1.3.4 Distribution Flashcards
What is a 4-way distribution channel & when is it commonly used for?
4 stages:
Producer, Wholesaler, Retailer,Consumer
Channel is commonly used for products such as groceries, clothing & electronics
What is the 3 stage distribution channel & when is it commonly used for?
Eliminates the wholesaler stage:
Producer, Retailer,Consumer
This channel is often used for products with high demand or where the cost of distribution is high
& Often used for products with high profit margins, where the manufacturer can afford to sell directly to the retailer and still make a profit
What is the 2 stage distribution channel & what is it commonly used for?
- Eliminates both wholesaler & retailer stages
Manufacturer selling directly to the end consumer - Commonly used for products that are sold online or through direct sales channels
What changes in distribution are there to reflect social trends?
- Online distribution
- The shift from product based businesses to service based business
What is online distrubution & why has it become increasingly popular?
- Has become increasingly popular due to the convenience & accessibility it offers to consumers
- Many businesses now use drop-shipping which allows them to sell products without holding stock
- Once business has sold products they are shipped from the producer to the customer
- This reduces cost & complexity of distribution making it easier for businesses to sell online
What is the explanation for the Shift from Product-based Businesses to Service-based Businesses
- Consumers increasingly value experiences over material possessions & this shift has impacted distribution, as delivery of services is often quite different from delivery of physical products
- Distribution for service-based businesses may involve delivering services to customers directly
- This requires a different set of distribution capabilities than traditional product-based distribution
