Marketing mix: Place

Marketing mix:PlaceSession: 10Date: 00/09/2014Fashion MarketingManagementDistributions FunctionThe major purpose of marketing is to satisfy human needs by delivering products of various types to buyers when and where they want them and at a reasonable cost. The when and where is the function of Distribution22What is a Distribution Channel?A set of interdependent organizations (intermediaries) involved in the process of making a product or service available for use or consumption by the consumer or business user.Marketing Channel decisions are among the most important decisions that management faces and will directly affect every other marketing decision.3Why are Marketing Intermediaries Used?The use of intermediaries results from their greater efficiency in making goods available to target markets.Offer the firm more than it can achieve on its own through the intermediaries:Contacts,Experience,Specialization,Scale of operation.Purpose: match supply from producers to demand from consumers.4DistributionPRODUCERCONSUMERDISTRIBUTION53Distribution Channel FunctionsOrderingPaymentsCommunicationTransferNegotiationFinancingRisk TakingPhysicalDistributionInformationTypical Channels of Distribution

ANUFACTURER

ONSUMER

HOLESALER

ETAILER

GENT

714Business-to-Business Channels

Direct

Wholesaler

Agent

821Business-to-Business Channel Trends

Disintermediation

Infomediaries & Vertical Exchange921Conventional Distribution Channel vs. Vertical Marketing SystemsVerticalmarketingchannelManufacturerRetailerConventionalmarketingchannelConsumerManufacturerConsumerRetailerWholesalerWholesalerTypes of Vertical Marketing SystemsCorporateCommon Ownership at Different Levels of the ChannelContractualContractual Agreement AmongChannel MembersAdministeredLeadership is Assumed by One ora Few Dominant MembersVertical Marketing SystemsCorporate systems - total ownershipAdministered - strong leadership

Contractual - legal relationships

1223Planning the Channel of DistributionDetermining the structureMarketing mix strategyOrganizational resourcesExternal environmental factorsMarket characteristicsConsumer preferences and behaviorThe nature and availability of IntermediariesOther environmental factors

1326Customers Desired Service LevelsLot sizeWaiting timeSpatial convenienceProduct varietyService backupSteps in Distribution Planning

15IntensiveDistributionExclusive DistributionSelectiveDistributionDistributionIntensity

Choosing a Distribution System16Intensive DistributionSeeks to obtain maximum product exposure at the retail levelProducerRetailerRetailerRetailerRetailerRetailerRetailerRetailerRetailerRetailerRetailerRetailerRetailerRetailerRetailerRetailer17Selective DistributionProduct is sold in a limited number of outletsProducerRetailerRetailerRetailerRetailerRetailerRetailer18Product is sold in only one outlet in a given areaProducerRetailerExclusive Distribution19Developing Distribution TacticsSelecting Channel PartnersReward orCoercivePowerLegitimatePowerEconomicPowerManaging the Channel of DistributionChannel Leader PowerDistribution Channels & the Marketing Mix20Materials HandlingMoving Products Into, Within, andOut of Warehouses Warehousing Number NeededWhereWhat TypeInventory ControlWhen to orderHow much to order

Order ProcessingReceivedProcessedShippedPhysical DistributionFunctionsTransportation Rail, Water, Trucks, Air, Pipeline, InternetPhysical Distribution21Rail Cost-effective for shipping bulk products, piggy-back, fishyback, birdyback.WaterLow cost for shipping bulky, low-value, non perishable goods, slowest form.TruckMost important carrier for consumer goods, flexible.AirHigh cost, ideal when speed is needed or distant markets have to be reachedPipelineCarry petroleum based products, very low cost, requires little energy.Transportation ModesInternetWeb sites have products available, used especially for services.

22Channel RelationshipsCooperation

Conflict

PowerCoerciveExpertLegitimate2328Common Issues in Supply Chain Management1. Order Processing Time2. Order Assembly Time3. Delivery Time4. Inventory Reliability5. Order Size Constraints6. Consolidation Stipulation7. Consistency of Delivery8. Frequency of Sales Visits9. Ordering Convenience10. Order Progress Information11. Inventory Backup During Promotion12. Invoice Formats13. Physical Condition of Goods14. Claims Response15. Billing Procedures16. Average Order Cycle Time17. Order Cycle Time Variability18. Rush Service19. Product Availability20. Competent Technical Reps21. Equipment Demonstrations22. Availability of Literature23. Accuracy in Filling Orders24. Terms of Sale25. Protective Packaging26. Degree of Cooperation

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