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What exactly is ‘Place’ ? • Distribution of goods product customer •Accessibility of services (Grönroos) customer product therefore including availability of information ease of booking location choice physical access issues eg parking, queuing Marketing Channels Sets of interdependent organisations involved in making the product available (El Ansary) Suppliers Producer Wholesaler Retailer Channels convey not only products but information, orders, payments, tickets etc Each member of the channel increases the costs and so must increase the value of the end product Customer Why use intermediaries? • Advantages to the Company – – – – – – – wider geographical coverage local market knowledge personal face-to-face selling pre-booking -> pre-planning for demand prepayment -> cashflow, interest lower administrative costs quick circulation of last-minute offers Does this outweigh the extra costs? Why use intermediaries • Advantages to the customer – – – – – local purchase, one-stop-shopping local reputation, someone to complain to comparison of alternatives on offer demonstration and expert advice up-to-date information eg late bargains Can home shopping technology offer all this? Channel Leadership and Control: Who decides what is available to buy? • depends on the relative bargaining power of the channel members Producer Power comes from • well known brands • high ad.spend • competitive prices • strong consumer demand Trend towards Retail Power • • • • Concentration of ownership Well-known retail brands centralised buying/stocking policy selective stocking – fewer brands – own label brands • Coordinated design and promotion • Vertical and horizontal integration Vertical Integration Same company owns more than one part of the marketing channel to ensure its supplies and outlets ( and so favours its own brands) BriitanniaAirways Universal Studios Thomson Holidays UPI Lunn Poly Travel UCI Cinemas Horizontal Integration Where the same company owns different brands competing with or complementing each other • to offer consumers a range of products • to prevent competitors exploiting gaps What have these brands in common? Beefeater Pizza Hut Costa TGI Friday Marriott Travel Inn David Lloyd Brewers’ Fayre Choosing the Channel • Consumer decision process – where do they usually look for this product? • Channel control – can I get my product on the shelves? • Costs and benefits – commission v direct response advertising – wide coverage v direct communication Are small independent producers forced to use direct marketing methods? Internet Channels • Dis-intermediation – consumers buy direct on-line or • Re-intermediation – customers buy from new on-line ‘retailers’ – Amazon, Lastminute.com, Expedia – offering the same advantages as high-street retailers (see Slide 4)