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P L A C E

P L A C E. PROBLEM: 1. Industrial sales to auto assemblers OK 2. Retail sales of replacement tires doing poorly. COMPETITION: 1. Bridgestone / Firestone from Japan 2. Michelin from France / Germany 3. Both companies will sell at low low price to increase North American market share.

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P L A C E

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  1. P L A C E

  2. PROBLEM: 1. Industrial sales to auto assemblers OK 2. Retail sales of replacement tires doing poorly

  3. COMPETITION: 1. Bridgestone / Firestone from Japan 2. Michelin from France / Germany 3. Both companies will sell at low low price to increase North American market share

  4. SOLUTION re: PLACE 1. Sell replacement tires where people buy them - SEARS 2. Sell higher quality tire through dealerships so dealers can still bring in high end customers 3. Convert some stores to no-frills quick-serve

  5. CHAPTER 11 Chpt 11 is about the distribution channels - how do you get the product, physically, from where it is made, to where people are going to buy it Chpt 12 is about storing, transporting etc. Chpt 13 is about different types of retailing and wholesaling firms

  6. Delivered at the right time - time utility Delivered to the right place - place utility With appropriate legal requirements - possession / ownership utility Marketing / Distribution Channels create- Time- Place- Possession/ownership utility Page 287

  7. The different Product Classes have different PLACE situations Place decisions can be aided by knowing about the product classes Product Classes - Place

  8. Convenience Products - have to be in convenient places - small stores, vending machines Shopping Products - have to be where shoppers go, malls, superstores etc. Specialty Products - have to available where people want to buy them - ie. Movie theatres have to be located where many people go, and where you can park easily Product Classes - Place

  9. PLACE must be considered in terms of the Product Life Cycle In the beginning Growth Stage - it might be good to have your product sold in a certain location, but in the maturity or decline stage, you may have to change locations to make it better for customers who are no longer so strongly interested in buying Place and PLC

  10. PLACE must be considered in terms of the Product Life Cycle Changing PLACEs, as you move through the PLC, is very hard to do because it is expensive and usually involves Real Estate Place decisions are usually harder to change than other marketing mix decisions Place and PLC Page 366

  11. Discrepancy of Quantity Discrepancy of Assortment Discrepancies Page 369

  12. Discrepancy of Quantity the mfg. Makes much more than individual consumers want to buy each time middlemen, wholesalers and retailers break this amount down into smaller amounts for individual consumers to buy Discrepancies Page 369

  13. Discrepancy of Quantity … the difference between the quantity of products it is economical for an individual producer to make and the quantity normally wanted by individual consumers or users... Discrepancies Page 369

  14. Discrepancy of Assortment the difference between ALL the product lines a mfg. Makes, and what the wholesaler wants to sell, and what the consumer will buy middlemen, break this amount down into different selections which the wholesalers want Discrepancies Page 369

  15. middlemen, break this amount down into different selections which the wholesalers want EG. KRAFT makes many many different types of salad dressing A no-frills store just wants to sell 7 types cause its customers don’t buy the fancy kinds Discrepancies

  16. Page 3 7 0 Accumulation - combining products from several different producers. “… make it more convenient for companies to buy and handle…” When farmers collect food, and sell them to buyers who gather large amounts for shipping to processors

  17. The Accumulating Process

  18. Page 3 7 0 Breaking Bulk - take all the product and physically move it into small containers so it can be shipped to wholesalers. “… divide larger quantities into smaller quantities…”

  19. Sorting Page 3 7 1 Separating products into grades and qualities desired by different target markets. Eg. Food products, small onions, large onions, or white eggs, brown eggs or …

  20. Sorting Page 3 7 1 Taking heterogeneus commodities and sorting them into homogenous categories Eg. All apples into red apples and green apples

  21. Sorting • The process that helps producers, • who produce different amounts, • and different types, • organize their products • into categories/assortments • to make it easier for the consumer to buy. WTGR

  22. Assorting Page 3 7 1 “… putting together a variety of products to give a target market what it wants…” ie. In this video store, mostly Asian films ie. In this record store, mostly hip hop ie. In this jewelry store, mostly chains

  23. Assorting Page 3 7 1 Some stores cannot take the full range of a company’s product line - they do not have the shelf space or floor space - so they carefully select the brands of several mfgs to sell.

  24. CHANNEL CAPTAIN PAGE 373 “A person, or company, that helps direct the activities of a whole channel, and tries to avoid, or solve conflicts…” However, some older products don’t have such a position.

  25. CHANNEL CAPTAIN PAGE 373 • Can be,,, • A strong wholesaler • a market oriented producer • a large retailer

  26. CHANNEL CAPTAIN PAGE 375 Sometimes Middlemen have a clear picture of what the customer wants, and who the producers are, so they arrange for producers to be in contact with the retailers, so more product can flow in the channel. The Middlemen makes more money by making nore commission on stuff sold. Note: explanation on bottom of page 374 and top of page 375

  27. The whole channel focusses on the same target market at the end of the channel sometimes a large firm will buy up the smaller companies in the channel to have more control over the distribution(Corporate Channel Systems - page 376) Vertical Marketing Systems

  28. Reverse Channels The paths goods follow from consumer to manufacturer or to marketing intermediaries. Common in the recycling industries. Eg. - Empty glass bottles - used batteries - used tires - used printer cartridges - Canon Page 384

  29. Reverse Channels - used cartridges - Canon

  30. Reverse Channels Also used for product recalls or for broken products that need to be fixed under Warranty - especially cars, tires and some expensive electronic consumer items. Important to maintain consumer satisfaction and confidence.

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