Marketing Management

BBA II semester
Date: 30th June 2021

Place

• It refers to the location where the products are available and can be
sold or purchased.

• Buyers can purchase products either from physical markets or from

virtual (online) markets.

PLACE MIX

• This element of marketing mix is concerned with taking decisions in

order to make product available to the customer for purchase and
consumption.

• It is important that the product is available at the right place and at

the right time.

➢ Objectives of Distribution
1. Movement of goods: - The major objective of distribution is to
effectively move the product from the place of production to the place
of consumption through the marketing channel system. Products
move from manufacture to wholesaler to retailer and finally moved to
consumer from retailer.
2. Safety of product: - Distribution facilities safety of the product.
Distribution makes the channel members responsible to the proper
storage and handling of the product, so that the product reaches to
the buyer in proper condition.
3. Cost reduction: - Distribution involves several channel members.
They assist in delivering goods and services to the end consumer. So,
manufactures do not need to reach to the door step of every
consumer. Distribution helps in minimizing the cost of manufacture's
transportation and travelling.
4. Availability of goods: - Effective distribution channels facilities easy
availability of goods. Distribution channel also helps consumers to
assort the required products. Any product demanded by consumers
becomes available at any place and any time. Different products in
different countries and continents are assorted at the same place by
channel members. It ensures right goods at reasonable price at right
place.

Uma Chaudhary
Assistant Professor, BEL First Grade College
 Marketing Management
BBA II semester
Date: 30th June 2021

5. Customer satisfaction:- Distribution is often termed as other halves of

marketing. It fulfils the customer's satisfaction by delivering right product at the
right place at right time. Thus, distribution channel sets objectives to render
crucial services of regular supply of goods.
6. Transfer of product ownership: Actual exchange process takes place only
when products reach to the end users. A channel members has to push the
product to the end consumer. So, the distribution function also fulfils the
process of ownership transfer.
7. Promotion of goods and services: Effectives distribution channel also helps
in promoting goods and services. Channel members reach to the target market
taking goods from production centre. After reaching target market, the
distributor gets chances to demonstrate the goods to customers. They also
promote the producer or services of the producer.
8. Regular Supply of goods:- An effective distribution system makes goods
available at a right place, regularly at a reasonable price. There is no room of
shortage and black market. Thus, customers do not feel the lack of goods in the
market place.
9. Employment and occupation:- Distribution is one of the important task of
marketing. This provides jobs and employment to many persons. It plays
important role in providing employment opportunities to the people. Many
persons get employment by involving in wholesale, business, retail business,
agents, intermediaries etc.
10. Financing:- Several intermediaries are involved in distribution function.
They manage financial resources themselves for distribution. Besides this, they
also manage financial resources for extra warehouse and stocks. So, the
producer need not make financial arrangement for distribution and creating
distribution

Uma Chaudhary
Assistant Professor, BEL First Grade College
 Marketing Management
BBA II semester
Date: 30th June 2021

Factors Affecting the Choice of Channels of Distribution

(A) Considerations Related to Product
1. Unit Value of the Product:
When the product is very costly it is best to use small distribution channel. For
example, Industrial Machinery or Gold Ornaments are very costly products that
are why for their distribution small distribution channel is used. On the other
hand, for less costly products long distribution channel is used.
2. Standardised or Customised Product:
Standardised products are those for which are pre-determined and there has no
scope for alteration. For example: utensils of MILTON. To sell this long
distribution channel is used.
On the other hand, customised products are those which are made according to
the discretion of the consumer and also there is a scope for alteration, for
example; furniture. For such products face-to-face interaction between the
manufacturer and the consumer is essential. So for these Direct Sales is a good
option.
3. Perishability:
A manufacturer should choose minimum or no middlemen as channel of
distribution for such an item or product which is of highly perishable nature.
On the contrary, a long distribution channel can be selected for durable goods.
4. Technical Nature:
If a product is of a technical nature, then it is better to supply it directly to the
consumer. This will help the user to know the necessary technicalities of the
product.

(B) Considerations Related to Market

Uma Chaudhary
Assistant Professor, BEL First Grade College
 Marketing Management
BBA II semester
Date: 30th June 2021

1. Number of Buyers:
If the number of buyer is large then it is better to take the services of
middlemen for the distribution of the goods. On the contrary, the distribution
should be done by the manufacturer directly if the number of buyers is less.
2. Types of Buyers:
Buyers can be of two types: General Buyers and Industrial Buyers. If the more
buyers of the product belong to general category then there can be more
middlemen. But in case of industrial buyers there can be less middlemen.
3. Buying Habits:
A manufacturer should take the services of middlemen if his financial position
does not permit him to sell goods on credit to those consumers who are in the
habit of purchasing goods on credit.
4. Buying Quantity: It is useful for the manufacturer to rely on the services of
middlemen if the goods are bought in smaller quantity.
5. Size of Market:
If the market area of the product is scattered fairly, then the producer must
take the help of middlemen.

(C) Considerations Related to Manufacturer/Company

1. Goodwill:
Manufacturer’s goodwill also affects the selection of channel of distribution. A
manufacturer enjoying good reputation need not depend on the middlemen as
he can open his own branches easily.
2. Desire to control the channel of Distribution:
A manufacturer’s ambition to control the channel of distribution affects its
selection. Consumers should be approached directly by such type of
manufacturer. For example, electronic goods sector with a motive to control the
service levels provided to the customers at the point of sale are resorting to
company owned retail counters.
3. Financial Strength:
A company which has a strong financial base can evolve its own channels. On
the other hand, financially weak companies would have to depend upon
middlemen.

(D) Considerations Related to Government

Uma Chaudhary
Assistant Professor, BEL First Grade College
 Marketing Management
BBA II semester
Date: 30th June 2021

Considerations related to the government also affect the selection of

channel of distribution. For example, only a license holder can sell
medicines in the market according to the law of the government.
In this situation, the manufacturer of medicines should take care that
the distribution of his product takes place only through such
middlemen who have the relevant license

(E) Others
1. Cost:
A manufacturer should select such a channel of distribution which is less costly
and also useful from other angles.
2. Availability:
Sometimes some other channel of distribution can be selected if the desired one
is not available.
3. Possibilities of Sales:
Such a channel which has a possibility of large sale should be given weightage.

Uma Chaudhary
Assistant Professor, BEL First Grade College