Place
Understanding the Concept of ‘Place’ in Marketing
- In marketing, ‘Place’ refers to how a business decides where to sell its products and how to deliver them to the market.
- ‘Place’ is one of the four key components of the marketing mix, commonly known as the 4 Ps of Marketing (Product, Price, Place, Promotion).
- Making decisions about ‘Place’ involves considering different aspects like the choice of selling points, modes of transport, warehousing facilities and inventory management.
Channels of Distribution
- Direct Channel: This is the simplest form of distribution channel where businesses sell their products directly to the customers. This can be done through stores owned by the business, online shopping websites or mail order.
- Retailer Channel: In this channel, products pass from manufacturer to retailer and then to the consumer. This is a common method for products such as clothing or furniture.
- Wholesaler Channel: Here, the goods move from the manufacturer to a wholesaler, then to a retailer and finally to the consumer. This channel is frequently used for perishable goods like food products.
- Agent/Broker Channel: The manufacturer uses an agent or broker to reach the consumer, often used when selling to customers abroad where the manufacturer may lack local knowledge.
Factors Affecting Choice of Distribution Channel
- Market Factors: The size and buying habits of the target market can strongly influence channel choice.
- Product Factors: The nature of the product, such as its price, shelf-life and complexity, can have a significant impact on the choice of distribution channel.
- Competitive Factors: Businesses might need to match or differentiate their distribution from competitors’.
- Company Factors: A company’s own abilities and resources will also affect the channels they can use, with larger companies often more able to distribute directly, for example.
Importance of ‘Place’ in Marketing
- ‘Place’ strategy plays a crucial role in reaching targeted consumers and achieving high customer satisfaction.
- A well-planned ‘Place’ strategy helps reduce total time taken from the product being produced to reaching the customer; this can in turn improve cash flow.
- Businesses that carefully choose where and how they sell their products have a better chance of getting their product in front of potential buyers, boosting sales and improving revenue.
- ‘Place’ decisions can also impact a company’s brand image; selling luxury goods through discount stores, for example, can dilute brand prestige.