Learn how to prepare a Marketing Plan for a company (with example)

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3.3 Place (Distribution)

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Your product manufactured at the plant needs to be delivered in the hands of the customers. For this, it needs a distribution channels.

There are two types of distribution channels. One is traditional distribution channels where the product reaches to the distributors through C&F (Carrying and Forwarding) Agents. These distributors sell the products to the local retailers, who then sell it to the customers.

All these middlemen take some profits which is added as the cost to the product. So longer will be the distribution channel, costlier will be the product.

Another distribution channel has emerged with the advent of the eCommerce companies. All middlemen has been eliminated in this mode of selling.

The eCommerce companies have become one touch point between the manufacturers and the end consumers. These companies directly purchase from the manufacturers and sell the product to the customers.

There are no middlemen in this concept, which has significantly reduced the product cost. In many countries, customers have started to make online purchases solely due to this reason. Another major reason is the offers they get on the online channels.

The ecommerce companies get the same product at the lower price from the manufacturers that gives them enough room for various forms of promotions for the customers. The offline sellers cannot afford to give such offers.