for 30 per cent to 50 per cent of the ultimate selling
price.
Channel System May Be Direct or Indirect

Greater Control

Lower Cost

Internet Makes Direct

Distribution Easier

Direct Contact with

Some Customer Needs

Reasons Quicker Response or Change

in Marketing Mix
For Choosing
Suitable Middlemen Not
Direct Channels Available
 Factors Related to the Use of Direct
Distribution
Manufacturer
• Direct (producer to customer) distribution is more
common when:
– an aggressive personal selling effort is required and/or when
customers need special technical service
– the product is primarily a service rather than a physical
good
– when working with middlemen would make it difficult to
maintain control of the marketing mix
– the producer can perform marketing functions more efficiently
End User
(economically) by itself
Indirect Distribution

 Goods may move through a set of intermediaries

 Most FMCG companies follow this route
 The intermediary has a far better reach than the
company
 The cost of operations of an intermediary like a
wholesaler / retailer is shared with many
businesses.
Indirect Distribution
Manufacturer Manufacturer
Manufacturer

Agent

Distributor/ wholesaler

Distributor/ wholesaler

Retailer
Retailer

Retailer

End User
End User
End User

One level Two level Third level

CHANNEL LEVEL
 Channel flow-;
Product Flow
The movement of the product from manufacturer through all parties who take physical
possession
Negotiation Flow
Interplay of buying/selling tasks associated with title transfer
Ownership Flow
Movement of title of the product
Information Flow Information to and from the manufacturer
Promotion Flow
Flow of persuasive communication (advertising, personal selling, etc.)
Marketing Channel Systems

Vertical:
Corporate
Administered
Contractual

Horizontal
Multi-channel
Vertical Marketing System
 Various parties like producers, wholesalers and retailers act as a
unified system to avoid conflicts
 Improves operating efficiency and marketing effectiveness
 3 types:
 Corporate:- combine production and distribute under single ownership
 Administered:-Co-ordinates distribution activities and Gains market power
by dominating a channel
 Contractual:-Independent producers, wholesalers and retailers operate on
a contract
 Horizontal Marketing System

 Two or more unrelated companies join together

to pool resources and exploit an emerging market
opportunity
 In-store banking in hotels, big stores
 Retail outlets in petrol bunks
 Coffee Day outlets in airports
 Limiting Market Exposure

Producer

Vertical
Arrangements
Wholesaler

Retailer Retailer Retailer

Horizontal Arrangements
Multi-channel Distribution

 Company uses different channels to reach /

same or different market segments
 Most FMCG companies have separate networks for
retail market and institutions
 Pharma companies may use different channels to
reach doctors, chemists and hospitals
Multi-channel distribution
 Push & pull strategy
 Push Strategy;
 Coca cola is using Push strategy in which they use its sales force and trade promotion money to induce intermediariés to
carry, promote and sell the product to end users i.e. consumers .

 For example-
 as coca cola is giving free pet bottles and other trade schemes to distributórs, agency owners and retailérs.

 PULL STRATEGY;
 Coca-cola is also using Pull strategy in which they are using advertising and promotion to persuade consumers to ask
intermediaries for the company brand product by this way coca cola inducing customer to order it from shopkeeper.

 For example–
 Coca cola is using flanges, display racks, tier racks, standees, mobile hangers and visicooler brand strips.
By:- Vikash
Sakshi
Tanmay
shalini
Any Questions