1.3.4 - Distribution Flashcards
Def of distribution channel
The route a product taken from producer to consumer
Def of intermediaries
Are businesses between the producer and the consumer in a distribution channel, such as retailers
Def of distribution
Is concerned with getting the products to the right place for consumers and at the right time
What are the 4 distribution channels
Direct channel, modern, traditional and agent channel
Traditional channel
Producer - wholesaler - retailer - consumer
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Benefit of traditional channel
Helps smaller firms to achieve a wide distribution across many outlets
Weaknesses of traditional channel
Pushes selling prices up as wholesalers and retailers with both add their own mark up
Direct to retailer
Producer - consumer
Strengths of direct channel
Exposing producers to tough negotiations with retail chains on price and credit terms
Benefits of direct
Able to sell products cheap to major retail chains, saving on wholesalers markup
Modern
Producer - retailer - consumer
Agent
Producer - agent - wholesaler - retailer - consumer
Benefits of modern distribution
Enables producer to directly control the supply and marketing of their products via limited and regulated outlets
Weakness of modern channel
Time consuming to manage relationship with multiple retailers
Benefits of agent
They can make selling in another country very simple due to market knowledge
Weakness of agent channel
Makes supply chain longer which can push the price to final consumer
Def of producer
Organisations that take raw materials or components and process them into finished or semi processed goods
Def wholesaler
Buy large quantities of supplies and sell them on in smaller quantities they act as intermediary between manufacturers and retailers and consumers
Def retailer
An organisation that sells goods and services to the general public or end user
Def customer
The end user of a product or service
What is it called when a wholesaler sends to a retailer
Business2business
Advantage of online retail for small businesses
They can’t afford building e-commerce platforms so exiting ones like eBay offer chance to sell online to a wide audience
How has ‘online’ affected distribution to affect social trends
- Websites offering a range or varied products with ability to update product on daily basis.
- offers small firms the ability to reach global audience
Can all services be distributed online?
Some services can’t be distributed online eg hotel rooms and haircuts though the way of booking them can moved to online
