Marketing Mix: Place (Cambridge (CIE) A Level Business): Revision Note

This channel is commonly used by smaller retail businesses that lack space or sufficient cash flow to hold large amounts of inventory

Advantage: Small shops can buy little and often from the wholesaler, so they do not need big, costly storage space

Disadvantage: Two extra markups (wholesaler and retailer) push the selling price up for customers

The Coca-Cola Company produces soft drinks, which are sold in bulk to a wholesaler

The wholesaler sells smaller quantities to a convenience store

The convenience store then sells individual soft drinks to the customer

This channel is less common but can be used when there are no physical retail stores, or for products where the wholesaler can sell directly to bulk-buying consumers (e.g. institutions or large events)

Advantage: It can reduce distribution costs by cutting out the retailer, allowing slightly lower prices for large-scale buyers

Disadvantage: It is not suitable for everyday consumers who want to buy in small quantities or need advice before purchasing

CleanPro Chemicals, a manufacturer of industrial cleaning supplies, sells bulk quantities of detergent to a wholesaler

The wholesaler then sells large tubs of cleaning products directly to schools, hotels or industrial users without going through a retail store

This channel is often used for products with high demand or where the cost of distribution is high

This method is also common where customers require support or advice in selecting the product

Advantage: Retail staff can give advice and after‑sales help, which suits complex goods such as laptops

Disadvantage: Inventory sits in the retailer’s warehouse or shop, tying up cash until each item is sold

Toshiba produces laptops and sells them directly to electronics retailers

Currys employs knowledgeable sales staff who sell Toshiba laptops to end customers
 

This channel is commonly used for products that are sold online or through direct sales channels

Advantage: No intermediaries mean lower costs, so the firm can offer low online prices or keep more profit

Disadvantage: The producer must handle delivery, returns and customer service itself, which can be expensive and time-consuming

GermanWings sells its service (airline passenger tickets) directly to the end customer on its website

Delivered electronically – no physical stock or transport needed

Physical delivery through wholesalers, retailers, or direct sellers

Instant access for consumers, often 24/7

Delivery takes time and depends on stock and location

Can be global from the start, reaching wide markets

Often restricted by geography, transport and store networks

Typically lower cost per unit (no packaging or delivery)

Higher cost due to shipping, warehousing, and staff

Ideal for intangible goods (e.g. media, software, NFTs)

Required for tangible goods (e.g. clothing, furniture)