The element of marketing mix that creates possession, place and time utility is Place or Physical Distribution mix. It includes activities that make firm’s products available to the target customers. Important decision areas in this respect include selection of dealers or intermediaries to reach the customers, providing support to the intermediaries.
Important functions performed by physical distribution mix are:
1. Sorting: Middlemen procure supplies of goods from a variety of sources, which is often not of the same quality, nature, and size. So he sorts the product into homogenous groups on the basis of the size or quality.
2. Accumulation: This function involves accumulation of goods into larger homogeneous stocks, which help in maintaining continuous flow of supply.
3. Allocation: Allocation involves breaking homogenous stock into smaller, marketable lots.
4. Assorting: Middlemen build assortment of products for resale. There is usually a difference between the product lines made by manufacturers and the assortment or combinations desired by the users. Middlemen procure variety of goods from different sources and deliver them in combinations desired by customers.
5. Product Promotion: Mostly advertising and other sales promotion activities are organised by manufacturers. Middlemen also participate in certain activities such as demonstrations, special displays, contests, etc., to increase the sale of products.