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Summary

This lecture provides a comprehensive overview of key marketing mix concepts, focusing on 'Place' and 'Promotion.' The speaker discusses various distribution strategies, including direct and indirect channels, and the different distribution intensities: exclusive, intensive, and selective. The concept of OEM (Original Equipment Manufacturer) is explained with examples from footwear, highlighting the distinction between branded and unbranded products. The role of middlemen like wholesalers, retailers, brokers, and manufacturer representatives is also explored. Finally, the importance of creative promotional strategies like advertising and publicity in introducing products to consumers is emphasized.

Takeaways

• 😀 The quiz covers only Chapter 1 with 15 items, and it is open until 8 PM today.
• 😀 The discussion today focuses on the 'Place' element of the marketing mix, which includes physical and virtual stores.
• 😀 Direct distribution means products are sold directly from the manufacturer to the final consumer, like freshly cooked food sold directly in karinderyas (local eateries).
• 😀 Indirect distribution involves middlemen, such as wholesalers, retailers, and brokers, to facilitate transactions between the seller and the buyer.
• 😀 The intensity of distribution can be exclusive, intensive, or selective, depending on how widely the product is distributed.
• 😀 Exclusive distribution limits the availability of products to specific stores or branches, often applied to high-end brands like Gucci and LV.
• 😀 Intensive distribution aims for widespread availability, such as in supermarkets, convenience stores, and sari-sari stores, often seen in mass-market products like canned goods.
• 😀 Selective distribution involves more selective outlets for products, like imported goods sold only in specific stores like SNR.
• 😀 OEM (Original Equipment Manufacturer) refers to products made with the same materials as branded products but without the brand name, often sold at a lower price.
• 😀 Manufacturer representatives serve as middlemen, bridging the gap between manufacturers and buyers by meeting the needs of both parties.
• 😀 Wholesalers buy in bulk and sell at original prices without additional markups, while retailers sell in smaller quantities and include markups for individual sales.
• 😀 Brokers act as intermediaries to close deals between buyers and sellers, ensuring both parties meet their standards and legal requirements.

Q & A

What is the 'Place' element in the marketing mix?

The 'Place' element in the marketing mix refers to the distribution channels or locations through which products are made available to consumers. This can involve both physical stores and virtual stores (online platforms).

What is the difference between direct and indirect distribution?

Direct distribution involves the product moving directly from the manufacturer to the final consumer, with no intermediaries. In contrast, indirect distribution includes intermediaries such as wholesalers, retailers, or brokers who facilitate the sale between the manufacturer and the consumer.

Can you give an example of direct distribution?

An example of direct distribution is a *karinderya* (local eatery), where food is prepared and sold directly to customers without any intermediaries.

What is the role of middlemen in the distribution process?

Middlemen, such as wholesalers, retailers, and brokers, help bridge the gap between the manufacturer and the consumer. They facilitate the sale and may add value to the product, but they also contribute additional costs.

What is exclusive distribution and how does it work?

Exclusive distribution is when a product is sold only in select, high-end locations or stores. This distribution model aims to create a sense of exclusivity, with brands like Gucci or Louis Vuitton being prime examples, where the products are only available at specific locations.

What is intensive distribution and what are some examples?

Intensive distribution aims for widespread product availability across multiple locations, including supermarkets, convenience stores, and even small businesses. Common products like canned goods or rice typically use this strategy.

What is selective distribution and how does it differ from exclusive distribution?

Selective distribution involves selling products in a limited number of stores or through chosen resellers. It’s less restrictive than exclusive distribution, which is highly selective. For example, imported products sold at stores like S&R use selective distribution.

What does OEM (Original Equipment Manufacturer) mean?

OEM refers to products made by a manufacturer that are then marketed under another brand's name. These products are often identical to branded ones but sold without the brand logo, typically at a lower price. OEM products are common in industries like footwear, electronics, and accessories.

What is the main difference between advertising and publicity?

Advertising is a paid form of communication used to promote a product, while publicity refers to unpaid exposure, such as media coverage or word-of-mouth. Both aim to raise awareness but differ in how the message is delivered.

Why are middlemen important in the distribution process?

Middlemen are important because they help manufacturers reach broader markets and ensure the efficient distribution of products. They may add services like product promotion, customer support, and market expansion, which ultimately benefit both manufacturers and consumers.