Place (Edexcel GCSE Business)

• Place in the marketing mix refers to where customers purchase the businesses products/services
• Distribution channels refer to the various intermediaries through which goods/services move from the business to the end customer 
   

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 to 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

• Changes in distribution have been impacted by social trends such as the growth of e-commerce and the shift from product-based businesses to service-based businesses
• By understanding these trends, businesses can adjust their distribution strategies to better meet the needs of their customers and stay competitive in the marketplace
   

 The Growth of E-commerce

Explanation

Example

Online distribution has become increasingly popular due to the convenience and accessibility it offers to consumers   Many businesses now use drop-shipping, which allows them to sell products without holding stock Once the business has sold the products, they are shipped directly from the producer to the customer This reduces the cost and complexity of distribution, making it easier for businesses to sell online

Amazon is known as a third-party logistics provider (3PLs)   They provide businesses with the infrastructure and online marketplace which allows them to reach a wider audience and increase sales without having to invest in their own distribution infrastructure   Many business now generate the bulk of their sales selling on Amazon