Place and Distribution Flashcards
(26 cards)
What is a marketing/distribution channel?
A set of interdependent organisations that help make a product available for use or consumption by the consumer or business user.
Why are distribution decisions of substantial perfroamnce?
- often not easy to revise
- long term oriented and committed
- cost intensive (players involved and are payed a %)
- often represents a significant amount of total costs
- involves managing complex networks of different people and partners
- also shapes part of our positioning and determines how we deliver value
What are the different distribution channels?
Producer -> consumer (direct)
Producer -> retailer -> consumers (indirect)
Producer -> wholesaler -> retailers -> consumers (indirect)
Producer -> agent/broker-> wholesaler -> retailers -> consumers (indirect)
What is a direct seller?
is the marketing and selling of products directly to customers away from a fixed retail location.
Direct selling can be conducted one-one-one in a group or party formant or online.
What is a example of a direct seller?
Avon - direct part of direct selling also refers to the personal component o this sales channel, its about building relationships with people and offering them a high level of serivce and personal attention.
What are retailers?
Primarily sell goods and services directly to the final consumer for personal use. There are many forms an sizes such as department stores (John Lewis), supermarkets (Tesco), discount stores (Home bargains), speciality stores (Halford, Waterstones), E commerce (Ebay, Shopify). There are different relationships to produce such as independent/contractual and franchises.
Going through a ‘apocalypse’ due to tech instore.
What is retail strategy?
retail segmentation and targeting, store differentiation and positioning.
Creates value for targeted retail customers.
What is retail marketing mix?
product and service assortment, retail prices, promotion and distribution(location)
Creates value for targeted retail customers.
What are wholesalers?
Primarily sell to other firms who are buying for resale or business use. Often buy a large quantity of products directly from producer.
Operate behind the scenes and are largely unknown to the customer e.g. Brakes (food), Anew (electronics), Palmer and Harvey (mixed), Hancocks (sweets)
What is wholesale strategy?
wholesale segmentation and targeting differentiation and service positioning.
Creates value for targeted wholesale customers.
What is the wholesale marketing mix?
Product and service assortment, wholesale prices, promotion and distribution (location). Creates value for targeted wholesale customers
What is social commerce?
involves selling directly via social media, messaging apps, influencers and livestreams e.g. 23.1% of US social buyers were aged between 25-34 in 2023.
71% of Gen Z users (18-26) are likely to use Instagram to make a purchase directly, in US 2023, compared to 40% of total population.
What is a multichannel?
All channels available to the consumer but are not integrated e.g. store, web, mobile, social and phone are all separate to the consumers.
Company decides for the customer which channel best suits the customer experience e.g. going to a physical store as price is same as offered in the app, then deciding they want to return a product but the conditions for return is different than in app.
What is a omnichannel?
All channels available to the consumer and they are connected. It refers to an integrated, well structured and consistent customer experience throughout all the possible channels that a customer engages with a business.
Customers should be able to visit any channel and the information and experiences should be fluid and consistent.
Its useful to sync channels to create a more seamless customer journey.
What is webrooming?
practice of looking at something you want to buy online and then later buying it in a shop.
What is showrooming?
practice of looking at something you want to buy in the shop and then later buying it online, usually at a lower price.
What is a intermediary?
An intermediary, also known as a middleman or go-between, is defined differently by context. In trade or barter, an intermediary acts as a conduit for goods or services offered by a supplier to a consumer, which may include wholesalers, resellers, brokers, and various other services.
What are advantages of intermediaries?
- market access
- transactional value e.g. lower cost, risk
- logistical value e.g. assortment, storage, sorting, transportation
- facilitating value e.g. information, training, after sales service
What are the disadvantages of intermediaries?
- adds margins
- might have substantial bargaining power
- manufacturer can lose control over marketing aspects
What are the steps to develop a channel strategy?
- Analysing customer needs - what adds the target segment wants and expect? (nearby locations, vs willing to travel?, offline vs online? service at retail location? But vs feasibility and cost)
- Setting channel objectives - what segments to serve? - target levels of customer service, desired level of control, desired distribution intensity.
- Identifying major channel distribution - which intermediaries? (how many? responsibilities of intermediaries)
- Evaluation - based on criteria and variables including: economic criteria, strategy, competitors, environment.
What is intensive distribution intensity?
higher reach, higher costs - widespread market coverage, widely accepted channel, diversity of outlets, multiple locations, conveniance orientated.
What is selective distribution intensity?
Moderate market coverage, well established channels, less generic formant than intensive channels, moderate number of outlets, consumers should be willing to travel to store.
What is exclusive distribution intensity?
Higher control, better customer support - important channel for strong brands, image focused channel, control over communications, service and prices, few channels locations and emphasis on experience.
What is assortment depth?
how many variations of a particular product category a store carries.
