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What exactly is ‘Place’ ?
• Distribution of goods
•Accessibility of services (Grönroos)
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)
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
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)
Universal Studios
Thomson Holidays
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
Beefeater Pizza Hut
TGI Friday
Travel Inn
David Lloyd
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
• Re-intermediation
– customers buy from new on-line ‘retailers’
– Amazon,, Expedia
– offering the same advantages as high-street
retailers (see Slide 4)