PLACE

A TOOLS OF
MARKETING MIX

VIKASH
srivastav
Marketing mix ; place

Place : in the marketing sense refer to the Distribution of

the product.
Place consideration involve decision that effect ;
• How you will get the product where it belongs?
• How will you manage inventory ?
• How warehouse operation will be carried out and if distribution
centres will be established ?
• When you consider place , you also must consider where you percive
the product will be sell best.

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Marketing Mix : Place
╸ • Place (or Placement ) decisions are those associated with channels
of distributions that serve as the means for getting the product to the
Target Customers.

╸ Channel Distribution System Performs :

1. Transactional
2. Logistical
3. Facilitating functions

╸ Distribution Decisions include Location , Market Coverage, Channe

member Selection, Logistics and Levels of Service.
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 Marketing
“ mix: place
The objective is to make product
available in the right place at the
right time in the right quantites
at least cost

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 Objectives of
Distribution
• Movement of goods:- The major objective of distribution is to effectively move the product from the place of production to the
place of consumption through the marketing channel system. Products move from manufacture to wholesaler to retailer and
finally moved to consumer from retailer.
• Safety of product:- Distribution facilities safety of the product. Distribution makes the channel members responsible to the
proper storage and handling of the product, so that the product reaches to the buyer in proper condition.
• Cost reduction:- Distribution involves several channel members. They assist in delivering goods and services to the end
consumer. So, manufacture do not need to reach to the door step of every consumer. Distribution helps in minimizing the cost
of manufacture's transportation and travelling
• Availability of goods: Effective distribution channels facilities easy availability of goods. Distribution channel also helps
consumers to assort the required products. Any product demanded by consumers becomes available at any place and any time.
Different products in different countries and continents are assorted at the same place by channel members. It ensures right
goods at reasonable price at right place
• Customer satisfaction:- Distribution is often termed as other halves of marketing. It fulfill the customer's satisfaction by
delivering right product at the right place at right time. Thus, distribution channel sets objectives to render crucial services of
regular supply of goods.

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 Marketing Channel Strategy

Place:-The fourth “P” in the Marketing Mix has been largely neglected

But this is changing....

Marketing Channel Strategy Has Become Critically Important For Most
Businesses
Marketing Channel
Strategy is Growing in
Importance. Why?

Five Reasons:-
(1) Search for Sustainable Competitive Advantage
(2) Growing Power of Retailers in Marketing Channels
(3) The Need to Reduce Distribution Costs
(4) The Increased Role and Power of Technology
(5) The New Stress on Growth

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1. The Search for
Sustainable
Competitive
Advantage
 A competitive advantage that cannot be quickly and easily copied by competitors

 Superior Marketing Channel Strategy is More Difficult for

Competitors to Copy Because
 Channel Strategy is Long Term.
 Requires a Channel Structure.
 Depends on Relationships and People
Requires Effective.
 Interorganizational Management.

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2.Growing Power of
Retailers in Marketing
Channels

Retailers:-

 Are Growing Larger

 Enjoy Substantial Channel Power
 Act as Buying Agents for Customers
 Often Operate on Low Price / Low
Margin Model
 Operate in Saturated Markets and Fight for
Market Share

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“ 3.The Need to
Reduce
Distribution Costs
Often Account for a
Significant Percentage
of the Final Price of
Products
Distribution Costs

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“ ╸ Firms that make effective
use of these technologies in
their channel strategy can
gain a substantial
competitive advantage
4.Increasing
Role and
Usefulness of
Technology 11
“5.The New Stress on
Growth Strategy”

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Place Decisions Are an
Important Part of
Marketing Strategy
PLACE
OBJECTIVE

TYPE OF Customer service

CHANNEL level desired

Inventory level, transportation arrangement ,

Direct Indirect facilities needed ,information technology
needed

Degree of market Middleman needed How to manage channel

exposure desire (many type) relationship

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Marketing
Channels:-
Most Producers do not sell their goods directly to the Final Users!

Marketing Channels ;are sets of interdependent organizations participating in the process of

making a product or service available for use or consumption.

They are set of pathways a product or service follows after production, Culminating in Purchase &
Consumption by the final end user.

• The importance of Channels : In the United States, channel members collectively have earned
margins that account for 30 per cent to 50 per cent of the ultimate selling price.

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Channel System May Be Direct
or Indirect

Greater Control

Some reason
Lower Cost
For Choosing
Direct Direct Contact with
Channels Customer Needs
Internet Makes Direct
Distribution Easier
Quicker Response or
Change in Marketing Mix

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Factors Related to the Use of
Direct Distribution Manufactur
er

Direct (producer to – an aggressive personal selling effort is

customer) distribution is required and/or when customers need special
more common when: technical service C
O
– the product is primarily a service rather than a
N
physical good S
U
– when working with middlemen would make it M
difficult to E
R
╸ maintain control of the marketing mix
– the producer can perform marketing functions
more efficiently (economically) by itself
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Indirect Distribution

 Goods may move through a set of intermediaries

 Most FMCG companies follow this route

 The intermediary has a far better reach than the company

 The cost of operations of an intermediary like a wholesaler / retailer is

shared with many businesses.
Indirect Distribution
Manufacturer
Manufacturer
Manufacturer

Agent

Distributor/ wholesaler Distributor/ wholesaler

Retailer
Retailer
Retailer

End User
End User End User

One level Two level Third level 18

Channel level

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 Channel flow-;

Product Flow
The movement of the product from manufacturer through all parties who take physical
possession
Negotiation Flow
Interplay of buying/selling tasks associated with title transfer
Ownership Flow
Movement of title of the product
Information Flow Information to and from the manufacturer
Promotion Flow ;-Flow of persuasive communication (advertising, personal selling, etc.)
 Systems ;

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Ve
 rt
Co ic
 rp
or
Ad al
 m at
e :
C
on in
ist
Marketing Channel

tra er
ct ed
ua
l

22
H
or
i zo
nta
l

33

M
ul
t i-
ch
an
ne
l
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Vertical Marketing System

 Various parties like producers, wholesalers and retailers act as a unified

system to avoid conflicts

 Improves operating efficiency and marketing effectiveness
3 types:
 Corporate:- combine production and distribute under single ownership
 Administered:-Co-ordinates distribution activities and Gains market power
by dominating a channel
 Contractual:-Independent producers, wholesalers and retailers operate on a
contract

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 Horizontal Marketing System

  Two or more unrelated companies join together to pool resources and exploit an emerging
market opportunity.
  In-store banking in hotels, big stores
  Retail outlets in petrol bunks
  Coffee Day outlets in airports 23
Limiting Market
Exposure

Prod
Prod
ucer
ucer

Vertical
Whol
Whol
esal
esal
er
er

Arrange Ret
Ret

ments ailer
ailer

Retailer Retailer

Horizontal Arrangements

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 “ Multi-channel Distribution

 Company uses different channels to reach /

same or different market segments
 Most FMCG companies have separate networks
for retail market and institutions
 Pharma companies may use different
channels to reach doctors, chemists and
hospitals

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“

Multi-channel
distribution
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push & pull strategy
 Push Strategy;
╸ Coca cola is using Push strategy in which they use its sales force and trade promotion money
to induce intermediaries to carry, promote and sell the product to end users i.e. consumers.
For example-as coca cola is giving free pet bottles and other trade schemes to distributors,
agency owners and retailers.
 PULL STRATEGY;
╸ Coca-cola is also using Pull strategy in which they are using advertising and promotion to
persuade consumers to ask intermediaries for the company brand product by this way coca
cola inducing customer to order it from shopkeeper.
╸ For example– Coca cola is using flanges, display racks, tier racks, standees, mobile hangers
and visicooler brand strips.

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“

EXAMPLE
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THANK
YOU
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 ANY QUESTION

SUBMITTED BY -;
VIKASH KUMAR SRIVASTAV
TO,
SHUBHAM AGGARWAL