[Commerce Class Notes] on Place and Place Mix Pdf for Exam

Place simply does not mean the physical movement of product from the manufacturers to the customers but this also means the ease of access to the products, the way the products are displayed, and in which environment that they are presented. The marketer then needs to adopt different channels of intermediaries to reach their end-user. The marketer then uses the choice of distribution channel which is affected by several factors.

We will further take notice of the distribution channel which suits the place mix of the marketing management. 

Channel of Distribution

The channel of distribution means the intermediaries that are involved in the process of how a product passes from the manufacturer to the end-users that are the consumers. This is quite important for the producers to engage the middlemen to reach the consumers. Foremostly, the middlemen reduce the problems of both the producers and the consumers. Then they help in distributing the products over a specific large area.

Different Channels of Distribution are as Follows:

Channel 0

This is called a direct marketing channel with no intermediary level. The producers sell the products directly to the consumers thus, this is called direct marketing. Apart from this, the remaining channels are indirect marketing channels.

Channel 1 

This channel includes only one intermediary which is generally a retailer. The retailers buy the products which come directly from the manufacturer and then sold to the consumers. Generally, electronic goods like televisions and computers are sold through this channel 1 level.

Channel 2 

Channel 2 contains two intermediary levels of a – wholesaler and a retailer. A wholesaler is one who typically buys and stores the large quantities of these several producers’ goods and then breaks them into bulk deliveries to supply to the retailers in smaller lots. 

Channel 3

This channel contains three middlemen levels. The jobbers usually come between the wholesalers and the retailers. Then they buy from the wholesalers, sell to the small retailers who are generally not served by the wholesalers. There can be even more levels in the distribution channel but from a producers’ point of view. 

Elements of Place and Place mix

Transportation:

Transportation is an important component of the physical distribution that is very essential for the firm as this increases the market length for the product. The decisions which relate to the transportation here include the choice of mode of transport that is to be used, whether to own the vehicles or to hire them, how the deliveries are scheduled, who will bear this transport cost and then the manufacturer to wholesaler and them to the retailer.

The different modes of transport are – Roadways, Railways, Waterways, Airways, and also Pipelines. Normally this combination of these modes is to be chosen by a business organization. This is important to note here that the choice of a particular mode of transport affects the condition of the goods and the pricing which ultimately affects the customer’s satisfaction.

Warehousing:

Warehousing provides the function of storage to the firm and thereby creates time utility. The long-time gap that is between the production and distribution, the seasonal production of certain commodities, and the continuous demand for the products, and such other factors have made it necessary for the firm to store their own products. The warehousing decisions include decisions that relate to the choice of public or private warehouse or the cold storages, and the number of places where the goods have to be stored which is to be released quickly when it is demanded.

Inventory Level:

This is very necessary for a firm to carry quite enough stock of goods to meet the demand as and when this is required, which involves the decisions as to how much the stock, who long to stock, and at how many places to stock the products.

Channel Level and Intermediaries:

The marketing channels are characterized by the variety of other channel levels, this depends upon the number of intermediaries, which can be of different channel levels – the direct marketing where the manufacturers sell directly to the consumers, one level channel where the goods that are sold through one intermediary and so on. The firm has even to decide the number and the type of intermediaries that are to be employed.