Place Flashcards
What is a place?
Place is the point where products are made available to customers. A business has to decide on the most cost-effective way to make their products easily available to customers.
What are methods of channel of distributions?
This involves selecting the best channel of distribution. Potential methods include using:
Retailers. Persuading shops to stock products means customers can buy items locally. However, using a middle man means lower profit margins for the producer.
Producers can opt to distribute using a wholesaler who buys in bulk and resells smaller quantities to retailers or consumers. This again means lower profit margins for the manufacturer.
Telesales and mail order. Direct communication allows a business to get products to customers without using a high street retailer. This is an example of direct selling.
Internet selling or e-commerce. Online selling is an increasingly popular method of distribution and allows small firms a low cost method of marketing their products overseas. A business website can be both a method of distribution and promotion.
Whats an advantage of new/improved channels of distribution?
Developing new or improved channels of distribution can increase sales and allow a firm to grow.
What is direct selling?
Where sellers contact potential buyers directly without having middlemen buying their goods and then selling them on to consumers.
What is promotion?
Promotion refers to the methods used by a business to make customers aware of its product.
Whats advertising?
Advertising is just one of the means a business can use to create publicity.
How do businesses create an overall promotional mix?
Businesses create an overall promotional mix by putting together a combination of the following strategies:
Advertising, where a business pays for messages about itself in mass media such as television or newspapers. Advertising is non-personal and is also called above-the-line promotion.
Sales promotions, which encourage customers to buy now rather than later. For example, point of sale displays, 2-for-1 offers, free gifts, samples, coupons or competitions.
Personal selling using face-to-face communication, eg employing a sales person or agent to make direct contact with customers.
Direct marketing takes place when firms make contact with individual consumers using tactics such as ‘junk’ mail shots and weekly ‘special offer’ emails.
Why are there different promotional mix’s for different firms?
There is no one right promotional mix for all firms. The combination of promotional elements selected takes into account the size of the market and available resources. Large businesses have the resources to use national advertising. Small firms with limited resources and a local market may instead opt for leaflet drops to promote their activities.
