Place/Distribution

Place/Distribution Place is the third component of marketing mix, also called distribution. Refers to the process of making a product available for the consumption or use of the consumer of business user. It covers all steps involved in moving products from the point of consumption.

Place/Distribution Distribution channel - Set of interdependent organizations involved in making a product or service available for use by the target market. Marketing Intermediaries – are companies that act as middlemen who facilitate the transfer of products from the company to the consumer

Functions of Distribution Channels Information gathering and dissemination Promotion Contact Matching Negotiation Physical distribution Financing Risk taking

Distribution Strategies Intensive – distributes products in as many outlets as possible Selective – this strategy permits at least two intermediaries to sell a company’s products, e.g. appliances, CD players, air conditioners Exclusive –a company gives only one dealer the exclusive right to distribute its product in the territory.

The Sales Force AIDA – Common traits of successful salespeople: Work hard Be self-confident Have self –discipline Have perseverance Be flexible Have goals other than money Have respect for the buyer’s good sense Be willing to learn from others Be able to handle big money Be a perfectionist

Retailing This form of distribution includes al activities involved in selling goods to the final consumers for their personal, non-business use. Two (2) general types: Store retailing Non-store retailing

Store Retailing Classifications Amount of service Product line Relative prices Control of outlets Type of store cluster

Types of stores based on Amount of Service Self-service retailers – customers perform their own “locate-compare-select” process to save money Limited-service retailers – provide more sales assistance because they carry more shopping goods about which customers need information. Full-service retailers – carry more specialty goods that create the need for salespeople to assist customers in every phase of the shopping process.

Types of stores based on Product Line Specialty stores-carry a narrow product line Department stores – carry a wide variety of product lines (each managed separately) Supermarkets – large, low-cost,low-margin,high-volume,self-service stores Convenience stores Superstores Service businesses

Types of stores based on Relative prices Discount stores Off-price retailers Catalog showrooms

Types of stores based on Control of Outlets Corporate chains Voluntary chain and retailer cooperative Franchises Merchandising conglomerates

Types of stores based on Store Cluster Central business district – this was the main cluster form in the 1950s. a.k.a. downtown where the many independently owned and managed stores conduct operations. Shopping center – this consists of a group of retail stores or businesses, which are owned, planned, developed and managed as a single unit.

Forms of Non-store Retailing Direct Marketing Direct selling or “in-home” selling Automatic vending machines

Wholesaling Includes all activities of wholesalers in selling products to those people or companies buying for resale or for business purposes. Three distinct groups: Merchant wholesalers Brokers and agents Manufacturers

Merchant Wholesalers Full-service wholesalers – provide full line of service like: warehousing, credit, delivery, and mgt. assistance. Limited service wholesalers Cash & carry Drop shippers Rack jobbers Producers cooperatives Mail-order wholesalers

Brokers and Agents Broker – brings seller and the buyer together and assists in their negotiation. Agent – represent a buyer or a seller on a more permanent basis.

Manufacturer’s Sales Branches and Offices Sales branch carries inventories and is found in such industries as automotive parts and equipment, and lumber Sales office does not carry inventory and is more common in the dry goods industry. Purchasing office – buys materials and supplies in behalf of the company. Performs similar role to that of agents and brokers but it is a part of the buyer’s organization itself.

Basic Aspects of Physical Distribution Inventory control Warehousing Transportation Water Rail Truck Air