What is Place Strategy & How to Decide on a Place Strategy?

The marketing mix is a very important concept of marketing wherein the entire marketing strategy of a product can be highlighted. Commonly known as four P’s of marketing this consists of Product, Promotion Place, and Price.

Place strategy is also known as a distribution strategy wherein the mode of distribution for the product is decided by the organization. Play strategy plays an important role in the marketing strategy of the product for the product.

The name of the place strategy is to determine where and how an organization will place their products and services so that major market share and customers are attracted. The other term for a strategy is distribution strategy which includes both online as well as physical stores or any other means by which the customers can be reached by the company.

The way the customer access the product has to compliment the remaining product strategy in the marketing mix.

Following are the few ways in which a distribution strategy can be applied to the market

Role of Place Strategy

1) Direct Sales

To begin with, direct sales can be a good strategy for a new company. The strategy is also used for that the product is limited or in case of the products which are seasonal in nature. One of the primary advantages of direct sales is that the products are directly delivered to customers from the organization.

The organization can get in touch of the market and due to the customer interaction which is direct in nature, the necessary changes can be implemented and adopted. Another advantage is that the prices of the products are controlled directly by you and the methods in which the product is to be sold to the customers is also controlled by you.

The door to door selling, E-Commerce, onsite orders are the other types of direct sales. Direct customer interaction is the primary advantage of direct sales. Also, Direct customer feedback is another advantage of direct sales. Booth of disadvantages of necessary for the organization to continuously improve their products.

2) Reseller Sales

Use of the third party can be done if the product is to be intended to be wider reach in the market. Distribution can be done via a third party or reseller who buys the product and then sells it to the customer with a profit margin for themselves. The strategy also reduces the distribution system pressure.

The storage space required to store the products also reduces in case of reseller sales since the company or the organization lose their personal touch with the customers because of selling through a reseller. Some of the resellers start their own brand under the original product. Intermediaries before handling our product have to be specific about the supply flow.

The distribution is expected to be entire year round. This puts the production line under stress in order to meet the demands of resellers. this is my selling through intermediaries may work if the production nice is up and efficient.

3) Market coverage

Every company has different products which have different requirements for distribution. Market coverage would refer to you how wide a company would want their products to be distributed in the market.

This applies via intermediaries, resellers or even by direct sales. Market coverage is classified into three types:

A) Selective distribution market coverage

Only a few say that businesses for customers are selected in selective distribution. the selective distribution is a common strategy for selling the products which are upscale in nature. these products are used with sold by the researchers who deal only in the products of high quality.

It is very easy to establish customer relationships using selective distribution as compared to other distribution strategies like intensive distribution.

B) Intensive Distribution market coverage

The widest possible distribution network is ensured by intensive distribution. This applies for products as weather services equally. A company with its products and services in money markets our in different locations and sometimes the requirements of price vary in different locations.

The strategy can be used by large businesses and corporations in order to reach customers globally. One of the examples of even distribution using intensive distribution strategy are products like chewing gum and ice cream.

C) Exclusive distribution

When the products are being sold to only one reseller then exclusive distribution strategy is the one that is applied. the reseller usually has exclusive rights over the products of the company of the organization and in return, the distribution shows that the supplier for that particular product will be only one that is you.

This works with specialty products which can be promoted as costly or prestigious products.

How to Decide on Place Strategy?

1) Choose a place which is convenient and close to the target market

When the organizations or the companies choose a place in order to distribute their product to the customers it is essential that the product should be available in close proximity to the target market. at times the companies are required to sell out a huge amount in order to satisfy the criteria. And since this falls under marketing budget the company is then cut down on the marketing budget in other ways in order to cover their place expenses amongst the four Ps.

For example, a company has an outlet on the main road in the center of the city. But out that is not preferred to advertise more because of the proximity to a busy market place and good visibility to the customers. on the other hand, a store which is located in the interior part of the town will spend heavily on advertising in order to attract the customers.

The budget for these will be reduced is over because of the distance between the market place of the city center and the store which is why a major part of the marketing budget will be allocated on promotional strategies like distributing pamphlets, having local advertisements, banners, and flyers, etc. In the earlier case, this will not be the situation because a major portion of investment would be gone or spent on procuring the space for the shop.

2) Ensure that the Place complements the other Ps

The 4Ps of marketing have to complement each other. The Product, Price, and Promotion should be in sync with the place. If the Place does not correspond to other Ps, then the business will get affected. For example, a souvenir shop has to be present near a tourist location and it does not make sense for the shop to be present away from the tourist location.

The tourists would want to purchase the souvenir and not the locals. Even though the shop will have good products, reasonable pricing and excellent promotional strategy to attract tourists, it won’t make sense for them to operate in some remote part of town. On the other hand, it does not makes sense if a grocery store is located near tourists spot.

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