Place of distribution is a critical element of the marketing mix. It is the location where goods are made available for purchase. This is also termed as a distribution channel.
It becomes convenient for some manufacturers to sell their products to wholesalers, who in turn sell them to the retailers, while other manufacturers prefer to directly sell their products to retailers or customers.
This whole process is known as the ‘distribution channel.’ The decisions related to place activity is majorly dominated by distribution channel.
According to American Marketing Association, “A channel of distribution or marketing channel is a structure of the intra-company organization, units and intra-company agents and dealers, wholesalers and retailers through which a commodity product or service is marketed.”
According to Philip Kotler, “Every producer seeks to link together the set of marketing intermediaries that best fulfill the firm’s objectives.
This set of marketing intermediaries is called the marketing channel (also trade channel or channel of distribution)”.
Here ‘place’ refers to the location where services can be availed conveniently. The production and consumption of services take place at the same point because they are inseparable in nature.
Due to this inseparability, neither the service providers can produce the service at a place where the cost of production is low, nor can they sell them at higher prices where the demand for service is high.
Hence, either there will be no distribution channel for the marketing of services, or there will be a small one. For determining the place for service, the following decisions must be considered:
- The nearby environment and physical appearance of the place must be considered while selecting a place for providing service.
- The locality from where the service is to be provided is also an essential factor. For example, banks are trying to establish their ATM’s at such locations where customers feel its importance most.
- The intermediaries should be selected carefully in such a way that they can easily provide the services to customers and can enhance the organization’s operational efficiency.
For example, the decision of a mobile company to give service to their customers either by opening their own service centers or by giving contracts to other service providers.