C2 Place in the Marketing Mix
Place refers to the way in which a business gets their product from manufacture to their customers. The choices involve whether to use intermediaries or not and what type of intermediaries to use.
Note: students often confuse ‘place’ with the geographical location of a shop or office. Make sure you focus on use of intermediaries.
Direct to end users . This involves a business selling their own products. They may open up a shop or chain of shops to display their products and make transactions. Other options include setting up a website so customers can purchase directly and receive their products through the mail. The benefits of this method include that the producer keeps all of the profits and has control over how the products are displayed and sold. However, maintaining stores and managing customer services can be expensive.
A firm may decide to sell their products through a retailer. This means they make one bulk sale to the retailer and the retailer ‘breaks bulk’ and sells the goods in their store or chain of stores.
Wholesalers buy from producers in large bulk quantities and sell to retailers in smaller bulk quantities.
The benefits of using retailers and wholesalers is that a producer can make a large sale in one transaction and it removes any stress of setting up a shop or customer service. The drawbacks include making price reductions to the retailers and wholesalers which reduces profits and losing control over how the products are displayed and sold.
