Q&A - Describe the main kinds of intermediary involved in distribution channels
Whilst many kinds of business get involved in distribution channels, the most common type of intermediaries are retailers, wholesalers, distributors, agents and franchisees. These are described briefly below:
read more...»Q&A - Should a business avoid intermediaries and sell direct?
A key decision a business has to make about distribution is whether to sell “direct”. Direct marketing means selling products by dealing directly with consumers rather than through intermediaries.
read more...»Q&A - What factors determine the type of distribution channel used by a business?
A wide variety of factors need to be considered when deciding on the most appropriate distribution channel for a product. These are summarised below:
read more...»Q&A - How many stages does a distribution channel have?
Distribution channels vary in terms of the number of stages a product goes through between producer and final consumer. “Long” channel routes involve one or more intermediaries such as wholesalers, retailers and agents. in “short” channels, the product is supplied to the consumer directly from the producer without the use of intermediaries (sometimes also called “middlemen”).
read more...»Q&A - Outline the role of a distribution channel
A distribution channel can be defined as: “all the organisations through which a product must pass between its point of production and consumption”. Looking at that definition, you can see that a product might pass through several stages before it finally reaches the consumer. The organisations involved in each stage of distribution are commonly referred to as “intermediaries”.
read more...»Q&A - What is the role of “place” in the marketing mix?
Place (or its more common name “distribution”) is about how a business gets its products to the customers. The objective of distribution is clear. It is to: to make products available in the right place at the right time in the right quantities. Distribution matters for a business of any size – it is a crucial part of the marketing mix.
read more...»Q&A - What is personal selling and merchandising?
Personal selling is where businesses use people (the “sales force”) to sell the product after meeting face-to-face with the customer. The sellers promote the product through their attitude, appearance and specialist product knowledge. They aim to inform and encourage the customer to buy, or at least trial the product.
read more...»Q&A - Outline the role of public relations and sponsorship in promotion
Public relations covers a broad series of activities where a business manages its relationships with different parts of the public, e.g. customers, the media, local communities, suppliers, employees and investors.
read more...»Q&A - Describe the main features of advertising as a method of promotion
Advertising is defined as any “paid-for method of promotion” and is the main form of “above the line promotion”. Advertising presents or promotes the product to the target audience through a variety of media such as TV, radio, cinema, online, newspapers and magazines.
read more...»Q&A - What is the difference between “above” and “below the line” promotion?
The way in which promotion is targeted is traditionally split into two types - “above the line” and “below the line”.
read more...»Q&A - What are the main aims of promotion?
Promotional activities have a variety of aims:
read more...»Q&A - What is promotion?
It is no longer enough for a business to have great products. Lots of businesses have those too. Customers need to know about a great product and be persuaded to buy. That is the role of promotion.
read more...»Q&A - How can a business use contribution pricing?
Contribution pricing involves setting a price based on the variable cost of producing or buying a product. The aim is to ensure the selling price generates an acceptable contribution towards covering the fixed costs of the business.
read more...»Q&A - What is competitor-based pricing?
Competitor-based pricing involves the setting of prices based on what rivals are charging.
read more...»Q&A - Outline the main methods of sales promotion
Sales promotion is the process of persuading a potential customer to buy the product. Sales promotion is designed to be used as a short-term tactic to boost sales – it is rarely suitable as a method of building long-term customer loyalty.
read more...»Q&A - Describe the main ways direct marketing is used in promotion
Direct marketing is a catch-all term that describes a range of promotional activities that are aimed directly at the customer, so bringing the promotional message straight to the target audience. Direct mail, telemarketing and email marketing can all be useful methods of targeting the kind of customer who is likely to buy from the business. However, each of them requires careful preparation and consideration towards the audience, and knowledge of how to manage customer data efficiently and within the boundaries of the law.
read more...»Q&A - Why might a business use psychological pricing?
Psychological pricing is a pricing tactic that is designed to appeal to customers who use emotional rather than rational responses to pricing messages.
read more...»Q&A - What is price discrimination and why do businesses use it?
In contrast to predatory pricing, price discrimination is perfectly legal and very common. It involves charging a different price to different groups of people for the same product.
read more...»Q&A - What is predatory pricing?
With predatory pricing, prices are deliberately set very low by a dominant competitor in the market in order to restrict or prevent competition. The price set might even be free, or lead to losses by the predator. Whatever the approach, predatory pricing is illegal under competition law.
read more...»Q&A - Outline what is meant by cost-based pricing
Cost-based pricing involves setting a price by adding a fixed amount or percentage to the cost of making or buying the product. In some ways this is quite an old-fashioned and somewhat discredited pricing strategy, although it is still widely used. After all, customers are not too bothered what it cost to make the product – they are interested in what value the product provides them.
read more...»Q&A - Outline how market research can help a business set its prices
There are many factors that determine what price a business sets for its product. Market research can help inform a business on several of these factors…
read more...»Q&A - Distinguish between price and cost
The terms “price” and “cost” are often confused by students. The two terms are related, but quite different…
read more...»Q&A - Should a business use a “loss leader” as part of its pricing tactics?
The use of loss leaders is a method of sales promotion. A loss leader is a product priced below cost-price in order to attract consumers into a shop or online store. The purpose of making a product a loss leader is to encourage customers to make further purchases of profitable goods while they are in the shop. But does this strategy work?
read more...»Q&A - What is the role of sampling in market research?
Market research involves the collection of data to obtain insight and knowledge into the needs and wants of customers and the structure and dynamics of a market. In nearly all cases, it would be very costly and time-consuming to collect data from the entire population of a market. Accordingly, in market research, extensive use is made of sampling from which, through careful design and analysis, marketers can draw information about the market.
read more...»Q&A - What is qualitative market research?
Qualitative market research is about investigating the features of a market through in-depth research that explores the background and context for decision making. There are two main qualitative methods - depth interviews and focus groups. However qualitative research can also include techniques such as usability testing, brainstorming sessions and “vox pop” surveys.
read more...»Q&A - What is quantitative market research?
Quantitative research is about measuring features of a market and quantifying that measurement with data. Most often the data required relates to market size, market share, penetration, installed base and market growth rates. However, quantitative research can also be used to measure customer attitudes, satisfaction, commitment and a range of other useful market data that can tracked over time.
read more...»Q&A - What are the main uses of market research?
A wide variety of information used to support marketing decisions can be obtained from market research. A selection of such uses are summarised below:
read more...»Q&A - What are the main ways in which a business can obtain information on a market?
To undertake marketing effectively, businesses need information. Information about customer wants, market demand, competitors, distribution channels etc. Marketers often complain that they lack enough marketing information or the right kind, or have too much of the wrong kind. The solution is an effective marketing information system.
read more...»Q&A - What are key parts of product life cycle theory?
The product life cycle is an important concept in marketing. It describes the stages a product goes through from when it was first thought of until it finally is removed from the market. Not all products reach this final stage. Some continue to grow and others rise and fall.
read more...»Q&A - How can the Boston Matrix help a business manage its product portfolio?
A business with a range of products has a portfolio of products. However, owning a product portfolio poses a problem for a business. It must decide how to allocate investment (e.g. in product development, promotion) across the portfolio. A portfolio of products can be analysed using the Boston Group Consulting Matrix.
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