THE MARKETING MIX – Place

Question 1

Place

Answer 1

Concerned with the distribution of goods and services, that is, how goods and services reach the consumer.

Question 2

How?

Answer 2

Physical distribution
Digital distribution

Question 3

Physical distribution

Answer 3

The distribution of a good or service using a physical presence such as a shop or office.

Question 4

How?

Answer 4

Direct
Via retailer
Via wholesaler and retailer

Question 5

Physical distribution: Direct

Answer 5

This is when the distribution of goods and services is directly between the producer and the consumer.

Question 6

Example?

Answer 6

Nike selling goods from their online website or Nike store.

Question 7

Physical distribution: Indirect (via retailer)

Answer 7

This is when the producer sells their products to a retailer who then sells them to the consumer.

Question 8

Example?

Answer 8

Nike selling their stock to JD and JD selling the products to the consumers.

Question 9

Physical distribution: Indirect (via wholesaler)

Answer 9

This is when the producer sells their products/services to a wholesaler (usually in bulk) who then sells it to the retailer, where the consumer then purchases it.

Question 10

Example?

Answer 10

Coca Cola selling coke to Costco who then sells it to convenience stores who then sells it to consumers.

Question 11

Channels of distribution advantages

Answer 11

The producer can make more profit rather than sharing it with wholesalers and retailers.
The producer can keep some of the profit that the wholesaler would usually have made.
Confident retailers can market the products/services for consumers
Wholesalers can break up bulk stock and sell to retailers in the quantities they want, which encourages more sales between wholesalers and retailers. Therefore increasing profit for the producer as their goods will be sold in more locations.

Question 12

Digital distribution

Answer 12

The distribution of goods and services digitally by downloading from a website.

Question 13

Example?

Answer 13

Music, books, insurance, banking and newspapers.

Question 14

Advantages

Answer 14

The consumer can buy the product 24/7.
It is a method of selling, without the costs of physical shops or transport.

Question 15

Disadvantages

Answer 15

Physical goods cannot be distributed digitally.
It is a very competitive market as consumers can compare prices and products online.
Customers who do not own a computer will be unable to buy online.
Some customers do not like sharing their bank or credit card details online.