Here’s the third P of the 4 P’s of marketing. It’s…
PLACE
It means how you will distribute the product or service you have, not where you will base yourself. You must get the product to the user at the right place and at the right time – the right place and time for the user, that is. This means effective distribution or you will not meet your marketing objectives. If the business underestimates demand and customers cannot buy from you, then obviously profits will go down, but more importantly, reputation will be lost as customers will know not to try and buy from you again.
There are two types of distribution channel available – indirect and direct. Indirect means distributing your product via a wholesaler who may sell to a retailer then on to a customer. Direct means from you straight to customer. The direct channel gives you complete control over the product, and usually means better margins (you are not giving anything away to wholesalers or retailers), but your ability to sell in volume is limited.
There are three common distribution strategies available.
Intensive distribution – to distribute a low priced or impulse purchase like chocolates.
Exclusive distribution – to a single outlet. Usually for high priced products and needs an intermediary to add detail into the selling process.
Selective distribution – a small number of retailers are chosen, and is commonly used to distribute items such as computers or household appliances, where customers shop around and manufacturers want a large geographical spread.
If a business decides on one of the later two strategies, then it should choose intermediaries who are experienced in the industry and have credibility amongst the target customers.