Using the Marketing Mix: Place

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Using the Marketing Mix Place

• I am the worlds worst salesman, therefore I
  must make it easy for people to buy.
• F.W. Woolworth
• Dont open a shop unless you like to smile
• Chinese Proverb

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Using the Marketing Mix PlaceIn this topic you
will learn about

• Choosing appropriate outlets/distributors
• Types of distribution channels

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What is place?
Place is the term that we give to
distribution. Distribution is the process of
getting the firms product to the market. It can
come in a variety of forms. This is a crucial
element of the marketing mix a firm might have
the best products in the market but if the market
cannot access the products then the firm will not
be successful.
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Where can a business sell its products from?
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Wholesalers
Place
Direct selling
Agents e.g.Ticket agents
Retailers
Authorised dealers
Personal selling
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Choose the right channel of distribution.

1. Direct to consumer
2. Through a retail outlet
3. Through a wholesaler
4. Using an agent

Stop after 1 min
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Choosing appropriate outlets/distributors

• Outlets are the places that sell a firms
  products. There are a variety of factors to take
  into account when choosing appropriate outlets
• Type of Product
• Market
• Quantity and Frequency
• Geographical Location
• Cost
• Competition

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Choosing appropriate outlets/distributors

• Type of product
• The characteristics of the product need to be
  taken into account. For example Coca Cola do not
  ship their product to the UK from the USA.
  Instead, they ship over the syrup and the actual
  product is then made in the UK using British
  water.
• The market
• It is important that the customers being
  targeted can access the product. High streets
  are accessible by public transport so that all
  customers can shop, not just those with cars.
• Quantity and Frequency of sales
• If only a few low cost items are being delivered
  it would not be cost effective to send them
  hundreds of miles. If a product is regularly
  being delivered then a firm might invest in a
  delivery system.

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Choosing appropriate outlets/distributors

• Geographical Location
• How far is the target market from the firm? The
  firm will have to take into account the nearness
  of the market. Regional markets are far more
  accessible than international markets.
• Cost
• This is very important for a firm. An expensive
  distribution method will reduce the contribution
  being made to a firms product. Therefore, the
  firm must ensure that the method is cost
  effective.
• Competition
• Firms will take into account distribution
  methods used by their competitors. In fact, some
  firms use the same distributors as their
  competitors!

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Choosing appropriate outlets/distributors

• Type of Product
• Market
• Quantity and Frequency
• Geographical Location
• Cost
• Competition

• Choose a product from the following
• Coca Cola
• Hairdressing
• Newspapers
• Computers
• Health gym
• .
• .

Explain how the six points listed might affect
the distribution of these products. For
example, furniture is large and difficult to
transport. Customers will use stores to select
their product and it will be delivered at a later
date. Firms will normally deliver more than one
item of furniture to different addresses at the
same time. This will save on costs, although
the delivery firm is likely to charge the final
customer as well. Some firms will have their
own, in-house delivery service, but some may use
the same delivery firm as their competitors.
These firms are likely to work on a regional
basis to save on costs
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Types of distribution channels
Distribution channels are the routes to market
that a product takes from producers to the final
customer. There are a number of distribution
channels available to firms. Short
distribution channels are where the producer
sells either directly to the customer or through
a retailer. Long distribution channels are
where there are more than one intermediary
(middle person) between the producer and the
customer.
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Types of distribution channels
Producers can use direct selling whereby they
sell directly to the final consumer. Often,
producers use retailers who sell products on to
the general public. Wholesalers buy large
quantities of supplies from producers and sell
them on in smaller quantities. For example, a
corner shop might go to a wholesaler to buy their
products. Increasingly, firms are using
e-commerce benefiting from the power of the
internet to sell on their products.
Amazon distribution network system.
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Wholesaler

• Act as a link between producer and retailer
• Buy in bulk and break down to smaller units to
  retailer
• They act as a storage place.

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Examples of Wholesalers
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Types of distribution channels
Short distribution routes are from the producer
direct to the customer (direct selling) or via a
retailer
PRODUCER
CONSUMER
RETAILER
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Types of distribution channels

• Long distribution channels can go through a
  number of intermediaries

PRODUCER
What BS issues are shown in the video clip?
WHOLESALER
RETAILER
CONSUMER
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Activities

Each member of the class should choose a product
in the classroom. This could be anything from
the white board to the clothes that you are
wearing.
Describe the distribution channel that the item
you have chosen has gone through. How do you
think this affected the price of the item?
To what extent do you believe that shortening the
distribution channels would reduce food miles?
You will need access to the internet to watch
this video clip
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Homework

• Use your time wisely for revision