Managerial Marketing Space Vs Place

Abstract

Consumers today have many ways or channels to acquire goods and services. With the increased usage of the internet and the expanding global economy retailers and business have to adapt their marketing strategies to compete. The place (physical) presence is slowly deteriorating each year and shifting to the space (digital) market. Organizations that have figured out ways to capitalize on this shift and at the same time keeping the consumer buying experience transparent between the channels are winning the battle. This paper will discuss the physical and digital markets and the segments that engage both channels.

Space versus Place

Physical brick and mortar retail locations still generate the majority of retail revenue in America but the digital stores are increasing each year. With so many brick and mortar stores now online, shoppers can choose between the convenience of ordering merchandise through the internet or purchasing it in a physical store. Some people choose online ordering because they like shopping during the time the physical store is closed, or they want to avoid crowds. On the other hand people prefer shopping in stores in order to try on the merchandise and get a feel for the item. Many people shop online because they think it's cheaper. Sometimes however this is not the case and a consumer may actually be paying more for the convenience of shopping on-line.

Most retailers today are a hybrid of physical and digital locations. There are a few large retailers that only operate in the digital space for example Zappos.com and Amazon.com. Outside of the few large retailers the majority of digital only retailers are small privately owned retailers that typically handle specialty items. These days a consumer can purchase pretty much anything in the digital space and have the item delivered right to their doorstep. Many items like music and videos are seeing a rapid increase in the digital space and correlating declines in the physical space. Items like clothes and shoes are somewhat neutral still and are primarily dominated by the large retailers that occupy both spaces. Large items like furniture, home appliances and televisions are still dominated by the physical retail locations (Williams, S. J. 2001, July 20). But as logistics gets more cost effective and there is a way for the consumer to be able to replicate the in store touch experience that to will start to change.

A traditional brick and mortar business can be very costly. The start-up costs and overhead costs include the lease, inventory, taxes, utility bills and the labor. Location is very important for a brick and mortar business-it can bring about the establishment's success or demise. Some of the pros of the brick and mortar locations are there is a sense of trust and reliability that comes with having your own brick and mortar store. Many customers still feel safer buying from a store. There are shady websites everywhere, so having your own physical store adds a touch of professionalism. Walk-ins are another benefit that comes with having a physical location that caters to the old-fashioned way of buying products. In high traffic locations, you can have plenty of walk-ins in a day. Many customers still want to see, feel, and touch the product physically before purchasing. Some cons for physical locations are; business is only open during business hours and there are huge startup capital and overhead costs that come with having your own brick and mortar store

A virtual online business is arguably easier to start and maintain but the target market can be difficult to isolate. The digital space can consist of business-to-business (Grainger.com), to business-to-consumer (Amazon.com or LandsEnd.com), to consumer-to-consumer (ebay.com), to consumer-to-business (Priceline.com) models (Mullins, J.W. et al, 2009). The benefit of a digital location is you are no longer limited to a specific area or location. The market segment can comprise of many different demographics due to distance not being a limitation. Utilizing online tools, social networking tools, forums, etc can help draw the correct segment to the location. One of the benefits of a digital retail space is there is smaller amount of capital dollars needed for startup and daily operating expenses which allows for larger margins than the brick and mortar locations. Marketing and advertising cost are usually lower and in some cases advertising is even free. Using forums, chat rooms and social