The 3rd ingredient of the Marketing Mix is PLACE. Place represents the location where a product can be purchased. It is often referred to as the distribution channel. It can include any physical store, as well as virtual stores on the Internet. It is also the mechanism through which goods and/or services are moved from the manufacturer/service provider to the user or consumer.
There many factors that a manufacturer has to decide of what strategies it will use in placing its products. Will it use direct or indirect channels? Single or multiple channels? What type of intermediary will it use? How many intermediaries at each level to use? Which companies to use as intermediaries to avoid intrachannel conflict?
Aside from the strategies to be used, the manufacturer will also have to consider some factors in choosing a distributor (intermediary). Such as the knowledge of the distributor of the target consumer and segment, the compatibility of the manufacturer and the distributor in terms of policies, strategies and image, the track record of the distributor and training and support the distributor will require.
There are many types of intermediaries such as wholesalers, agents, retailers, the Internet, overseas distributors, direct marketing (from manufacturer to user without an intermediary), and many others. The wholesalers are the ones who break down ‘bulk’ into smaller packages for resale by a retailer. They buy from producers and resell to retailers. They take ownership to goods and provide storage facilities. The wholesaler will also often take on some of the marketing responsibilities.
On the other hand, the retailer has a much stronger personal relationship with the consumer. The retailer will hold several other brands and products and will often offer credit to the consumer. The retailer will also give the final selling price to the product.
Agents are another distribution channel. An agent will typically secure an order for a producer and will take a commission. They do not tend to take title to the goods. This means that capital is not tied up in goods. Agents can be very expensive to train. They are difficult to keep control of due to the physical distances involved, and can be difficult to motivate.
The Internet has a geographically diverse market. The main benefit of the Internet is that niche products reach a wider audience. Using e-Commerce technology provides easy payment and shopping. In today’s market, there is a paradigm shift in commerce and consumption which benefits distribution via the internet.
Determine the Place Where They Can Buy It,