Marketing place and price Flashcards
What is distribution ?
Distribution is a key element of the
marketing mix
– Where should the product be sold?
– How will it move from the producer to the
consumer?
What is place?
- Place is concerned with distribution channels, intermediaries,
the distribution mix, and the distribution strategy. - Distribution channels may be consumer or industrial, and they
may involve such intermediaries as agents and brokers,
wholesalers, and retailers, who add value to the products they
handle. - The distribution mix is the combination of distribution channels
a company uses to get its products to customers. - Three kinds of distribution strategy are intensive, selective, and
exclusive
what is the distribution strategy about?
Distribution Strategy is about getting the right product
to the right person, at the right place, at the right time.
Where do buyers look for your product or service?
* If they look in a store, what kind? A specialist boutique or in
a supermarket, or both? Or online? Or direct, via a
catalogue?
* How can you access the right distribution channels?
* Do you need to use a sales force? Or attend trade fairs? Or
make online submissions? Or send samples to catalogue
companies?
* What do your competitors do, and how can you learn from
that and/or differentiate?
what is the channel of distribution?
The channel of distribution is the path that a product takes from the producer to the consumer
producer –> direct,retailer,…–> consumer
Chanel of distribution: Direct to consumer ?
From the manufacturer to consumer with no intermediary.
ex: Corporately operated stores, telemarketing,
online orders, door-to-door, vending machines
(by manufacturer directly)
Chanel of distribution: Stores Retailers
Buy from manufacturer
ex: Department stores, convenience stores,
supermarkets, discount stores, specialty
boutiques, big-box stores
Chanel of distribution: Non-stores retailers
Buy from manufacturer or wholesales
ex: Online orders, vending machines,
telemarketing (done by retailers)
Chanel of distribution: Wholesales
Buy from manufacturers
ex: Resell to retailers or businesses (take
ownership of the product and often store it
before selling it)
Chanel of distribution: Agents
Facilitate the transaction between
manufacturers and consumers or businesses
(receive a commission)
How intermediates add value: cost items
Employees : Salary & benefits for
employees such as sales
& service.
Marketing: Marketing costs such as
publicity & promotions.
Inventory: Interest charges on the
cost of holding inventory.
Place: Charges related to space
& building (insurance,
heating, electricity)
Transportation: Transportation, for
deliveries.
How intermediates add values:
- location
- time
- information
- ownership
- service
- form
- Location:
- Selling Products Where People Want
Them - Time:
- Selling Products When People Want
Them - Information:
- Providing Knowledge about Products
- Ownership:
- Helping Customers Acquire the
Products - Service:
- Helping customers use the products
- Form:
- Changing Materials into Useful
Products
what is pricing ?
It is figuring out how much to charge for a product.
why is pricing so important in the marketing strategy?
– Pricing is supposed to:
* make a profit;
* match or beat the competition;
* attract customers;
* make products affordable to certain people;
* and create prestige.
What are some things that they
would want to consider when
pricing?
- product cost
- competitors prices and other inter/external factors
- Consumer perception of value
What are some strategies that a
company could use to set the price
of their product?
Cost pricing:
the cost of producing or buying the product—plus making a profit—is the
primary basis for setting price.
Target costing:
Considers market forces. In, a company
starts with the price it wants to charge, figures out the profit margin it wants,
then determines what the costs must be to produce the product to meet the
desired price and profit goals
Competitive pricing:
price is determined in relation to rivals, factoring in other considerations such
as market dominance, number of competitors, and customer loyalty.
