4.5(d) Place

Place

Place (Distribution) in Marketing
Place refers to how products are distributed from the producer to the consumer.
Key Elements of Place:
Channels: Warehouses, retail outlets, agents, internet.
Accessibility: Making products available to customers at the right time and place.

Distribution channel refers to the path a product takes from the manufacturer to the consumer.
Intermediaries are middlemen who facilitate this process.

A zero-level distribution channel (also known as direct distribution) skips out any intermediaries, i.e., the producer sells directly to the consumer.
Examples include the use of mail order, e-commerce and telesales. Direct distribution is common in the services industry.
For example, customers can book their rooms at a hotel or make restaurant reservations without using an intermediary such as a travel agent.

Wholesalers buy large quantities of products from manufacturers and sell them in smaller quantities to retailers.
Benefits for Producers and Retailers:
Storage: Reduces storage costs for manufacturers and retailers.
Smaller quantities: Allows retailers to buy smaller amounts.
Lower transaction costs: Fewer invoices and transportation costs for manufacturers.
Focus on production: Manufacturers can focus on production instead of distribution.
Limitations:
Risk of marketing control: Wholesalers may not promote products as desired.
Reduced demand from large retailers: Some retailers bypass wholesalers and buy directly from manufacturers.

Distributors are independent businesses that specialize in selling products from a specific manufacturer to consumers. They act as intermediaries between the manufacturer and the end-user.
Key Points:
Specialization: Distributors focus on a particular product type (e.g., car distributors).
Intermediary role: They connect manufacturers with consumers.
Product knowledge: Distributors have a deep understanding of the products they sell.
Distribution expertise: They handle the distribution process for manufacturers.

Retailers are businesses that sell products directly to consumers. They are the final link in the distribution channel.
Types of Retailers:
Independent retailers: Small, locally owned shops.
Convenience stores: Offer a limited range of everyday products.
Multiple retailers (chain stores): Operate multiple outlets (e.g., H&M, Starbucks).
Supermarkets: Sell mainly groceries and food items.
Department stores: Sell a wide range of products across various departments.
Hypermarkets (superstores): Large stores with a broad range of products, often located outside of city centers.
Key Points:
Retailers are the final point of contact for consumers.
They play a crucial role in reaching customers and influencing purchasing decisions.
Different types of retailers cater to different customer needs and preferences.
Retailers often stock well-known brands to attract customers.

E-commerce is the sale of products and services over the internet. It's a popular distribution channel that allows businesses to reach customers directly.
Advantages of E-commerce:
No intermediaries: Businesses can sell directly to consumers without involving wholesalers or retailers.es can sell directly to consumers without involving wholesalers or retailers.
Global reach: Can reach customers worldwide.
Reduced costs and risks: Lower costs compared to traditional distribution channels.
Convenience: Customers can buy products from the comfort of their homes.
Limitations:
Internet access: Customers need internet access to make purchases.
Product suitability: Some products (e.g., cars, glasses) require personal interaction and may not be well-suited for e-commerce.

Vending Machines
Specialized machines: Stock and sell products like drinks, snacks, toys, and even hot meals.
Location: Can be placed in various locations like offices, malls, parks, schools, airports.
Payment methods: Modern machines accept smartcards, credit/debit cards for convenience.
Advantages:
Minimal running and maintenance costs.
No need for salespeople.
Can sell products 24/7.
Disadvantages:
Limited product range due to size constraints.
Prone to vandalism and mechanical failures.
Key Points:
Vending machines offer a convenient way for customers to purchase products.
They have low operating costs but can be limited by size and maintenance issues.
Vending machines are suitable for selling small, frequently consumed products.

Mail Order
Selling products through the postal system: Customers order products by mail using catalogs or other materials.
Advantages:
Can reach customers who don't have easy access to retail stores.
Can provide detailed product information.
Disadvantages:
High production costs for catalogs.
Low response rates due to junk mail perception.
Outdated information in databases.
Key Points:
Mail order is a traditional method of selling products.
It can be effective for reaching customers who prefer to shop from home.
Businesses need to overcome the challenges of junk mail and outdated information to make mail order successful.

Product:
Perishable goods: Require shorter channels (e.g., fresh produce).
Fast-moving consumer goods: Benefit from wider distribution networks (e.g., wholesalers, retailers).
E-commerce suitability: Some products (e.g., books, music) are well-suited for online sales.
Market:
Local niche markets: Can be reached without intermediaries.
Large, dispersed markets: Require intermediaries for wider reach.
Time:
Urgent delivery: Direct channels are better for products needing quick delivery.
E-commerce: May have delays in delivery.
Legal Constraints:
Government regulations: Can prohibit certain products from being sold in specific channels (e.g., alcohol in restaurants).
Cost and Benefits:
Direct selling: Reduces costs but may limit reach.
Intermediaries: Can increase costs but offer better access to customers.
Transportation: Consider costs and efficiency of different transportation methods.