The Marketing Mix in Business and Business Studies A Level is very important both in the success and strategy of a Business and in the A level subject. This post has all you need to know about the Marketing Mix. This post covers PLACE.
The Marketing mix can be best described through one quote:
Putting the right product in the right place, at the right price, at the right time.
The Marketing Mix contains for main categories that all begin with the letter ‘P’:
– Product (or service)
Now, Place is basically how do you sell your product to your target market, where do you sell your product to the customer. It’s all about the best place and way to sell your product to your target market. Yes you can try to sell it to customers, but place is how to sell it to your specific target market. Now with any one element of the mix you must ask yourself questions to help identify it’s importance.
Place – Distribution
Where are buyers looking for your product or service?
The first channel is where the manufacture sells straight to the consumer. Such examples are Apple, Dell etc…
Second channel is where consumer buys from retailer, who buys from the manufacture. Such examples are Tescos, John Lewis or Asda.
The third channel has a wholesaler between the manufacture and retailer that has both advantages to the channel and disadvantages..
What channel should you use?
The Role of Wholesalers – Should you include and use wholesalers in your distribution channel?
Wholesalers “break bulk”
They buy large quantities from manufacturers and break it into smaller quantities to sell to retailers
+ Reduces the manufacturers’ transport costs.
+ Retailers can order in small amounts from wholesalers decreasing storage costs for retailers.
Wholesalers make their money by buying at a lower price from the producer and adding a profit margin onto the price paid by the retailer.
Are wholesalers benefits such as breaking bulk counteract the disadvantage of the increased price?
Choosing a Distribution Channel
With this there are three ‘C’s:
Consider your target customers e.g. mass market, small number of large companies.
The more links in the chain or intermediaries, the higher the final price. Cost of physically getting the product to customers.
Is is better to have more links and a higher price or less links and a lower price?
New owner of the product can change price, control how it is displayed, marketed, who he sells it on to etc…
How much control does the manufacturer want over his product or service?
Factors to consider with Place
– Businesses must find out where customers want to buy there product, and then stock it there.
– Anyone can have a new idea, but getting shops to take a chance on a newcomer is more of a problem
– A barrier of entry, especially for new firms.
‘If a man can make a better mouse trap, though he builds his house in the woods , the world will make a better path to his door’
(if the product is good enough, customers will come and find you)