1. Place – Distribution
Mr Ahern

2. Learning starts with a question
• As the business owner of an ice cream
manufacturer.
• You’ve just started running the business and are
new to the market.
• You need to get retailers to sell your product –
who would you approach? How would you
persuade them?

3. What is today's lesson about?

4. Lesson Outcomes
• Identify the importance of businesses using
place and distribution as an element of the
marketing mix.
• Explain 4 channels of distribution, available to a
business.
• Analyse three businesses use of distribution,
considering the affect upon the rest of the
marketing mix.

5. Place
Product
Place
Marketing
Mix
Price
Promotion

6. Place (Distributing the Product)
• The part of the marketing mix that determines
where goods are going to be sold and how they
are going to get there.
• Where goods are sold will depend on the nature
of the goods.

7. Different Goods – Different Markets
• Most goods are sold through shops. Buyers
decide on where they buy from.
• Some shops position themselves so that they
are accessible to their type of customer. (Netto,
Harrods).

8. Different Goods – Different Markets
• Other types of shops;
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Wholesalers
Direct Sales
Mail Order
Tele Sales
Exhibitions
E-Commerce

9. Question – why?
Vs
90% of retail outlets
64% of retail outlets

10. Why may The Jammy Dodger be losing
out to The Jaffa
• Possible reasons include:
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High consumer demand for The Jaffa
Jammy Ds may have more direct competitors
Differentiation of products
Jaffa cakes may have more advertising support
Market share and product portfolio

11. Channels of Distribution
Producer
Consumer
Retailer
Producer
Producer
Producer
Wholesaler
Agent
Consumer
Retailer
Consumer
Seller
Consumer

12. Producer
Consumer
This is very simple because it means that
producers are selling their products directly to
the consumer.
An example of this could be a bakery. The bread
and cakes are baked by the shopkeeper and sold
directly to the consumer. The product does not
pass through any channels.

13. Producer
Retailer
Consumer
• In this channel, the producer of the goods sells
directly to a retail outlet, generally a shop.
• Many large supermarkets are stocked in this
way. The manufacturer producers large amounts
of a product especially for the supermarket (e.g.
bread and milk) and delivers them directly to the
supermarket.
• This method also is used in the clothing
industry, where fashion garments are supplied
directly from the producer to the shops.

14. Producer
Wholesaler
Retailer
Consumer
• This channel involves using a wholesaler who
buys products from the producers and then
divides the stock up into much smaller
quantities for retailers to buy.
• The wholesaler takes on the cost of storing the
items and also the risk of not selling them.
Retailers usually have a wide choice of goods
from a wholesaler.

15. Producer
Agent
Seller
Consumer
• The job of an agent is to bring buyers and sellers
together.
• They are used by sellers to find buyer, a good
example would be a travel agent.
• The producer in this case would be the hotel, the
Tour Operator will have numerous hotels and
holiday packages from lots of different companies
which the customer can look at.
• The income of the agent comes from the
commission of each sale.

16. e.g. xBOX
You can buy an
Xbox 360 on a
website such as
play.com
You can walk into a Tesco store and buy one
You can even go straight to Microsoft and buy one (online)
You are likely to buy an
Xbox through a retailer
such as Tesco but you
could buy it straight from
the producer.

17. What factors affect distribution?

18. Factors Affecting Distribution
• The Product;
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Nature of the product (fragile, explosive etc)
Technical product (IT based technology)
Direct Services (call centres)
Where are the goods needed?
Presence of wholesalers
• The market (local, national)
• Legal restrictions (alcohol)
• The company (economies of scale)

19. Choosing Appropriate Distributors
• How should your product get to the consumer?
• You have to think about your product/brand image.
• To a retailer opportunity cost and rental space is
important.
• Where would you stock a new ice cream, how would
you convince a retailer to stock your product?

20. Ensuring good links with intermediaries
• Products available when customer require them.
• Keeping intermediaries happy to promote
products, through:
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Providing specific product displays.
Offering retailer competitions.
Other promotions.
Offering special deals or higher commission.
Offering training or retailers.

21. Activity
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Three products create a presentation on paper
Show where products are sold.
Explain the distribution chain the business uses.
Analyse whether you feel this is the correct
distribution channel inline with the rest of the
marketing mix.
• Spot new opportunities in the place product is
sold.

22. Lesson Outcomes
• Identify the importance of businesses using
place and distribution as an element of the
marketing mix.
• Explain 4 channels of distribution, available to a
business.
• Analyse three businesses use of distribution,
considering the affect upon the rest of the
market mix.