Making ‘Place’ Work for You
Understanding ‘Place’ in the 4Ps of Marketing
In marketing, “Place” refers to the methods and locations used to deliver a product or service to customers. It includes distribution channels, logistics, and overall product accessibility. In this post, we focus specifically on distribution channels.
There are two fundamental strategic decisions to consider when designing a distribution strategy: the degree of market coverage and the ownership of the distribution channel.
The Degree of Market Coverage
Market coverage refers to how widely a product is made available through different sales outlets. For example, a luxury jewelry brand might adopt a selective or exclusive distribution strategy—limiting availability to a few high-end retailers to maintain a premium image. In contrast, a carbonated beverage company is likely to pursue intensive distribution, making its products available in as many stores as possible to maximize visibility and convenience.
Ownership of the Distribution Channel
A key strategic decision involves choosing between building your own channel and using third-party channel. For instance, an online education business can either develop its own website or utilize platforms like YouTube, TikTok, or Instagram. Owning the channel gives full control over branding, user experience, customer data, and profits, as there are no commission fees to pay. However, leveraging existing platforms offers immediate access to large audiences at minimal upfront cost. The trade-off is reduced control and lower profit margins, as these platforms charge commissions, and businesses may become reliant on changing algorithms and platform policies.
A Framework for Channel Strategy
To design an effective distribution strategy, marketers can follow a three-step framework:
Step 1: Align with the Overall Marketing Strategy. Begin by reviewing your segmentation, targeting, and positioning (STP) decisions. Your distribution strategy should support and amplify these decisions. Understanding your target customers and the image you want to convey is essential for alignment.
Step 2: Consider Channel Implications. Evaluate the trade-offs between control and cost. Direct channels offer control but require effort and investment to build. Indirect channels—such as social media or e-commerce platforms—offer quick access to large audiences but may limit control and profitability due to commissions and platform rules.
Step 3: Choose Among Available Options After assessing strategic alignment and cost-effectiveness, choose the distribution method—or combination of methods—that best fits your business goals.
- Omnichannel Distribution as a Strategic Choice: Omnichannel refers to a strategy that integrates owned channels (e.g., company-operated stores, websites) with third-party platforms (e.g., resellers, marketplaces). The goal is to provide a seamless, consistent experience across all customer touchpoints. A well-known example is Apple, which operates both owned channels (Apple Stores and its official website) and non-owned channels (authorized resellers), giving customers flexibility without sacrificing brand consistency.
Conclusion
Strategic alignment is key in marketing. Always revisit the core problem you’re solving for customers and your original business purpose. Your place strategy should reinforce these foundations. Even with a clear STP framework, uncertainty is normal. In such cases, experimentation and marketing research can provide valuable guidance toward smarter channel decisions.