Place



MEET THE 4 P's EXERCISE - PLACE

This heading refers to distribution. This means all aspects related to how goods and services are 'moved' from the producers to the end user. This means the coordination of retailers and/or wholesales and in the case of products the logistics involved in moving from factory/warehouse/head office, to the end user.

Most goods are sold through intermediaries, (for example, retailers). Marketers must therefore consider the type, size and location of retailers and possibly also the training of retail staff.

But increasingly organizations - especially service organizations - are selling direct to the consumer via the telephone and the Internet. This has the potential to reduce costs (no retailer margin) and bring organizations closer to their customers. However, it also adds considerable burden to organizations to introduce payment and service systems that would previously have been dealt with by retailers.

The introduction of a system of direct sales might also bring an organization into conflict with existing retailers who they now compete with. For example, British Airways used to sell through travel agents, now they also sell directly via their website.

Just like with pricing, the places where your product is available say a lot about both the quality and "status" of the product. Your channels of distribution must match the image goals of your product. In other words, if you're selling hand-made exotic wood picture frames with luxurious cloth matting, you probably don't want to go to Wal-Mart to sell them. You would use the high-quality, luxury-item image and sell them in an exclusive boutique or other shop. On the other hand, if your product is a mid-line car-care product, then Wal-Mart would be perfect.

EXERCISE:

Welcome to Newtown. It sits 25 miles from Commerce Town, 10 miles away from Friesner Airport, and 35 miles away from Poshbury.

Floor-Mart is considering where to put their new store. Their store will sell groceries and provisions 24 hours a day (at a premium price of course).They have three options, each one is considered below. You must recommend a place for the position of the new store.

• (1) This site is next to Commerce Town. It has very few inhabitants. However 7,000 people travel there everyday to go to work. It already has a competing store (C). There are plans to build low cost housing in the area.

• (2)This site is very close to the exclusive Poshbury. It has 1,000 very exclusive, wealthy inhabitants. There is no competition in the locality.

• (3) This site is close to Newtown. However the 7,000 of the 10,000 citizens of Newtown work in Commerce Town and spend little time at home during the working week. This site site some 5 miles away from Newtown and 4 miles away from the growing Friesner Airport. It is situated on the only road between Friesner airport and Newtown.

Which place would you recommend to Floor-Mart? Justify your recommendations.

Type answer below:

LOOK FOR PLACE EXERCISE TWO ON THE CLASS WEBSITE

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