MKB1700 · Fundamentals Of Marketing
Place & Distribution
Place answers a deceptively simple question: how does the product get from where it is made to where the buyer can buy it — at the right time and place? A marketing (distribution) channel is the chain between producer and consumer, and Place is the P that ties STP, Product and Price together: it must be consistent with the chosen position. The chapter covers channel levels (how many intermediaries sit between producer and buyer) and channel intensity — intensive, selective or exclusive coverage — where the right choice flows directly from the product's classification (the Product → Place link). It then covers how channels are organised: vertical, horizontal and hybrid systems, plus franchising, retailing, wholesaling and logistics / supply-chain management. Finally it manages the channel across risk, power and conflict, using the real Arnott's vs Coles supermarket-supplier standoff to show what happens when members fight over who controls the shelf.
What this chapter covers
- 01Marketing channels & channel levels
- 028.2 Channel intensity (intensive / selective / exclusive)
- 03The Product → Place link
- 048.4 Channel structures (vertical / horizontal / hybrid)
- 05Franchising, retailing & wholesaling
- 06Logistics & the supply chain
- 078.7 Channel power & conflict — Arnott's vs Coles
Worked example: choosing channel intensity from the product class
- +1(a) The three settings: intensive (every available outlet), selective (a chosen subset of outlets) and exclusive (one or very few outlets per area).
- +1(b) Soft drink: a convenience product buyers will not search for → intensive distribution (every shop and vending machine).
- +1(b) Luxury watch: a specialty product buyers will travel and wait for → exclusive distribution, which also protects the premium image.
- +1(c) Cross-P link: this is the Product → Place link — the product's class drives the distribution intensity.
Key terms
- Marketing channel
- The chain of intermediaries between producer and consumer that gets the product to where the buyer can buy it, at the right time and place. Channel length is the number of intermediary levels.
- Channel intensity
- How many outlets carry the product — intensive (every available outlet, for convenience goods), selective (a chosen subset, for shopping goods) or exclusive (one or very few, for specialty goods). The choice flows from the product's classification.
- Vertical marketing system
- A channel in which producer, wholesaler and retailer act as one unified, coordinated system — for control, efficiency and less in-channel conflict — rather than as independent firms each pursuing their own interests.
- Channel power
- The ability of one channel member to influence the behaviour of another. When members depend on each other but their interests diverge, whoever holds the power can dictate terms — the heart of the Arnott's vs Coles standoff over shelf control.
- Logistics
- The management of how goods physically flow through the channel — storage, inventory, transport and order processing — so the right product reaches the right place at the right time and cost.
Place & Distribution FAQ
What is the difference between intensive, selective and exclusive distribution?
They are the three settings of channel intensity (how many outlets carry the product). Intensive means every available outlet (for convenience goods buyers will not search for, like soft drinks). Selective means a chosen subset of outlets (for shopping goods compared on price and quality). Exclusive means one or very few outlets per area (for specialty goods buyers will travel for, which also protects a premium image).
How does Place connect to Product?
Through the Product → Place link: the product's classification drives the distribution intensity. Convenience products take intensive distribution, shopping products take selective, and specialty products take exclusive. It is one of the cleanest cross-P links on a concept map because the reasoning is direct — how buyers shop for the class decides how widely you distribute it.
What is a vertical marketing system?
A channel where the producer, wholesaler and retailer act as one unified, coordinated system rather than as independent firms. The point is coordination, control and efficiency, with less conflict inside the channel. It contrasts with horizontal systems (two firms at the same level cooperating) and hybrid / multi-channel systems.
What does the Arnott's vs Coles case illustrate?
Channel power and conflict. Channels must be managed across risk, power and conflict because members depend on each other but their interests diverge. The real supermarket-supplier standoff shows what happens when a powerful retailer and a major supplier fight over who controls the shelf — whoever holds the power can dictate terms.
Exam move
Make the Product → Place link your anchor: state a product's class and read the channel intensity straight off it (convenience → intensive, shopping → selective, specialty → exclusive), justifying it from how buyers shop. Learn the three channel structures (vertical, horizontal, hybrid) and what each is for, and keep the Arnott's vs Coles case ready to illustrate channel power and conflict. On your concept map, draw Place as the P that ties STP, Product and Price together — the channel must be consistent with the chosen position — and link intermediaries back to the micro environment from Chapter 2.
