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5.4e The Marketing Mix: Place

Distribution Channels

The distribution channel is the path taken to get the product from producer to the customer.

There are different distribution channels, but all start and end in the same way.

Producer arrow Customer

Manufacturer to Customer illustration

The product manufacturer sells directly to the customer, usually via mail order or e-commerce. This is known as direct selling. Example: Buying an iPhone from Apple's website.

Advantages
Disadvantages

Producer arrow Wholesaler arrow Customer

Producer - Wholesaler - Customer illustration

The wholesaler bulk-buys products from the manufacturer, then sells smaller volumes to customers. Example: Cash & Carry warehouses.

Advantages
Disadvantages

Producer arrow Wholesaler arrow Retailer arrow Customer

Producer - Wholesaler - Retailer - Customer illustration

The wholesaler bulk-buys products from the manufacturer, then sells smaller volumes to retailers (shops), who then sell to the customer. Example: Small convenience stores

Advantages
Disadvantages

Producer arrow Retailer arrow Customer

Producer - Retailer - Customer illustration

Large retailers can purchase in sufficient volumes to deal directly with the producer, missing-out wholesalers. Examples: Tesco, ASDA, Sainsbury's, Morrisons.

Advantages
Disadvantages
GCSE Business Studies revision quiz