The element of the marketing mix that involves distributing inventory, transport and storage.
products to customers in line with demand and minimising cost of
The place element of the marketing mix refers to how the product is distributed to customers. Typically, for offline channels, the aim of Place is to maximise the reach of distribution to achieve widespread availability of products while minimising the costs of inventory, transport and storage. In an online context, thanks to ease of navigating from one site to another through the humble hyperlink, the scope of 'Place' is less clear since Place also relates to Promotion and Partnerships. Take the example of a retailer of mobile phones. For this retailer to reach its potential audience to sell and distribute its product, it has to think beyond its own web site to third-party web sites where it can promote its services. Successful retailers are those that maximise their representation or visibility on third-party sites which are used by their target audiences. These third-party sites will include search engines, online portals about mobile phones and product comparison sites. When thinking about representation on third-party sites, it is useful to think of the long-tail concept (Anderson, 2004) referenced in Figure 5.4. Across all Internet sites, there are a small number of sites including portals such as Google, MSN and Yahoo! which are very popular (the head which may theoretically account for 80% of the volume of visitors) and a much larger number of sites that are less popular individually, but still collectively important. Similarly within a category of sites, such as automotive, there will be a few very popular sites, and then many niche sites which are collectively important in volume and may be more effective at reaching a niche target audience. When considering Place and Promotion, it is important to target both the head and the tail to maximise reach and to attract quality visitors to the destination site.
The main implications of the Internet for the Place aspect of the mix, which we will review in this section, are:
1 place of purchase;
2 new channel structures;
3 channel conflicts;
4 virtual organisations.
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