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Marketing 4P(Place)

By Ryan Warren,2014-05-28 14:27
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Marketing 4P(Place)

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     M85BS MARKETING MANAGEMENT

     MARKETING MIX ?C PLACE / DISTRIBUTION

     Workshop 7- July 24th 2007

     1

     DEFINITION

     A marketing channel can be defined as:

     ????the structure linking a group of individuals or organizations

    through which a product or service is made available to the consumer

    or industrial user???? (Brassington and Pettitt, 2006:519)

     2

     TYPES OF INTERMEDIARIES

     AGENTS AND BROKERS: have legal authority to act on behalf of the

    manufacturer WHOLESALERS: do not usually deal directly with the end

    user or consumer DISTRIBUTORS AND DEALERS: add value through special

    services RETAILERS: sell direct to the consumer

     3

     DISTRIBUTION CHANNELS ?C CONSUMER GOODS

     Producer Consumer

     Producer

     Retailer

     Consumer

     Producer

     Wholesaler/ Distributor Wholesaler/ Distributor

     Retailer

     Consumer

     Producer

     Agent

     Retailer

     Consumer

     4

     DISTRIBUTION CHANNELS ?C B2B GOODS

     Producer Business Customer Business Customer

     Producer

     Agent

     Producer

     Wholesaler/ Distributor

     Business Customer

     Producer

     Agent

     Wholesaler/ Distributor

     Business Customer

     5

     VALUE-ADDED SERVICES PROVIDED BY INTERMEDIARIES

     Value-Added Services

     Facilitating Value ?Training ?Information ?After Sales

     Transactional Value ?Financing ?Risk ?Marketing ?Administration

     Logistical Value ?Assortment ?Storage ?Sorting ?Bulk Breaking ?Transportation

     6

     CHANNEL STRATEGY

     Involves making decisions about the allocation and performance of value-added intermediary roles, the basis of their remuneration within the system, and the effectiveness of alternative options in ensuring that complete market penetration is achieved competitively and efficiently

     7

     CHANNEL STRATEGY DECISIONS

     MARKET COVERAGE:

     Intensive Distribution: where the product or service is placed in as many outlets as possible, and no interested intermediary is barred from stocking the product Selective Distribution: where a more selective approach is designed to use a small number of carefully chosen outlets within a defined geographic area Exclusive Distribution: where only one outlet covers a relatively large geographic area

     8

     CHANNEL STRATEGY DECISIONS

     Factors Influencing Channel Strategy Decisions

     Organizational Objectives, Capabilities, and Resources Channel Strategy Buying Complexity and Buyer Behaviour

     Market Size, Dispersion, and Remoteness

     Product Characteristics

     Changing Environmental Factors ?C PESTEL

     9

     CHANNEL STRATEGY DECISIONS

     Criteria for Selecting Channel Members

     Strategic Management Quality/Competence Vision Market Coverage Size Loyalty/Cooperation Ethics Operational Local Market Knowledge Premises/Equipment Stockholding Policy Industry Knowledge Credit / Payment Terms Capability Customer Service

     10

     CHANNEL STRATEGY DECISIONS

     REVERSE SELECTION:

     Intermediaries are also proactive in looking for new manufacturers to complement their supply sources Especially in B2B markets, the buyer

approaches the supplier

     11

     CHANNEL STRUCTURE

     COMPETITION IN CHANNELS:

     Horizontal Competition: between intermediaries of the same type Intertype Competition: at the same level in the channel but between different types of outlet Vertical Competition: between different levels in the channel

     12

     CHANNEL STRUCTURE

     VERTICAL MARKETING SYSTEMS:

     VMS represent an advanced form of channel integration where a number of channels are being effectively led and managed by one channel member who can control the policies, strategies, actions, and returns of the other members

     13

     VERTICAL MARKETING SYSTEMS

     Corporate VMS: where an organization owns and operates other levels in the channel. This system can be either: Forward Integration Backward Integration Contractual VMS: where channel members retain their independence but negotiate contractual agreements Retail Cooperatives http://www.co-operative.co.uk/en/corporate/groupoverview/ Franchise Systems

     14

     WHAT DO CUSTOMERS REQUIRE?

     The right goods, at the right time and in the right place Efficiency and speed in deliveries Reliability of service Consistency of product and service High stock levels to ensure goods are available when required Variety of goods to allow maximum choice

     15

     TRENDS IN PHYSICAL DISTRIBUTION

     Increase in road and decline of rail transport Growth in air and sea transport Growth in ??Just In Time?? production Changing role of warehouse/ distribution centres Increased road congestion Restrictions on driver hours

     16

     FUNCTIONS OF RETAILING

     Assembling a range of products and services Providing storage and transportation Giving advise and information to customers and stockists Transferring title of goods and services Providing an appropriate environment After sales service

     17

     STRUCTURE OF THE RETAIL SECTOR

     Form of Ownership: Independent Corporate Chain Contractual System

    Level of Service: Full Limited Self-Service Operating Methods: Store Retailing Non-Store Retailing

     18

     TYPES OF RETAILERS ?C STORES

     Departmental Stores Concession Outlets Variety Stores Supermarkets Hypermarkets Out-of-town retail parks Out-of-town discount villages Town Centre Stores Convenience Stores Discount Clubs Markets Catalogue Showrooms

     19

     TYPES OF RETAILERS ?C NON-STORE

     In-Home Selling Mail Order TV Shopping Channels Vending- static and mobile E-tailers

     20

     1. Factors Influencing the Location Decision-Making Process Accessibility: ?Pedestrian Flow ?Public Transport ?Car

    Access ?Parking ?Visibility ?Staff Access ?Delivery Access

     Population: ? Size ?Age Profile ?Income ?Housing

    Profile ?Unemployment ?Lifestyles ?Ethnic Mix

     Location DecisionMaking Process

     Competition: ?Existing Activity ?Saturation ?Turnover ?Trade Areas

     Age of Outlets ?Design ?Facilities ?Future Potential

     Costs: ?Site Acquisition ?Site Development ?Shop Fitting ?Rent / Business Rates

     Maintenance ?Security ?Staffing ?Delivery Costs

     21

     RETAILER STRATEGY

     Areas of decision making for strategic retailing issues include:

     1. 2. 3. 4. 5. 6. 7.

     Location Product Range Competitive Positioning Store Image and Atmosphere Merchandising Use of Technology Retailer Own Brands

     22

     1. LOCATION

     Population Catchment Area Buyer Behaviour Accessibility City Centre Suburban Out of Town Competition Costs

     23

     2. PRODUCT RANGE

     Product Assortment: Store Image Stock Control Systems Branding Strategy Staff Expertise and Ability

     24

     3. RETAIL COMPETITIVE POSITIONING

     Examining the market and other retailers Analyze one??s own positioning through customer??s perspective Analyze the totality of the offer, in terms of merchandizing, brand image, products, pricing, atmosphere, image, and service quality

     25

     4. STORE IMAGE AND ATMOSPHERE

     Exterior factors influencing perceptions of store image Interior factors affecting store atmosphere Sight Sound Scent

     26

     5. MERCHANDIZING STRATEGIES

     Store Display: (affected by store image; number of shelving; cost of fixtures and fittings; number and location of till points; customer traffic flow; size, bulk, weight of merchandise; cost of layout and display; permanent fixtures and PoS fittings Store Layout: grid pattern; free flow; boutique style

     27

     6. USE OF TECHNOLOGY

     Barcode Scanning Stock Management Market Information/ Loyalty Cards Customer Database Management Self-Serve/ Electronic Payments

     28

     7. RETAILER OWN BRANDS

     Balancing the retailer-supplier relationship Better quality own-label brands Better value for money Penetration across a range of products Sub-segmentation on basis of price and quality

     29

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