it is a presentation which shows how specific place is important for any business.

1. (A TOOL 0F MARKETING MIX)

2. 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

3. 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
Marketing Channel Strategy is
Growing in Importance. Why?

4. 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

5. 2.Growing Power of Retailers
in Marketing Channels
Retailers
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
Retailers

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

7. 4.Increasing Role and Usefulness of
Technology
 Firms that make effective
use of these technologies in
their channel strategy can
gain a substantial
competitive advantage

8. 5.The New Stress on Growth
Strategy

9. Place Decisions Are an Important Part of
Marketing Strategy

10. Channels of
Distribution

11. Internet Makes Direct Distribution
Easier
Greater Control
Lower Cost
Direct Contact with Customer
Needs
Quicker Response or Change in
Marketing Mix
Suitable Middlemen Not
Available
Channel System May Be Direct or Indirect
Some
Reasons
For Choosing
Direct Channels

12. Factors Related to the Use of Direct
Distribution
• Direct (producer to customer) distribution is more
common when:
– an aggressive personal selling effort is required and/or when
customers need special technical service
– the product is primarily a service rather than a physical good
– when working with middlemen would make it difficult to
maintain control of the marketing mix
– the producer can perform marketing functions more efficiently
(economically) by itself
Manufacturer
End User

13. 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.

14. Indirect Distribution
ManufacturerManufacturer
Retailer
End User
Retailer
End User
Distributor/ wholesaler
Two levelOne level
Manufacturer
Retailer
Distributor/ wholesaler
End User
Agent
Third level

15. Marketing Channel
Systems
Vertical:
Corporate
Administered
Contractual
Horizontal
Multi-channel

16. 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

17. 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

18. Retailer Retailer Retailer
Horizontal Arrangements
Limiting Market Exposure
Producer
Vertical
Arrangements
Wholesaler

19. 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

20. By:-
Mithilesh Trivedi
Akshay Tiwari
Suresh Yadav
Dhruv Aggarwal
Arun Patel
Shrinath

21. Questions