Distribution

Distribution Channel -

A channel is the pipeline through which a product flows on its way to the consumer. The manufacturer puts his product into the pipeline or marketing channel and various marketing people move it along to the consumer at the other end of the channel.
According to American Marketing Association - a channel of distribution or marketing channel, is the structure of intra company organisation units and extra company agents and dealers, wholesale and retail through which a commodity, product or service is marketed.
For a big organisation like 3M, the business hugely depends on the distribution channel and the consumer attitude towards the product. In a distribution channel retailers play a very important role. While making a product a Stock Keeping Unit of the shop, retailers think about the Gross Margin Return On Investment and they promote the brand which provides them the highest. They expect return in the form of profit margin, company schemes, window display and reference of the shop. Among these, company schemes make the difference and are the highest source of motivation after the profit margin. Retailing demands a constant push from the company.
3M products are sold through various distribution channels, including directly to users and through numerous wholesalers, retailers, jobbers, distributors and dealers in a wide variety of trades in many countries around the world. Management believes the confidence of wholesalers, retailers, jobbers, distributors and dealers in 3M and its products  - a confidence developed through long association with skilled marketing and sales representatives - has contributed significantly to 3M's position in the market place and to its growth.
3M has 157 sales offices worldwide, with 9 in the United States and 148 internationally. Many 3M products are available online directly from the company. 
Marketer needs to use advertising and brand building strategies to address the discerning buyers and retail push to in different buyers. The manufacturer should understand consumer behavior because retailers cant help quality and price.
Functions of channel intermediaries -

• Reconciling the needs of producers and consumers.
• Improve efficiency by reducing the number of transactions and creating bulk transportation.
• Improve accessibility.
• Providing specialist services.

Channel distribution foe consumer goods - 

1. Zero level channel : Manufacturer --------- Consumer. Direct marketing includes use of personal selling, direct mail, telephone selling and internet.
2. One level channel - Manufacturer --------- Retailer --------- Consumer. It is economical for producers to supply directly to retailers than through wholesalers.
3. Two level channel - Manufacturer --------- Wholesaler --------- Retailer --------- Consumer. Wholesalers buy in bulk from producers and sell smaller quantities to retailers.
4. Three level channel - Produce dedicate this task of selling to to agents who sell their products to wholesalers and get commissions in return. 

Pricing

According to American Marketing Association, Pricing is the marketing lever with the most immediate and direct business impact. Pricing is sometimes considered in isolation from the rest of marketing. The formal ratio that indicates the quantity of money goods or services needed to acquire a given quantity of goods or services. 3M's pricing strategy for its Post It was as follows -

1. Charge a price that would give a reasonable bookstore price to students and an acceptable profit to distributors and 3M.
2. Set an initially low price with the intent of bringing down the price even further later if sales were less than anticipated.

The total market for Post Its, consumer and office products was valued at $164.4 billion in 2009 and $169.8 billion in 2010. It increased to steadily to an estimated $183.5 billion in 2013.

The products are priced according to the lot size, category, and logistic charges.

Product

Components of market offering 

Value Based Prices - It is a pricing strategy which sets prices primarily, but not exclusively on the value, perceived or estimated, to the customer rather than on the cost of the product or historical prices. Thus Post It catering to a variety of uses, utilizes this fact and sets a price of Rs. 60 for a 100 leaf pad.
Product Features and Quality - A function of an item which is capable of gratifying a particular customer need and is hence seen as a benefit of owning the item. The collection of features and characteristics of a product that contribute to its ability to meet the given requirements is called the product quality. Post It provides a variety of benefits to its customers - useful in meeting, used as a bookmark for keeping quotes, useful in homes to keep things organized, etc. On top of that it has a low adhesive glue which does not leave a mark when used on a surface.
Services Mix - A selection of services developed to offer customers a choice within a particular range.Post It offers a number of services to its customers -

1. Post It super sticky notes - Available in variety of colors and sizes and they can be put on doors, walls and computer monitors.
2. Post It Memoboard - Used in classrooms, offices and homes and do not require a pin and hence safe for children as well.
3. Post It Notes - Self adhesive removable colored notes for sending across messages.
4. Post It Index and dipensers - Used for highlighting pages in books and notes and for color coding and labelling.
5. Post It meeting charts - Quality meeting charts to fit on presentation boards. Do not require tapes or pins and hence mess free. 

Customer Value Hierarchy

Core Benefit - It is the service or benefit the customer is really buying. For a Post It the customer is purchasing a product which will enable him to buy an effective way of communicating and arranging things.
Basic Product - The basic product of a Post It would include its ability to stick to surfaces and not leave residues when removed.
Expected Product - It includes a set of attributes and conditions buyers normally expect when they purchase this product. A customer would expect a Post It to catch the eye for the purpose of reminding him constantly or so that the information can be communicated to some other person in an effective manner.
Augmented Product - An augmented product exceeds customer expectations. For ex - Post It has introduced its pads in different colors and sizes and have recently launched a recyclable product.
Potential Product - It encompasses all the possible augmentations and transformations the product or offering might undergo in the future. Here is where companies search for new ways to satisfy customers and distinguish their offerings. For ex Post It has started making use of technology now for its product in the form of sticky notes on laptops and other electronic devices.

Product Hierarchy

According to Kotler, Each product can be related to other products to ensure that a firm is offering and marketing the optimal set of products. 

The product hierarchy stretches from basic needs to particular items that satisfy those needs. 6 levels of product hierarchy have been identified. Some of which are - 

1. Need family - These are the core needs that underlines the existence of a product family. The core needs being satisfied by purchasing a Post It is the assistance provided by Post It to a user of effective communication and arranging things. Thus the need family is related to the core benefit of the customer.
2. Product family - All the product classes that can satisfy a core need with reasonable effectiveness define a product family. The product family for Post It will be effective communication. It is related to the expected product for a customer in terms of the customer value hierarchy.

Marketing Mix Elements

According to American Marketing Association, the mix of controllable marketing variables that the firm uses to pursue the desired level of sales in the target market. The most common classification of these factors is the four factor classification called the four P's - Price, product, promotion and place. Optimization of the marketing mix is achieved by assigning the amount of the marketing budget to be spent on each element of the marketing mix so as to maximize the total contribution to the firm. Contribution may be measured in terms of sales or profits or in terms of any other organizational goals.
The marketing mix for Post It is as follows -

PLC and ILC

Product Life Cycle - 
A commercial product undergoes metamorphic stages in life. These stages constitute the product life cycle. They illustrate the various phases like induction, growth, maturity and decline of a product in the market.
A product enters into the market owing to a lot of pre launch research. The product is under constant development and the pre launch activities are carried out with rigor. Early investors and creditors are identified.

Business idea -
in 1968, a scientist at 3M in the United States, Dr. Spencer Silver, was attempting to develop a super strong adhesive, instead he accidentally created a low tack, reusable, pressure sensitive adhesive. For 5 years, Silver promoted his solution without a problem within 3M both informally and through seminars but failed to gain acceptance. In 1974 a colleague who had attended one of his seminars, Art Fry, came up with the idea of using the adhesive to anchor his bookmark in his hymnbook. Fry then utilized 3M's officially sanctioned permitted bootlegging policy to develop the idea. the original notes yellow color was chosen by accident, as the lab next door to the post it team had only yellow scrap paper to use.
Introduction -
The first sale of the product, marks the introduction of the product. The introduction stage gives weighted importance to the marketing and promotion of the product. The phase is characterized by low sales and as an outcome, low revenue and hence low profit. The product is introduced into the market and is waiting for acceptance from the consumer. This phase also sees customers known as Early adopters, who welcome new products with ease and start purchasing the the product at this stage. 3M launched the product as "press n peel" in 4 cities in 1977, but results were disappointing. People thought that the press n peel was a very expensive item compared to the ordinary, non stick scratch pads which were sold for just 7 US cents and the people who did buy it were the top executives in an organisation.
Growth -
The growth phase shows gradual pickup in sales. Revenue is generated and the product is well recognized and welcome in the market. The early majority breed of customers start purchasing start purchasing the product after the initial review showered by the early adopters. Advertising and marketing play a key role in this phase. A year later 3M instead issued free samples directly to the consumer in Boise, Idaho, with 94 percent of those who tried them indicating they would buy the product and soon it became an indispensable part of everyday life, making it as important as a ball point pen or a stapler on a table. The communication in offices became more personal and hence post it came in handy.
Maturity -
Maturity phase is where the sales are at an all time high. The market is raided by a several new players. The competition is fierce and everyone is vying for market share during this phase. The late majority group is the group of people who start buying at this stage. On April 6, 1980, "Press n Peel" was reintroduced in US stores as "Post It Notes". The following year they were launched in Canada and Europe. One year after 3M officially launched the post it note, the packs of sticky paper raked in more than US$2 Million in sales. Post It Notes are now available in 27 sizes, 57 color and 20 fragrances and generate around $1 Billion annually and dominate the self sticky note market. Research from the NPD group indicates a 13.5 percent increase between 2006 and 2007. In 2003, the company came out with "Post It Brand Super Sticky Notes", with a stronger glue that adheres better to vertical and non smooth surfaces. Until 3M's patent expired in the 1990s Post It type notes were produced only in the company's plant in Cynthiana, Kentucky. Now post it is more used by people for reminding themselves and marking important files and locations in offices rather than just as a means of communication. In technology virtual post it notes have been created for computer in the form of desktop notes. These include 3M's own "Post It Brand Software Notes", "Stickies" in Mac OS, "Sticky Notes" in windows, or other for fee applications like ShixxNote. Additionally, some web applications have developed Post it like notes for online use.
Decline -
Decline is when the product no longer finds its place in the shopping basket. The sales decline and gradually the product fades out of the market. There is still time for the Post It Notes to see a decline.

Market Structure and Competition

According to AMA "The brands that are considered as alternatives by buyers in a particular market segment; sometimes called the evoked set. Occasionally, it is used to mean a (smaller) set of products which a particular seller wishes to be competing with; more rarely; it means the full set of competitors in fact competing in a given market."
Post It faces competition from cheaper copy cat competitors and has appointed Grey London to run its advertising campaign to uplift the product again. The post it brand is one of those rare brands which has not only established an entire category but the name in itself denotes it.
The following image shows the way Post It is trying to curb the competition through its advertising campaigns -

The direct competitors for Post It include -

1. Big Logonotes.
2. Stick it or Not notes from American stationary.
3. Sticky Notepsads from Traylor Papers.
4. Office Depot Self Stick Notes.
5. Universal standard Self Stick Yellow Notepads. 

The major competition for Post It is from indirect sources like -

1. Cellular phones.
2. Electronic mails.
3. Messaging.

Keeping in view the above mentioned competition, Post It has come up with products like -

1. Super Sticky Notes.
2. Post it Flags for marking, tabbing, and indexing documents.
3. The big Post It Easel pads for writing down the next big idea.
4. In 2007, 3M launched its Post It recycled notes which are made using recyclable fibers and plant based adhesives.
5. They have also started combining Post It labels with a pen, marker and a highlighter, thereby providing a complete stationary package.