MANAGEMENT OF MARKETING

PLACEMENT

LEARNING INTENTIONS AND SUCCESS CRITERIA

LEARNING INTENTIONS:

I understand the role of

PLACEMENT as part of the

marketing activities of an

organisation.

SUCCESS CRITERIA:• I can explain the factors

which will influence the

LOCATION of business

premises.• I can suggest appropriate

METHODS OF DISTRIBUTION for

different products.

WHAT IS PLACEMENT?

The PLACEMENT element of the marketing mix involves trying to provide goods and services IN THE RIGHT PLACE and AT THE RIGHT TIME for consumers. This applies to where a business locates its premises or where they sell their goods/services.

The placement element of the marketing mix is very important as without it the business would fail because consumers would not be able to gain access to its’ goods or services at a time or place that suits them.

FACTORS WHICH INFLUENCE CHOICE OF LOCATION

WHERE THE CUSTOMER IS:

Market research should have identified where the customers are and where the business should locate tomeet the needs of these customers. A business might need to locate near to its target market, eg a shop sellingclothing for skiers might open up next to a dry ski slope,and a car accessories shop next to a car showroom orRepair garage.

AVAILABILITY OF STAFF:

Staff with suitable skills should live nearby to help the business to run and expand.

FACTORS WHICH INFLUENCE CHOICE OF LOCATION

AVAILABILITY OF SUITABLE PREMISES:Premises which are the right size, have the right facilities (eg car parking, storage area, kitchen area) and the right cost to suit the businesses needs and finance available are important.

LOCATION OF COMPETITORS:Businesses might want to locate away from their competitors because they would not want businesses in their area doing things that takeaway their customers eg hairdressers.

On the other hand, some businesses will want to be next to their competitors so that it makes it easier for customers to compare products eg car showrooms.

FACTORS WHICH INFLUENCE CHOICE OF LOCATION

ENVIRONMENTAL IMPACT:

Businesses have to consider the effect their business might

have on the surrounding environment and be socially

responsible in their choice of location. Eg nuclear power

stations, airports.

SUITABLE INFRASTRUCTURE:

This is the availability of utilities (gas, electricity, water) and

transport links (road, rail, sea, air) to support the business.

Good transport links are essential for allowing customers,

suppliers and staff to access the business.

FACTORS WHICH INFLUENCE CHOICE OF LOCATION

GOVERNMENT INCENTIVES AND GRANTS:

Local governments eg Aberdeenshire Council can offer

incentives like low cost premises for businesses starting

up, rent free periods for the first 6-12 months of business,

grants for tools and equipment needed to equip the

business. These are given to encourage businesses into

areas which:• have high rates of unemployment• have areas of urban decay• are rural and remote

FACTORS WHICH INFLUENCE CHOICE OF LOCATION

RAW MATERIALS USED:

• Some businesses use RAW MATERIALS that are PERISHABLE, an example is food. These businesses will want to locate CLOSE to their SUPPLIERS to shorten transport times. This is to minimise the chance materials will be wasted in transport.

• Some businesses use BULK REDUCING materials ie they buy in large, bulky materials and make them into something smaller eg power stations burning coal. These businesses will want to be CLOSE TO their SUPPLIERS.

• Some businesses make BULK INCREASING products where they buy in small materials and make them into something bigger, eg car manufacturers. These businesses will want to be CLOSE TO their CUSTOMERS to keep transport costs down.

TASK

Complete Worksheet 29 in your jotters.

METHODS OF DISTRIBUTION

No matter where a business locates, it will have to distribute its products to its customers. The main methods of distribution are:

ROADRAILAIRSEA

However, some products are distributed via pipelines, cables or electronically using the internet.

ROAD DISTRIBUTIONExamples of road based methods of distribution includetankers, transporters, refrigerated vehicles, trucks, and vans.

This is the only method of distribution whichdelivers directly to the customer’s address. It is aquick and relatively inexpensive method comparedto the others.

However, it is not an environmentally- friendly method due to the amount of fuel used andthere can be many hold-ups on the road network due tobad weather, roadworks and traffic accidents.

RAIL DISTRIBUTION

It is easier to transport large or bulky products in large quantities using the rail network.

However, this is not a door-to-door service and train stations are generally located in major cities and towns, thus not giving totalcoverage of the whole country.

AIR DISTRIBUTION

This method allows for speedy distribution tomost parts of the world. Large quantities of small items can be transported this way. Remote and normally inaccessible areas can be accessed.

However, it is not a door-to-door service andit could still involve a fairly lengthy journey by road to get to the final destination. It is also a very expensive method of distribution.

DISTRIBUTION BY SEA For example super tankers, refrigerated ships, cargo container ships and barges.

This is useful for distributing large products

around the world eg cars

However, it is not a door-to-door service and

journey times can be very long compared to

air transport.

CHOOSING THE METHOD OF DISTRIBUTION

Businesses will decide which method of distribution to use by looking at the following factors:• Market Structure eg if goods are needed on an island,

sea will have to be used• Product Type eg if products are perishable they will

have to be distributed quickly using specialist refrigerated transport

• Method Cost eg cost must match the needs of the customer and the profit level to be achieved by the business

• Infrastructure eg does the destination have an airport, harbour, etc

TASK

Complete Worksheet 30 in your jotters