Price often influences purchasing decisions, so getting it right is important. Set the price too high and consumers will not purchase. Set it too low and there is a risk that the business will make losses.
Place refers to the channels of distribution used to get the products from the producer to the final customer. The channel of distribution can include:
producers – this is the maker of the product or service
wholesalers – these businesses buy products and sell them in smaller quantities to retailers
retailers – these are the shops that sell goods and service to the final customer
Distribution channels can be set up in a number of ways
Producer → customer
Producer → wholesalerA business that buys products in bulk from the producer, who then sells smaller quantities to retailers and/or consumers. → customer
Producer → wholesaler → retailerA store (or person) that sells products directly to customers. → customer
Other distribution channels
Mail order businesses do not have any stores, instead they send catalogues to customers who then place orders.
Some businesses sell their products over the telephone. This is known as telesales. Customers can phone the business to place an order or the business can call potential customers to try and convince them to buy them.
Some businesses sell their products on a website using e-commerce. Some sell via mobile devices, which is known as m-commerce.
