4. Place (distribution)

• Place (or distribution) are :: the activities that make the products available to customers when and where they want to purchase the item.

Distribution channels

• Distribution channels (or marketing channels) are :: the routes taken to get the product from the factory to the market

• The four (most commonly used) distribution channels are:
  ?

1. producer → consumer
   • most services use
2. producer → retailer → consumer
   • bulky/perishable goods
3. producer → wholesaler → retailer → consumer
4. producer → agent → wholesaler → retailer → consumer
   • (agents are paid commission, never owns the product)

• Two rapidly developing methods of Distribution:

  • (e-commerce, mobile-commerce)

• non-store retailing is :: retailing activity conducted away from the traditional store.

Channel choice

• selecting distribution channels 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 products

• Three ways the business can cover the market (varying in intensity):
  ?

1. Intensive distribution:
   • When the business wishes to saturate the market
   • Their goods & services are readily available in various stores & locations
     • (allows for customers shopping at local markets)
2. Selective distribution:
   • When the business is using only a moderate proportion of all possible outlets
     • (The customer is prepared to travel to specific retail outlets)
3. Exclusive distribution:
   • When the business uses only one retail outlet for a product in a large geographic area
   • commonly used for exclusive and expensive products

Physical distribution issues

• Physical distribution is :: all those activities concerned with the efficient movement of the products from the producer to the consumer.

• The three factors (shit u gotta deal with) of physical distribution are:
  ?

• Transport

  • the method of transport depends on the type of product & degree of service to provide.
  • common methods: (rail, road, air, sea)

• Warehousing

  • a set of activities involved with receiving, storing and dispatching goods
  • Acts as a central organising point for efficient delivery

• Inventory control

  • a system that maintains quantities and varieties of products.
  • to find the right balance of stock.
    • too much stock → high storage costs
    • too little stock → loss of sales OR ‘stock-out costs’

• inventory control is :: a system that maintains quantities and varieties of products appropriate for the target market