Place (distribution)
Place is referred to as one of the 4Ps for the sake of simplicity and to create a memorable shorthand for the marketing mix. However, the marketing concept of 'place' is more accurately described as 'distribution'. Where a product is sold is place; getting it from the producer to the consumer is distribution, which is an active process. The process is also known as physical distribution management (PDM), which is concerned with ensuring the product is in the right place at the right time. PDM is often carried out by specialist companies, which use logistics (computer controlled distribution) to maximise channel efficiency and cost-effectiveness.
Whatever a firm is producing, it has to reach those who want to buy it. There is little point if a firm makes a product that consumers want, promotes it effectively and creates a demand, but then fails to place it in outlets where customers want to buy it. Getting the 'place' right is crucial to the success of the sales process and this involves understanding the customer and their purchasing behaviour.
The path from producer to consumer normally involves more than one organisation, though in recent times cutting out parts of the distribution process have become more popular e.g. insurance companies selling direct to consumers rather than through brokers. New technologies have supported the shortening of the distribution chain and encouraged firms to sell directly to the consumer, so reducing costs and lowering prices.
With price competition in markets being so fierce, firms are constantly looking for efficiencies. Once a firm has examined ways of making human resources more productive and squeezing suppliers for the best deals, there are few remaining cost efficiencies except the distribution process. Indeed, it is here that many firms are now finding the extra edge over their rivals.
In the examination, you should not forget the vital role of distribution, even though it is less 'glamorous' than promotion. Distribution topics are also well suited to the internal assessment and the extended essay
