7 Marketing P’s
Product
Price
Place
Promotion
People
Physical Evidence
Process
Marketing – the act of satisfying or retaining customers. It is one of the primary
components of the business management and commerce. Marketing is typically
conducted by the seller, typically a retailer or manufacturer. Products can be marketed to
other businesses or directly to consumers.
Marketing Channel – is the people, organization and activities that make goods and
services are available for use by consumers. It transfers the ownership of goods from the
point of production to the point of consumption. It also viewed and defined as the “external
contractual organization that management operates to achieve its distribution objectives”.
External – Marketing Channel exists outside of the firm.
Contractual Organizations – refers to those firms or parties who are involved in the
negotiatory functions including buying, selling and transferring titles from one firm to
another.
Operates – involvement by the management in the affairs of the channel.
Distribution Objectives – management has a certain goals in mind such as the distribution
to particular retail stores of product at or near key times.
Channel Manager – provides a sense of focus of referring the important role of the
channel decision making within the firm.
The Marketing Mix Model portrays the Marketing Management process as a strategic
blending of the 4 controllable marketing variables including the product, price, place and
promotion.
The External Uncontrollable Elements including economy, technology, government,
sociocultural patter of buyer behavior and competition.
Channel fits under the “place” of the marketing management strategy.
The Importance of Marketing Channel’s!
A. The Explosion of Information Technology and E-commerce – in recent years has
focused attention to “channel” as a means for sustainable competitive advantage.
The Notes:
1. Disintermediation – shorthand for a metamorphosis that would allow the
hundreds of thousands of producers to be connected directly with a millions
of consumers without the help of middlemen.
2. Re-intermediation – occurred as a new type of middlemen called
infomediaries such as eBay and Yahoo! to emerged connections between
the producers and consumers.
B. Difficulty in Gaining Sustainable Competitive Advantage – the companies struggles
to find the sustainable competitive advantage that cannot be easily or quickly
copied by the competitors.
The Notes:
1. Sustainable Competitive Advantage – a company edge cannot be easily or
quickly copied by the competitors.
2. Product Strategies – whereby a company creates or modifies a product
offering to a new or current markets through the use of product innovation,
augmentation or line extensions.
3. Pricing Strategies – gaining a competitive advantages through pricing
strategies is even less feasible through product development.
4. Promotion – the integration of personal selling, advertising, public relations,
price discounts, and trade allowances designs to enticed the consumers to
purchase.
5. Place – where and how the products and services is delivered to the
consumers, the 4th element of the marketing mix does offer a greater
potential for sustainable competitive advantage.
C. Growing Power of Distributors – economic power has shifted from the producers
of goods to the distributors of goods.
D. Need to Reduce Distribution Costs – distribution costs for many manufacturing
firms often meet or exceed the cost of manufacturing or raw materials.
Channel Strategy – concerned with the entire process of setting up the contractual
organizations that are responsible for meeting the firm’s distribution objectives.
Logistics Management – more narrowly focuses on providing product availability at the
appropriate place and time in the marketing channel.
The Notes:
1. Channel Strategy and Logistics Management comprise the distribution variable of
the marketing mix
2. Channel Strategy must be first established before logistics management should be
considered. Logistics Management is a subsidiary of channel management.
Flows in Marketing Channel’s
1. Product Flow – the actual physical movement of the product from the manufacturer
through all of the parties to the consumer.
2. Negotiation Flow – the interplay of the buying and selling functions associated with
the transfer of title or rights of ownership negotiation is a two-way process involving
mutual exchange between buyer and seller.
3. Ownership Flow – the movement of the title of the product from one stage in the
process to another.
4. Information Flow – it involves two directions From the manufacturer to the
consumer and from the consumer to the manufacturer.
5. Promotion Flow – it refers to the flow of persuasive communication in the form of
advertising. Personal selling, sales promotion and publicity.
The Advantages of Strategic Alliance’s or Partnerships
Long-term viability
Cannot be copied quickly
Cannot be duplicated with price
Cannot be substituted with a clever idea or short-term promotional program(s).