Marketing Mix – Place
The "place" component of the marketing mix, often referred to as distribution, is crucial in determining how a
product or service reaches the end consumer. This is also referring to the location where people can buy
products.
To understand the lesson more clearly, following key words are important. Match the following terms with its
meaning.
Distribution channel Person or organization that helps arrange agreements or
business deals between other people or organization
Intermediary Person or business that buy goods from manufacturers and sell
them in smaller quantities to retailers
wholesalers Route taken by a product from the producer to the customer
Distribution Channels
Producers can choose any distribution channel or multiple channels according to their management
and marketing decisions.
Retailing
Businesses that buy goods from manufacturers and wholesalers and sell them in smaller quantities to
consumers
Retailers provide following services to manufacturers.
Buying large quantities from manufacturers and wholesalers and sell small quantities to customers.
This is known as bulk breaking.
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Selling products in convenient places for customers.
Adding value to products providing other services. Such as,
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Features of retailers
1. Independents -
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2. Supermarkets -
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3. Department stores -
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4. Multiple or chain stores -
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5. Super stores or hypermarkets –
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6. Kiosks and street vendors -
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7. Market traders –
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8. Online retailers -
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E-Tailing or E - Commerce
Use of electronic systems to sell goods and services
With the evolvement of technology, electronic means of selling goods and services were introduced to the
marketing and trading. E- commerce of e- tailing is one of such means popular among businesses and
customers.
There are different ways of how e – commerce is used as distribution channels.
Business to consumers (B2C)
This means selling goods by businesses to customers.
Most of e- tailing businesses involve selling goods online and delivering them at home. Due to the
convenience, this has started to become a popular method of distribution for customers.
e.g.-
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Business to Business (B2B)
This involves selling products from a business to another business online. Most businesses create specialist
software to purchase resources under cheap price.
Here are some benefits and drawbacks of using online commerce for both consumers and sellers.
Benefits
Drawbacks
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Other Distribution Method
Direct Selling
This is where businesses sell their products directly to consumers. Direct selling methods are;
Telephone selling Direct response adverts Shopping parties
Mail order catalogues The internet
Door to door selling Direct mail
Wholesaling
Wholesalers usually buy from manufacturer and sell it to retailers. They are also known as “cash and carry
stores” because customers can come and purchase directly from them.
Agents and Brokers
Role is to connect the buyers and sellers. They are spread in diverse fields of work, such as real estate,
travelling, education, insurance and other financial sectors. Especially in exporting businesses, having an agent
is safe and reduce risks.
Activity case study – Bata (pg 318)
Choosing Appropriate Distributing Channel
Nature of the product
Cost
The market
Control