P lace considerations do not relate solely to physical location. They also relate to how and when your products will be offered, in short, the distribution management techniques that you will use to solve three key issues:The distribution techniques that you use will depend on your type of business. Different considerations will apply depending on whether you are a service business, a retailer, a wholesaler or a manufacturer. In all cases, you will need to concentrate on the demands of the consumer and the characteristics of the market.As with all aspects of marketing you must not forget the importance of competitive advantage. New and innovative distribution techniques may enable you to reach markets and consumers that were previously unavailable. The increasing use of the Internet, for example, has opened up new opportunities for small businesses to compete with large multinational companies on a global basis.

Understanding The Importance Of Location

The importance to your business of physical location will depend on the type of business that you operate. For a retailer, for example, it may be extremely important to be in a location with a high volume of passing trade, while a mobile car mechanic need have no physical location, apart from their vehicle. In this case, the question of location will only be relevant in terms of the geographical area in which they operate.

To explore the importance of place decisions further, let us consider the implications for the four main types of business:

• retailers
• wholesalers
• manufacturers
• service businesses.

Retailers

Having the right shop location is undoubtedly an important factor in this sector of business, provided you intend to operate on a face-to-face basis with your customers. As extreme examples, take the following cases and decide which would receive the most sales:

• a book retailer in a popular shopping mall
• a book retailer in an industrial unit on a trading estate.

 

You have probably chosen the shop in the shopping mall. But are you right? Have you considered how they are distributing their books? The first shop is obviously dealing direct with the public on a face-to-face basis. That does not mean, however, that they are making more sales. What if the book shop on the trading estate only deals with the public through mail order?

You can see from this example that decisions on location do not relate to just one aspect, but to a combination of factors which will depend on how you intend to deal with your customers. Because of the Internet, in some cases it is no longer necessary to have a physical location for the customer to visit.

This aspect will have the greatest impact on a retailer. Even if you operate one small shop, you should probably have a presence on the Internet through which you can sell. More and more shopping will be undertaken from home and you need to consider the Internet as part of your place decision.

Wholesalers

To a wholesaler the consideration of place will not be of prime importance. Provided they are within a reasonable distance of the retailing outlets who will provide most of their business, and there is adequate car parking, physical location will not be a major factor.

What will be important, however, will be the ease with which deliveries can be accepted from manufacturers. It would be blatantly unwise to establish a wholesaling business without access to adequate roads being in place to accommodate the large delivery wagons. It will also be necessary to ensure that appropriate equipment – for example, fork lift trucks – can operate effectively within the wholesale premises.

All of these factors may not immediately come to mind but they will play a part in the success of your business. You will need to consider also the physical layout of the interior of your premises. Your customers need to have easy access to all of your goods and, perhaps more importantly to them, easy means by which to transport them from your premises to their own vehicles.