place
There is no point having a great product or service if the customer cannot easily get access to it. This is where the PLACE part of the marketing mix is important. Companies need to find the most cost-effective channels of distribution to get their products to their target customers.
The nature of the product and its target audience will influence the places at which a company wishes to sell its products. If their product is low-priced, like a chocolate bar, companies may use intensive distribution by getting their product into as many shops and outlets as possible.
However, if a company is selling a luxurious product, e.g. an expensive perfume, they might want their product to be sold only in high prestige shops – reflecting the exclusivity of the product. A customer might not want to buy an expensive perfume from a local convenience store, but would like to purchase it from a trendy department store.
As well as considering WHERE the product should be available for purchase, the PLACE element of the marketing mix also looks at how the product or service gets from production to the consumer. This is known as the channel of distribution.
There are two types of distribution channel; direct and indirect.
Direct channels of distribution
Business > customer (i.e. TV shopping channels, mail order catalogues, internet sites, telesales, factory shops etc.)
Using direct channels of distribution cuts out the middleman and therefore increases profit for the company.
Indirect channels of distribution
Business > Wholesalers > High-street retailers > customers
Organisations in the distribution channel provide different benefits and value to the product.
Places where Cadbury products are sold
- Retail outlets – shops, supermarkets, garages
- Vending machines –train stations
- Restaurants and cafés
- Cinemas, theatres, theme parks
- Travel – buffet cars, on board airlines, motorway service stations
