Pricing affects place decisions by determining which distribution channels and locations are suitable for a product’s target market, positioning, and margin structure. In the marketing mix, a product’s price and where it is sold must align, so changing one often requires adjusting the other.
Target market and channel choice
Higher-priced or premium products are usually placed in outlets that match their status, such as upscale retailers, specialty stores, or exclusive online platforms where customers expect to pay more and value the experience. Lower- priced or value products tend to be distributed through mass retailers, discount stores, or broad e‑commerce marketplaces that attract price‑sensitive buyers.
Profit margins and coverage
Price level and cost structure determine how many intermediaries a firm can afford to use and what margin can be offered to wholesalers and retailers. Low-margin, low-price items often require high-volume, efficient channels (e.g., supermarkets, big-box stores), while higher-margin products can sustain selective or intensive personal selling and more expensive locations.
Positioning and brand image
Pricing signals quality and brand positioning, so place decisions must reinforce that signal. A “premium” price sold through bargain outlets creates a mismatch, whereas aligning premium pricing with carefully chosen, controlled channels strengthens the intended image.
Competitive strategy and access
Pricing relative to competitors also shapes where a firm needs to be available to remain viable in the consideration set. If a brand competes on low price, it often needs broad distribution where comparison shopping is easy, while a differentiated, higher-priced brand may focus on selective outlets where service and experience justify the price.
Brief comparison
Aspect| High-price / premium strategy| Low-price / value strategy
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Typical locations| High-end retailers, exclusive online shops, specialty
stores 2| Mass merchandisers, discount stores, broad online marketplaces 6
Channel intensity| Selective or exclusive distribution to protect image 8|
Intensive distribution to maximize reach and volume 9
Intermediary margins| Higher margins per unit, fewer outlets needed 9| Lower
margins per unit, require efficient, high-volume channels 7
Customer expectation| Service, experience, and prestige to match higher price
1| Convenience and low total cost to match price focus 3
