Place (Distribution)

Question 1

What is the Marketing Logistics Network?

Answer 1

• a system of efficiently making products for end users
• involves “delivery” and distribution: Getting it out to customers and distribution involves where and how you can get the product
• will reduce lead time: the time to serve the product e.g. Iconic is one day express, or maccas drive through is fast. Lead time from overseas on ebay can take long as well.

Question 2

How does the MLN add to the value chain?

Answer 2

Starts with the manufacturer and ends at end user. Between each part of the chain, something beneficial is added to the product, there is value added. E.g. giving it to another company that can add components then retailers then delivery etc.

Question 3

What are the four functions of logistics (place)?

Answer 3

This enables effective and efficient distribution.
Functions:
- Warehousing: storage element, where you keep your products. Needs to be readily accessible so you can transition it to the next place comfortably.
- Inventory management: Just keeping track of your inventory, what goes in and out, how much you have etc. Important to have proper supply to meet demand. Also important to keep track of loss as you know where everything is (can get stolen etc).
- Transportation: Just delivery, getting the product to the customer.
-Logistics info mgmt: Involves keeping track of data such as time to see how effective you are at delivery etc.

Question 4

What is a distribution channel?

Answer 4

• they are a group of interdependent organisations

- work together to deliver goods, includes retailers. So working with the intermediaries.

Question 5

You can look at distribution channels as a ______

Answer 5

value chain

Question 6

What is are distribution channels?

Answer 6

Basically the various means a firm distributes its products to its customers.

Question 7

How does overcoming discrepancies add value?

Answer 7

Discrepancy is the difference between what is happening and what should be happening.

There are 4 ways to do this, by considering: quantity, assortment, temporal factors, spatial factors (QATS)

Question 8

What is quantity in relation to overcoming discrepancies?

Answer 8

What is demanded is what should be provided to maximise profits. Obviously you want to supply at the right quantity (not too much or too little - unnecessary costs).

This adds value as it saves the company money (as opposed to it being lost).

Question 9

What is assortment in relation to overcoming discrepancies?

Answer 9

Specifically, WHAT is demanded. You dont want to be giving dildos for a customer base that wants bananas.

This adds value by having relevant products that their customer base wants, retaining their customer base and saving losses.

Question 10

What is the temporal factor in relation to overcoming discrepancies?

Answer 10

Basically you want to sell things at the right time e.g. seasonal changes. Also, minimising lead time.

This adds value by giving the product to the customer at the time they want it.

Question 11

What is the spatial factor in relation to overcoming discrepancies?

Answer 11

Related to the geography. You don’t want your retailer to be too far from where the customer base is.
Or, you can make your delivery process more effective.

Adds value more customers can access your products and buy them, giving them further profit.

Question 12

How does distribution add value via specialisation?

Answer 12

Through information, contacts (industry), negotiation, financing, promotion (PINFC)

Question 13

What is ‘information’ in relation to specialisation?

Answer 13

Specialising in information means you have an exclusive business channel. Allows you to learn a lot about that industry, and they most effective way to compete and market.

This adds value as a business gets better as it gathers more relevant information.

Question 14

What is ‘contacts’ in relation to specialisation?

Answer 14

Based on WHO you know. If you are connected to leading industry experts, your products will likely be better.

Or if you have good contacts in retail industry, can better distribute products.

Add value through these ways.

Question 15

What is ‘negotiation’ in relation to specialisation?

Answer 15

Having leverage with the people you’re dealing with. If you manage to get favourable outcomes in the delivery of your products to your customer, you get value added e.g. you’re a large client working with a delivery company for a long time - get better deals.

Note that the more advanced your distribution channel is, the more leverage you have.

Question 16

What is ‘financing’ in relation to specialisation?

Answer 16

How you fund your distribution channels. Involves economy of scales, the bigger you are, the lower the per product cost there is. As you get bigger, you get better so you get leniency.

Question 17

What are the types of distribution channels?

Answer 17

Vertical channels,

Question 18

What is a vertical channel?

Answer 18

Basically just moving good from manufacturer to manufacturer where components are added to retailer etc. Each intermediary do something different.

Hard because very segmented, making communication between each limited.

Question 19

What is a horizontal channel?

Answer 19

Companies on the same level that are competitors in the industry that work together to increase their economy of scales.

This is problematic as there are competitive problems.

Question 20

What is a vertical marketing network?

Answer 20

Three kinds: corporate, contractual, administered.

Question 21

What is the corporate type of a modern vertical marketing network?

Answer 21

A modern vertical channel. It’s when one company owns every part of the value chain and distribution channel. This is good because you don’t have to worry about other businesses affecting you.

Question 22

What is the contractual type of a modern vertical marketing network?

Answer 22

A bunch of businesses under a contract from another firm. Makes it more expansive e.g. more retail stores.

Question 23

What is the administered type of a modern vertical marketing network?

Answer 23

Essentially a monopoly. You create the entire value chain as there is no one else there to help you. You are the only market player essentially.

This is obviously resource exhaustive, minimising profit.

Question 24

What is a hybrid marketing network?

Answer 24

Essentially combination of corporate, contractual and administered vertical marketing network.
The main difference is that it has a wide horizontal channel as well, which allows businesses to work together.
Those companies can then have their own vertical chains, which gives them stricter controls over their logistics.
Sharing contacts, resources, etc means more efficient industry in general.

Question 25

What is distribution intensity?

Answer 25

Basically how much of your product you want to distribute.
Intensive: Basically everywhere, mass marketed.
Selective: Available some places, but not others. Could be firm just starting out for example, and they haven’t secured many distribution deals. Segmented targeting.
Exclusive: Available in very few places, a niche market. Could also be luxury goods aiming at wealthy people.