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4P: Place (6: Selecting channels of distribution (Technicality of product …
4P: Place
6: Selecting channels of distribution
Technicality of product
-
products that require technical asssistance are sold directly
, without retailers e.g airplanes
**Price of produc
t
-
expensive products sold through limited outlets:** empathises exclusiveness + high quality
Life of product
-
longer shelf life=longer distribution channel while perishable=direct
e.g fruits, bread,...
Geographical distribution of customers
-
geographical scatter of customers uses networks of wholesales/retailers
- if in different country then
Agents
Nature of product
-
industrial products usually sold through direct channels more than consumer products
which are distributed through
wider distribution channel
*Frequency of purchase
- frequently purchased
products
through retailers, easily available
for everyone
e.g soap, shampoo**
channels of distribution
def:processess and partners that moves product to customers
If a product is very good, well promoted and the best prices offered still
customers would not be able to buy if it is not easily accessible
-
distribution is important
2 types
DIRECT - producer and customers deal with each other directy
e.g company owned stores, sales force, internet
**
pros
high quality contact with customer
- memployees only focus on advocating customers
fast feedback
- direct contact
dedicated to products
cons
smaller coverage
high fixed cost
on own to generate leads
whole solution?
- alone
INDIRECT - independent retailers between producer and customer
e.g retailer
**
pros
reach new market segments
create
whole solutions
lower fixed cost
larger coverage
cons
less focus on product
- DON'T WORK FOR COMPANY, BUT FOR THEMSELVES
smaller margin
-give some profit to channel
may
limit of customer information
- nOt direct,
4 KEY QUESTIONS
does channel
fit brand positioning?
is channel a good
fit for the organization?
can we
achieve economic goals through channel?
does channel
fit target customers?
1: Direct marketing producers to consumers
popular in
consumer market with improvement in technology
employed by specialist mail-order manufacturers + factory outlets
common for
industrial products
2:Manufacturer -retailer-consumer
retail chains buy in bulk
and thus
deal directly with the manufactures
and
undertake their own wholesale functions.
E.g. Carrefour, Wal-Mart
rise of
large supermarkets chain
has
reduced the importance of the independent wholesaler
3: Manufacturer - wholesaler-retailer-consumer
tradditional channel
Small retailers depend on wholesalers for supplies and manufacturers are also keen to avail themselves the services of wholesalers.
The wholesaler buys in bulk from the producer and distributes to small retailers in according to their needs.
4: Manufacturer-Agent-Wholesaler-Retailer-consumer
Manufacturer-Agent-Wholesaler-Retailer-consumer