Placement strategies

Placement A channel of distribution comprises a set of institutions which perform all of the activities Utilised to move a product and its title from production to consumption

Channel intermediaries – Wholesalers  Break down ‘bulk’  Buys from producers and sell small quantities to retailers  Provides storage facilities  reduces contact cost between producer and consumer  Wholesaler takes some of the marketing responsibility e.g sales force, promotions

Channel intermediaries – Agents  Mainly used in international markets  Commission agent - does not take title of the goods. Secures orders.  Control is difficult due to cultural differences  Training, motivation, etc are expensive

Channel intermediaries – Retailer  Much stronger personal relationship with the consumer  Hold a variety of products  Offer consumers credit  Promote and merchandise products  Price the final product

Channel intermediaries – Internet  Sell to a geographically disperse market  Able to target and focus on specific segments  Relatively low set-up costs  Use of e-commerce technology (for payment, shopping software, etc)

Importance of Marketing Channels  Intermediaries offer producers greater efficiency in making goods available to target markets. Through their contacts, experience, specialization, and scale of operations, intermediaries usually offer the firm more than it can achieve on its own.

How Channel Members Add Value  From an economic view, intermediaries transform the assortment of products into assortments wanted by consumers.  Channel members add value by bridging the major time, place, and possession gaps that separate goods and services from those who would use them

How Channel Members Add Value

Basic channel decisions  Direct or indirect channels  Single or multiple channels  Types of intermediaries  Number of intermediaries at each level

Number of Channel Levels

Intensive distribution Candy and toothpaste Exclusive distribution Luxury automobiles and prestige clothing Selective distribution Television and home appliance Identifying Major Alternatives

Intermediaries Selection consideration  Market segment - must know the specific segment and target customer  Changes during plc - different channels are exploited at various stages of plc  Producer-distributor fit - their policies, strategies and image  Qualification assessment - experience and track record must be established  Training and support

Supply Chain Management & Logistics

Supply chain management is the process of managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers

Logistics (physical distribution) involves planning, implementing, and controlling the physical flow of goods, services, and related information from points of origin to points of consumption to meet consumer requirements at a profit

End of Topic