4.5 Marketing PLACE

Question 1

Define PLace

Answer 1

• how a product is delivered from the producer to the final consumer
• Includes distribution channels used, physical location, & logistics
• ensures product is accessible to the target market at the right place + time in a cost-effective way

Question 2

Define distribution channels

Answer 2

• chain of intermediaries a product passes through from the producer to the final consumer
• can include agents, wholesalers, and retailers
• shorter channel gives the producer more control, while longer channels help with wider market reach

Question 3

What are the 4 types of distribution channels

Answer 3

1. Zero-Channel Distribution (Direct Distribution)
   —> Producer sells directly to the consumer with no intermediaries.
   Examples: Local bakeries, farmers’ markets, e-commerce (Netflix, Apple iTunes)
2. One-Channel Distribution
   —> One intermediary (either an agent or a retailer) is used between producer and consumer
   Examples: Travel agents (for flights), Amazon, supermarkets selling Coca-Cola
3. Two-Channel Distribution
   —> Two intermediaries (usually wholesalers and retailers) are used
   Examples: Fast-moving consumer goods (FMCGs), like snacks or soft drinks.
4. Three-Channel Distribution
   —> Producer sells via an agent, who sells to wholesalers, who then sell to retailers
   Common for international sales or large-scale distribution.

Question 4

State 4 advantages of using more intermediaries

Answer 4

✅ wider market reach (for mass distribution or global markets)
✅ reduced workload for producers bc intermediaries handle marketing, logistics, storage and sales
✅ lower distribution costs - wholesalers buy in bulk, creating economies of scale
✅ expertise - agents or retailers may have market-specific knowledge to boost sales

Question 5

Disadvantages of using more intermediaries

Answer 5

❌ reduced profit margins bc of markups taken by intermediaries
❌ less control on how product is promoted, priced or displayed
❌ slower distribution
❌ brand inconsistency

Question 6

Describe + evaluate intermediaries ‘agents’

Answer 6

—> specialists who sell goods on behalf of the producer w/out taking ownership of the product
✅ Access to expert sales services and niche markets
✅ Producers save costs bc have ⬇️ distribution tasks
❌ Commission fees ⬇️ the producer’s profit margin
❌ Poor agent performance can damage the brand image

Question 7

Describe + evaluate intermediaries retailers

Answer 7

—> businesses that sell goods directly to final consumers, often in-store or online
✅ Provide wide accessibility & customer service
✅ Handle marketing & sales, reducing producer burden
❌ Producers have limited control over how products are sold
❌ increase final price due to markups

Question 8

Describe + evaluate intermediaries ‘wholesalers’

Answer 8

—> Wholesalers buy in bulk from producers and resell in smaller amounts to retailers
✅ Break bulk for smaller retailers, improving distribution efficiency
✅ Handle storage and promotion, ⬇️ producer costs
❌ Lower profit margins for producers due to bulk discounts
❌ Suitable only for high-volume manufacturers.

Question 9

Describe 2 ways that distributions have evolved

Answer 9

E-commerce: Allows producers to sell directly to global consumers through websites and platforms like Amazon or Etsy.
Convenience + accessibility + global audience

Drop-shipping: Producers ship products directly to customers, removing need for inventory storage