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Higher Business- Marketing > Marketing Mix- Place > Flashcards

Marketing Mix- Place Flashcards

1
Q

What are the channels of distribution?

A

Channels of distribution are the possible routes taken by a product to reach the consumer from the manufacturer

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2
Q

What are the different channels of distribution?

A
  • manufacturer➡️customer (selling directly to consumers)
  • manufacturer➡️retailer➡️customer (selling through retailers)
  • manufacturer➡️wholesaler➡️retailer➡️customer (selling through wholesalers)
  • manufacturer➡️wholesalers➡️customers
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3
Q

Factors affecting the channels of distribution

A
  • finance available
  • desired image for the product
  • shelf life of the product
  • legal restrictions
  • stage of the product life cycle
  • technical qualities of the product
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4
Q

Finance available

A

The manufacturer may not have the finance available to set up e-commerce or print catalogues to sell direct, so using wholesalers or retailers are the only options

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5
Q

Desired image of the product

A

Certain products have images that dictate where they can be sold. Eg Hugo boss only sell in retailers that have built up a good reputation over at-least 5 years 

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6
Q

Shelf life of the product

A

Some products need to be shipped to retailers fast as they will go out of date quickly eg fresh fruit

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7
Q

Legal restrictions

A

Some products can’t be sold through certain channels eg prescription medicines need to be sold through pharmacies 

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8
Q

Stage of the product life cycle

A

Products may only be sold in exclusive outlets at the beginning of a product life-cycle, but may be sold in discount stores during the decline stage to encourage sales.

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9
Q

Technical qualities of the product

A

Highly technical products may need to be demonstrated, which means personal selling is the ideal channel.

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10
Q

What is a Manufacturer?

A

The manufacturer is the company that makes the product.

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11
Q

What is direct selling?

A
  • direct selling means selling direct to the customer from the manufacturer
  • this Is the shortest channel of distribution and means there are less ‘middle men’ taking a cut of the profits
  • businesses also retain control of how their product is marketed
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12
Q

Methods of direct selling

A
  • E-commerce
  • mail order
  • direct mail
  • personal selling
  • shopping channels
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13
Q

What is E-commerce,

Advantages and disadvantages?

A

-a business sells its products using the internet

Advantages

  • customers in the global market can be reached 24/7
  • an entire range can be shown online
  • online discounts can be offered to attract customers
  • product information and customer comments can sway purchasing decisions

Disadvantages

  • it can take a lot of time and expense to design attractive, high quality websites
  • customers might be wary of providing their personal details online
  • customers need to have access to the internet
  • customers need to wait for products to arrive and may have to pay delivery costs
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14
Q

What is mail order and what are the advantages and disadvantages?

A

-a business sells its products using a catalogue, which is usually sent directly to the customer

Advantages

  • credit facilites are often offered to customers
  • customers can browse for products and place orders from home, at a time that suits them
  • mail-order-only companies save money on staffing and store costs

Disadvantages

  • glossy catalogues can be expensive to produce
  • producing catalogues is not environmentally friendly and may not meet CSR aims
  • a level of bad dept might be incurred
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15
Q

What is direct mail and what are the advantages and disadvantages?

A

-a business posts letters, leaflets and brochures directly to the customer

Advantages

  • specific market segments can be targeted, eg by inserting supermarket recipe cards inside cookery magazines
  • a wide geographical area can be targeted by placing leaflets inside newspapers and magazines

Disadvantages

  • customers can perceive this as ‘junk mail’ and simply throw it away
  • customers making lists quickly becomes out of date, meaning a business may target the wrong people and waste money
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16
Q

What is personal selling and what are the advantages and disadvantages?

A

-a salesperson sells products directly to the customer, often by going ‘door to door’ or over the phone (telesales)

Advantages

  • allows a demonstration or explanation of the product to be given
  • feedback on products can be gathered from customers

Disadvantages

  • customers can find this type of selling nuisance and may not be keen to listen
  • staffing costs and commission make this method expensive and increasingly unpopular with businesses
17
Q

What are shopping channels and what are the advantages and disadvantages of it?

A

-a business sells products on the TV using dedicated shopping channels

Advantages

  • customers can see products being modelled and demonstrated
  • customers can be encouraged to buy on impulse due to short-time bargain prices

Disadvantages

  • customers need to switch on to the channel before they can be targeted
  • customers need to wait for products to arrive and may have to pay delivery costs
18
Q

What a

A

E

19
Q

What are retailers?

A

-retailers sell the product to the customers on behalf of the manufacturer

20
Q

Why do manufacturers prefer to use retailers ?

A
  • Manufacturers may sometimes prefer to use retailers because retailers can attract large numbers of customers from lots of different target markets.
  • Many retailers already have an established loyal customer base and may offer additional services such as free delivery and credit facilities.
21
Q

What are the 4 distinct functions that retailers perform?

A
  • The retailer breaks down bulk supplies of an assortment of goods and services from a range of suppliers and offers them for sale to the public.
  • The retailer provides information to consumers through advertising, displays and signs, and trained sales personnel.
  • The retailer stores goods, prepares them for sale, marks prices on them and displays them on the sales floor.
  • The retailer physically sells these goods to consumers and offers a range of related services such as credit facilities, hire-purchase, after-sales guarantees and delivery.
22
Q

Advantages and disadvantages of manufacturers selling their products through retailers

A

Advantages

  • retailers are located close to customers
  • retailers often promote the product for the manufacturer
  • retailers employ sales assistants to help sell the product
  • larger retailers buy in bulk

Disadvantages

  • retailers take a cut of the profits
  • retailers may alter the price of the product and so have an effect of the image of the product
  • the product will face competition from other products stocked by the retailer
23
Q

What are the different types of retailers?

A

-hypermarkets and superstores
-convenience supermarkets
-out-of-town retail parks
-online retailers
-discount stores
-department stores

24
Q

What are hypermarkets and superstores and what are the advantages and disadvantages?

A

-there has been a growth in massive supermarkets, which sell many goods and services under one roof. The largest of these are known as hypermarkets, eg Tesco extra

Advantages

  • most hypermarkets are open 24/7
  • a huge range of products is offered to customers

Disadvantages
-lack of competition from high-street stores can lead to poorer quality products

25
Q

Convenience stores,
Advantages and
Disadvantages?

A

-due to changing work patterns and lifestyle changes, there has been a growth in smaller supermarkets appearing in convenient locations

Advantages

  • cater for the changing needs of customers so are guaranteed football?.??????.?.?..
  • prices can be slightly higher than larger supermarkets due to the convenience factor

Disadvantages

  • limited choice of products due to smaller store sizes
  • there can be high levels of waste as it is harder to predict customer numbers than it is for larger, more traditional supermarkets
26
Q

Out-of-town retail parks,

Advantages and disadvantages?

A

out of town retailing is now found on the outskirts of most major towns in the uk with good infrastructure such as road links and free car parking

Advantages

  • infrastructure attracts customers
  • often near amenities such as restaurant chains and cinemas, which can increase football?????..
  • larger store sizes mean a good product range for low prices due to bulk buying by OOT retailers

Disadvantages

  • limited choice of stores compared to high-street shopping or more traditional shopping malls
  • only suitable for customers with access to transport
  • ‘showtooming’ can occur, where customers view/try products in store but buy online for a lower price
27
Q

Online retailers,

Advantages and disadvantages?

A

-Amazon is the biggest online retailer in the uk. Rather than setting up their own e-commerce site, some manufacturers will sell through retailers like this

Advantages

  • products can be sold to a worldwide market by online retailers
  • products can be sold 24/7

Disadvantages

  • customers cant try to touch the product before buying
  • delivery charges may put some customers off
28
Q

Discount stores,

Advantages and disadvantages?

A

-in response to the recession, discount stores have become popular in the UK over the last few years

Advantages
-products are sold for rock-bottom prices, which attracts customers looking for value

Disadvantages
-limited product range compared to other retailers
-some customers don’t like the image of discount stores
-

29
Q

Department stores,

Advantages and disadvantages?

A

-often flagship stores of any shopping mall or town centre, stores such as John Lewis and Debenhams sell a huge variety of items from clothing to beauty products to home furnishings

Advantages

  • many target markets can be catered for
  • central locations can attract customers, commuters, tourists ect
  • can benefit from impulse buying

Disadvantages
-more and more department stores and closing due to the high rents and other expenses for the prime retail sites they often occupy.

30
Q

What are wholesalers?

A
  • A wholesaler buys large quantities of items from the manufacturer and then sells them on to retailers, or directly to the customer, in smaller quantities.
  • Many larger retailers do not use a wholesaler as part of their distribution channel because they have their own warehouses and transport systems.
31
Q

Advantages and disadvantages for manufacturers using a wholesaler

A

Advantages
-packaging and displaying of goods is carried out by the wholesaler, saving the manufacturer time and costs
Wholesalers buy in bulk, saving manufacturers from making lots of small deliveries
-wholesalers can promote products to retailers, which saves the manufacturer promotion costs
-the wholesaler carries the risk of products going out of fashion as manufacturers get rid of goods as soon as they are produced

Disadvantages

  • manufacturers make less profit as a cut is taken by wholesalers
  • the manufacturer loses control of how the product is marketed
  • the manufacturer loses control of which retailers the product is sold to
32
Q

Advantages and disadvantages for retailers of using a wholesaler

A

Advantages

  • retailers can save on storage facilities by buying smaller quantities from wholesalers and they would get from manufacturers
  • retailers can benefit from promotions offered by wholesalers that they may not get direct from manufacturers
  • retailers can trial smaller orders of newer products and not be left with large amounts of unsold inventory

Disadvantages

  • it is more expensive than going directly to manufacturers as wholesalers add on a margin of profit
  • wholesalers offer the same products to retailers competitors, so other areas of the marketing mix have to be relied on
  • The retailer may miss out on exclusivity deals by not going direct to manufacturers

Higher Business- Marketing (10 decks)

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