Do you know what square means in marketing? If your answer was negative, don’t worry. Actually, if you have ever consumed a product or service, it is very likely that you know it more in practice than in theory.
In this article, we will explain in detail what square is and why it is such an important element to carry out a marketing strategy. Go!
Plaza in Marketing, what is it?
To make a sale, it is not enough to have a good product or service at an adequate price. In addition, you must have an efficiency plan to drive the product or service to the customer.
This is where the square, also known as distribution.
The square (in English placement), is understood as the way in which a good or service will get from a company to the hands of the final consumer.
¡Be sure to check out our complete ebook on Marketing to learn more about this strategy!
What is it for?
All products and services, after they are produced, need to reach their final consumer and there would be no way to do it if there was not a bridge between the two.
It is almost impossible for a producer or manufacturer to individually reach all stores.
For this reason, the role of the marketplace in the marketing mix is to specify the transmission of a product or service to the strategic distribution points, so that they reach their consumers impeccable.
The distribution can be executed through activities carried out by the organization itself and through an intermediary. For this reason, we divide it into two main concepts:
It refers to the activities involved in the process of physical distribution of the product to the final consumer. These are some:
- inventory control;
- order processing, etc.
They are the paths that the product travels until it reaches the consumer. It is the complex of companies that exist for distribution to occur, including agentsthe retailers and the wholesalers.
There are different types of distribution channels, the difference between them is in the number of intermediaries between the producer and the end user.
Direct distribution occurs when the producer or manufacturer is solely responsible for delivering their product or service, without the involvement of intermediaries. Examples: factory outlets, service providers, such as dentists, hairdressers, etc.
The short channel has only one intermediary in its process: manufacturer – retailer – final consumer. Examples: automobile stores, hypermarkets, bookstores.
This channel is made up of at least four levels: manufacturer, wholesaler, retailer and consumers, although many more intermediaries may intervene (distributors, stockists, resellers, commercial agents, etc.).
This type of distribution is most common medium of most consumer products. Examples: supermarkets, traditional stores, food galleries.
Choice of distribution channel
You agree that it is not the same to sell dairy products and electronics, right? Well, there’s a lot to consider: transportation, storage, distribution intensity, consumers, and the list goes on.
Therefore, the projection of a distribution channel must consider some factors:
- Evaluation of the real market (composed of people or organizations that need a product or service, have the necessary money to cover it and are willing to spend it) and potential (public that does not consume the product or service, but who have or may have the need to consume it within an established time horizon);
- study of the characteristics, behaviors and needs of customers, as well as their quantity, their geographical dispersion and their frequency of purchase;
- determination of the properties of the product or service (permanence, dimensions, degrees of standardization, etc.);
- definition of the attributes of the intermediaries in terms of the type of transport, equipment and storage system used, information technology, among others;
- analysis of environmental characteristics related to local conditions, humidity and temperature;
- evaluation of the companies involved in financial strength, products, service levels, marketing, brand, etc.
Distribution channel strategies
Another important point when thinking about the market strategy is to consider what distribution modality will be carried out. The choice of the modality is conditioned to the type of product and the market that the company wants to target.
In this modality, the producer chooses an intermediary and authorizes the exclusive sale in a certain region. In this type of system, normally, the distributor agrees not to sell competing products.
It is widely used when the business requires the loyalty of the distributor and a high degree of control over their activity.
Apply the logic of “the more the better”. The manufacturer sells through as many intermediaries as possible. It is used when you want to generate high availability of the product in the greatest number of points of sale.
It occurs when the manufacturer sells through a selected group of middlemen. It is used when the business needs valuation.
Who are brand ambassadors and why can they help you sell more?
Discover how to execute a Field Marketing strategy
Network Marketing: how this brand strategy works
Point of sale location
The location of the point of sale is a decision of great importance for the business. If a company manages to choose its location well and reach the right audience, there is no doubt that it will be successful in its sales.
To choose the location, a company must consider factors such as the cost-benefit ratio.
Also, if it is a physical space, you should look for places with good visibility, easy access, adequate structure (attractive display cases, good lighting and product layout, etc.) among other aspects.
In the case of virtual and online establishments, analyzing which ones will be used (e-commerce, catalog, social networks) is also essential.
The place or distribution It is very important for the consumer to have access to the product offers. Nothing more dangerous for a brand than a consumer who is interested in your product but can’t find it. So now you see why this element is so essential.
We hope we have helped you understand the concept of place in marketing, although did you know that there are other fundamental pillars for a marketing strategy?
In Digital Marketing, for example, there are countless strategies that can help your business grow. Learn more about them in this ebook