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pregnancies a year； but the circulation of specialist magazines is only around
the 300；000 mark。 We have yet to discover a way of reaching all our potential
customers at the right time – in other words； early on in their pregnancies。
Place （distribution and logistics）
Place is the fourth ‘P’ in the marketing mix。 This aspect of marketing strategy
is about how products and services are actually delivered into the
customer’s hands。
106 The Thirty…Day MBA
If you are a retailer； restaurant or hotel chain； for example； then your
customers will e to you。 Here； your physical location will most probably
be the key to success。 For businesses in the manufacturing field it is
more likely that you will go out to ‘find’ customers。 In this case it will be
your channels of distribution that are the vital link。 For many businesses
delivering a service the internet will be both the ordering and fulfilment
vehicle。
The following are the factors to take into account in this area。
Channels of distribution
If your customers don’t e to you； then you have the following options
in ge。。ing your product or service to them：
。 Retail stores： This general name covers the great range of outlets from
the corner shop to Harrods。 Some offer speciality goods such as hi…fi
equipment； where the customer expects professional help from the staff。
Others； such as Marks & Spencer and Tesco； are mostly self…service；
with customers making up their own mind on choice of product。
。 Wholesalers and distributors： The pa。。ern of wholesale distribution
has changed out of all recognition over the past two decades。 It is still
an extremely important channel where physical distribution； stock
holding； finance and breaking bulk are still profitable functions。
。 Cash and carry： This slightly confusing route has replaced the traditional
wholesaler as a source of supply for smaller retailers。 In return for
your paying cash and picking up the goods yourself； the ‘wholesaler’
shares part of his or her profit margin with you。 The a。。raction for the
wholesaler is improved cash flow and for the retailer a bigger margin
and a wide product range。 Hypermarkets and discount stores also fit
somewhere between the manufacturer and the marketplace。
。 Mail order： This specialized technique provides a direct channel
to the customer； and is an increasingly popular route for new small
businesses。
。 Internet： Revenue generation via the internet is big business and ge。。ing
bigger。 For some sectors； such as advertising； books； music and video；
it has bee the dominant route to market。 There is no longer any
serious argument about whether ‘bricks’ or ‘clicks’ is the way forward；
or if service businesses work be。。er on the web than physical products。
Almost every sector has a major part to play and it is increasingly
unlikely that any serious ‘bricks’ business will not either have or being
building an internet trading platform too。 Dixon’s； a major electrical
retailer； has shi。。ed emphasis from the high street to the web and Tesco
has built a ￡ billion…plus home delivery business on the back of its store
structure。 Amazon； the sector’s pioneer； now has in effect the first online
department store； with a neat sideline in selling on second…hand items
once the customer has finished with the product。
Marketing 107
。 Door…to…door selling： Traditionally used by vacuum cleaner distributors
and encyclopaedia panies； this is now used by insurance panies；
cavity…wall insulation firms； double…glazing firms and others。
Many use hard…sell techniques； giving door…to…door selling a bad name。
However； panies such as Avon Cosmetics have managed to sell
successfully door…to…door without a。。racting the stigma of unethical
selling practices。
。 Party…plan selling： This is a variation on door…to…door selling that is on
the increase； with new party…plan ideas arriving from the United States。
Agents enrolled by the pany invite their friends to a get…together
where the products are demonstrated and orders are invited。 The agent
gets a mission。 Party plan has worked very well for Avon and other
firms that sell this way。
Selecting distribution channels
These are the factors you should consider when choosing channels of distribution
for your particular business：
1。 Does it meet your customers’ needs？ You have to find out how your
customers expect their product or service to be delivered to them and
why they need that particular route。
2。 Will the product itself survive？ Fresh vegetables； for example； need
to be moved quickly from where they are grown to where they are
consumed。
3。 Is it patible with your image？ If you are selling a luxury product；
then door…to…door selling may spoil the impression you are trying to
create in the rest of your marketing effort。
4。 How do your petitors distribute？ If they have been around for a
while and are obviously successful； it is well worth looking at how your
petitors distribute and using that knowledge to your advantage。
5。 Will the channel be cost…effective？ A small manufacturer may not find it
cost… effective to sell to retailers over a certain distance because the direct
‘drop’ size – that is； the load per order – is too small to be worthwhile。
6。 Will the mark…up be enough？ If your product cannot bear at least a
100％ mark…up； then it is unlikely that you will be able to sell it through
department stores。 Your distribution channel has to be able to make a
profit from selling your product too。
7。 Push–pull： Moving a product through a distribution channel calls for
two sorts of selling activity。 ‘Push’ is the name given to selling your
product in； for example； a shop。 ‘Pull’ is the effort that you carry out on
the shop’s behalf to help it to sell your product out of that shop。 That pull
may be caused by your national advertising； a merchandising activity
or the uniqueness of your product。 You need to know how much push
and pull are needed for the channel you are considering。 If you are not
108 The Thirty…Day MBA
geared up to help retailers to sell your product； and they need that help；
then this could be a poor channel。
8。 Physical distribution： The way in which you have to move your product
to your end customer is also an important factor to weigh up when
choosing a channel。 As well as such factors as the cost of carriage； you
will also have to decide about packaging materials； warehousing and
storage。 As a rough rule of thumb； the more stages in the distribution
channel； the more robust and expensive your packaging will have to
be。
9。 Cash flow。 Not all channels of distribution se。。le their bills promptly。
Mail…order customers； for example； will pay in advance； but retailers can
take up to 90 days or more。 You need to take account of this se。。lement
period in your cash…flow forecast。
Logistics
The goal of a marketing logistics system is to manage the whole process of
ge。。ing products to customers in an efficient and cost…effective manner to
meet marketing goals； and to get faulty or unwanted products back。 This
interfaces with a host of related areas of business； including physical transportation；
warehousing； relationships with suppliers； and inventory and
stock management。 Some important considerations in logistics include：
。 Just in time （JIT） aims to reduce the need for warehousing through
accurate sales forecasting。 All parties in the distribution channel carry
minimum stock and share information on demand levels。
。 Vendor managed inventory （VMI） and continuous inventory replenishment
systems （CIRS） require customers to share real…time data on
sales demand and inventory levels with suppliers。
Both supplier and customers； while benefiting from cooperation； have
mutually conflicting goals in that they want to shi。。 costs onto the other
party。 Their capacity for doing so depends on their relative strengths。 For
example； giant retailers such as Tesco and Marks & Spencer have been
very successful in ge。。ing their suppliers to carry a major part of the cost of
stockholding。
SELLING
Marketing is the thinking process behind selling； in other words； finding
the right people to buy your product or service and making them aware
that you are able to meet their needs at a petitive price。 But just because
customers know you are in the market is not in itself sufficient to make
them buy from you。 Even if you have a superior product at a petitive
price they can escape your net。
Marketing 109
Ge。。ing customers to sign on the do。。ed line almost invariably involves
selling。 This is a process that business people have to use in many situations
other than in persuading customers to buy。 MBAs have to ‘sell’ bank
managers the idea that lending their business money is worthwhile； that
shareholders should invest； that employees by working for them are making
a good career move or that their boss should back one of their proposals。
Though essential； selling on its own is an inefficient method of ge。。ing
potential customers to the point of buying。 Understanding the ‘ascending
ladder of influence’； as marketers call it； puts the salesperson’s role in
perspective。 This is a method to rank the ‘warm bodies’ a customer will
encounter in the selling process in the order in which it is most likely to
influence your customers favourably。 At the top of the scale is the personal
remendation of someone whose opinion is trusted and who is known
to be unbiased。 An example here is the endorsement of an industry expert
who is not on the payroll； such as an existing user of the goods or services
who is in the same line of business as the prospective customer。 While
highly effective； this method is hard to achieve and can be expensive and
time consuming。 Further down the scale is an approach by you in your
role as a salesperson。 While you may be seen to be knowledgeable； you
clearly stand to gain if a sale is made。 So you can hardly be unbiased。 Sales
calls； however they are made； are an expensive way to reach customers；
especially if their orders are likely to be small and infrequent。
How selling works
There is an erroneous view that salespeople； like artists and musicians；
are born； not made。 Selling can be learnt； improved and enhanced just like
any other business activity。 First； you need to understand selling’s three
elements：
。 Selling is a process moving through certain stages if the best results
are to be achieved。 First； you need to listen to the customers to learn
what they want to achieve from buying your product or service； then
you should demonstrate how you can meet their needs。 The next stage
is handling questions or objections； a good sign as it shows that the
customer is sufficiently interested to engage。 Finally es ‘closing
the sale’。 This is li。。le more than asking for the order with a degree of
subtlety。
。 Selling requires planning in that you need to keep records and
information on customers and potential customers so you know when
they might be ready to buy or reorder。
。 Selling is a skill that can be learnt and enhanced by training and
practice； as shown in the case study below。 The Sales Training Directory
（sales…training…courses。uk》Directory） lists sales course
providers in the UK。
110 The Thirty…Day MBA
NEGOTIATING
Like selling； negotiating； of which it usually forms a part； is as much a
science as an art。 There are a few immutable rules； easily understood but
invariably difficult to execute：
。 Aim high at the outset。 Unless you can find the point of resistance； you
can’t find the outer limits of your negotiating range。
。 You must be prepared to walk away from a deal and make that evident；
if you are to have any negotiating leverage。 To achieve this you
must have prepared plans B and C ready to execute if the terms you
want can’t be achieved。 For example； when negotiating to buy out a
petitor； have other businesses in the frame too； or have plans to
enter that market without them。
。 Search out a range of variables to negotiate other than price。 Delivery
date； payment terms； quantities； currencies； shared future profits； knowhow
swaps are just a handful of areas rich in negotiating possibilities。
。 Never give a concession away。 Anything given for nothing is seen as
being worth nothing。 Instead； trade concessions and always put the
highest value possible on the concession。 ‘We will pay 30％ upfront
rather than the 20％ you’re asking for （a gain for the seller） if you bring
the price down to ￡1。2m rather than the ￡1。3m you’re asking’ （a gain for
the buyer） is the place to start if you hope to hit a ￡1。25m final price。
。 Talk as li。。le as possible。 The less you say the less you can give away。
。 Once you have put a proposition on the table； shut up。 The first to blink
is the loser。
When Sumir Karayi started up in business in the spare room of his flat in
West Ealing； London； he wanted his business to be distinctive。 He was
a technical expert at Microsoft and with two colleagues he set up 1E
（1e） as a mune aiming to be the top technical experts in
their field。 The business name es fro