Importance of the Place Concept in Marketing
One of the 4Ps of the marketing model is Place, which refers to the characteristics of marketing channels and aims to increase product availability among the target audience. There are multiple reasons for the fundamental importance of Place in product promotion and positioning, including that it increases customer accessibility, drives sales growth by creating a more effective competitive advantage, and generates reputational wins. In other words, the role of Place in developing product strategies cannot be overemphasized. This paper presents a critical review of two research articles focused on Place as an attribute of the 4Ps marketing model.
Zhang and Hezarkhani’s Study
Research Topic and Methodology
Primarily, the study of marketing channels and how to increase the availability of a product or service is a frequent topic among authors in the academic community. One such paper was selected from Zhang and Hezarkhani (2021), who investigated the challenges and barriers to selecting the optimal balance across sales channels in dual-channel supply chains. Strictly speaking, a dual-channel supply chain is a supply chain management concept in which, as the name implies, there are two main supply channels for a given product or service, and, importantly, these channels can be either similar or completely different in nature. The authors of the paper turn to a two-player Nash game mathematical model — two major industry competitors — in which each participant can choose their own pricing and marketing investment for the product or service. In this model, as the authors note, the goal of each competitor is to create conditions that maximize their profits, which strengthens the study by tying it to the real-world profit-maximization goals of any business.
Findings
After creating and testing such a model, Zhang and Hezarkhani (2021) came to several intriguing conclusions. First, it was shown that channel selection in such supply chains is an integral task that is influenced by many factors: retail and wholesale prices, existing return policies, market reach, barriers to entry, and the manufacturer’s investment in advertising campaigns and marketing. Second, it has been shown that manufacturers can multiply profits by finding an optimal balance between pricing and marketing. Third, and this seems to be the most obvious conclusion, the producer’s profit depends not only on its own decisions but also on those of the competitor. Thus, three correlations were found: an increase in retail price, a decrease in wholesale price, and an increase in marketing investment led to higher producer profits.
Another finding of this study is that a manufacturer can choose between two channel strategies — retail or direct — depending on existing costs. On the one hand, it has been shown that the numerical prevalence of costs leads the manufacturer to choose the retail channel as the most profitable. On the contrary, if the costs of the direct channel are lower, it is preferable to choose it as a sales strategy. However, when the calculated costs are comparable across the two channels, the dual channel strategy is selected as a better, more balanced approach.
Based on the Nash model, Zhang and Hezarkhani (2021) also concluded that industry competitors can achieve the greatest joint benefit for the retailer. It was shown that when both market participants, two competitors, invest in retail channels, this is the most favorable condition for the retailer, but it also increases competition between manufacturers. The dual-channel system, in this case, was described as softer because it helped to reduce the adverse effects of pressurized competition while maintaining a presence in both retail channels.
Biblical Perspective
The findings of the study described above are confirmed in sacred texts. For example, one of the related wisdoms may be Proverbs 4:7, which states, “The beginning of wisdom is this: Get wisdom. Though it costs all you have, get understanding” (New International Version, 2020a). This thought indicates the need to build business wisdom and the ability to balance various aspects of life and make informed decisions. In other words, making channel-selection decisions for a manufacturer should not be based on rational or spontaneous considerations, but solely on facts and data that characterize the market.
Another biblical idea that also makes sense within the studied research is Proverbs 24:27, which states, “put your outdoor work in order and get your fields ready; after that, build your house”(New International Version, 2020b). According to this wisdom, a manufacturer of a product or service should organize its business and plan strategically to enhance supply chain management and channel selection.
Farida and Setiawan’s Study
Research Topic and Methodology
The second study reviewed in the context of marketing channel strategies is Farida and Setiawan (2022). The focus of this paper is to investigate the role of the link between business and innovation to create competitive advantage for firms. The authors focus on the importance of effective performance management when innovating to increase competitiveness in an industry market.
Findings
Using a data-driven approach based on a study of 150 SMEs, the authors conclude that there is a correlation between business strategies and companies’ competitive advantage: increased investment in the former positively influences the development of the latter. It was also shown that the more influential the implemented strategies are, the more tangible the effects on the formation and growth of competitive advantage are. In the relationship found, it was shown that the drive to innovate mediates the relationship between the variables, or, to put it simply, the more and more effectively the producer invests in innovation, the more positive effects are observed for the company.
Implications
With respect to Place in the 4P model, the findings yield several significant direct and indirect results. First, the successful implementation of innovation in distribution strategies can lead to higher customer satisfaction, which, in turn, will drive brand loyalty growth. Second, increased investment in developing manufacturer innovation can expand access to the product through new distribution channels or qualitative improvements to existing ones. Third, better management of performance and innovation helps firms to develop and implement more effective product distribution strategies.
Biblical Perspective
In relation to the named outcomes, it is appropriate to cite biblical wisdom that emphasizes the connection between serving and ensuring that business goals are met. Luke 14:28 asks, “Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it”(New International Version, 2020c). This wisdom underscores the importance of planning and analysis, which, in the context of the study, points to the need for careful calculations to develop effective business strategies and manage innovation.
References
Farida, I., & Setiawan, D. (2022). Business strategies and competitive advantage: The role of performance and innovation. Journal of Open Innovation: Technology, Market, and Complexity, 8(3), 1-16.
New International Version. (2020a). Bible Gateway.
New International Version. (2020b). Bible Gateway.
New International Version. (2020c). Bible Gateway.
Zhang, Y., & Hezarkhani, B. (2021). Competition in dual-channel supply chains: The manufacturers’ channel selection. European Journal of Operational Research, 291(1), 244-262.