The Four Ps of Marketing:
Place
Maria Jewdaly L. Costales
SPCBA Professor
The Four Ps of Marketing:
The Marketing Mix Strategies
Marketing Mix is a
strategy integral to the
success of a business,
the basics of every
marketing theory.
4 Variables of Marketing
Mix:
1. Product
2. Price
3. Place
4. Promotion
Place
Place
or
distribution
ensures utmost availability
and visibility of the right
product to its right target
market through the right
distribution channel at the
right place, right quantity,
right time, right condition
and right cost.
Distribution Strategy
It is the method you use
to get your product or
service through various
distribution channels to
the ultimate purchaser
or
end-user-in
other
words, how and where
the consumer buys your
product or service.
Distribution
Channel
Can be defined as:
all the organizations
through which a product
must pass between its
point of production and
consumption.
Requisites of Distribution Strategy
MARKETING CHANNELS
Distributors
Dealers
Wholesalers
Retailers
The Need for Marketing
Intermediaries
They perform functions more cheaply
and more efficiently than the producer
can.
Their primary role is to bring supply
and demand together in an efficient
and orderly fashion.
Major Types of Marketing
Intermediaries
Middleman an independent business concern
that operates as a link between producers and
ultimate consumers or organizational buyers.
Merchant middleman a middleman who buys
the goods outright and takes title to them.
Agent a business unit that negotiates
purchases, sales, or both but does not take title
to the goods in which it deals.
Wholesaler a merchant establishment
operated by a concern that is primarily engaged
in buying, taking title to, usually storing and
physically handling goods in large quantities, and
reselling the goods (usually in smaller quantities)
to retailers or to organizational buyers.
Retailer a merchant middleman who is engaged
primarily in selling to ultimate consumers.
Brokers a middleman who serves as a gobetween for the buyer or seller. The broker
assumes no title risks, does not have usually have
physical custody of products, and is not looked
upon as a permanent representative of either the
buyer or the seller.
Manufacturers agent - an agent who generally
operates on an extended contractual basis, often
sells within an exclusive territory, handles
noncompeting but related lines of goods, and
possesses limited authority with regard to prices
and terms of sales.
Distributor
a wholesale middleman
especially in lines where selective or
exclusive distribution is common at the
wholesaler level in which the manufacturer
expects strong promotional support; often a
synonym for wholesaler.
Jobber a middleman who buys from
manufacturers and sells to retailers; a
wholesaler.
Facilitating agent a business firm that
assists in the performance of distribution
tasks other than buying, selling, and
transferring
title
(ex.
transportation
companies, warehouses, etc.)
Channels of Distribution
Thepath
through
whichgoods
and
services
travelfrom
thevendorto
theconsumerorpaymentsfor
thoseproducts travel from the consumer
to the vendor.
can
be
as
short
as
a
directtransactionfrom the vendor to the
consumer, or may include several
interconnectedintermediariesalong
the
way
such
as
wholesalers,
distributers,agents andretailers.
Conventional Channel of Distribution
of Consumer Goods
Selling directly to
consumers
Selling through
retailers
Selling through
wholesalers
Wholesal
Have agents
Agent
er
Agent
Wholesal
er
Retaile
rs
Consum
ers
Conventional Channels of Distribution
for Organizational Goods
Manufactur
er
Organization
al Users
Organizationa
l distributors
Agents
Agents
Organizationa
l Distributors
Channel 1
Drug Manufacturer
Department of Health
Govt Health Units
Govt Hospitals
End Users
Channel 2
Drug Manufacturer
Sales
Reps
Dispensing
Physicians
End
Users
Channel 3
Manufacturer
Independe
nt
Distributors
Retailers
End Users
Channel 4
Manufacturer
Wholesaler
Retailer
s
End Users
Channel 5
Manufacturer/
Distributors
Wholesalers
Jobber
Retailers
End Users
Innovative Distribution Channel
Strategies
Finding new Markets for your present
products: Developing as many nontraditional outlets from as many of your
existing product line as possible
12 Key Innovative Distribution
Channel Strategies
1. Groceries & Supermarkets
2. Large Drugstore Chains with Self-service Areas
3. Convenience Stores
4. Gasoline Stations
5. Boutique & Gift Shops
6. Trading & Sari-Sari Stores
7. Post Office & Air Cargo Forwarders
8. Restaurants, Food stores, and Entertainment Houses
9. Multipurpose Halls, Clubhouses of
Villages/Subdivisions, Chapels, & Conference Rooms
10. Schools, Offices and other Places at Work
11. Barbers Shops, Beauty Parlors, Massage Clinics,
Reflexology Centers and Body Shops
12. Hospital and Large Medical Clinics
Gasoline
Stations
Traditional Products
Gasoline, oil, lubricants, &
additives
Car accessories, tires, &
batteries
Repair & maintenance/
diagnostic service
Services such as: washing,
greasing, shampooing,
change oil & related services
Vulcanizing and wheel
balancing
Vendo machines for
beverages, coffee, &
chocolates
Present Products
Non-Traditional Products
Mini-mart & boutique shop
items
Fast food services
Drive thru ATM services
Car rental
Pay phones, telefax, copier,
Foto-Me, telegram services
Mailing station services
Parking services
Health food over the counter
medicines
New Products Available
What is the best distribution
channel for a product?
4 Factors:
1. Nature of the product
Technical/complex? Complex products are
often sold by specialist distributors or
agents.
2. The Market
Is it geographically spread?
Does it involve selling overseas?
The extent and nature of competition
which distribution channels and
intermediaries do competitors use?
3. The Business
Its size and scope ex. Can it afford an in-house
sales force?
Its marketing objectives revenue or profit
maximization?
Does it have established distribution network or
does it need to extend its distribution option?
How much control does it want over distribution?
The longer the channel, the less control is
available.
4. Legal Issues
Are there limitations on sale?
What are the risks if an intermediary sells the
product to an inappropriate customer?
Selecting Channels of
Distribution
1. Market Coverage No matter whether you sell
your product direct or through a reseller, you
must decide what your coverage will be in
distributing your product. Will you pursue
intensive, selective, or exclusive coverage?
.Intensive
distribution
is
widespread
placement in as many places as possible, often
at low prices.
.Selective distribution narrows distribution to
a few businesses
.Exclusive distribution restricts distribution to
a single reseller.
2. Degree of Control Desired
.When more indirect channels are used, the
manufacturer must surrender some control
over the marketing of the firms products.
3. Total Distribution Cost
.The total system should be designed to
minimize costs for a given level of service.
Major distribution costs to be minimized:
-Transportation
-Order processing
-Cost of loss business (inability to meet
customer demands)
- Inventory-carrying costs,
including:
Storage-space charges.
Cost of capital invested.
Taxes.
Insurance.
Obsolescence and
deterioration
- Packaging
- Materials handling
4. Channel Flexibility
.Ability of the manufacturer to
adapt to changing conditions
4 Major Elements of the
Distribution Mix
1. Order Processing
Sales order submitted by sales
representatives/accounts executives to the firms
main office everyday are processed on schedule
then forwarded to the computer data system for
invoicing then sent to Traffic/Warehouse for
scheduled deliveries to the sales outlets.
2. Warehousing
Warehousing receives, identifies and sorts
merchandise, store these goods, implement
product recall programs, select good for
shipments and dispatch sales orders.
3. Inventory
Many companies would ideally want to carry
just enough finished goods inventory to satisfy
market demands, at the right time and right
quantity
Inventory decisions involve 2 major concerns:
a. When to order
b. How much to order
Just-in-time Inventory System (JIT)
The purchasing firm reduces the amount of
inventory it keeps on hand by offering/ordering
more frequently and in lower quantities.
4.
Transportations
Choosing your mode of
transport: what to consider
.. budget should be the most
important factor in your
decision-making.
.. The speed of the transport
.. If
you
are
transporting hazardous
or
dangerous products
.. If you are shipping your
product by sea, you may
want to consider some form
of insurance.
If your cargo is valuable, it
might be necessary to use
avehicle tracking systemso
you know exactly where it
is.
Rail
Modes of
Transportation
Air
Roa
d
Courie
r
Sea
Location Issues to
Consider:
Demographics
Foot Traffic
Accessibility and Parking
Competition
Proximity to Other
Businesses
Ordinances
Utilities and Other Costs
Major Functions Performed
in Channels of Distribution
Transactional Function:
Buying purchasing products
for resale or as an agent for
supply of a product.
Selling Contacting potential
customers,
promoting
products, and soliciting orders.
Risk
taking
assuming
business risks in the ownership
of inventory that can become
obsolete or deteriorate.
Logistical Function:
1. Assorting
creating
product assortments from
several sources to serve
customer service.
2. Storing assembling and
protecting products at a
convenient
location
to
offer
better
customer
service.
3. Sorting purchasing in
large
quantities
and
breaking
into
smaller
amounts
desired
by
Facilitating Function
1. Financing
Extending
credit to customers.
2. Grading
Inspecting,
testing,
or
judging
products, and assigning
them quality grades.
3. Marketing Information
and
Research
providing information to
customers and suppliers,
including
competitive
conditions and trends.
Requisites of Distribution
Strategy
MARKETING LOGISTICS
Warehousing
Stocking
Trucking
Sales force
Logistics
Logistics
is how you plan, implement and
control the flow of raw materials, final products
or services and related information from your
business, or source of supply to the final enduser or customer.
Importance
of Logistics:
1.
Reduced Delivery Time
2.
Pinpointing Customer Issues
3.
Quality Control
4.
Extra Services
4 Functions
of Logistics
1. Product Delivery
2. Price
3. Promotion
4. Place
Requisites of Distribution
Strategy
Marketing Functions
Selling
Processing
Delivering
Collecting
E-Commerce
Electronic commerce, commonly known
asE-commerceoreCommerce, is trading
in products or services using computer
networks, such as the Internet.
Advantages for Marketers:
1. Reduces the need for stores.
2. Allows good visual presentation and full
description of product features and
benefits.
3. Allows vast assortments of products to be
offered efficiently.
4. Allows
5.
6.
7.
8.
strategic elements, such as
product offerings, prices, and promotion
appeals, to be changed quickly.
Allows products to be offered globally in
an efficient manner.
Allows products to be offered 24 hours a
day, 365 days a year.
Fosters the development of one-on-one,
interactive relationships with customers.
Provides
an
efficient
means
for
developing a customer database and
doing online marketing research.
Disadvantages for Marketers:
1. Strong price competition online often
squeezes profit margins.
2. Low entry barriers lead some e-marketers to
overemphasize order-taking and not develop
sufficient infrastructure for order fulfillment.
3. Customers must go to the Web site rather
than having marketers seek them out via
salespeople and advertising; advertising
their Web sites is prohibitively expensive for
many small e-marketers.
4. Limits the market to customers who are
willing and able to purchase electronically;
many countries still have a small population
of computer-literate people.
5. Not as good for selling touch-and-feel products
as opposed to look-and-buy products unless
there is strong brand/store/site equity (Dell
computers/Walmart/[Link]) or the
products are homogeneous (books, CDs, plane
tickets, etc.
6. Often less effective and efficient in business-to
consumer markets than in business-tobusiness markets.
Place (or distribution) is a
critical element of marketing
- after all, marketing is about
getting the right product, in
the right quantity, to the
right place, at the right time.
Thank you!
