1. Place – Marketing Mix
4.5 The four Ps

2. Learning Objectives Place
The importance of place in the marketing mix (AO2)
The effectiveness of different types of distribution channels (AO3)

3. Place in the Marketing Mix

4. PLACE IS ALL about how the product reaches its consumers
Its concerned with how the product is distributed to make it available to consumers
Place decisions are concerned with how products should pass from manufacturer to final consumer
Distribution system includes making the right product in the right place at the right time with the right quantities.

5. Place represents the location where a product can be purchased
It can include any physical store as well as virtual stores on internet
It is often referred to as the distribution channel
A distribution channel is the path taken by a product from the producer to the consumer

6. A business has to focus on the segment of people they are targeting in order to locate the place where the products or services will be sold
EXAMPLE: A Ralph Lauren clothing store will be located in a wealthy area because their segment is directed to wealthy people, or people that look more for fashion or for quality
Malls
High end stores
Online stores

7. Importance of place in the marketing mix
Place is very important in the marketing mix, because it’s where the consumer receives the product or service
They have to focus not only on the locations of the business, but also in the location of the customers
Businesses should develop strategies to get goods from their present location of consumers
The use of intermediaries such as wholesalers and retailers helps the business to store and market their products and enhance their brand image
The growing global use of the Internet is making it easier for businesses to reach a wide range of consumers directly with their products

8. IMPORTANCE OF PLACE IN THE DECISIONS OF THE CONSUMERS
Consumers may need easy access to a firm’s products to allow them to see and try them before they buy
to make purchasing easy and to allow the return of goods if necessary
Manufacturers need outlets for their products that will help promote their product and at the same time have a better market coverage

9. Distribution Channels

10. Distribution Channels
Channel of distribution: the chain of intermediaries a product passes through from producer to final consumer

11. Appropriate Distribution Channels
Recent trends
Types

12. Recent trends
The increased use of the internet for direct selling of goods and services. In the service sector this can be seen with internet banking and direct selling of insurance policies online
Large supermarket chains perform the function of wholesalers as well as retailers, as they hold large stocks in their own central warehouse. By owning another link in the distribution chain, the business is engaging in vertical marketing

13. Recent trends
Businesses are increasingly using a variety of different channels – for example, an ice-cream manufacturer may have its own ice-cream vans to sell directly to consumers as well as supplying retailers. Hotels may sell room accommodation directly as well as through travel agents and holiday companies
There is increasing integration of services where a complete package is sold to consumers – for example, air flights, car hire, hotel accommodations all sold or distributed to consumers at the same time

14. Types Direct selling Single-intermediary channel
Two-intermediaries channel

15. Direct Selling
Direct selling: no intermediaries are involved and it is sometimes referred to as ‘zero intermediary’ channel.
Examples:
airline tickets
hotel accommodation sold over the internet by the service providers
farmers’ markets – selling products directly to consumers

16. Benefits
No intermediaries so no mark-up or profit margin taken by other businesses
Producer has complete control over the marketing mix – how the product is sold, promoted and priced to consumers
Quicker than other channels
May lead to fresher food products
Direct contact with consumers offers useful market research

17. Drawbacks All storage and stock costs have to be paid for by producer
No retailer outlets limits the chances for consumers to ‘see and try’ before they buy
No advertising or promotion paid for by intermediaries and no after sales service offered by shops
Can be expensive to deliver each item sold to consumers

18. Single-intermediary
Single-intermediary channel: usually used for consumer goods but could also be an agent for selling industrial products to businesses
Examples:
Holiday companies selling holidays via travel agents
Large supermarkets that hold their own stocks rather than using wholesalers
Agent: a business with the authority to act on behalf of another firm

19. Benefits Retailer holds stocks and pays for cost of this
Retailer has product displays and offers after-sales service
Retailer offers in locations that are convenient to consumers
Producers can focus on production – not on selling the products to consumers

20. Drawbacks
Intermediary takes a profit mark-up and this could make the product more expensive to final consumers
Producers lose some control over marketing mix
Retailers may sell products from competitors too, so there is no exclusive outlet
Producer has delivered costs to retailer

21. Two-intermediaries channel
Two-intermediaries channel: wholesaler buys goods from producer and sells to retailer
Examples:
In a large country with great distances to each retailer, many consumer goods are distributed this way, e.g. soft drinks, electrical goods, and books

22. Benefits Wholesaler holds goods and buys in bulk from producer
Reduces stock-holding costs of producer
Wholesaler pays for transport costs to retailer
Wholesaler ‘breaks bulk’ by buying in large quantities and selling to retailers in small quantities
May be the best way to enter foreign markets where producer has no direct contact with retailers

23. Drawbacks
Another intermediary takes a profit mark-up – may make final goods more expensive to consumer
Producer loses further control over marketing mix
Slows down the distribution chain

24. Video

26. Here’s how it works
There are 9 questions with three levels of difficulty and for each you get certain amount of points ( )
If you reach 1500 points you don’t get homework
But for every incorrect answer you get points off, the same amount you would get if you answer the question right

27. Jeopardy Definitions Types T or F 100 100 100 200 200 200 300 300 3004 5 6 7 8 9 10 11 12 13 14 15 16 17 18

28. End Definitions - 100 Define single-intermediary and give an example
1 minute
Define single-intermediary and give an example
End
A type of distribution channel in which a mediator, such as a retailer, buys from manufacturer and then sells to final customer

29. End Definitions - 200 What is place in the marketing mix?
1 minute
What is place in the marketing mix?
End
The process of moving products with various methods of transporting and storing goods from the producer to the customer

30. End Definitions - 300 What is an agent? Give an example
1 minute
What is an agent? Give an example
End
A business with the authority to act on behalf of another firm

31. Types of Channels- 100
1 minute
Give an example of a benefit for customers from buying a product from retailers
End
Retailer have the product displays and offers after-sales service
Retailers offer products in locations that are convenient to consumers

32. Types of Channels - 200
1 minute
Give an example of a company that sells in more than one type of distribution channel, and one from a company that sells without intermediaries
End
Adidas – Oneplus

33. Types of Channels - 300
1 minute
Give two examples of benefits and two from drawbacks of direct-selling for manufacturers
End
+ Producer has complete control over the marketing mix
+ Direct contact with consumers offers useful market research
- All storage and stock costs have to be paid for by producer
- Can be expensive to deliver each item sold to consumers

34. True or False - 100
1 minute
Place in the marketing mix cannot be applied to services
End
False

35. True or False - 200
1 minute
The increasing use of the internet is causing direct-selling to be more popular
End
True

36. True or False - 300
1 minute
The type of channel does not affect the price of the final product
End
False

37. Homework