The role of place decisions in the marketing mix

-After deciding on the product and right price, the business has to get the product to the consumer. The product or service has to be available where and when customers want to buy. The location will affect how well it will sell also.
-If the product is not available where customers want to buy it, and they have to search for it. Finally if they are tired, they will just buy competitors' products.
-If the product is not available where customers want to buy it, and they have to search for it. Finally if they are tired, they will just buy competitors' products.
Distribution channels
Means by which a product is passed from the place of production to the customer or retailer.
Distribution channel 1:
Producer -------------------------------------------------> Consumer
-Advantages:
Producer --------------------> Retailer---------------------->Consumer
-Advantages:
Producer------------------>Wholesaler----------------->Retailer----------------->Consumer
-Advantages:
Producer---------> Agent-----------> Wholesaler----------> Retailer------------> Consumer
-Advantages:
Distribution channel 1:
Producer -------------------------------------------------> Consumer
-Advantages:
- Simple, involves manufacturers selling their products directly to the consumer.
- Suitable for products, such as certain types of agricultural products, which are sold straight from the farm.
- Lower price because it does not go through wholesaler or retailer.
- Products can be sold by mail order or via the internet.
- Impractical for most products because the customers do not live near the factory or could not go there to buy the products.
- Not suitable for products which can not be sent by post.
- It might be very expensive if send by post so it will not be cost effective.
Producer --------------------> Retailer---------------------->Consumer
-Advantages:
- Producer sells large quantities to retailers.
- Reduced distribution cost compared to distribution channel 1.
- No direct contact with customers.
Producer------------------>Wholesaler----------------->Retailer----------------->Consumer
-Advantages:
- Wholesaler saves storage space for small retailer and reduces storage costs.
- Small retailers can purchase products in small quantities from wholesaler because they have short "shelf life" before they deteriorate.
- May give credit to customers so they can take the goods straight away and pay at a later date.
- Wholesaler may deliver to the small retailers thus saving on transport costs
- Wholesaler can give advice to small retailers about what is selling well. They can also advise the manufacturer what is selling well.
- More expensive for the small shop to buy from a wholesaler than if they bought it straight from the manufacturer.
- Wholesaler may not have the full range of products to sell.
- Takes longer for fresh product to reach the shops and so it may not be as good quality.
- Wholesaler may be a long way from the small shops
Producer---------> Agent-----------> Wholesaler----------> Retailer------------> Consumer
-Advantages:
- Manufacturer might not know the best way to sell the product in other markets.
- Agents will be aware of local conditions and will be in the best position to select the most effective selling place.
- Less control over the way the product is sold to customers.