Place

1
Place

• Unit 3
• Topic 3.1

2
The marketing mix place

• What is place?
• Where the product is sold
• How it gets to the customer otherwise known as
  distribution
• Making sure products are available

3
The marketing mix place

• A channel of distribution is the route taken by a
  product from the producer to the consumer.

4
Channel of distribution 1

• Traditional route
• Producer - the manufacturer/provider of service
• ?
• Wholesaler - bulk buyer
• ?
• Retailer - shops
• ?
• Customer

5
Channel of distribution 1

• This channel involves using a wholesaler. The
  functions of a wholesaler are
• Breaking bulk large manufacturers will not sell
  to small retailers because it is too costly to
  deliver small amounts. A wholesaler will purchase
  large quantities and the sell small amounts to
  these retailers.
• Stocking a variety of products from which the
  retailer can choose
• Lowers delivery costs to retailer, it would be
  more expensive to have separate deliveries from
  all the different retailers.

6
Channel of distribution 2

• Large retailers supermarkets
• Producer
• ?
• Retailer
• ?
• Customer

7
Channel of distribution 2

• Large retailers supermarkets
• Producer
• ?
• Retailer
• ?
• Customer

8
Channel of distribution 3

• Factory shop, mail order, internet, Bakery,
  producer to producer
• Producer
• ?
• Customer

9
Choosing the correct channel

• The product
• Will it keep? If no then a short channel is
  advisable
• Is it fragile? If yes then a short channel is
  advisable
• Does it need installing? If yes then a short
  channel is advisable
• The cost
• Short channels may keep costs down for the
  consumer

10
Choosing the correct channel

• The market
• Mass produced products can have a variety of
  channels
• Specialist products need to think carefully about
  channels (usually channel 2 or 3)
• The competition
• Using same methods as competitors

11
Methods of distribution

• Department stores
• Chain or multiples
• Discount stores
• Superstores
• Supermarkets
• Local shops
• Direct sales
• Internet

12
Questions

• 1. Answer D
• Comments
• A incorrect costs of production may rise or
  fall regardless of the seasonality of clothing.
• B incorrect an annual increase in price may
  lead to a downturn in sales volume.
• C incorrect this is part of the marketing mix
  in its own right.
• D correct clothing has a high fashion turnover
  (and a short product life cycle) and a clothing
  company must react to this change in market
  taste.
• 2. Answer A
• Comments
• A correct a premium price is one that is
  significantly above the market price level and
  can be associated with strong brands.
• B incorrect quality and price do not
  necessarily go together.
• C incorrect the price charged by a company
  does not necessarily mean that they are
  automatically more profitable.
• D incorrect premium pricing can lead to a
  reduction in sales levels.

13
Questions

• 3. Answer B
• Comments
• A incorrect manufacturing costs are unlikely
  to rise if it is selling fewer televisions.
• B correct the supermarket chain was one of the
  distribution outlets for the television sets.
• C incorrect this narrows the distribution
  chain, not widens it.
• D incorrect distribution costs may well fall
  due to less products being sent out to retailers.

14
Questions

• 4
• Price
• Helps KFC remain competitive
• Correct pricing allows for profit to be made
• Costs can be covered
• Can maximise the effects of economies of scale
• Retains existing customers and entices new ones
• Profits from correct pricing can help a company
  develop in the future
• Product
• Fast food is competitive so quality is a key
  issue
• KFC must be seen to continue to give value for
  money
• The product must meet the needs and wants of the
  consumer
• The market is subject to fashion and trend (Jamie
  Oliver influence)
• Product must be adaptable and have easily
  interchangeable parts

15
Questions

• 4
• Promotion
• Must entice and attract the right target market
• Must sell the business and its products
• Must use the right medium
• Must be cost effective
• Should support any current campaign
• Packaging should reflect the current
  environmental trend whilst remaining functional
•  Place
• Development of franchises offers more outlets
• Must be accessible to the target market, many of
  whom do not drive (too young)
• Outlets must fit the image of the company
• Can they attract the impulse purchaser (also
  linked to promotion)
• Must match quality of product.