What is marketing place?

Another important P of marketing mix that a marketer must have skill to manage is Place (the location where the product being sold), we can call them the distribution channel. We have good products, good price and a huge budget for communication but we can fail if we don’t bring our products to the customer (Laser beer is one of valuable example for the failure of Place). Place is an important element in marketing mix and more important with fast consumed products. People only find Coca Cola, Pepsi, Unilever and P&G through their prominent activities, other in other words, are their brand and communication. But to manage channels of those companies are also a kind of art, which is very meticulous, effective and good to learn.

To understand what is marketing channel, we should know the definitions of channel:

Distribution channel

By customer’s view, distribution channel is a mean that thanks to it, the customer can receive and pay for goods or services that they are looking for. By the suppliers’ view, the channel is a mean that the supplier can use it to provide goods and services for their customers.

Marketing channel

The marketing channel is a gather of many persons and organizations (dependent and independent to each others) jointly take part in the creation, excite the need and satisfy the demand by providing products and services.

Value chain

The value chain contemplates marketing channel by the value aspect and is a chain of activities of element that take part in the customer’s value creation (tangible and intangible) and get back the value for themselves. From customer side, the value chain is where the customer receives and pays for the value that they are in need.

The existence of marketing channel is clear. It brings products from the producer to the customer. It enhances the effectiveness of providing process. The channel brings to the customer plenty of selection for similar products, or provided in attachment of the subsidiary products. The channel is formed to balance the big demand and small demand customers in terms of quantities of product. It is also to adapt different group of customers (different segments). Finally, the channel is formed to meet more and more dynamic and complicated need of the markets.

Channel selection principle

Each company has their own requirement in policies for channels. Normally, the company can control the channel policies by these criteria:

  • Planning channel strategy process
  • Policies for non-traditional channel
  • Channel effectiveness measuring
  • Price by channel
  • Opting and acquiring suppliers
  • Managing suppliers and measuring the effectiveness of the suppliers
  • The customer’s movement

Channel managing formular

It is a closed process with 6 steps of managing distribution channel generating the value to adapt the demand of the customers and adapt the need of channel’s elements simultaneously.

Market map

Channels are a part of the market. To evaluate and select the most optimizing channel, the marketer should understand strongly the market map where they are taking part in with the size, value and motive characteristics of the market.

Decision making unit

The decision-making unit of the B2C consuming market is totally different from the B2B market. It is important to analyze the elements of decision-making unit and from that, marketing can impact by tools of marketing mix.

Value chain

Analyzing the value chain let us know what value that our customer is looking for and a suitable and effective strategy may be found thereafter.

Designing channels

The marketer can design the most optimizing channel, comparing advantage and disadvantage aspect of the available channels base on such aforementioned analyzing. And that is the foundation to choose a channel model with the precedent factor or creating a totally new channel.

Popular channels are

  • Direct channel
  • Distribution channel
  • Wholesale channel
  • Professional channel
  • Electronic channel

Channel Evaluation and selection

The marketer should focus on 3 main tasks:

 

  • Evaluating the participant of the channel
  • Evaluating the effectiveness of the channel
  • Selecting the channel

Building the value solution for channel’s participants

We acknowledge that the success of the channel cannot rely on a single member. To have a successful channel, the participants joint in should stay in a strict collaboration. It is clear that the marketer should care of channel partner (we call them distribution partner). Value solution systemizes and specialize the benefit and value of each participant joining channel.

The Price strategy in the channel

The marketer will calculate the price strategy for each channel and a common price strategy for different channel (advance content).

Distributor management

The last one is the other important matter that can decide the success of a channel. We call it distributor management. This content can share you the principles of selecting the partners, distributor management strategy and the process of dealing with the distributer to make sure that the effectiveness of marketing channel is highlighted.