Distribution & Promotion - The Marketing Mix

Generally speaking, company management has a number of variables or ingredients that it can control. For example, the management of a company has discretion over the range of products to be produced, their feature, quality levels, etc. The task of marketing management is to blend these ingredients together into the successful recipe. The term marketing mix is appropriate, for there are many marketing mix ingredients and even more ways of combining them. Each element of four Ps requires that decisions are taken:

• Price: price levels, credit terms, price changes, discounts
• Product: features, packaging, quality, range
• Promotion: advertising, publicity, sales promotion, personal selling
• Place: inventory, channels of distribution, number of intermediaries


Distribution


The distribution (or place) element of the marketing mix, particularly the management of physical distribution has long been considered one of the areas in business where substantial improvements and cost savings can be made. Representing a substantial portion of total costs in a company, the distribution area has attracted considerable attention in terms of new concepts and techniques designed to manage this important function more effectively. The management of distribution is now recognized as a key part of the strategic management of a company and in a larger organization, it is often the responsibility of a specialist.

In its broadest sense of distribution is concerned with all those activities required to move goods and materials into the factory, through the factory, and to the final consumer. Here are some examples of the decision areas encompassed in the distribution element of the marketing mix.

The selection of distribution channels involves determining in what manner and through which distribution outlets, goods, and services are to be made available to the final consumers. Marketing channels may be very short (such as ordering via social media, email) or alternatively may include a whole set of intermediaries including brokers, wholesalers, and retailers. In addition to selecting the route through which product will reach consumers, decisions must also be made about the extent of distribution coverage. Some company has a policy of exclusive distribution where only a small number of selected intermediaries are used to distribute company products. In other cases, a company may decide that it requires as wide a distribution cover as possible (intensive distribution) and will seek a large number of distribution outlets.

In addition to selecting channels of distribution, decisions must also be made about factors such as delivery periods and methods of transportation. Reduced delivery times can provide a significant advantage to a company in marketing its products. On the other hand, such a policy is often accompanied by a need to increase inventory levels, thereby increasing costs. A policy decision must, therefore, be made about the requisite level of customer service, after considering the benefits and costs involved.

Terms and conditions of distribution include conditions of sale on the part of distributors, minimum order or stocking quantities and the determination of credit, payment, and discount terms of distributors. Terms and conditions of distribution influence the framework within which sales are negotiated. The management of physical distribution influences the all-important delivery terms which the salesforce are able to offer their customers.

Promotion


This element has the most influence on sales because personal selling itself is considered as one element of the total promotional mix of a company. Other elements of this promotional submix include advertising, sales promotion, and publicity.

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