MQM 328 E & The Arts

1. MQM 328E & The Arts Chapter 7 The Place Variable

2. Three Elements to the Place Variable • Distribution Channels • Physical Distribution • Commercial Location

3. Cultural Products • Consumers form of consumption determines the product’s mode of distribution • Collective consumption • Individual consumption

4. Possession • Possessing the technical dimensions of a product give the consumer greater flexibility

5. Distribution • Use of agents or intermediaries • Distribution agreements are both defining and limiting • Sell directly to end consumer?

6. Functions of an Intermediary • Reduce contacts necessary for success • Aid in handling logistics • Help a company adjust the quantity and variety of a product

7. Types of Distribution Channels • Direct • Short • Long • Ultra Long

8. Distribution Strategies • Intensive • Maximum distribution of a product to all • Selective • Selecting retailers according to specific criteria • Exclusive • Carefully choose distributors

9. Distribution Strategies • Push • Offering higher profit margins to your retailers, get them to push product • Pull • Massive investments in advertising, get your customers to demand product

10. Physical Distribution • Where will the product be sold? • How will it get there? • Shipping, warehousing, inventory management, order processing, merchandise handling and packaging

11. Commercial Location • Trading area • Primary, includes customers from the main population served by the sales unit (i.e. the densest population) • Secondary—here sales hover between 20% and 40% of the sales volume • Tertiary– a residual zone, holding 10% to 20% of the clientele

12. Trading Area Usefulness • Estimate demand in $ • Estimate future demand • Decide on long term, short term and medium term markets • Measure the impact of competition • Better understand the socio-economic profile of the area

13. Trading Area Configuration • The Product • The Company’s Marketing Strategies • Consumer’s Perceptions