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However well a product may be designed, it is of little use to the customer if is not available to him at the right time and place all the possible combinations are variations of these are what the marketing manager must consider when choosing the place combination he will use in a marketing mix. For simplicity, these will be called place, just as we used product to mean the "total product" offered.

The place variable requires decisions about the use of marketing specialists, including transportation and storage agencies, wholesalers and retailers. Some of the material will seem theoretical and descriptive, but it is extremely important that the marketing manager understand the why and why of present method of distribution. A marketing manager must plan for the future as well as the immediate present; this means he must be able to see what is coming and ideally, what should be-not just what presently available. There may be well-established ways of providing place utility for some target markets, while new ways may have to be developed for others.

And there may be special situations. Strong middlemen may dominate some target markets, for example, forcing unwelcome adjustments in a manufacturer's marketing mix.

In any case, a marketing manager must seek to match what he would like in the way of distribution facilities with what is actually available. In the process of doing this and provided he understands the underlying reasons for the various kinds of place facilities, he may discover new opportunities. In our dynamic economy, marketing facilities are such a constant state of flux that the marketing manager must continually reevaluate his own (and his competition's) current and possible place offerings.

The critical place questions are: How much exposure do we want? And how shall we go about getting it? The marketing manager must develop place policies to answer these questions. It is his job to see that the "right" product reaches the "right" place. As a guide in setting these policies, he must consider his place objectives what kind of distribution he would ideally want.

Here we will discuss place objectives and the basic  place policies which must be determined in order to accomplish these objectives. We will be more concerned with the "ideal" channel or channels to reach the selected target market, not what the marketing manager ma actually have to use. "Ideal" here refers to the place combination which will completely satisfy target customers (It is strictly customer) oriented. But cost and market realities   may   cause   the   marketing   manager   to   settle   for something other than the ideal. The ideal may be too expensive or impossible and some compromise may be necessary The other three P's may have to be adjusted too. Ultimately, he will select the "best" channel the one which comes closest to the "ideal", fits the entire marketing mix, and still satisfies the company's overall objectives.

8.1. Developing Place Objectives

The channel captain's first task in developing place objectives is to specify the target markets he wishes to reach. Than he must sketch the marketing mix he (and his channel) is going to offer these target customers.

Let us put ourselves for a moment in the channel captain' place. While all these mix decisions must be made at once, we now have something our goods classifications. These summarize our judgment on the nature of the product: What the target customers think of it, their willingness to shop for it, the amount of service desired, etc. these factors will have a bearing on our ideal place objectives. There're grocery products which are thought of as strapless, for instance; it follows that if customers think of all these products in essentially the same way they will also want similar place facilities for these products.

Ideal place objectives which follow from the interaction of customer behavior and the nature of the products. For instance, if the target customers thought of particular appliance as a heterogeneous shopping good, then the marketing manager need not obtain distribution in every possible store in the country. It would be adequate to obtain outlets where other shopping goods are displayed because these target customers are willing to shop around. If it were expected that other target markets would think of this same appliance as an implies good, however, than ideally more outlets should be sought, especially ones which would give assurance of preferred display or counter position.

The ideal place objectives for industrial goods may be more difficult for the student to determine, as he may have had less experience with such products. Again, buyers' preferences must be considered. It will be recalled that industrial buyers do much less seeking and therefore wider distribution may be ideal.

This suggests a difficult place job, but it should be recalled that industrial customers are less numerous than final customers and sometimes even geographically concentrated. Sometimes, depending on the product and target market, the place job is simplified.

8.2. Developing Place Policies

Place objectives suggest the ideal, but definitely set place policies. While they flow the objectives, certain decisions must be made about how much market exposure is desired and how to obtain it. In other words, place policies decisions must be made about:

          The degree of market exposure,

          The type of channels of distribution.

8.2.1. Degree Of Market Exposure

Ideally, it would seem that all marketing managers would want their products to have maximum exposure to potential customers. But in the foregoing list of place objectives, it was indicated that some products need widespread distribution whereas others need only limited distribution. Since a definite policy must be set on the degree of market exposure, a deeper understanding of this concept is imperative.

We will discuss three degrees of market exposure:

       Intensive distribution,

       Selective distribution,

       Exclusive distribution.

8.2.1.1. Intensive Distribution

Intensive distribution is commonly need for convenience goods and for industrial supplies (pencils, paper clips, typing paper, etc.), which are used by all or most all plants or offices. Some industrial raw materials and component materials which are used regularly but in small quantities by many small plants may require intensive distribution.

The intent is important here. Intensive distribution refers to the desire to sell through all responsible and suitable outlets. Intensive distribution is directly related to customer habits and preferences.

8.2.1.2. Selective Distribution

Selective distribution is the broad band between intensive and exclusive distribution and may be suitable for all categories of products. Here only better distributors, chosen on some predetermined basis, are used. The usual purpose is to gain some advantages of exclusive distribution without tightly restricting and number of outlets and to get adequate coverage at lower sales cost.

A selective policy might be used to avoid selling to wholesalers or retails ;

   Who have a poor credit rating,

   Who have a reputation for making too many returns orrequesting too much service,   

Whose orders are too small to justify making calls or providing services,  

Who for any other reason are not in position to do a satis­factory marketing job.

8.2.1.3. Exclusive Distribution

Exclusive distribution may be satisfactory for some shopping goods and more expensive specialty goods. It may also be practical for many industrial products, including installations, larger accessory equipment, some raw materials and component materials, which have limited markets and require special selling effort. When a middleman is given a monopoly in an area, he is more likely to provide aggressive selling effort when he knows all the fruits of his efforts will come to him.

Exclusive distribution method may also be useful when extensive installation or repair services are necessary, such as for automobiles, heating equipment, some industrial equipment and electric household appliances.

8.2.2. Type of Channel Distribution

Besides deciding how much market exposure he would like, the marketing manager must also decide upon the type of distribution channel he will use for each target market. He may be able to do the job completely on his own or he may depend on specialists, if they are available. If they are not (or if the better specialists have already been taken by competitors), he may try to encourage the development of new specialized agencies.

Two basic decisions are involved here:

Should the firm go directly to the final user or consumer orindirectly through specialist?   

If the indirect method is used, should specialists be entirely independent or should some effort be made to integrate the channel?

8.3. Place Objectives

Customer Goods

1 - Convenience goods  

a) Staples (need maximum exposure) need widespread distribution at low cost.

b) Impulse goods (need maximum exposure) need widespread distribution but with assurance of preferred display or counter position.

c) Emergency goods (need widespread distribution near probable point of use)

2 - Shopping goods

a) Homogeneous (need enough exposure to facilitate price comparison)

b) Heterogeneous (need adequate representation in major shopping districts or large shopping centers near other, similar shopping goods)  

3- Specialty goods can have limited availability, but in general should be treated as convenience or shopping good (in which ever category product would normally be included), to reach persons not yet sold on its specialty goods status.

4- Unsought goods need attention directed to product and aggressive promotion in outlets or must be available in places where similar products would be sought.

Industrial Goods

1 – Installations

a)   Buildings (used) and land rights need widespread and/or knowledgeable contacts, depending upon specialized nature of product.

b)   Buildings (new) need technical and experienced personal contact, probably at top-management level (multiple -buying influence)

c)   Major equipment

I.Custom-made need technical (design) contacts byman able to visualize and design applications and preset to high-level and technical management.

II.Standard need experienced (not necessarily highlytechnical) contacts by man able to visualize applications and present to high-level and technical management.

2- Accessory equipment needs fairly widespread and numerous contacts by experienced and sometimes technically trained personnel.

3 - Raw materials

a) Farm products need contacts with many small farmer producers and fairly widespread contacts with users.

b) Natural products need fairly widespread contacts with users.

4 - Component parts and materials need technical contacts to determine specifications required widespread contacts usually not necessary.

5 - Supplies  

a)  Maintenance need very widespread distribution for prompt delivery.

b) Repairs need widespread distribution for some and prompt service from factory for others (depends on customers references).

c) Operating supplies need fair to widespread distribution for prompt delivery.

6- Services most need very widespread availability.

 

 
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