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Marketing Mix: Place
Place strategies
Refers to how an organisation will distribute the product or service they are offering to the end user. 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 organisation underestimate demand and customers cannot purchase products because of it profitability will be affected.
What channel of distribution will they use?
Two types of channel of distribution methods are available. Indirect distribution involves distributing your product by the use of an intermediary. Direct distribution involves distributing direct from a manufacturer to the consumer e.g. For example Dell Computers. Clearly direct distribution gives a manufacturer complete control over their product.
Above indirect distribution (left) and direct distribution (right).
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.
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Further reading:
Case studies from www.thetimes100.co.uk
Principles of Marketing by Philip Kotler
Principles of Marketing by Frances Brassington
