For Marketing Learners Globally
THE MARKETING MIX
Marketing mix place strategies is about how an organisation will distribute its product or service to buyers. The organisation must distribute the product to the user at the right place at the right time. Efficient and effective distribution is important if the organisation is to meet its overall marketing objectives. If an organisation underestimates demand and customers cannot purchase products because of it, profitability will be affected.
What Marketing Mix Distribution Channels Can Firms Use?
There are two channels of distribution available to firms. Indirect distribution involves distributing your product through an intermediary for example a manufacturer selling to a wholesaler and then on to the retailer. Direct distribution involves distributing direct from a manufacturer to the consumer (end user). For example Dell Computers selling its computers and laptops directly to consumers instead of just to shops. The advantage of direct distribution is that it gives a manufacturer complete control over their product and how it is sold.
Above indirect distribution (left) and direct distribution (right).
Place and Distribution Intermediaries Defined
Manufacturer: Person, group or firm that makes the product.
Wholesaler: The party that buys large quantities of a product from manufacturers and sells it to retailers. Wholesalers sell goods to other businesses, they do not sell directly to consumers.
Retailers: The organisation that sells products directly to consumers and end users. As they are selling to consumers for personal use, the goods are usually sold in small quantities.
Place and Distribution Strategies
Depending on the type of product being distributed there are three common distribution strategies available:
1. Intensive distribution Used commonly to distribute low priced or impulse purchase products eg chocolates, soft drinks.
2. Exclusive distribution Involves limiting distribution to a single outlet. The product is usually highly priced, and requires the intermediary to place much detail in its sell. An example of would be the sale of vehicles through exclusive dealers.
3. Selective Distribution A small number of retail outlets are chosen to distribute the product. Selective distribution is common with products such as computers, televisions household appliances, where consumers are willing to shop around and where manufacturers want a large geographical spread.
If a manufacturer decides to adopt an exclusive or selective strategy they should select a intermediary which has experience of handling similar products, credible and is known by the target audience.
Marketing Mix Place and Distribution strategy is about how a firm gets its product to consumers and end users. Firms can sells their products directly to the consumer (direct distribution) or through intermediaries (indirect distributions).
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