Place refers to the activities involved in getting a good or service to the end user. It involves determining when, where, and how products get to customers. Place is also known as distribution.
A supply chain consists of the businesses, people, and activities involved in turning raw materials into products and delivering them to end users. Supply chain management involves coordinating the events happening throughout the supply chain.
A major decision involving place is selecting the channel of distribution. A channel of distribution is the path that goods take through the supply chain to get to the end user. Distribution for consumer goods can be direct or indirect. Both direct and indirect channels include producers who create goods or services. Indirect channels may include intermediaries such as retailers, wholesalers, or agents.
Transportation is the physical movement of products through the channel of distribution. Transportation decisions impact the price of a product and the length of time it takes to reach the end user. The seven main methods of transportation are road, rail, air, maritime, intermodal, pipeline, and digital.
Several factors should be considered before deciding which channel of distribution to use. These factors include characteristics of the target market, distribution requirements of the product, impact of distribution cost on final price, and level of distribution used.
Distribution channel members must carry out many activities in order to transfer ownership of products from the producer to the end user.