The Marketing Mix: Place (Edexcel IGCSE Business)

The Importance of Place

• Place in the marketing mix refers to where customers purchase a businesses products and the distribution channels used to move the product from producer to consumer
  
  

• In a competitive environment, location and distribution decisions can give a company a competitive advantage

  • Businesses could locate themselves in areas with high foot traffic to achieve high sales volumes

  • They may use innovative online channels to reach customers who prefer to shop online
    

• Changing consumer needs can impact the way businesses distribute their products

  • E-commerce makes it easier for consumers to shop online and have products delivered to their doorstep

    • Many businesses have therefore invested in their online presence, offering convenience and fast delivery to meet customer needs

Types of Distribution Channels

• Distribution channels refer to the various intermediaries through which goods/services move from the business to the end customer 
   

Diagram: Distribution Channels

The two different types of distribution channels businesses can use to move products to the end customer 
  

Three-stage distribution channel

• The three-stage distribution channel moves the product directly from the producer to the retailer, who then sells it to the final customer

• This channel is often used for products with high profit margins, where the manufacturer can afford to sell directly to the retailer and still make a profit

  • Eg Toshiba produces laptops and sells them directly to retailers like Currys, who then sells them to the end customer 

Two-stage distribution channel

• The two-stage distribution channel moves the product directly from the manufacturer to the end customer

• This channel is commonly used for products that are sold online or through direct sales channels and is referred to as e-tailing

  • E.g. RyanAir sells its service (passenger tickets) directly to the end customer on their website