Blog 8: How customers get a product

When customers need a product they go to the store and find it on the shelf. Products are readily available to customers when they need them and where they need them. Having a product when you want it is called time utility and having a product available where you need it is called place utility. Form utility involves enhancing a product to make it more appealing to consumers and possession utility includes the efforts by intermediaries to help buyers get possession of the product. Together these four types of utility are vital for marketers to make products available to customers. If products aren’t available to customers, then they can’t purchase them. This would greatly impact a company’s sales in a negative way. As customers, we may not consider how these products get to the shelves our favorite stores and how they are always readily available to us. But from a marketing standpoint, there is a lot of consideration and steps that get products where they need to be.

A marketing channel consists of individuals and firms involved in the process of making a product available for use by consumers or industries. Marketers have to make a choice on what kind of marketing channel they are going to use to best implement their marketing strategies.  There are many different types of distribution and techniques that marketers can utilize to make their products available. Marketers consider how to achieve the best coverage of their target market through density, which is the number of stores in an area and the type of intermediaries that are going to be used to distribute. The three degrees of distribution density that marketers can adopt are inclusive, extensive, and selective.

Inclusive distribution is when companies sell their products in as many outlets as possible. Companies that utilize this technique are ones that sell convenience products. Common, everyday products can be found at a variety of locations. An example of such a company is Coke, which sells products in many different outlets. You can find a bottle of Coke at convenience stores, grocery stores, vending machines, restaurants, and many more places. It is always readily available to customers and seldom is there a time when you can’t find it at a convenient location.

Extensive distribution is the opposite of inclusive distribution. This is when only one retailer in a specific geographic area carries the firm’s products. This usually includes specialty products that are only available at specific, usually high-end stores. Products like this include expensive handbags and exclusive car brands.

Selective distribution is when firms choose a few retailers to carry their products. Products of this type include shopping products such as iPods, televisions, and other technology. You can find these products in most electronic or superstores, which sell a variety of products. Another shopping product sold under selective distribution are shoes, which can be found at shoe stores and department stores.

References:

http://www.dreamstime.com/illustration/distribution.html
http://www.turbosquid.com/3d-models/coca-cola-vending-machine-3d-model/551208