Like product, promotion, and price, the place is another important element in Marketing Mix. I already said that marketing mix is the combination of price, promotion, product, and place that are used to attain certain business goals.
Companies consider this combination in a certain proportion based on their marketing strategy. If companies follow the same marketing strategy, they will not succeed. Because every business organization works in a different business environment.
But today I’m going to elaborate on the significance of place in the marketing mix and how does it differ in Multi-level Marketing (MLM) from other forms of business.
Place in Marketing Mix is a super important element that ensures the availability of products in the market.
Based on the studies it is better to use a shorter distribution channel for FMCG products (Fast Moving Consumable Goods). Because FMCG products are not durable for a longer period. They must be consumed fastly.
On the other hand, it is better to use longer or indirect channels to distribute the products.
Therefore, I suggest that MLM or Network Marketing is the best platform for consumable products that require shorter channels. Because in Network Marketing we directly sell products to the customers.
What is Place in Marketing Mix?
Role of Place in Marketing Mix
Aspects of Place
Observing the Distribution Mix of Place
Activities Involved in Marketing Mix
How to Evaluate Distribution Channels?
How Does the Place Mix in Multi-level Marketing Differ From Common Business?
Let’s look at each topic in detail.
What is Place in Marketing Mix?
I know that many of you knew this before because as a marketer you should have some basic idea of business, marketing, and demand & supply.
Place Mix is also called Distribution Mix. This includes various activities for ensuring the availability of goods at the right place at right time. The general objective of place is to move products from the manufacturing units to the real customers.
It involves the decision regarding the distribution channels and physical distribution. It is a very crucial factor that creates time utility, place utility, and ownership utility of products.
Role of Place in Marketing Mix
Place in the marketing mix is an essential factor in determining the demand and supply of products in the market.
As we know that if there is an insufficient stock of a product, the price for that commodity will become higher. On the other hand, if there is sufficient stock of products in the market, the price will become low.
Therefore, place mix is a super important element that influences the price of the products.
Objectives of Place in Marketing Mix
The following are the objectives of Place;
a) Movement of Goods
Place in Marketing Mix is always concerned with the movement of goods from factory to the market.
b) Safety of Products
Place or Distribution mix ensures the safety of the products. It makes the distribution channels more responsible for the product’s safety. Channel members, therefore, take more care while transporting, storing, and other activities.
c) Cost Reduction
The place helps to reduce the price of products by ensuring the availability of products at the right place at the right time and right quantity.
The most important objective of place is to ensure the availability of products at right time at the right quantity.
e) Promotion of Goods
If you choose an indirect channel for marketing your product, the intermediaries will promote your products. You don’t need to care about your products.
However, these benefits are only available for the traditional type of business and not to Multi-level Marketing businesses. Because MLM companies usually sell their products directly to the customers.
f) Financial Assistance
Another important objective is that to give financial assistance to the manufactures. In indirect channels, wholesalers give advance payment to the producers to meet their production costs. Furthermore, the producers will get an opportunity to produce goods for the next stage.
As a result, place or distribution mix assists to manufacture products continuously without any interruption.
But, MLM companies cannot avail of financial assistance because they use the direct channel to sell their products.
g) Transfer the Ownership
A place is an element that transfers the ownership of products from one person to another. In the case of the indirect channel, the ownership usually transfers from producer to wholesalers. Then it transfers to retailers and finally to the customers.
However, in the network marketing business, the ownership is transferred directly to the customers.
Aspects of Place in Marketing Mix That You Should Know
I already said that Place in Marketing Mix guarantees the availability of products in a market.
Do you know what are the 3 aspects of Place?
Right place, right time, and right quantity are the three aspects of the distribution mix.
Let’s make it in detail.
a) Right Place
Place mix ensures the availability of products in right place. For example, groceries are available in every supermarket or store, but in the case of mobile phones, they are available only in mobile shops.
b) Right Time
Time is an important factor for the successful sale of a product. Place ensure the availability of products at right time. For example, school bags should be available in the market before the opening of schools.
c) Right Quantity
You need to know that the availability of products should not be higher or lower. It should keep at an optimum level. If the availability of vegetables is high in a market and there is no demand for them, you cannot sell them.
Observing Place in the Marketing Mix
By observing the distribution mix, we can see that mainly two types of distribution are available to you.
What are they?
Direct and indirect distribution are the two types of distribution. The corporation can distribute the product in a variety of ways. And this could involve a variety of stakeholders at various levels.
Direct distribution means that the producer directly makes sure of the availability of products to the customers.
For this, the manufacturing company owns warehouses, logistics, and other valuable resources itself.
Because of the one-to-one engagement between company and customer, businesses focus on establishing customer loyalty through their ties with various parts of the brand.
Though the prerequisites are capital heavy, the distribution process itself is less expensive per unit than other routes of distribution because of its shorter duration.
Usually, direct selling companies use this type of distribution and get the benefits of loyalty of the customers.
The products of MLM companies are always lower than the other products because of avoiding the intermediaries.
Various intermediaries are involved in the process of distributing the goods to the consumer market. These intermediaries are middlemen of many levels, ranging from agents to wholesalers, distributors, and retailers.
This is not recommended to any network marketing business. Because the primary objective of network marketing is to avoid intermediaries. Therefore, it is not suitable for them.
Functions or Elements of Distribution
Let’s discuss what are the functions carry in Distribution or Place in Marketing Mix.
Channels of distribution, inventory control, warehouse, transportation, product handling, order processing, and coverage are the function or elements of distribution.
a) Channels of Distribution
Distribution channels are the intermediaries who are involved in the journey of products from the manufacturing units to the customers. In other words, it is the paths through which a product reaches the customers.
Like selecting the best suitable MLM products, the selection of channels is also important for the success of every company.
Mainly there are three types of distribution channels available for you.
a.1) Wholesalers- Retailers- Customers
Here in this channel, products reach the customers through intermediaries such as wholesalers and retailers. It is also called a two-level channel.
a.2) Retailers- Customers
In this channel, there is only one intermediate involved in the product’s journey. Here, the producer transfer the products to the retailers, and then the retailers sell these products to the customers. It is also called one level channel.
a.3) Direct to Customers
This is the shortest distribution channel. In this channel, producers directly sell their products to the customers. There is no involvement of intermediaries in this channel.
This is the perfect way for the network marketing business to produce, sell and earn profits for a longer period.
b) Inventory Control
Inventory control, often known as stock control, is the act of maintaining a company’s inventory levels, whether in its own warehouse or in multiple locations. It entails managing products from the time they are in stock to their eventual destination.
Warehousing is the process of holding physical products in a designated warehouse or storage facility before they are sold or distributed. Warehouses keep products safely and securely in an orderly manner, allowing you to trace where they are stored, when they arrived, how long they have been there, and the quantity on hand.
Transportation is a component of the distribution process; it involves the transportation of items but does not include the planning of how to move the products through a channel, which is the concern of distribution. Transportation focuses solely on removing a good from its original location and delivering it to the proper recipient.
How to Select Distribution Channels?
Do you know how to select a distribution channel that is best suitable for you?
There are several factors that influence the selection of distribution channels. Objectives, customers, market, channel, and competitors are the various factors influencing the selection of distribution channels.
The object of a company is to reduce the price of the product, they can choose shorter channels. On the other hand, if a company wishes to get the benefits of promotion activities, wider channels are more beneficial.
Customer behavior is another important factor. You should always take reasonable steps to get the royalty of the customers while selecting distribution channels.
There is various type of channels are available to you. Among them, you need to choose the best suitable channel in order to attain your business goal.
By using direct distribution, a Direct Selling company is always making profits by higher sales.
Before selecting the channel, you need to conduct a competitor analysis thoroughly. You should carefully examine what type of channel they used, their performance using that channel, and weaker points of the channel.
Finally, you will get the best channel. I’m sure about that.
How Does the Place in Marketing Mix of Multi-level Marketing Differ From Common Business?
Do you know how the place or distribution in the marketing mix differs in MLM from typical types of business?
Normal businesses can select any of these channels, they can choose either direct channel or indirect channel. However, they usually use indirect channels for selling their products.
But in the case of MLM or multi-level marketing, the company uses direct channels for selling its products.
We can also see that the traditional business expects benefits from intermediaries such as promotional activities, financial assistance, etc.
However, Network Marketing Business expects to reduce the price of the products. Their main intention is to provide quality products at lower prices.
As I conclude this topic, I want to say important information to my readers. An MLM company can give you the best quality products at lower rates. This will enhance your lifestyle better.
Additionally, MLM company can provide you with an additional income for representing the company.