This is the 2nd part of a 4 part series I’m covering on Applying Marketing 4Ps in Retail environment. If you’ve missed out the 1st part of Applying Marketing 4Ps in Retail fret not, you can always click back on this link to review. You can always cover this article first before going back to Part 1 – Product of Applying Marketing 4Ps in Retail.
Place when Applying Marketing 4Ps in Retail simply means deciding on how you can get your product from your factory to the stores and when they arrive in the stores, where should they be placed. So here are the few points in which you need to consider
What sort of transportation are you engaging
Is your product sensitive to temperature change? You may need to consider the cost of hiring a chiller truck? If its not, you would just need a normal lorry. Will you be engaging your own transportation or a 3rd party? This would be closely related to your consideration of market coverage
What are the channels that you are targetting
In Malaysia, we split the FMCG market into GT and MT. GT simply stands for General Trade and MT as Modern Trade. Depending on companies, some define Modern Trade channel as outlets with head offices and this includes international and local key accounts (also known as IKA International Key Accounts and LKA Local Key Accounts). Examples of these IKA retail chains are such as Giant, Aeon, Aeon Big, Family Mart and LKA are such as Econsave and 99 Speeedmart. The General Trade outlets would consist of wholesalers, distributors, local mom and pop stores.
Your depth of market coverage
Identifying what channels that you would like to go into would also give you an idea of the depth of your market coverage. Going into international key accounts would seem like the right idea as they have outlets in almost every region but you would need a considerable amount of start up fund to get listed onto their shelf. So what about going into the GT market instead? Although you may not need a huge fund to start with in comparison but to cover every region you would need more resources as well
How much inventory do you need to keep
A big question for every business. Inventory as with all the other points above and points that I will cover below, is closely related to how much market coverage and the type of channels you need to go for. Too little, you may lose the sales opportunity, too much causes high risk in financial term and also jeopardizes the freshness of your product especially if you are dealing with food products.
What are the assortments that each channel should carry
In wishful thinking, I’m sure you would want every store to carry all of the assortment that you are offering. However, targeting and considering different assortments for different channels would make sense especially if you are just starting out. This is to minimize risk and at the same time offering the best to different channels. A simple example would be that usually GT channel spending power is lesser than of the MT channel hence you may only want to introduce a smaller volume or pack size to GT and keeping the bigger pack size for the MT.
Where should your product be placed
You need to ensure that your product is placed at the retail outlet at the right place. Often if you are successfully listed into a retail outlet, you may find yourself placed on the bottom most or upper most shelf. To be in the eye level, sales would need to be proven to convince the buyer your product is worth that location. Apart from that, you need to ensure your product is placed at the right category. An example is if you are selling car air freshener, would you want to be placed at the area where they sell other air freshener products or at the place where they are selling car accessories? In IKA, both of these categories are handled by a different buyer hence you need to identify which buyer you would like to meet. In the local supermarkets, they may be handled by the same buyer hence a little convincing or selling is needed to ensure the buyer is placing your product as per your suggestion.