Ch14 Marketing Mix Place

The Role of Place Decisions in the Marketing Mix

Introduction

• Importance of place decisions in the marketing mix.

• Impact on product availability and sales.

• Real-world example of a local shop.

Distribution Channels Overview

• Four main distribution channels.

  • Direct to consumers,

  • Retailer as intermediary,

  • Wholesaler and retailer,

  • Additional intermediary (agent).

Multiple Choice

Which distribution channel involves manufacturers selling their products directly to the consumer?

• Distribution channel 1 – Direct to consumers

• Distribution channel 2 – Using a retailer as the only intermediary

• Distribution channel 3 – Using a wholesaler and retailer as intermediaries

• Distribution channel 4 – Using an additional intermediary such as an agen

Distribution Channel 1 - Direct to Consumers

• Advantages:

  • Simplicity

  • Suitable for certain products

  • Lower price

  • Mail order and internet sales.

Distribution Channel 1 - Direct to Consumers

• Disadvantages:

  • Impractical for most products

  • Unsuitable for certain items

  • Costly for shipping

• Examples: Farm-fresh products, car components.

Multiple Choice

What is one of the advantages of using a retailer as the only intermediary in the distribution process?

• Reduced distribution costs compared to direct selling

• Direct contact with customers

• Lower product prices

• Faster delivery to consumers

Distribution Channel 2 - Retailer as Intermediary

• Advantages:

  • Large quantities sold to retailers

  • Reduced distribution costs

• Disadvantages:

  • No direct contact with customers

  • Higher pricing due to retailer costs

• Examples: Large supermarkets, expensive items.

Distribution Channel 3 - Wholesaler and Retailer

• Advantages:

  • Bulk breaking

  • Storage space savings

  • Credit options

  • Delivery to retailers

  • Expert advice

Distribution Channel 3 - Wholesaler and Retailer

• Disadvantages:

  • Potentially higher costs

  • Limited product range

  • Delayed fresh produce

  • Geographic challenges

  • Increased consumer prices

Multiple Choice

What is the disadvantage of using an additional intermediary, such as an agent, in distribution channels?

• Reduced control over the way the product is sold

• Lower product prices for consumers

• Faster delivery to consumers

• Greater understanding of local conditions

Distribution Channel 4 - Additional Intermediary (Agent)

• Advantages:

  • Expertise in foreign markets

  • Local market awareness

• Disadvantage:

  • Reduced control over sales

Multiple Choice

Which factor should be considered when determining the distribution channel based on customer location?

• The location of competitors

• The price of the product

• The perishability of the product

• The technical knowledge required for the product

Multiple Choice

In which scenario is direct selling from the manufacturer more likely to be used?

• When the product is very technical and requires explanation

• When the product is highly perishable

• When the product is marketed as being expensive and of high quality

• When the product is purchased every day

Selecting the Right Distribution Channel

• Manufacturers' considerations:

  • Type of product (B2B or B2C)

  • Technicality

  • Purchase frequency

  • Product cost and image

  • Perishability

  • Customer locations

  • Competitor strategies