The Marketing Mix: Place

Place is the fourth element of the marketing mix. It refers to how and where a product is made available to customers. The right distribution strategy ensures that products reach customers conveniently and efficiently.

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What Is Place?

Place (also called distribution) is the method by which a product gets from the producer to the consumer. It involves decisions about distribution channels, retail locations, online selling, and logistics.

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Distribution Channels

A distribution channel is the route a product takes from the manufacturer to the consumer. There are several common channels:

graph TD
    A[Manufacturer] --> B[Wholesaler]
    B --> C[Retailer]
    C --> D[Consumer]
    A --> E[Retailer]
    E --> D
    A --> F[Consumer - Direct]
    A --> G[Agent/Broker]
    G --> C

Channel	Description	Example
Manufacturer → Consumer	Direct selling; no intermediaries	Apple Store, farm shops, Dell computers
Manufacturer → Retailer → Consumer	The manufacturer sells to a retailer, who sells to the consumer	Nike sells to JD Sports, who sells to customers
Manufacturer → Wholesaler → Retailer → Consumer	The manufacturer sells to a wholesaler in bulk, who sells to retailers	A food manufacturer sells to Booker (wholesaler), who sells to corner shops
Manufacturer → Agent → Retailer → Consumer	An agent acts as intermediary, often in international markets	A clothing brand uses an agent to access overseas retailers

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Choosing a Distribution Channel

The choice of distribution channel depends on several factors:

Factor	Impact
Product type	Perishable goods need short, fast channels; luxury goods may sell direct
Target market	Mass market products need wide distribution; niche products may sell direct
Business size	Large businesses can negotiate directly with retailers; small businesses may need wholesalers
Cost	More intermediaries = higher costs (but also wider distribution)
Control	Direct selling gives maximum control over pricing and customer experience
Geography	International distribution may require agents or online channels

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E-commerce and Online Retailing

E-commerce (electronic commerce) is the buying and selling of goods and services over the internet. It has transformed the way businesses distribute their products.

Advantages of E-commerce

Advantage	Explanation
Global reach	Sell to customers anywhere in the world, 24/7
Lower costs	No need for expensive high street premises
Convenience for customers	Customers can shop from home at any time
Data collection	Online transactions generate valuable customer data
Personalisation	Websites can recommend products based on browsing and purchase history
Scalability	Easier to grow an online business than to open new physical stores

Disadvantages of E-commerce

Disadvantage	Explanation
Delivery costs and delays	Products must be shipped; customers may have to wait
Returns	High return rates, especially for clothing
No physical experience	Customers cannot touch, try, or test products before buying
Competition	Easy for new competitors to enter the market online
Security concerns	Risk of data breaches and online fraud
Technical issues	Website downtime, payment failures, and cybersecurity threats

Example: ASOS

ASOS is a purely online fashion retailer. It has no physical stores. By selling exclusively online, ASOS avoids the high costs of renting high street locations and can offer a vast range of products. However, ASOS faces challenges including high return rates (customers cannot try clothes on before buying) and intense competition from other online retailers.

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Bricks-and-Mortar vs Online vs Multi-Channel

Strategy	Description	Example
Bricks-and-mortar	Physical stores only	Primark (no online store for most products)
Online only	Selling exclusively through the internet	ASOS, Boohoo
Multi-channel	Selling through both physical stores and online	John Lewis, Next, Argos
Omni-channel	A seamless customer experience across all channels (online, in-store, mobile)	Tesco (app, website, stores, Click & Collect)

Many businesses are moving towards multi-channel or omni-channel strategies to reach the widest possible audience and provide the most convenient shopping experience.

Exam Tip: Questions about "place" often ask about the impact of e-commerce on traditional retailers. Always consider both advantages and disadvantages, and use real-world examples to support your answer.

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The Role of Location

For businesses with physical premises, location is a critical decision:

Factor	Consideration
Proximity to customers	Being close to the target market increases footfall and convenience
Accessibility	Easy access by car, public transport, or on foot
Costs	Rent and rates vary hugely; prime high street locations are expensive
Competition	Being near competitors can attract customers (e.g. restaurant districts) or create challenges
Labour supply	Availability of skilled workers in the area
Infrastructure	Good roads, broadband, and utilities are essential

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Summary

• Place is about how products get from the manufacturer to the consumer.
• Distribution channels include direct selling, manufacturer-retailer-consumer, and manufacturer-wholesaler-retailer-consumer.
• E-commerce has transformed distribution — offering global reach, lower costs, and convenience.
• Disadvantages of e-commerce include delivery costs, high returns, and security concerns.
• Businesses increasingly use multi-channel and omni-channel strategies.
• For physical premises, location decisions depend on proximity to customers, costs, competition, and accessibility.

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UK case study: Ocado — redefining UK grocery distribution

Ocado is one of the most innovative UK distribution stories of the last 25 years. Founded in 2000 by former Goldman Sachs bankers, Ocado began as a pure-play online grocery delivery service — delivering groceries to UK customers' homes without owning a single physical store. At a time when Tesco, Sainsbury's and Morrisons were building ever more superstores, Ocado bet that UK customers would eventually buy groceries online. That bet paid off.