THE MARKETING MIX
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Marketing Mix
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At the end of this topic, students should be able to :
•Demonstrates an understanding of the role of the
place mix and the different channels of distribution
•Identify the factors to consider when choosing the
channel of distribution
•Explain the functions of intermediaries
•Explain the different distribution strategies
•Understand the key channel issues in e-commerce
and m-commerce
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Place in marketing refers to the channels of
distribution/marketing channels through which
goods flow from the manufacturer to the final
consumer.
This consists of intermediaries or middlemen who
serve as links between the manufacturer and the
consumer.
Channels members earn margins accounting for 30-
50% of the ultimate selling price as compared to
advertising that account less than only 10%
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Marketing Channels
and Value Networks
Marketing channels
Sets of interdependent organizations participating in
the process of making a product or service available for
use or consumption
The Role of
Marketing Channels
Customer Marketing Channels
•Merchants - wholesalers/retailers
•Brokers- manufacturers representative, sales agent
•Facilitators - transportation, independent warehouses, banks,
advertising agencies
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Channel Strategy
Push strategy- inducing intermediaries to promote
and sell the products
Pull strategy- persuading customers through
advertisement and promotions to ask
intermediaries for products
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Firms in their distribution activities can adopt any or a
combination of three main strategies.
1. Intensive distribution strategy: This consists of the
manufacturer placing the goods or services in as many outlets
as possible. This strategy is generally used for such items as
tobacco products, soap and snack foods (FMCGs).
2. Selective distribution strategy: This involves the use of
more than a few but less than all of the intermediaries who are
willing to carry a particular product. Nike, the world’s largest
athletic shoemaker is a good example of selective distribution.
3. Exclusive distribution strategy: This means severely limiting
the number of intermediaries and often involves granting
exclusive dealership arrangements, in which the seller agrees
not to carry competing brands. Canon operates this strategy
in the African market.
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1. Characteristics of the product
2. Consumer characteristics
3. Characteristics of intermediaries
4. Cost involved in distributing the product
5. Control over channel members
6. Competitors choice of channel
7. Channel availability in the marketplace 12
Channel – Design Decisions
Analyzing customer needs and wants
Establish objectives and constraints
Identify major channel alternatives
Evaluates alternative channels
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Channel-Design Decisions
Analyzing customer needs and wants
Desired lot size
Waiting and delivery time
Convenience
Product variety
Service backup
Channel-Design Decisions
Establishing objectives and constraints
Service output level
Channel-Design Decisions
Identifying major channel alternatives
Types of intermediaries
sales forces ,agents, distributors, dealers,
direct mail, telemarketing, Internet
Number of intermediaries
Terms/responsibilities of
channel members
Channel-Design Decisions
Evaluating major channel alternatives
Economic criteria
Control and adaptive criteria
Channel-Management Decisions
Selecting Training
channel channel
members members
Evaluating
Global channel
channel
considerations
members
Modifying
channel
design
Conflict, Cooperation,
and Competition
Channel conflict
Generated when one channel member’s actions prevent
another channel member from achieving its goal
Conflict, Cooperation,
and Competition
Causes of channel conflict
Goal incompatibility
Unclear roles and rights
Differences in perception
Intermediaries’ dependence on
manufacturer
Types Of Channel Conflict
Vertical conflict- channel member of different level
Eg GM verses dealers
Horizontal conflict- members on the same levels – ford car
dealers complaint about other ford car dealers unethical
behaviour
Multichannel conflict- unfair treatment of different channel
members in the same market.
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Managing channel conflict
Strategic justification (showing channels or members how each
serves distinctive segments)
Superordinate goals (for mutual benefit)
Employee exchange (between channel levels)
Joint memberships (in trade groups)
Co-optation (including leaders in advisory councils and other
groups);
Diplomacy, mediation, and arbitration (when conflict is chronic or
acute)
Legal recourse (if nothing else proves effective).
Conflict, Cooperation,
and Competition
Dilution and cannibalization
Marketers must be careful not to dilute their brands
through inappropriate channels
Legal and ethical issues in channel relations
Exclusive dealing/territories, tying agreements, and
dealers’ rights
Marketing Channels
and Value Networks
The digital channels revolution
◦ Customer support in store/online/
phone
◦ Check online for product availability
at local stores
◦ Find out in-store if product can be
shipped from another store to home
◦ Order product online to pick up at
store
◦ Return a product purchased online to a nearby store
◦ Get discounts based on online/offline purchases
E-Commerce and M-Commerce
Marketing Practices
E-commerce
Uses a Web site to transact or facilitate the sale of
products and services online
Pure-click vs. brick-and-click companies
E-Commerce and M-Commerce
Marketing Practices
M-commerce
Selling via mobile devices such as smart phones and
tablets
Advertising and promotion
Geofencing
Privacy issues
Group activity
Identify a need in the Ghanaian market and propose
an attractive segment to serve
Now come up with a new product that satisfy your
chosen market and justify how the product will satisfy
your chosen market and how the product was
developed through the NPD process
Decide on your pricing and place strategy and justify
this.
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