3.4 (Market mix- Place and promotion)

• Distribution Channel: A chain of businesses or intermediaries through which a good or service passes until it reaches the final buyer or the end consumer
• Marketing channels for consumer products

  
• Place- distribution channels

  • Place is the point where products are made available to customers
  • Retailers are shops that stick products so customers can buy items locally
  • Wholesalers buy in bulk and resell smaller quantities - 'Middlemen'
  • Telesales and mail orders is direct selling that allows businesses to get products to customer
  • Internet selling or e-commerce: website can be a method of distribution and promotion
• How to choose a method of distribution

  • The type of product
  • The technicality of the product
  • How often the product is purchased
  • The durability of the product
  • Location of customers
  • Where competitors sell their products
  • The price of the product
• Pros and Cons of Distribution sales channels:

  Pros

  • established network
  • feet on the ground
  • market and or product specialists
  • can be seen as "full-service" providers with a unique value proposition
  • will hold inventory
  • reduce cost of sales (customer consolidation)

  Cons

  • high markups can price you out of their market
  • wont share vital market or customer information
  • will use your company only to boost their profile and image
  • use your company to secure business with another they represent
  • aren't always the best partners
• Promotion: methods to make customers aware of its product

  • Persuasion is at heart of promotion
  • explaining the product/ service
  • Creating and developing brand
  • Encouraging wholesalers and retailers to stick
  • Reassuring consumers of the need/ want
  • Increasing sales is the bottom line
• Methods of promotion overview(1):

  • Advertising is non personal, and where a business pays for messages about itself in mass media such as television or newspapers
  • Sales promotions - buy now rather than later. Examples include point-of-sale displays, 2-for-1 offers, gifts, samples, coupons, or competitions
• Methods of promotion overview(2):

  • Personal selling using face-to-face communication, e.g., employing salespersons or agents to sell directly
  • Direct marketing - when firms contact individual consumers using tactics such as ‘junk’ mail shots and weekly ‘special offer’ emails
  • Sponsorship – the business is linked to an event, place, or person
• Methods of sales promotion(bullet-points):

  • Coupons
  • premiums
  • incentives
  • product samples
  • sponsorship
  • product placement
  • loyalty programs
  • point-of-Purchase displays
• What affects promotional decisions(1)...

  • Stage of product on PLC (product life cycle)
  • The nature of the product
  • ->A firm could use persuasive advertising, billboards, and TV commercials if it's a consumer good. 
  • ->Producer goods would have bulk-buy discounts to encourage more sales
• What affects promotional decisions(2)...

  • The nature of the target market
  • -> Local markets need small advertising, while national markets need TV and billboards
  • -> Extensive advertising would be required if the product is sold to a mass market.
  • -> However, niche market products such as water skis only need advertising in special sports
  • Cost-effectiveness: promotional activities are highly dependent on the budget
• Technology and the marketing mix(1):

  • Producers favour online selling because it is cheaper in the long run
  • Allows companies to sell products to a larger customer base/ market

  -> However, there will be increased competition from many producers
• Technology and the marketing mix(2):

  • Consumers prefer online shopping because there are wider choices and cheaper prices
  • Customers can buy at convenience 24*7

  -> However, there is no personal communication with the producer

  -> And online security issues may occur
• Using the internet to vary the marketing mix

  
• SWOT (Strengths, Weaknesses, Opportunities and Threats) of using the internet to vary the marketing mix:

  Strengths:

  • Savings in local costs
  • Geographic reach
  • Data collection
  • convenience and flexibility in the sales process

  Weaknesses:

  • Remote customer service
  • Delivery times
  • Technological barriers
  • fraud risk

  Opportunities:

  • eCommerce expansion
  • Popularity of home delivery
  • Use of IA and automations
  • more personalised offers

  Threats:

  • Competitive sector
  • Logistical problems
  • Economic uncertainty
  • changes in trends