Place-3

Place involves shipping, handling, and storing products and determining when and where they will be available. Pricing affects place decisions in the following ways:

Choice of transportation channels. There are a variety of ways that companies can ship their products to their final destinations. Trucks, planes, trains, and ships are all used to transport products across town, across the country, and across the globe. The cost of each type of transportation varies. Companies will choose the method that fits within their budget. Again, remember that the cost of the transportation will be built into the price of the product. For example, trucking is less expensive than flying, so an item transported by truck may be less expensive than one transported by plane (think about the cost of goods in remote areas such as Hawaii). Marketers must also consider time when it comes to distribution channels—one channel may be cheaper but might take longer for products to get to their destinations. This factor will have an impact on pricing decisions.

Where the product is offered. A product’s price affects where it is sold. Goods and services with high prices will be carried by stores that sell higher priced items. If a product is priced inexpensively, it will sell at a different type of store. Take haircuts for example. A $100 haircut is a service you will most likely find at a fine salon or day spa. A $10 haircut is a service you will most likely find at a discount salon.