How products get from the producer to the customer — and why the channel matters
Place refers to how and where a product is made available for customers to buy. It involves decisions about distribution channels — the route a product takes from the producer to the end consumer. It is not just about physical location, but also includes online sales.
Getting place right is critical: the best product at the right price with great promotion will still fail if customers cannot easily find and buy it.
| Channel | Description | Example |
|---|---|---|
| Direct | Producer sells direct to consumer — no intermediary | Dell computers, farm shops, Etsy sellers |
| Retailer | Producer → Retailer → Consumer | Cadbury → Tesco → Consumer |
| Wholesaler | Producer → Wholesaler → Retailer → Consumer | Small manufacturers selling to corner shops via Cash & Carry |
| Online / E-commerce | Producer sells via own website or marketplace (Amazon, eBay) | ASOS, Amazon third-party sellers |
The producer sells directly to the customer with no intermediary. This can be through a factory outlet, company website, market stall, or door-to-door sales.
Advantages: Higher profit margin (no middleman cut); direct relationship with customer; control over price and experience
Disadvantages: Requires business to manage all logistics and customer service; limited reach compared to using retailers
The most common channel for consumer goods. Retailers buy products in bulk from producers and sell them to consumers, taking a margin.
Advantages: Wide reach through existing retail networks; retailer handles customer service and payments
Disadvantages: Retailer takes a margin, reducing producer profit; less control over how product is displayed/priced
Wholesalers buy large quantities from producers and break them into smaller lots for retailers. Useful for small producers who cannot supply many retailers directly.
Example: A small confectionery manufacturer sells pallets of products to a cash-and-carry wholesaler (like Bestway), which then supplies thousands of independent corner shops.
E-commerce means buying and selling online. It has transformed distribution — many businesses now sell directly to consumers via their own website or through online marketplaces like Amazon, eBay, and Etsy.
Example: ASOS operates entirely online — no physical stores. This keeps overhead costs low and allows global delivery, but means it must excel at delivery, returns and online customer experience.
Many businesses use multiple channels simultaneously — selling in physical stores AND online. This is called a multi-channel approach and maximises availability for customers.
Example: John Lewis sells in large physical stores, through its website (johnlewis.com), and via click-and-collect. Customers can choose whichever channel suits them, improving the customer experience.
Omni-channel goes further — it integrates all channels seamlessly so customers can move between them (e.g. browse online, try in-store, buy online, collect in-store).
| Factor | Influence |
|---|---|
| Product type | Perishable goods need fast, direct channels; luxury goods suit exclusive retailers |
| Target market | Older consumers may prefer physical stores; younger shoppers prefer online |
| Business size | Small producers may need wholesalers; large brands can supply retailers directly |
| Profit margin | Direct selling preserves margin; using intermediaries reduces it |
| Control | Direct channels give more control over price, display and customer experience |
| Geography | Global reach requires e-commerce; local businesses may only need one physical location |
Luxury brands (e.g. Rolex, Chanel) use selective distribution — only selling through approved, high-end retailers to maintain exclusivity and brand image.
The internet has dramatically changed distribution:
Click a term then click its matching definition.
Direct = higher margin but limited reach. Via retailers = wide reach but lower margin. Via wholesaler = best for small producers supplying many retailers. Always pick the one that fits the business context.
Don't just say "e-commerce is good." Acknowledge the challenges too: delivery costs, returns, cybersecurity, no physical inspection. This shows the examiner you can evaluate, not just describe.
Place must be consistent with the rest of the marketing mix. A premium product (high price, quality branding) should not be distributed through budget discount stores — it would damage the brand image.
Many students write only about physical shop location. Remember: place includes online channels, click-and-collect, marketplaces, and the whole distribution chain.
Q: "Explain one advantage to a business of selling directly to consumers online rather than through retailers." (3 marks)
"Selling directly online removes the retailer intermediary (1), which means the business keeps the full selling price rather than sharing a margin with a retailer (1), which could result in significantly higher profit per unit sold and more cash available to reinvest in the business. (1)"
✅ Advantage stated (1) ✅ Developed with connective (1) ✅ Business benefit linked (1) = Full 3 marks!