Chapter 13 - Marketing mix: place and
promotion
Place - distribution channels
Channels of distribution: how a product gets from the producer to the final
consumer
Choosing a method of distribution
Cost
Nature of the product
The market
Wholesaler - a business that buys products in bulk from producers and then sells
them to retailers
Retailers - shops and other outlets that sell goods and services to the final
consumer
Middleman - these are the intermediaries in the channels of distribution, for example
wholesalers and retailers
DIrect selling - the product is sold by the producer directly to the final consumer
without the need for any middleman
Promotion
Promotion - marketing activities used to communicate with customers and potential
customers to inform and persuade them to buy a business’s products
The aims of promotion
● Attracting the attention of consumers and
reminding consumers that the product is still on the market
● Persuading consumers to buy the product
● Explaining how a product is better than competitor’s products
● Creating and developing brand image
● Encouraging wholesalers and retailers to stock the product
● Reassuring consumers, following a problem with the product
How promotion influences sales
Advertising - paid-for communication with consumers which uses printed and
visual media. The aim is to inform and persuade consumers to buy a product
Two main forms of advertising:
Informative advertising - information about the product communicated to
consumers to create product awareness and attract their interest
Persuasive advertising - communication with consumers aimed at getting
them to buy a firm’s product rather than a competitor’s product
Sales promotion - incentives used to encourage short-term increases in sales or
repeat purchases
This type of promotion is sometimes called below-the-line promotion.
Below-the-line promotion - promotion that is not paid for communication but uses
incentives to encourage consumers to buy
Different activities includes are:
● Money-off coupons or vouchers
● Point of sale displays in shops
● Loyalty reward schemes
● Competitions and games with cash or other prizes
Advantage - very specific to the business or its product, customer mist buy the
product to use the money-off coupons or vouchers, loyalty reward points when
consumers spend money in a particular business
Personal selling - sales staff communicate directly with the consumer to achieve a
sale and form a long-term relationship between the firm and consumer
- Expensive form as more staff are needed to provide the personal service to
consumers and pay bonuses, or a commission on any sales made which
reduces the profit
Direct mail - also known as ‘mailshots; printed materials which are sent directly to
the address of customers
- A very good way of communicating with a large market over a wide
geographical area
- A danger of it being considered ‘junk mail’ and thrown away before being read
Sponsorship - payment by a business to have its name or products associated
with a particular event
The marketing budget and promotion decisions
Marketing budget - the amount of money made available by a business for its
marketing activities during a particular period of time / an amount of money available
for promotional activities
- The size of the marketing budget affects promotion decisions
- Spending very large amount of money does not always guarantee success
- Business needs to know that its marketing budget is spent cost-effectively
Technology and the marketing mix
E-commerce - use of the internet and other technologies by businesses to market
and sell goods and services to customers Examples:
● Online shopping
● Online ticketing
● Electronic payment
● Internet banking
● Hotel reservations
● Online auctions
Using the internet and social media networks for promotion
- Can be used to promote a business and its products
- A business may pay to place banner adverts or pop-ups
- Can advertise the business especially if the pop-up or banner is placed on
related product’s website
- Social media marketing gives businesses access to a huge number of
potential customers from around the world