-: Hello and welcome to the video lecture
for place, part one.
This will talk about both where do you sell
and where do you buy those things that you need
to run your business or organization.
So first we're talk about where do you sell
and what are the sort of market channels
and supply chains that you might use.
We'll talk about direct markets versus indirect markets.
And then we're going to talk about
where do you buy the inputs that you need?
Where do you get them?
Which ones do you have to make for yourself
and which ones do you have to buy
or do you choose to buy from another business?
And finally, for those of you
who have a service-based business,
what are the implications of place for that?
So we'll start with thinking about
how does the good get from you to the consumers?
And we can think of in terms of a pipeline
that takes it there, the market channel,
the organizations, the individuals,
and the processes of getting it from you to the consumer.
So we talked a few weeks ago about the difference
between business to consumer and business to business,
so here it's the same thing.
Are you selling directly to the consumer?
Are you sort of interacting with them?
Or is there one or more other businesses, organizations
that are acting as intermediaries
to help you get it from you to them?
So we'll start with direct markets.
So here's a farmers market stall.
Many firms start with this.
They start with selling direct to consumers.
And there's a lot of benefits to this.
First you have complete control
over how it is being presented, how it's marketed,
how it's labeled, that's all on you.
It gives you the direct contact with your customers.
Maybe the opportunity to create relationships and loyalty,
build your brand.
As well as, when you interact, you can learn.
You can learn well, what do they like,
what do they don't like?
Well, what are the features, what are the processes and such
that they want more versus what's not working
for them and why?
So one key thing that those are the upside.
So you retain ownership all the way through.
You collect the money. You have to do any customer service.
So this is, when you're in the direct market world,
you have to do it all yourself.
Yes, you control it, but it's just so much more work.
Every task is on you.
So one way to think about it,
some examples in food and agriculture,
which is of course my specialties,
of ways that a consumer can buy directly
from a farm is through a farmers market,
such as our own Burlington for farmers market.
You can be part of a Community Supported Agriculture Share.
You can go to the farm,
whether it's a farm stand or a farm market,
where they sell their things on their own farm.
There are U-pick where you go and walk down the rows
and pick them yourself.
And there are other examples.
When you're thinking about indirect markets,
so what if you want to use somebody else?
So there's a number of possible intermediaries,
and here's a list of who might help you move it
from one to the other.
Distributors, wholesalers, and retailers.
Note that the top two in red, agent and brokers,
tend to not take possession.
They just make the deal where the ones at the bottom,
they actually take your good
and sort of physically transport it,
and in many cases, they take ownership of it.
So they buy it from you or they resell it.
So when you're thinking about farm produce,
say a farm that grows vegetables,
there's a continuum of options that they might have.
So first, they can buy it right from you,
which we talked about,
sell it at a farmers market or on farm.
They could sell it direct to an account,
like a small restaurant, like a farm-to-table restaurant.
They can sell it to a health food co-op,
to a school, or a hospital.
And this is so-called farm to school farm institution.
Next there are food hubs,
which are specialty local food distributors
that have a specific mission
of supporting local food and agriculture.
And they sell to many of the same ones that we see above,
but rather than in direct accounts,
the farm has to drive their stuff here.
Here the farm could drive it to the food hub
so that these food hubs buy from many farms
and then they resell to many buyers.
And then last is through a distributor
who tend to have much more of a larger regional
or even national scope.
In many cases, they sell not only food,
but they'll sell like napkins and plates
and lots of other things, many times to food service.
And in this case, it very likely leaves the region.
The farmer will probably not know where it ends up.
But this is a model for sort of selling larger volumes.
That is the end of part one.