PLACEMENT MARKET SEGMENTATION It is very unlikely a

PLACEMENT MARKET SEGMENTATION It is very unlikely a firm can produce a universal product which suits everyone. WHY? As a result firms must identify a specific group/s of consumers, i. e. utilize limited resources to achieve high levels of efficiency. E. g. different clothes firms target different groups, with regard to age, geographical area, lifestyle, price etc. DISTRIBUTION CHANNEL MEMBERS These include wholesalers, agents, brokers and retailers. Transportation is a service to channel members and is usually provided by specialist sub -contractors. E. g. frozen foods and fresh foods need different vehicles, timescales etc. A producers decisions related to ‘place’ (called channel decisions) are complex and important as, unlike promotion and price, once it is implemented it is very difficult to change with any speed. WHY DO WE NEED ALL THE CHANNEL MEMBERS? WHY CAN’T WE JUST HAVE PRODUCERS AND RETAILERS? (we need middlemen to speed and facilitate distribution)

WHOLESALERS/ MERCHANTS Buy in bulk from producers and then sell onto retailers. Wholesaler accepts risk of loss/ damage/ changes in fashion. Advantage to producers- Only needs one lot of administration, get paid up-front, also they can do what they do best; production. DISADVANTAGES? Advantage to retailers- Wholesaler bears distribution costs, storage, transport, risk etc. BUT gets products cheaper due to bulk buying (and put mark-up on sales). AGENTS Have specialist sales expertise in their field, provide producers with skills they don’t have. No agents own what they sell, e. g. Estate agents- make money via commission. BROKERS Put buyers and sellers in touch. They offer the seller specialist knowledge, e. g. stock broker, ship broker etc. Usually paid by commission. Millions of pounds are traded at a nod, e. g. in London metal exchange, London commodity exchange. RETAILERS These are the most visible channel member. Buy goods from producers or wholesalers and sell to final consumers. Their depth of product lines and product mix depends on their objectives, e. g. ? Retailer supplying to households A, B and C will have different stock to one selling to C 2, D and E (location, service etc will also be affected). Types of outlet are classified via ownership of product assortment. The two main types are: Department stores Multiple stores