Marketing Mix: Place

Business: 11 class
 Place – Distribution Channels

• Place - Where a product is sold will affect how well

it will sell.
• Distribution Channel - the method a business will
use to send a product from the factory to
customer/retailer.
 Manufacturer sells products directly to consumer
Producer Consumer

Advantages Disadvantages

• Very simple • Impractical because consumers

• Suitable for products that are don’t usually live near factories
sold straight out of factory • Not good for products that
• There is a lower price for can’t be sent easily by post (may
consumer be expensive to ship it)
 Producer sells to retailers which sell to consumers:
Producer Retailer Consumer

Advantages Disadvantages

• Manufacturer sells lots of • There is no direct contact

stock to retailer with customers which
• Cheaper transportation makes it hard to create
costs because all products customer loyalty
go to one place
 Producers sell to wholesalers
Producer Wholesaler Retailer Consumer

Advantages Disadvantages

• Reduces storage costs for small • More expensive to buy from

retailers because small quantities are
sold
• Small quantities so transport costs
are low
• Wholesaler can give feedback on
what sells well to producer
wholesaler than from manufacturer
• Wholesaler might not have all the
products a retailer wants
• Takes longer to get to consumer
 Producer hires an agent
Producer Agent Wholesaler Retailer Consumer

Advantages Disadvantages

• Agents know the most • Manufacturer loses lots of

profitable places & prices control on the way the
to sell in other markets product is sold to
that manufacturers may customers
not know