For a company to comprehend and understand the needs of its consumers and determine the best route to put its product in a market space accessible to potential buyers, they have to determine and understand the method of distribution used. An excellent marketing place strategy enables the service and products to stand out, differentiating the company from the rest of the competition. Companies must define the distribution channels that will suit their business model.
Goods and services pass through a chain of intermediaries to reach the final consumer. These intermediaries act as the distribution channels and form an integral part of place marketing strategies. Place marketing examples of distribution channels include retailers, wholesalers, distributors, and online platforms. Broadly, these examples are categorized into two main types; direct sales and intermediaries.
The next section expounds more on place marketing examples by exploring specific examples of physical stores, wholesalers, direct sales, and sales representatives.
Physical Stores
Physical stores are physical retail spaces that enable sellers to display and sell their products to customers. For example, sellers can rent spaces inside malls or shopping centers. Alternatively, they can construct free-standing structures or establish a stand-alone store near events, residences, public areas, and museums. A typical physical store employs workers to guide, help, and engage with shoppers. Physical stores offer customers a range of services and products in strategic retail locations. This distribution channel offers front-end access to products, the most common method used in shopping malls and many other stores that serve consumers. Companies design their physical stores depending on the nature of the products sold, the location of the business, the clientele, and even the size of the business entity.
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Wholesale
Wholesale is an indirect approach to distributing goods that employs a third party to distribute goods and services. It involves the acquisition of goods from producers and manufacturers and subsequently holding them in distribution centers from where they sell to retailers. Wholesalers such as Sam's Club and Costco act as a link between the producer and the final consumer. A key advantage of wholesale distribution is brand awareness. Selling a product through multiple retail stores or an e-commerce setup ensures many consumers will access it, thus creating more brand awareness. Wholesalers also have the option of drop shipping, which entails directly shipping from a manufacturer to the consumer without having inventory.
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Direct Sales
Direct Sales entails selling products directly to end users without distributors or intermediaries. Instead of a retail environment, direct sales occur at non-store locations such as online, workplaces, or homes. Businesses that employ this distribution channel avoid intermediaries by relying on salespeople. These salespeople engage potential customers and attempt to convince them to purchase the product. The direct marketing of goods can be conducted through telemarketing or mail offerings. As such, the internet and telephone are valuable tools for direct sales. Telemarketing and mail offerings remain effective direct sales strategies despite increased consumer reports of scams, frauds, and intrusive sales techniques.
Sales Representative
A sales representative is an organization or a business professional who interacts with potential customers and sells products on behalf of wholesalers and manufacturers. As the point of contact between the business and its potential customers, sales representatives communicate the benefits of the company's product and its value to prospective clients. The main objective of soliciting these professionals is to conduct sales on-site and drive transactions. For example, if a neighbor invites those next door to a party where she is selling kitchen items, she is acting as a sales representative for the company producing the kitchen items.
The scope of a sales representative is broad because there is a wide range of duties and responsibilities attached to this position. They are expected to have a deep understanding of the brand, allowing them to highlight how the product features address customer needs. Furthermore, they identify market leads, recognize potential customers, and answer questions related to the product. They also must collaborate with professionals in different sectors, retain a contact list to maintain customer relationships, negotiate prices, and formulate sales agreements. In addition, a sales representative contacts new and existing clients to discuss needs and offer solutions.
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