Place

Place is concerned with how goods and services reach customers. This includes how customers access products, and which methods of transport will be involved in moving them. How this is done will depend upon whether the product exists in a physical format or a digital one.

Physical Distribution channels

The different ways of moving goods from producers to customers are called channels of distribution. Common channels of distribution are:

• producers

• retailers

• e-tailers

Direct channels of distribution

A direct channel of distribution only involves the producer and the customer. The producer sells products directly to customers in a physical shop, using a website or through the post. For example, a farmer might sell produce directly to customers through a physical shop.

The advantage for a producer of selling directly is that they can control the distribution of their products and the prices that are charged. However, the disadvantage is that it can become increasingly difficult to sell directly to a large number of customers.

Indirect channels of distribution

An indirect channel of distribution introduces an intermediary into the distribution process. These intermediaries:

• make it easier for producers to distribute their products

• make it more convenient for consumers to buy those products

For example, retailers and e-tailers are both types of intermediary. They buy products in bulk from producers and then sell them in smaller quantities to consumers.

Digital Distribution channels

An increasing number of goods and services are sold in digital format, meaning that there is no physical item to move. Examples include e-books, music, video games and software which can be downloaded or streamed. In addition, services such as insurance and banking products can be purchased and accessed online.

Digital products can be sold through both direct and indirect channels of distribution. For example, it is possible to buy software products through a retailer or e-tailer who provide a code that can be used to download the software, or the same product may be available directly from the website of the business that creates it.

Distributing products digitally means that they are available for customers to buy at any time and access the products immediately. However, it is not suitable for all products, and can lead to problems of illegal copying and sharing of items that have been downloaded.