🏬 Place — the third P
Big Idea: Place is about how the product gets from the business to the customer. It covers distribution channels — the route products take to reach buyers. 🚚
What is a distribution channel?
A distribution channel is the path a product follows from the producer to the final customer.
- Direct: Producer → Customer (e.g. online sales, farm shops)
- One intermediary: Producer → Retailer → Customer
- Two intermediaries: Producer → Wholesaler → Retailer → Customer
- Agent: Producer → Agent → Retailer → Customer
🔑 Factors affecting place decisions
- Nature of the product — perishable goods need short channels; digital products can go direct
- Target market — where do your customers shop? Online? High street?
- Cost — more intermediaries = less profit per sale for the producer
- Control — direct channels give more control over branding and customer experience
- Coverage — using retailers and wholesalers reaches more customers
E-commerce and digital distribution
- Online sales are growing rapidly — many businesses sell directly via websites
- Cuts out intermediaries (fewer middlemen = higher profit margins)
- Reaches global customers 24/7
- But: high competition online, delivery logistics, and returns can be challenging
If an exam question asks about the 'place' element of the marketing mix, discuss distribution channels AND the shift to e-commerce.
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⚖️ Direct vs indirect distribution
- Direct: ✅ Higher profit margins, ✅ Full control, ❌ Limited reach, ❌ Must handle logistics
- Indirect: ✅ Wider reach, ✅ Logistics handled by others, ❌ Lower margins, ❌ Less control
Direct = you sell it yourself (more control, more profit per sale). Indirect = someone else helps you sell (wider reach, less profit per sale). 🤝