Marketing

• Place


  Where the product is available for the consumer to purchase. Could include shops, markets, telephone sales, the internet and so on
• Distribution Channels


  Involves the routes which goods follow between the manufacturer and the consumer. The route may be direct between the two but the interaction of middlemen is more likely
• Distribution


  Involves materials being transported or moved to the producer or the final product being moved to the consumer
• Manufacturer


  The maker of products
• Wholesaler


  Buys goods from the manufacturer and sells these goods in smaller quantities to retailers
• Retailers


  Sells goods to consumers. Small retailers buy their stock from wholesalers but large-scale retailers buy directly from manufacturers
• Functions of a Retailer

  • Display goods
  • Promote goods
  • Sell to consumers/sell goods and services
  • Give customers advice/provide customer service
  • Deal with faulty goods/complaints
  • Distribute goods/deliver goods
  • Buy from wholesalers/manufacturers/suppliers
  • Break bulk/buy in large quantities and sell in small quantities
• Warehouse


  A place where resources or finished products are stored before they are sold
• Factors to Consider When Locating a Store

  • Closeness of shop to market+plenty of customers
  • Availability of shop town centre or out of town
  • Suitability of shop size, facilities
  • Cost of shop to buy or rent
  • Ease of access for customers and for deliveries
  • Business area/passing trade plenty of customers
  • Nearness of similar shops as competition, as attraction
  • Planning permission can the area be developed?
• Multi-Channel Distribution


  Involves a business using more than one channel to distribute its goods perhaps through traditional shops and catalogues and online
• Direct Marketing


  Occurs when there is a direct link from the producer to the customer with no intermediaries
• Direct Marketing Channels


  • Selling directly to consumers
  • Selling through retailers
  • Selling through wholesalers
• 1. E-Commerce


  Involves the buying and selling of goods and services via the internet
• Advantages of Retailers Selling on the Internet


  • Wider markets the business will be able to attract more customers 24/7geographical benefics mo
  • Expansion/growth possible without having to locate/fund new sits
  • Internet advert customers to the shops might encourage
  • Possible lower costs of labour-fitting/running shops
  • Keep up with competitors
  • Convenience for customers who cannot travel to the shop shop outside business hours
• Disadvantages of Retailers Selling on the Internet


  • Effects on current business+with time efforts spent with website
  • Reputation may be diminished website crashes problems with delivery
  • Costs of setting up website particularly if professional drugner employed
  • More storage space may be needed so higher warehouse costs
  • Some higher costs maintenance/special packaging/delivery/returns
  • Possible fraud related to payments
  • Customer resistance from people who would want to see the goods before buying (social aspect
• Advantages of Customers Buying on the Internet


  • Can see images of products so can compare many products
  • Prices many sellers can be compared on one computer
  • No need to travel so casts saved
  • Can pay online saving bank charges
  • Cheaper because seller costs lower
  • Wider choice from many sellers
  • Order 24/7
• Disadvantages of Customers Buying on the Internet


  • Goods not inspected to see if goods meet the need
  • Images may be misleading so quality difficult to judge
  • Delays in receiving goods
  • If goods need to be returned there could be additional costs incurred
  • Possibility of fraud if goods not sent when paying
  • Technical issues eg. reliability, speed
• 1. M-Commerce


  Involves buying goods and services through hand-held mobile devices such as smartphones
• Using the Marketing Mix (The 4Ps) to Encourage Customers to use their Business


  • Product: Introduce new goods
  • Place: Move to bigger shop in busier location, sell on internet to reach more antomers
  • Price: An example of a pricing strategy is economy pricing to attract budget conscious shoppers
  • Promotion: Sales promotion where customers are offered incentives to buy from them, Tesco clubcard
• Price


  The amount of money a business wants to receive in order to sell a good or service or the amount of money the consumer is willing to pay to buy that product
• Pricing Strategies


  • Penetration Pricing
  • Cost Plus Pricing
  • Price Skimming
  • Psychological Pricing
  • Competitive Pricing/Market Orientated
  • Price Discrimination
  • Loss Leader
• Penetration Pricing


  Setting a low price for a new product to encourage sales. The price may be increased later with increased customer loyalty and market share
• Cost Plus Pricing


  Involves the producer adding a sum of money (the profit per good) to the cost of producing goods to determine the selling price of the good or service
• Price Skimming


  Selling a product at a high price in order to earn high initial profits. Profits may be reduced later to increase sales at the lower prices
• Psychological Pricing


  Involves offering goods and services at prices below whole numbers such as £5.99p or £499, or using words such as "only". It is hoped that the customers believes it is much cheaper than if the price had been E6 or £500
• Competitive Pricing/Market Orientated


  Involves the producer offering goods for sale at a price, at or below ,that set by competitors
• Price Discrimination


  Charging different prices to different market segments-e.g. discounted pricing to students
• Loss Leader


  Products put on sale, usually in supermarkets, at prices which make no profits and may even make losses in order to attract customers into the shop to buy other goods
• Factors affecting pricing


  • Manufacturing cost
  • Competition
  • Market condition
  • Demand
  • Profitability
  • Price/quality relationship
  • Place
  • Retail share
• Product


  The good or service provided by a business
• Product Portfolio


  The collection range of all the goods and services offered by a business
• Product Differentiation


  Distinguishing a product or service from others by making it different or appearing to be different from similar products sold by rivals, in order to attract more customers
• Brand


  Unique design, sign, symbol, and/or words used in creating a unique image that identifies a product and differentiates it from its competitors
• Characteristics of branded products


  • They are trusted by consumers
  • They usually have a high price/premium price
  • They are unique/differentiated/stand out/recognised
  • Customers are loyal to the brand and repeat purchase
• Why do businesses brand their product?


  • It differentiates products from rivals
  • It is associated with the business so customers can recognise and ask for the brand
  • It is used in advertising to promote the range of products made by the business
  • It encourages repeat buying and impulse buying, increasing sales
  • It enables higher prices which customers will be willing to pay, increasing profits
  • It makes the business more likely to succeed in global markets as it is widely known for quality
• USP (Unique Selling Point)


  What makes a product different from ones sold by competitors. It may involve the lowest price, the best quality, or the first of its kind. It may help a business gain a competitive advantage, justify a premium price, and attract more customers.
• Why sell high quality products?


  • High levels of customer satisfaction/customers will be happy with the products, repeat purchasing
  • It differentiates the goods from rivals, making them more competitive
  • It increases sales/market share by attracting customers with better products and retaining existing customers
  • It improves the business's image and can be used in promotion
  • It allows the business to charge higher prices, increasing sales revenue and profit margins
  • It reduces costs of providing new/replacement products due to fewer complaints/returns
• Why do businesses sell a wide range of products?


  • It spreads risk - selling more goods will compensate for underperforming products and reduces the risk of failure
  • It attracts more custom by targeting more customers with a variety of products to meet their needs and wants
  • It provides a competitor advantage by keeping up with competitors
  • It increases revenue and market share
  • It increases profit through greater sales and economies of scale from bulk buying
• Purposes of Packaging


  • Reduce risk of damage, ensure high product quality
  • Storage before sale in retailers/wholesalers
  • Keep product fresh/clean and prevent contamination to ensure consumers aren't harmed
  • Provide information like name, address, ingredients, safety, use by dates
  • Identify the product from advertising/previous purchase, enabling higher prices, differentiating from rivals, and encouraging brand loyalty and impulse buying
• Product Life Cycle

  The stages a product passes from its earliest development until it is no longer available on the market