Place (method of distribution)

Place simply refers to how you will sell your products to your customers.  Depending on what it is you are selling will directly influence how you distribute it, and it affects mainly those businesses that are in production.  If for example you own a small retail outlet or offer a service to your local community then you are at the end of the distribution chain so and will be directly supplying a variety of products directly to the customer.

However, if you are a producer, the method of distribution is extremely important as it could effect how their product is received and how it sells.

Direct Supply / Direct Sale
Direct selling involves selling directly to your customer; retailing, door-to-door, mail order and ecommerce all directly sell to customers.  The advantage of deciding to directly sell would mean you are in direct contact will your customers and can easily detect the subtle changes which are occurring and adapt to the changes; i.e. demand for price changes or overall demand for your products.  You also have complete control over your product range, how it is sold and at what price.

However, direct sales can come at a price; you will need storage facilities or retail premises to sell your products directly.  Shopping carts on the internet required a degree of Internet knowledge to pull it off and building consumer confidence can prove a tricky business.

Direct to retailer
If you don't want the expense of opening and running your own retail outlet to sell to your customers, then you might consider selling to existing retail outlets.  This would obviously save your company a lot of money setting up a variety of retails outlets to cover areas regionally or nationally.

However, the administration behind running a system like this would be considerable.  Firstly you would have to have a sales teams to consult with the retailers on new products, price and promotion. You would also have to have a method of distributing to many small outlets in which ever region of the country you are selling to: this would cost a small business quite a lot of money and effort.  The financial side also needs to be considered as you will have to administer a number of small accounts at the same time.