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1. PLACE
MIX
By: Nayana S

2. What is a Place?
◦ Place simply does not mean the physical movement of product from the manufacturers to the customers
but it also means the ease of access to the products, the way the products are displayed, and in which
environment that they are presented.
◦ Distribution of products is an important element of marketing mix because if the products are not
made available to the customers at the right place, in right quantity and at the right time, they would not
buy the products.
◦ Distribution element involves two broad functions, namely:
◦ (a) the choice of distribution channel through which the product shall flow from the manufacturer to ultimate users
and
◦ (b) physical distribution comprising transportation, and storage of goods.

3. 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.
◦ A distribution channel serves as the connecting link between the producer and the consumers.
It creates utilities of time, place and possession by bridging the gap between the point of
production and the point of consumption.

4. ◦ Functions performed by the channel of distribution:
1. Sorting
2. Accumulation
3. Allocation
4. Assorting
5. Promotion
6. Risk Taking

5. Different Channels of Distribution:
1. Manufacturer-Consumer (Zero Level Channel or Direct Channel):
◦ This is the shortest and simplest channel involving direct sale of goods and services by the producer to
the consumers. No middleman or intermediary ice is present between the producer and the consumer.
◦ However large investment is required to create facilities for direct selling and Therefore, this channel is
more popular among big and well established firms.
◦ Direct selling is unsuitable for new and small producers.

6. 2. Manufacturer-Retailer-Consumer (One-Level Channel):
◦ 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.
◦ This channel is often used for the distribution of consumer durables and products of high value.
◦ Automobiles, home appliances, readymade garments, shoes and perishable products are often sold
through this channel. This channel is popular for selling to departmental stores and supermarkets.

7. 3. Manufacturer-Wholesaler-Retailer-Consumer (Two-Level Channel):
◦ This channel contains two intermediary levels, i.e, wholesaler and a retailer. A wholesaler is the one
who buys and stores the large quantities of the producers’ goods and then breaks them into bulk
deliveries to supply to retailers in smaller lots.
◦ This is the most commonly used channel for the distribution of consumer goods.
◦ This channel is suitable where the producer has limited finance and a narrow product line or where the
wholesalers are specialised and provided strong promotional support.
◦ This channel is used in case of convenience goods like soap, salt, tea, toothpaste, shampoo, etc.

8. 4. Manufacturer-Agent-Wholesaler-Retailer-Consumer (Three- Level Channel):
◦ This channel is used when the manufacturer wants to be fully relieved of the problem of distribution.
◦ This is the longest channel of distribution.
◦ The producer hands over his entire output to the selling agent who distributes it among a
few wholesalers. The wholesalers in turn sell to a number of retailers who in turn sell to the ultimate
consumers.
◦ This channel is suitable when the producer has a limited product line and a wide market is to be
covered

9. Choice of Channels of Distribution:

10. Product-Related Factors:
1. Unit Value
2. Perishability
3. Bulk and Weight
4. Standardistion
5. Complexity of the Product

11. Market-Related Factors:
1. Nature of the Market
2. Size of the Market
3. Geographical Situation
4. Size and Frequency of Order

12. Company-Related Factors:
1. Financial Situation
2. Desire for Control
3. Volume of Output

13. Middlemen-Related Factors:
1. Availability
2. Attitudes
3. Services
4. Sales potential
5. Costs
6. Customs and competition
7. Legal constraints

14. Physical Distribution:

15. ◦ Physical distribution means a series of interrelated activities involved in the movement storage,
control, etc. of materials and finished goods so that they are available at the right time and at
the right place.
◦ Physical distribution is also known as Supply Chain Management and Marketing Logistics.
Its main elements are as follows:
1. Warehousing or storage
2. Transportation
3. Inventory control
4. Order processing

16. 1. Warehousing:
◦ Goods are produced in factories on a continuing basis a are not sold immediately after production.
It is, therefore, necessary to store goods until they are sold
◦ A warehouse should be located in such a way that it ensures regular supply of moods to the
consumers at minimum possible cost.The other factors which should be considered in deciding the
location of warehouses are:
1. Number of markets to be served.
2. Location of production centres.
3. Quality, availability and cost of transportation.
4. Quantity to be stored and transported.

17. 2. Inventory Control:
◦ Inventory means the stock of raw materials, semi-finished goods and finished good held in
anticipation of use or sales.
◦ Inventory control implies control over the size of inventory. It is a planned approach of maintaining
inventory at such a level that the cost of inventory are minimised without affecting sales.
◦ The main decisions involved in inventory control are as follows:
1. Determine the items to be stocked.
2. Decide when and how much to stock and replenish.
3. Keep suitable stock records.
4. Weed out obsolete items from stock.

18. 3. Order Processing:
◦ The manner in which customer orders are processed determines the level of customer service. More
quickly and accurately the orders are processed, greater is the customer satisfaction.
◦ The order processing cycle generally involves the following steps:
1. Receipt of order by the salesperson.
2. Transmission of order by the salesperson.
3. Entry of the order in the company's records.
4. Checking credit stranding of the customer.
5. Procuring goods from inventory and packing them.
6. Shipment and invoice.
7. Received payment.

19. 4. Transportation:
◦ Transportation refers to the physical movement of goods from one place to another.
◦ The choice of the mode of transport depends upon relative costs of different modes of
transport, their speed, reliability, frequency, availability, capacity and appropriateness.
◦ Transportation is a necessary function of marketing because most of the markets are
geographically separated from the centres of production.
◦ Transportation plays a vital role in the distribution of goods. It creates place utility.