The definition of PLACE (Distribution) in marketing sense means the availability of product being properly distributed in a convenient location at the right time.
“Whatever you need, we will have it ready for you right way,” or else the customers might take the business somewhere else. This is why it is so important to have the product available at the right time at the right ‘Place’ (Barcik and Jakubiec 2013).
Thus, place strategy, which is sometimes referred to as distribution strategy plays a fundamental role in the marketing mix of a product or a service. It outlines the placement of the products and services in order to gain market share and consumer purchases. The products and services may click the stores either physically or online or by any other means by which the companies can reach the consumers.
To determine the best possible distribution strategy, the company understands the need of the consumers and determines which avenue provides the ability to put the product or service in front of the potential buyer (Segetlija, Mosaics and Dujak n.d.).
One of the successful automobile companies that have effectively used its distribution channels is ‘Toyota.’ Toyota mainly relies on its dealership for the sales of its products. A Toyota dealer relies upon the parent organisation to outline the car designs according to the needs of the consumers. Thus, Toyota relies upon the dealer to pull in customers, influence them to purchase Toyota cars, and service cars after the deal has been made. The organisation additionally relies upon different dealers to give great sales and services that will maintain the reputation of Toyota and its dealer body. Indeed, the accomplishment of individual Toyota dealer relies upon how well the whole Toyota distribution channel contends with the channels of other automobile producers (Toyota 2015).
Does a firm like Toyota use just a single method for distribution or use a different channel structure to ensure that its products reach its market?
Toyota in addition to being an automobile company that manufactures affordable cars also has made its presence felt in the luxury car segment with the Lexus brand.
The distribution of these cars is placed in areas that are inhabited by the ‘rich’ and competes with other premium car segment players such as BMW, Audi and Mercedes-Benz. Toyota also does not use its brand name or logo just so that the premium image that Lexus brand has garnered is not minimised.
Lets look at how Toyota goes about its business in its hometown Japan. Toyota uses four sales channels namely Toyota, Toyopet, Corolla and Netz. Another sales channel, Lexus was introduced to the Japanese market in 2005 to increase its presence and competitiveness in the luxury car segment in Japan. The firm’s sales distribution network is the largest in Japan (Wikinvest 2009).
Looking at the worldwide automobile market, Toyota has managed to gain the reputation of being the world’s biggest automaker both as a brand and also in terms of the number of cars sold (Forbes 2015). As mentioned earlier, the main places for the distribution of Toyota’s products are Dealerships. These are the places where customers can access Toyota’s products. For an automobile industry player like Toyota, distribution channels are limited. The firm relies on either the dealerships or retailers. It is the dealerships that see majority of sales transactions be it cars, spare parts, accessories or servicing. How well Toyota manages this distribution channel in collaboration with marketing channels is the key to Toyota’s success.
Barcik, R. and Jakubiec, M. 2013, Marketing Logistics, 1st ed, accessed 12 May 2016, <http://www.slu.cz/opf/cz/informace/acta-academica-karviniensia/casopisy-aak/aak-rocnik-2013/docs-4-2013/Barcik_Jakubiec.pdf>
Forbes 2015, Forbes Welcome, accessed 14 May 2016, <http://www.forbes.com/sites/andreamurphy/2015/05/06/2015-global-2000-the-worlds-biggest-auto-companies/#780f07c46e48>
Segetlija, Z., Mesarić, J. and Dujak, D. n.d., IMPORTANCE OF DISTRIBUTION CHANNELS – MARKETING CHANNELS – FOR NATIONAL ECONOMY, 1st ed, accessed 12 May 2016, <https://bib.irb.hr/datoteka/529824.Segetlija_Dujak_Mesaric.pdf>
Toyota 2015, Toyota Sustainability Report 2015, accessed 14 May 2016, <http://www.toyota.com.au/toyota/sustainability/cms/download/2015/Toyota_Full_Report.pdf>
Wikinvest 2009, Distribution for Toyota_Motor (TM), accessed 14 May 2016, <http://www.wikinvest.com/stock/Toyota_Motor_(TM)/Distribution>
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