In-Depth Notes on Marketing Strategies: Place, People, Processes, Physical Evidence

Marketing Strategies: Place, People, Processes, Physical Evidence

Overview of Marketing Strategies

  • Focus Areas:
    • Marketing strategies
    • Market segmentation, product/service differentiation, positioning
    • Products (goods/services)
    • Branding and packaging
    • Pricing methods: cost, market, competition-based
    • Pricing strategies: skimming, penetration, loss leaders, price points
    • Interaction of price and quality
    • Promotion: advertising, personal selling, sales promotions, public relations
    • Place/distribution: channels and physical distribution issues
    • People, processes, and physical evidence
    • E-marketing and global marketing strategies
    • Competitive positioning, standardization, and customization

Place in the Marketing Mix

  • Definition:

    • Place refers to how products reach consumers and where they are sold.
    • Also known as distribution.

  • Importance of Place:

    • Includes location of the business and consumers.
    • Facilitates effective distribution strategies to move goods efficiently.
    • Use of intermediaries (wholesalers/retailers) enhances brand image and market reach.
    • Increasing internet use enables direct access to a wider customer base.

Distribution Channels

  1. Producer to Customer:
    • No intermediaries. Used by service providers (e.g., tax advice).
  2. Producer to Retailer to Customer:
    • Retailers buy from producers and sell directly to customers (e.g., furniture, fruits).
  3. Producer to Wholesaler to Retailer to Customer:
    • Common channel for consumer goods; wholesalers buy in bulk, then resell to retailers.
Channel Levels
  • Zero Level:
    • No intermediaries.
  • One Level:
    • One intermediary (producer-retailer-consumer).
  • Two Level:
    • Two intermediaries (producer-wholesaler-retailer-consumer).

Channel Choice

  • Types of Distribution:
    1. Intensive Distribution:
    • Saturates market (common for convenience goods like milk, newspapers).
    1. Selective Distribution:
    • Moderate coverage; customers willing to seek specific brands.
    1. Exclusive Distribution:
    • Only one retail outlet for a product in a large area, often for luxury items.

Case Study: McDonald's

  • Channel Used:
    • Producer-retailer-customer model.
  • Distribution Strategy:
    • Selective distribution with around 42,000 outlets worldwide.
    • Focus on delivery services, with a reported $16 billion in delivery orders.

Physical Distribution Issues

  1. Transport:
    • Requires intricate networks (e.g., rail, road, sea, air) to maximize efficiency.
    • Example: Australian flowers can reach Tokyo in 24 hours post-harvesting.
  2. Warehousing:
    • Activities include receiving, storing, and dispatching goods.
  3. Inventory Control:
    • Balancing stock to avoid costs associated with overstock (storage) and stock-outs (lost sales).

Additional 3 Ps of Services

  • People:
    • Importance of hiring, training, and staff engagement as services are person-dependent.
  • Processes:
    • Flow of activities must be customer-friendly (e.g., efficient online booking systems for airlines).
  • Physical Evidence:
    • Refers to the service environment, cleanliness, visibility of processes, and presentation materials (e.g., menus, brochures).

Conclusion

  • A robust marketing strategy requires a coherent understanding of Place, People, Processes, and Physical Evidence, integrating efforts for effective communication and customer satisfaction.