The Marketing Mix: Place

The next P is Place. Place is about method of distribution: do you sell direct or through different channels? What channels?

Let's use pizza again as our example. There are many different places you can buy a pizza: a grocery store, a pizza parlor, your home, and a ballpark. Each situation is an entirely different channel.

In a grocery store, you are relying on a retailer to sell your product. That has pros and cons. Since you are relying on a retailer, they are bringing customers to your product. But the negative side of that is they likely don't have an exclusivity deal with you (which is a good distribution deal). This means they will be selling competing pizza right next to yours. So the marketing weight here is two fold: get good shelf position and get customers in to buy your product using techniques like advertising and couponing. As you can see, you can sell your product at more outlets with less overhead, but also with less profit since you are selling through one or more layers of distribution. Everyone from the wholesaler to the grocer needs to make money on your product.

Direct distribution is another method. That would be like opening a pizza parlor. You might get to keep a larger percentage of the profit but to serve another geographic area, you need to open another restaurant, which means an investment in more staff, equipment and rent.

Within this pizzeria example you have several other channels of distribution: you have people coming in to eat, picking up and/or requesting delivery. Each is a unique market with unique staffing and equipment requirements. So some like Little Caesar's only offer pick-up. Others like Dominoes only offer delivery. Some local restaurants only offer dine-in, and most offer a combination of all three. Many now even offer different ordering options: phone, text and online.

And obviously in a situation like a sporting event, the method of distribution is different. It's based on a different kind of buying habit -- mostly impulse.

How do you go to market? Is there a channel you aren't using? Is there a channel that's not profitable? What are you having for lunch tomorrow? (Just kidding!)