Place in the marketing mix refers to how a product is delivered from the producer to the consumer, shaping accessibility and convenience for customers.

Understanding 'Place' in the Marketing Mix

Place is one of the seven key elements in the marketing mix (7Ps) and focuses on the methods, systems, and strategies used to ensure a product or service is available to customers when and where they need it. It encompasses more than just the physical location of a store—it covers the entire distribution strategy, including transportation, warehousing, inventory management, and point of sale.

For a business to meet customer expectations and generate sales, it must ensure that its products are:

• Available in the right quantities

• Accessible at the right time

• Conveniently located for the target customer

An effective place strategy not only supports a business’s marketing objectives but also creates competitive advantage. For example, a business offering faster delivery or broader product access than rivals may increase customer satisfaction and loyalty.

Distribution Channels

Distribution refers to the route a product takes from the producer or manufacturer to the end consumer. This journey can vary significantly based on the type of product, customer expectations, and business model.

Types of Distribution Channels

There are two main categories of distribution channels: direct and indirect.

1. Direct Distribution

• Involves selling products directly from the manufacturer or service provider to the consumer.

• Examples include:

  • A bakery selling directly from its store

  • A fashion brand selling through its own website

  • A service provider offering bookings via its app

• There are no intermediaries, which allows businesses greater control over pricing, branding, and customer experience.

2. Indirect Distribution

• Products move through one or more intermediaries such as agents, wholesalers, or retailers before reaching the consumer.

• Common for mass-market products like groceries, electronics, and books.

• Indirect channels allow producers to scale operations and reach wider markets, especially when they lack the infrastructure for direct sales.

Channel Levels

Zero-level channel (Direct):

• Manufacturer → Consumer

• Example: Handmade crafts sold at a local market.

One-level channel:

• Manufacturer → Retailer → Consumer

• Example: A small tech company sells its products through Currys.

Two-level channel:

• Manufacturer → Wholesaler → Retailer → Consumer

• Example: A soft drink manufacturer distributes to wholesalers who then sell to convenience shops.

Each additional level typically:

• Reduces profit margins for the producer (as intermediaries take a share)

• Increases customer reach and availability

• Adds logistical complexity

Businesses must choose channel levels based on the nature of the product, pricing strategy, and customer expectations.

Multi-Channel Distribution

Multi-channel distribution is when a business uses more than one method of delivering its products to customers. This approach is increasingly common as businesses strive to meet diverse customer preferences and buying behaviours.

Common Forms of Multi-Channel Distribution

1. Physical Stores

• Traditional high street and retail outlets where customers can see, touch, and buy products.

• Advantages:

  • Offers a tangible experience

  • Provides immediate access to products

  • Enables face-to-face interaction with staff

• Disadvantages:

  • High overheads (rent, utilities, wages)

  • Limited to specific geographical areas

  • Opening hours restrict access

2. Online Platforms

• Websites, apps, and e-commerce marketplaces (e.g. Amazon, eBay).

• Advantages:

  • 24/7 access to products

  • Broader geographic reach

  • Lower operational costs than physical stores

  • Easier to collect customer data for personalisation

• Disadvantages:

  • No physical interaction with products

  • Requires investment in digital infrastructure and marketing

  • Shipping delays or return issues may affect customer experience

3. Direct-to-Consumer (DTC)

• Producers sell directly to end users, often through digital platforms.

• Common in fashion, cosmetics, and tech.

• Advantages:

  • Higher profit margins

  • Full control over customer journey and brand image

  • Enables stronger relationships and brand loyalty

• Disadvantages:

  • Requires robust logistics and customer service

  • Scaling operations can be difficult

  • High marketing costs to attract customers

4. Hybrid Models

• Combine online and offline experiences.

• Examples include:

  • “Click and collect” systems

  • In-store kiosks that offer online browsing

  • QR codes in print ads that link to online purchasing

• Used to bridge the gap between physical and digital experiences.

Benefits of Distribution Strategies

Benefits of Direct Distribution

• Profit Retention: No middlemen means businesses retain a larger portion of sales revenue.

• Brand Control: Full control over how the product is marketed and delivered.

• Faster Customer Feedback: Helps refine products and services.

• Personalisation: Easier to tailor communications and offerings to individual customers.

Benefits of Indirect Distribution

• Wide Reach: Ideal for reaching national or global markets quickly.

• Convenience: Leverages existing retail or wholesale infrastructure.

• Reduced Burden: Intermediaries handle storage, transport, and sometimes marketing.

• Scalability: Easier to grow volume without investing in logistics.

Benefits of Multi-Channel Distribution

• Flexibility: Customers choose their preferred method of shopping.

• Increased Sales Opportunities: Different channels serve different customer segments.

• Cross-Promotion: Stores can promote online services and vice versa.

• Customer Data: Insights from multiple touchpoints allow more informed decision-making.

Challenges of Distribution Strategies

Each distribution method comes with its own risks and trade-offs.

Physical Store Challenges

• Fixed Costs: Rent, salaries, insurance, and maintenance raise the break-even point.

• Footfall Dependency: Relies heavily on location and passing trade.

• Inventory Costs: Stock must be held locally, increasing holding costs.

Online Platform Challenges

• Logistics and Fulfilment: Requires fast and reliable delivery systems.

• Returns Handling: Often complex and costly.

• Digital Competition: Competing on price and convenience against global players.

Direct-to-Consumer Challenges

• High Initial Investment: In technology, staff, and marketing.

• Limited Trust: New or unknown brands may struggle to win trust without intermediaries.

• Customer Service Pressure: All post-sale responsibility falls on the business.

Multi-Channel Distribution Challenges

• Channel Conflict: Retailers may be upset if a business sells directly at lower prices.

• Brand Consistency: Difficult to maintain messaging and pricing across platforms.

• Technical Integration: Systems must sync inventory, pricing, and customer data in real-time.

Factors Influencing Distribution Channel Choice

A business must consider several internal and external factors before deciding on a distribution strategy.

1. Nature of the Product

• Perishable goods (e.g. fresh food) need quick and often localised distribution.

• Complex products (e.g. high-end electronics) may require expert intermediaries.

• Bulk items (e.g. raw materials) are better suited to wholesaling.

2. Customer Expectations

• Customers expect fast, reliable delivery—particularly in urban markets.

• B2B clients often require different terms and delivery schedules than consumers.

• Customer demographics (age, location, tech-savviness) impact channel preference.

3. Business Objectives

• A start-up might aim to maximise exposure, favouring indirect channels.

• A niche brand may aim to control its image through exclusive DTC distribution.

• A cost leader may choose the most economical channel to keep prices down.

4. Competition

• Businesses must consider:

  • What channels are used by rivals?

  • Are there opportunities to differentiate through an innovative channel?

  • Can exclusive partnerships create channel advantages?

5. Product Positioning

• Premium brands may opt for exclusive or selective distribution to maintain a high-end image.

• Mass-market goods will typically use intensive distribution—as many outlets as possible.

6. Technological Capabilities

• The ability to support online sales, customer support, and order tracking is essential.

• Integration of Customer Relationship Management (CRM) and Inventory Management Systems (IMS) can support smooth distribution.

Case Study Examples

Apple

• Sells through:

  • Own retail stores (controlled brand experience)

  • Authorised resellers (broader reach)

  • Online store and app (direct global access)

• Benefits from tight channel control and omnichannel consistency.

Zara

• Uses a highly integrated system where distribution, design, and sales are closely linked.

• Shortens time-to-market by managing its own stores and online platform.

Nike

• Formerly relied heavily on wholesalers like Foot Locker.

• Now focuses more on DTC through flagship stores and Nike.com, increasing margins and customer insight.

John Lewis

• Offers a strong click-and-collect system, blending physical and digital channels.

• Enables in-store returns for online purchases, enhancing convenience.

Current Trends in Place Strategies

Omnichannel Retailing

• Focus on unified experience across channels.

• Inventory visibility, cross-channel promotions, and seamless service are essential.

• Supported by integrated systems and real-time data sharing.

Growth of E-commerce

• The pandemic accelerated the shift to digital channels.

• Investment in websites, apps, and mobile-optimised experiences has become critical.

Use of Third-Party Logistics (3PL)

• Businesses outsource delivery, warehousing, and returns to logistics experts.

• Reduces in-house pressure but depends on partner reliability.

Subscription Models

• Regular delivery of goods (e.g. snacks, grooming kits) through a DTC model.

• Builds loyalty and provides predictable revenue.

Localisation

• Adapting distribution to local cultures, preferences, and infrastructure.

• For example, using pickup lockers in urban areas or local delivery services in rural locations.