Slide 1
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 2
PROBLEM:
1. Industrial sales to auto assemblers OK
2. Retail sales of replacement tires doing
poorly
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 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
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 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
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 5
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
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 6
Marketing / Distribution Channels
create
- Time
- Place
- Possession/ownership utility
• Delivered at the right time - time utility
• Delivered to the right place - place utility
• With appropriate legal requirements -
possession / ownership utility
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt
Page 287 slides created
and Copyright by Prof. Tim Richardson
Slide 7
Product Classes - Place
• The different Product Classes have
different PLACE situations
• Place decisions can be aided by
knowing about the product classes
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 8
Product Classes - Place
• 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
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 9
Place and PLC
• 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
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 10
Place and PLC
• 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 Page 366
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 11
Discrepancies
Page 369
• Discrepancy of Quantity
• Discrepancy of Assortment
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 12
Discrepancies
Page 369
• 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
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 13
Discrepancies
Page 369
• 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...
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 14
Discrepancies
Page 369
• 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
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 15
Discrepancies
• 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
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 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
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 17
The Accumulating Process
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 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…”
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 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 …
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 20
Sorting Page 3 7 1
Taking heterogeneus commodities and
sorting them into homogenous categories
Eg. All apples into red apples and green
apples
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 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
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 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
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 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.
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 24
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.
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 25
PAGE 373
Can be,,,
• A strong wholesaler
• a market oriented producer
• a large retailer
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 26
PAGE 375
Note: explanation on bottom of page 374
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
and top of page 375
with the retailers, so more product can
flow in the channel. The Middlemen
makes more money by making nore
commission on stuff sold.
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 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)
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 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 Page 384
- used printer cartridges - Canon
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 29
Reverse Channels
- used cartridges - Canon
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson
Slide 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.
Based on Basic Marketing, Shapiro, 8th Cdn Ed. ppt slides created
and Copyright by Prof. Tim Richardson