Place and Distribution 1

Place  The means by which products and services get from producer to consumer.  Place, where products can be accessed by the consumer  The more places to buy the product and the easier it is made to buy it, the better for the business and the consumer 2

Distribution  Distribution is the process of delivering the products manufactured or service provided by a firm to the end user  Various intermediaries are involved in this process  Intermediaries is a set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business used. 3

Distribution Channel level  A layer of intermediaries that performs some work in bringing the product and its ownership to the final buyer. 1. Direct distribution channel  A marketing channel that has no intermediary levels. 2. Indirect distribution channel  Channel containing one or more intermediary levels. 4

5 Wholesaler Small whole seller Small whole seller Retailer Consumer  Retailer Consumer  Producer 0-level channel – Direct Wholesaler Retailer Consumer  Producer 2-level channel Producer 3-level channel 1-level channel Producer Number of Channel Levels Channel Level - Each Layer of Marketing Intermediaries that Perform Some Work in Bringing the Product and its Ownership Closer to the Final Buyer.

Function of intermediaries  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 it’s own through the intermediaries: i. Contacts, ii. Experience, iii. Specialization, iv. Scale of operation.  Purpose: match supply from producers to demand from consumers. 6

7 Intermediaries' Functions Information Promotion Contact Matching Negotiation Physical Gathering and distributing marketing research about the environment Developing and spreading persuasive communications about an offer Finding and communicating with prospective buyers Shaping and fitting the offer to the buyer’s need Agreeing on price and terms of the offer so ownership or possession can be transferred Distribution: transporting and storing goods

8 Travel Agents Tour Wholesalers Custodians Specialists: Brokers Specialists: Brokers Internet Hotel Representatives Syndicates & Reservations Systems Syndicates & Reservations Systems Global Distribution Systems Global Distribution Systems National, State, and Local Tour Agencies National, State, and Local Tour Agencies MARKETING INTERMIDIARIES

Internet  The Internet is quickly becoming an effective distribution channel.  It never closes.  It allows companies to tangibles their products and services.  It reaches a broad geographic areas.  It allows interaction with the guests.  It saves labor. 9

Retailer  Retailing refers to a process where the retailer sells the goods directly to the end-user for his own consumption  There are a few types of retailer store. 1. Department store 2. Discount store 3. Supermarket 4. Warehouse store 5. Mom and pop store 6. Specialty store 7. Malls 8. E-tailer 9. Dollar store 10

1) Department store  A department store is a set-up which offers wide range of products to the end-users under one roof  Department stores provide a wide range of options to the consumers and thus fulfill all their shopping needs.  Offer department for Electronic Appliances, Apparels, Toiletries, Cosmetics, Footwear, Sportswear, Toys, Books, CDs, DVD and others 11

2)Discount store  Discount stores also offer a huge range of products to the end-users but at a discounted rate  The discount stores generally offer a limited range and the quality in certain cases might be a little inferior as compared to the department stores. 12

3) Supermarket  A retail store which generally sells food products and household items, properly placed and arranged in specific departments.  A supermarket is an advanced form of the small grocery stores and caters to the household needs of the consumer.  Product offer; Bakery products, Cereals, Meat Products, Fish products, Breads, Medicines, Vegetables, Fruits, Soft drinks, Frozen Food, Canned Juices 13

4) Warehouse store  A retail format which sells limited stock in bulk at a discounted rate.  Warehouse stores do not bother much about the interiors of the store and the products are not properly displayed. 14

5) Mom and pop store  small stores run by individuals in the nearby locality to cater to daily needs of the consumers staying in the vicinity.  They offer selected items and are not at all organized. The size of the store would not be very big and depends on the land available to the owner. 15

6) Speciality store  Speciality store would specialize in a particular product and would not sell anything else apart from the specific range  Speciality stores sell only selective items of one particular brand to the consumers and primarily focus on high customer satisfaction. 16

7) Mall  Many retail stores operating at one place form a mall.  A mall would consist of several retail outlets each selling their own merchandise but at a common platform. 17

8) E - tailer  Non-store retailing  Seller will display the product in the internet and buyer will place order and make payment with help of debit or credit card.  Eg; ebay, amazon, lelong 18

9) Dollar store  Dollar stores offer selected products at extremely low rates but here the prices are fixed.  Example – kedai 2 would offer all its merchandise at RM2 only. No further bargaining is entertained. However the quality of the product is always in doubt at the discount stores 19

Channel Behavior & Conflict  The channel will be most effective when:  each member is assigned tasks it can do best.  all members cooperate to attain overall channel goals and satisfy the target market.  When this doesn’t happen, conflict occurs:  Horizontal Conflict occurs among firms at the same level of the channel, i.e retailer to retailer.  Vertical Conflict occurs between different levels of the same channel, i.e. wholesaler to retailer.  For the channel to perform well, each channel member’s role must be specified and conflict must be managed. 20

Causes of Channel Conflict 1. Incompatibility 2. Difference in Perception 3. Dependence 21 4.Giving a special deal to a larger channel member 5.Direct selling 6.Not servicing your products, parts and technical advice 7.Adding new channels may cause conflict with existing channels

THE END Thank you 22