The document discusses marketing mix place decisions, which involve how to distribute products to target customers. It covers channel distribution systems that perform transactional, logistical, and facilitating functions. Distribution decisions include location, market coverage, channel member selection, logistics, and service levels. Most producers use intermediaries like distributors and retailers rather than selling directly to end users. Effective channel management requires selecting and motivating intermediaries. The document provides examples of Apple Stores and Vodafone stores as direct marketing channels.

1. Presentation on Place Decisions
By : Group No 7 , MBA 2015- DMS , IIT Delhi
• Pawandeep Singh Maniktala -2012SMN6706
• Mayank Lau - 2012SMN6682

2. Marketing Mix
• McCarthy classified these tools into four broad groups that he
called the four Ps
• 4 Ps of marketing:
• Marketers use numerous tools to elicit the desired responses
from their Target Markets.

4. Marketing Mix : Place
• Place: in the marketing sense refers to the Distribution of the Product.
Place considerations involve decisions that affect :
• How you will get the product where it belongs ?
• How you will manage inventory ?
• How warehouse operations will be carried out and if distribution centres will be
established ?
When you consider place, you also must consider where you perceive the product will
sell best.
For some products this means in the store,
while for other products this means online!

5. Marketing Mix : Place
The Objective is to make products available
in the Right Place at the Right time in
the Right quantites at least cost !

6. 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, Channel member Selection ,
Logistics and Levels of Service.

7. 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.

8. Marketing Channels
• Distributor , Wholesaler , Retailers , Agent .
• Each Party in the Distribution channel is called an “intermediary”.
• Retailer is the final step in the chain – Deals directly with
Customer.

9. Marketing Channel Strategy
• Channel Strategy is Long Term
• Requires a Channel Structure
• Depends on Relationships and People
• Requires Effective Inter-Organizational Management
Key Points
1. Need to Reduce Distribution Costs : Significant % of the Final Price of Product
2. Increasing Use of Technology : Technologies help to gain Competitive Adv.
3. Companies use intermediaries when they lack the financial resources to carry
out direct marketing, when direct marketing is not feasible
4. Effective channel management calls for selecting intermediaries and training
and motivating them.

10. Channel Marketing Strategy Contd..
• The channels chosen affect all other marketing decisions
The company’s pricing depends on whether it uses online discounters or high-quality boutiques.
• Push versus Pull marketing
A push strategy uses manufacturer’s sales force, trade promotion money, or other means to induce
intermediaries to carry, promote, and sell the product to end users.
In a pull strategy the manufacturer uses advertising, promotion, and other forms of communication to
persuade consumers to demand the product from intermediaries, thus inducing the intermediaries to
order it.
• Example :
Top marketing companies such as , skilfully employ both push
and pull strategies.
A push strategy is more effective when accompanied by a well-designed and well-executed pull
strategy that activates consumer demand.

11. Multichannel Marketing
• Today’s successful companies employ Hybrid channels or multichannel marketing
i.e. when a single firm uses two or more marketing channels to reach customer segments.
• Example :
Royal Philips Electronics of the Netherlands is one of the world’s biggest electronics companies
and Europe’s largest, with sales of over $66 billion in 2009.
`
i. Products are channelled toward consumer primarily through local & international retailers.
ii. Company offers broad range of products, relying on a diverse distribution model that
includes mass merchants, retail chains, independents, and small specialty stores.
iii. To work most effectively with these retail channels, Philips has created an organization
designed around its retail customers, with dedicated global key account managers serving
leading retailers such as Best Buy, Carrefour, Costco, Dixons, and Tesco.
iv. Like many modern firms, Philips also sells via the Web through its own online store as well
as through a number of other online retailers

12. The Role of Marketing Channels
1. Gather Information about potential and
current customers, competitors, and other
actors and forces in the Marketing
environment.
2. Develop and disseminate persuasive
communications to stimulate purchasing
3. Negotiate and reach agreements on price
4. Place orders with manufactures
5. Acquire the funds to finance inventories at
different levels in the marketing channel
6. Assume Risks connected with carrying out
channel work
7. Provide for the successive storage and
movement of physical products
8. Provide for buyers payment of their bills
through banks and other financial institutions
9. Oversee actual transfer of ownership from
one organization or person to another

13. Five Marketing Flows : Example
(Marketing Channel for Forklift Trucks)

14. So Why Use intermediaries ?
• Geography- Customers may live too far away
to be reached directly or spread widely
• Consolidation of small orders into large ones
• Better use of resources elsewhere
• Lack of retailing expertise
• Segmentation – different segments of the
markets can be best reached by different
distribution channels

15. Channel Levels
A zero-level channel, also called a Direct Marketing
channel, consists of a manufacturer selling directly to
the final customer.
Examples are door-to-door sales, home parties, mail
order, telemarketing, TV selling, Internet selling, and
manufacturer-owned stores.
A one-level channel contains one selling
intermediary, such as a retailer.
A two-level channel contains two intermediaries. In
consumer markets, these are typically a wholesaler
and a retailer.
A three-level channel contains three intermediaries.
Channels normally describe a forward movement of products from source to user, but reverse-flow channels
are also important
(1) Reuse products or containers (such as refillable chemical-carrying drums),
(2) Refurbish products for resale (such as circuit boards or computers)
(3) Recycle products (such as paper), and (4) Dispose of products and packaging.

16. Direct Marketing Example
• Apple Stores
When Apple stores were
launched in 2001, many
questioned their prospects
and BusinessWeek published an article titled, “Sorry Steve, Here’s Why Apple Stores Won’t Work.”
But Apple stores have been an unqualified success.
• Designed to fuel excitement for the brand, they let people see and touch
• Apple products—and experience what Apple can do for them—making it more likely they’ll
become Apple customers.
• They target tech-savvy customers with in-store product presentations and workshops;
• a full line of Apple products, software, and accessories;
• and a “Genius Bar” staffed by Apple specialists who provide technical support, often free of charge.
Apple stores offer a unique brand experience to Apple enthusiasts and prospects !

17. Value-Adds Vs Costs of Diff Channel

18. Vodafone Stores
Vodafone store are found in various Malls as a Marketing Strategy to reach out the customers !

19. McDonalds – 24/7 Drive Thru

20. Factors to Consider
• Nature of the Product
- Perishable/fragile
- Techincal/complex
- Type of Product eg, shopping,convenience
• The Market
- It is geographically spread
- The extent and natue of the competition
• The Business
- Its Size
- Its Nature
- Does it have established distribution network

21. The Objective is to make products available
in the Right Place at the Right time in
the Right quantities at least cost!

22. Thank You !
References :
• Marketing management millennium edition - Philp Kotler
• Product Placement Decisions - http://productplacement.biz/201009072807/branded-entertainment/philips-tries-onlin
branded-entertainment.html
• MBA Skool - http://www.mbaskool.com/business-articles/marketing/4823-product-placement-why-do-we-place-
them.html
• Harvard Article - http://blogs.hbr.org/2013/02/the-decline-and-fall-of-product-placement/
• Small Buiness .com - http://smallbusiness.chron.com/product-placement-strategies-1684.html
• Academic.edu - http://www.academia.edu/389600/The_Strategic_Positioning_of_Coca-
Cola_in_their_Global_Marketing_Operation
• Google Images 