Module MM063

Placement Policy (Marketing Mix IV)

 

Module authors

Ko de Ruyter

Maastrich University
The Netherlands

 

 

 

Debbie I. Keeling

Loughborough University
UK

 

Learning objectives

After you completed this module, you will:

  • Know the structural dimensions of the distribution channel.
  • Recognize the social dimensions of placement.
  • Be able to recognize the elements of the distribution mix.
  • Be familiar with push and pull strategies as bases for placement policy.
  • Be able to calculate distribution ratios.
  • Learn about the elements of virtual distribution.
  • Know the impact of social media on placement policy.
Contents

1. Introduction
2. Structural channel dimensions
3. Social channel dimensions
4. Physical distribution mix
5. Virtual distribution

Workload units 1
Read excerpt Placement Policy

 

Why Open School of Management believes that knowing the instruments of placement policy is important

Product distribution and placement comprise the crucial final component of the marketing mix. Since expert and pioneer Dr. E. Jerome McCarthy proposed his "four Ps" theory of marketing in the 1960s, marketers the world over have considered the marketing mix to consist of product, price, promotion, and placement. The present module will focus on the placement policy and the channels of distribution.

The first part of the marketing mix -- product -- constitutes the goods or services that satisfies a demand, which exists due to the product fulfilling a need or desire of the consumer. The price of the product is, in short, the amount that the consumer will pay for product and is set according to considerations like the consumer's perception of value and the cost of competitors' products. Promotion consists of all avenues in which information about a product, such as its features and cost, are communicated or conveyed to the consumer; this includes things like advertising, social media, and public relations. Placement, which is the current focus, is the final part of the marketing mix and deals with all aspects of product distribution and making the product accessible to those who want to purchase it.

This module emphasizes the importance of product placement and distribution, or making the product available to consumers, in today's economic landscape. A crucial part of marketing and sales, placement policy is the set of attributes and processees that guide a product to the consumer for purchase. Furthermore, placement involves a very specific confluence of physical, social, and virtual factors. The study of product placement will enlighten on all the processes that occur after a product is manufactured to the point when it is purchased and will promote a better understanding of placement strategy.

This module is a comprehensive study of placement policy and the distribution mix, the channels and structure, as well as social and virtual dimensions. The efficient placement strategy of a product will allow a business or company to succeed in meeting or exceeding its sales and marketing goals.

 

Module overview

To start, we will define and discuss placement policy, as well as outline the processes and structural dimmensions of the distribution channel that serve to make a product available to the consumer. There are direct and indirect distribution channels, terms which refer to the sets of intermediaries through which a product will pass after its production until it is made available for purchase. You will learn the different levels of indirect distribution channels in which the product passes through intermediaries like a wholesaler or retailer before reaching the consumer; a level one channel passes through a single intermediary, and so on. However, if the distribution channel is direct, the product will go straight to the consumer from the product's manufacturer or producer.

This module will also familiarize with social dimensions of placement and distribution, such as the ways in which the features and price of a product are communicated to the consumer. A large focus of the module will be using push and pull strategies as the bases for placement policy. Push strategies, in short, are when you take the product to the consumer, or "push" the product; direct sales, attractive packaging design, encouraging retailers to stock and sell the product, and point of sales displays are examples of effective push placement strategies. On the other hand, pull strategies are when the customer is attracted to the product, not unlike a moth drawn to flame; examples of pull strategies include strong advertising social media promotion, positive word of mouth, sales promotions and incentives, and customer relationship management. Social channels of distibution will also be discussed with an emphasis on the potential of social media to be incorporated into product placement strategies by distributing and promoting content.

Another important component of the distribution mix, physical channels of distribution will be discussed including the ways in which they can be combined for an effective placement strategy. The differences between intensive, selective, and exclusive distribution will be indentified according to whether a product is made widely available or is sold by only certain retailer(s). You will also learn to calculate distribution ratios by considering the process and cost of making a product available after its production, which could involve the product being exchanged between more than one shipper, versus the price consumers will pay for the product to the end retailer.

In today's economic environment, sometimes it's not enough to rely only on a conventional distribution strategy. Virtual distibution is a synergy between conventional distribution channels and internet marketing. The module will conclude by identifying ways in which product placement strategies can incorporate virtual distribution, such as referral and affiliate internet marketing, as a way to effectively promote and distribute both digital and non-digital content. We will compare physical and virtual distribution, acknowledging ways in which they are similar and different.

By the end of the module, you will have a thorough understanding of product placement policy including the distribution mix, social distribution channels, physical and virtual distribution. You will also be familiar with the impact of social media on placement policy as well as push and pull promotion strategies.

 

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