Managing Place, Your Distribution Channel

John Lawn

After the Product, the Marketing “P” most often discussed next is Price, but I like to put that off until the end. Food is so easily commoditized in the customer's mind that I prefer to focus instead on the parts of the marketing mix that have to do with adding value and the perception of value.

That takes us to “Place,” the P in the marketing mix that is most often misunderstood. In traditional theory, it describes the marketing channels a manufacturer employs to sell or deliver its products to end users. In foodservice, those channels involve the use of distributors to stock and deliver product locally; and brokers and manufacturers' agents, who act as the manufacturers' regional sales representatives.

Of more significance to FM readers' marketing plans are the ways their own departments deliver products and services to their customers. In fact, almost all readers of this magazine are large-volume foodservice operators. As such, they operate much like small manufacturers, sourcing ingredients, assembling them into meals, and distributing those meals or meal components to their customers.

One way to think of Place is to consider it as the point at which your customers and your products and services “touch.” That interfacing occurs over and over again in many parts of your operation: when a customer places an order; when he or she is served a meal; makes an impulse buying decision at a grab-and-go display cooler; and even at a vending machine, which acts as a delivery channel when manual foodservice is not a practical option.

Another way to think of Place is in terms of your own product delivery logistics: the flow of product from your kitchen to your serving line; or convenience retailing options, like vending or c-stores, that provide alternate points of service.

If you have cook-chill production, consider the flow of product into storage and then out to point of sale (or, if you also produce food for satellite operations, to those points of service).

Customers will often perceive Place as convenience. As far as possible, your goal should be for them to perceive foodservice as available wherever and whenever it is wanted.

In the same way, if you mass produce sandwiches and other items that are sold in multiple locations, Place involves your systems for delivering, stocking and rotating such items. Finally, it includes other delivery services you may provide for such products and services as pizza, catering, or takeout.

Finally, Place also includes the systems you have in place that allow customers to pay for their meals. Cashier lines, P.O.S. systems, debit card accounts and so on are as much a part of your product delivery service as they are a part of your pricing.

Managing Place is much like managing your own in-house distribution channel. Customers do not perceive it as distribution, however. More likely, they will perceive it as convenience. If you are satisfying their wants and needs, they will see you as a provider who makes foodservice available whenever and wherever it is wanted.

Another measure is more subtle, appropriateness. For a special occasion, that may mean a fine dining service option, with an ambience to match; for a time of celebration, it may mean a casual, party atmosphere, again with an ambience to match. Service level can also play an important role; in some cases, self-service options might not only be appropriate, but preferred by customers. At other times, a perception of full service may be critical, offered as meal customization options on a serving line or as consultative services such as those offered for catered event planning.

The point is, how you deliver your product to your customers can be just as important—even more important—than the product itself in terms of how it is perceived.

Even if you provide the right products and services at the right times and places, your marketing mix may fail if customers are not aware of them or do not perceive them in the way you want them to. Adequately informing your customers about your services and finding ways to manage their perceptions is the role of Promotion, the P we will consider next month.