Contents
Introduction to Marketing
The Marketing Plan
Segmentation, Targeting, and Positioning
Consumer Behavior
The Four Ps
Product
Place
Promotion
Price
Market Research
Other Types of Marketing
Marketing Ethics
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Place
For products to be successful, they must be placed in the right quantity, in the right place, at the right time.
Development of Channel Systems
Products are placed through distribution systems, which may be either direct or indirect.
Direct Distribution Systems
Direct distribution to the final consumer allows the
producer to:
- Be more in tune with consumer needs
- Quickly adapt the marketing mix
- Keep a greater share of the revenue
This system is not necessarily more convenient or less
expensive than indirect distribution systems.
Indirect Distribution Systems
Major types of indirect distribution systems include:
- Traditional channel system: Members of the channel buy and sell from one another but do not cooperate in revenue sharing or cost-cutting.
- Vertical marketing system: One channel member exerts legal or economic control (e.g., ownership, franchising, market power) over the others, causing all channel members to cooperate in a single system.
Ideal Market Exposure
Ideal market exposure occurs when product availability is sufficient to satisfy consumer needs. Methods to ensure ideal exposure include:
- Intensive distribution: Selling through all available channels, anywhere customers buy similar products
- Selective distribution: Selling through only one middleman focused on your product, or selling where the product sells best
- Exclusive distribution: An extreme case of selective distribution; selling through only one middleman in a particular geographic region
Managing Distribution Channels
Products may be pushed or pulled through the distribution channel.
- Pushing products through: The producer uses traditional selling, sales promotion, and advertising with the channel members who, in turn, push the product through the chain to the final consumer.
- Pulling products through: The final consumers ask channel members to supply the products—effectively pulling them through the chain from the producer.
Physical Distribution
Physical distribution includes the storing and transportation of goods to consumers and channel partners. Maintaining high customer service levels—that is, ensuring that products are available to customers and channel members rapidly and dependably—is the key to a successful physical distribution system.
Retail
Retailing includes all elements involved in selling to the final consumer. Consumers consider several economic factors when deciding among retail outlets, including:
- Location
- Price
- Convenience
- Variety of selection
- Quality of service
- Quality of product
- Brand reputation
- Special services
Retail outlets fall into one of three categories:
- Convenience stores: Close location; good product selection; easy access (e.g., 7-Eleven, local markets)
- Shopping stores: Many selections at more reasonable prices; convenient (e.g., The Gap, Wal-Mart, Target)
- Specialty stores: Specialized stores that offer greater-than-average depth of selection and often better service (e.g., Williams-Sonoma, Godiva Chocolatier)
Wholesale
Wholesalers can be found in the middle of the distribution channel. They buy merchandise from upstream partners (e.g., manufacturers) for resale to downstream partners (e.g., retailers). There are several categories of wholesalers.
Merchant Wholesalers
Merchant wholesalers own the products that they sell.
Full-Service Wholesalers
Full-service wholesalers participate in all wholesaling functions. Types of full-service wholesalers include:
- General merchandise wholesalers: Carry a wide variety of nonperishable items
- Single-line (general-line) wholesalers: Carry a more select line of items
- Specialty wholesalers: Carry a narrow range of items
Limited-Function Wholesalers
Limited-function wholesalers participate in limited wholesaling functions. Types of limited-function wholesalers include:
- Cash-and-carry wholesalers: Are similar to full-service wholesalers, except that customers pay cash
- Drop-shippers: Own the products that they sell, but do not store or transport them
- Truck wholesalers: Deliver perishable products that they store in their trucks
- Mail-order wholesalers: Sell from widely distributed catalogs
- Producers’ cooperatives: Work like full-service wholesalers; profits are shared by the co-op’s members
- Rack jobbers: Specialize in nonfood items sold in supermarkets and grocery stores
Brokers and Agents
Brokers and agents do not take ownership of goods but rather facilitate the buying and selling process in exchange for a percentage of the sale.
- Agent middlemen: Are wholesalers who do not own the products they sell
- Manufacturers’ agents: Sell products from noncompeting manufacturers for a commission
- Brokers: Match buyers with sellers
- Commission merchants: Serve distant markets by handling goods from sellers and cash from buyers
- Selling agents: Assume all marketing responsibilities for the manufacturer
- Auction companies: Provide a place where multiple buyers auction goods to various sellers
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