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PLACEThis is also called ‘Distribution’.
A business must get the product to the right place, at the right time in a way that is most convenient to customers.
PLACE
A product which is effectively priced and promoted may not be successful unless the consumer is able to purchase it easily.
Distribution Chain/ Channel
The link between producer and customer using two intermediaries – wholesaler and retailer.
A business that holds stock by buying from manufacturers in large quantities, breaking the bulk and selling in smaller quantities to
retailers
Wholesalers
Reduced transport costs
Cost of holding stock now paid for by the wholesaler
Wholesaler sells products in smaller quantities
Benefits to the manufacturer of using wholesalers
Offers a large range of products from different manufacturers
Will often supply in small quantities and deliver to retailers
Prepares and pre-packs goods ready to be put straight onto retailers’ shelves
Benefits to the retailer of using wholesalers
A business buys products in large quantities from producers or wholesalers and sells to
customers in small quantities
Retailers
They make good and services available to customers in the quantities that they want
They are often located in areas convenient for customers
They provide advice and after-sales service to consumers
They provide outlets for manufacturers’ products
They provide useful information gained from consumers about products and give feedback to wholesalers or manufacturers
Functions of Retailers
Door-to-door
These salespeople deal in relatively minor goods. They either walk from door to door or
use some form of transportation.
Market traders
These operate from stalls in open or covered areas. Prices are low because they avoid
expenses such as electricity and high rent
Shops
These are small and may be owned by sole traders. They provide personal attention and
customers are familiar with owners and employees
Multiples or Chain Stores
These are owned by one company. They are controlled from a central headquarters and are located across a country or region. One
advertisement can cover all branches.
Supermarkets
This is a large self-service store where customers can purchase food and household
items.
Department Stores
This is a large shop that is divided into departments which each operate like a single
shop, that is, they are responsible for their own profitability
Vending Machines
These are open 24 hours a day and are situated in public areas like hospitals and universities. They have a variety of snacks
and drinks.
Catalogue Shops
A catalogue shop publishes a detailed catalogue with all the products for sale. If
customers are interested in the product they can purchase through a shop or order and
have the item delivered.