Business – 3.3 The marketing mix – Place (distribution) | e-Consult
3.3 The marketing mix – Place (distribution) (1 questions)
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Own flagship store
- Cost: High fixed costs reduce profit margins, but can be offset by premium pricing.
- Control: Very high – the retailer dictates store layout, staff training, pricing, and brand experience.
- Market coverage: Limited to a single high‑traffic area; does not reach customers outside the city centre.
Online shop
- Cost: Medium – investment in e‑commerce platform and logistics, but no physical retail rent.
- Control: High – the retailer manages product presentation, pricing, and customer data.
- Market coverage: Wide – can serve national and international customers 24/7.
Third‑party department stores
- Cost: Low – no need for own premises; costs are usually commission or slot fees.
- Control: Low – retailer must conform to the department store’s merchandising standards and pricing policies.
- Market coverage: Broad – leverages the retailer’s existing network of locations.
Recommendation
The retailer should maintain the flagship store to preserve brand prestige and provide a premium experience, expand the online shop to capture the growing digital market, and continue using third‑party department stores to achieve extensive geographic reach while keeping costs low. This mixed‑channel approach balances cost, control, and coverage effectively.