PLACE
Place/Distribution
• Crucial to getting the product to the customer
• Efficient distribution system needed
• Most products are distributed by different companies who are
selling them
• For example the textbook we use is passes though, authors,
publishers, printers, wholesalers and retailers before it gets to
us, the customers
Traditional Distribution
Channels
• Product to customer
no intermediaries
• Producer to retailer to customer
Retailer is an intermediary who sells to the customer, used for
perishable items e.g. fruits or furniture
• Producer to wholesaler to retailer
most common method, used for distribution or consumer
goods, wholesaler buys in bulk, from a producer, then resells
in smaller quantities to retailers
• Product to agent to wholesaler to retailer to customer
agents distribute products but never own them, paid a
commission by the producer, used for inexpensive, frequently
used products, a business that doesn’t have sale
representation will often use an agent
Non-Store Retailing
• A retailing activity conducted away from the traditional store
• Methods
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Door to door selling
Mail-order catalogues
Party-plan merchandising
Vending machines
Telemarketing
Internet marketing
Internet marketing has become popular as customers can order
products that can be delivered directly
Examples
• 'But wait, if you ring this line in the next 15 minutes, we'll
throw in a set of steak knives absolutely free‘ (Telemarketing)
• ’Would you like to do a 30 day trial on our skincare product?’
(Telemarketing)
(Internet Marketing
Channel Choice
• How a business chooses the channel of distribution best
suited to its product depends largely on the location of the
business's market or market coverage
• Market coverage refers to the number of outlets a firm
chooses for its product
• business can decide to cover the market in one of the three
ways as follows, the difference being the intensity of coverage
• Intensive Distribution
occurs when the business wishes to saturate the market with its
product
• Selective Distribution
involves using only a moderate proportion of all possible outlets
• Exclusive Distribution
only used for one retail outlet for a product in a large geographic
area
Physical Distribution Issues
• Is all those activities concerned with the efficient movement
of the products from the producer to the customer
• It is therefore the movement of the products themselves
through their channels of distribution
• Includes the functions of transportation, warehousing and
inventory control
• Electronic post and parcel delivery channels will be used more
extensively to meet the increasing demand
Transport
• An intricate network of transportation is required to deliver
the vast array of products on supermarket shelves
• The method of transportation a business uses will largely
depend on the type of product and the degree of service the
business wishes to provide. The most common methods
include: rail, road, sea, and air
Warehouse/Inventory
• A warehouse is a central meeting point for products
• They are used for receiving, storing and dispatching goods
• Inventory is the amount of stock they have in storage and in
their retail shop
• If a business carries too much stock it an cause for the
business to have to pay high storage fees
• If the business doesn’t have enough stock and is always ‘out of
stock’ it causes in having ‘stock-out costs’ or loss of sales
• The goal of inventory is to have a good inventory control
system which balances their stock to not have too much stock
and not too have too little stock
Short Answer Questions
• Define the term ‘Place’
• Create 3 examples of telemarketing