Place
Place and distribution
Place is the element of the marketing mix that deals with distribution. Distribution is the process of making a product or service available from the producer to the consumer. A business can make a great product at a fair price, but if customers cannot easily get hold of it, few sales will follow.
A distribution channel is the route a product takes from the producer to the consumer. Some businesses sell straight to the customer, while others pass goods through another business first.
Two common routes
| Channel | What happens | Effect on the producer |
|---|---|---|
| Producer to consumer (direct) | The business sells through its own shop, market stall or website | Keeps the whole selling price, but pays all the selling costs and must attract every customer itself |
| Producer to retailer to consumer | A retailer — a shop or an e-tailer — sells on to the final customer | Reaches the retailer's existing customers, but the retailer takes a share of the price |
Choosing a channel changes costs, how many customers can be reached and how much control the producer has over price and display, so it feeds straight into sales and profit.
Place is more than a location
Place covers both the selling environment — a physical shop, a market stall, a website or a mix of these — and the route the product takes to the customer. It is not simply the address of a business; a firm trading only from a lock-up unit can still sell nationwide online.
For example, a small business in Leicester that makes reusable water bottles sells at music festivals and through its own website, and also supplies a chain of outdoor activity shops. Each route reaches a different set of buyers, and the shops keep a share of every bottle they sell.
Practise this
Edexcel GCSE Business · 2.2.4 Place