Chapter 11 - Chapter 11 Marketing Strategy Planning...

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Chapter 11 Marketing Strategy Planning Decisions For Place Managers must think about place —making goods and services available in the right quantities and locations, when customers want them Channel of distribution : any series of firms or individuals who participate in the flow of products from producer to final user or consumer Place Decisions Are Guided By “Ideal” Place Objectives All MM want to be sure that their goods and services are available in the right quantities and locations—when customers want them Product classes help us decide how much market exposure we’ll need in each geographic area Several different product classes may be involved if different market segments view a product in different ways o MM need to develop several strategies, each with its own Place arrangements The MM must also consider Place objectives in relation to the product life cycle o Place decisions often have long-run effects and are harder to change than any of the other 4 P’s o As products mature, they typically need broader distribution to reach different target markets Channel System May Be Direct or Indirect One of the most basic Place decisions producers have to make is whether to handle the whole distribution job themselves or use local wholesalers, retailers, and other specialists o Many firms prefer to distribute directly to the final customer or consumer because they want to control the whole marketing job Direct distribution allows a firm to maintain control of the MMix If a firm is in direct contact with its consumers, it is more aware of changes in customer attitudes A firm may have to go direct if suitable intermediaries are not available or will not cooperate Many business products are sold direct-to-customer Service firms often use direct channels Many firms that produce physical goods turn to channel specialists to help provide the services customers expect o Many companies that produce consumer products have websites where a consumer can place a direct order Even though most consumer products are sold through intermediaries, an increasing number of firms rely on direct marketing— direct communication between a seller and an individual customer using a promotion method other than face-to-face personal selling.
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o Direct marketing is primarily concerned with the Promotion area, not Place decisions Consumers are spread throughout many geographic areas and often prefer to shop for certain products at specific places Intermediaries may further reduce a producer’s need for working capital by buying the producer’s output and carrying it in inventory until it’s sold The most important reason for using an indirect channel of distribution is that an intermediary can often help producers serve customer needs better and at lower cost Producers are often located far from their customers and may not know how best
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This note was uploaded on 12/04/2011 for the course MKT 320F taught by Professor Miller during the Spring '08 term at University of Texas at Austin.

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Chapter 11 - Chapter 11 Marketing Strategy Planning...

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