1.3.4 Distribution Flashcards
1
Q
What is a distribution channel?
A
- refers to the various intermediaries through which goods/services move from the manufacturer to the end customer
2
Q
What is the four stage distribution channel (traditional)?
A
- consists of four stages: producer, wholesaler, retailer, and consumer
- commonly used for products such as groceries, clothing, and electronics
3
Q
What is the three stage distribution channel?
A
- it eliminates the wholesaler stage, with the product selling directly to the retailer
- 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
4
Q
What is the two stage distribution channel?
A
- it eliminates both the wholesaler and retailer stages, with the manufacturer selling directly to the end customer
- commonly used for products that are sold online or through direct sales channels
5
Q
Explanation of the changes in distribution to reflect social trends: the growth of E-commerce
A
- online distribution has become increasingly popular due to the convenience and accessibility it offers to consumers
- many business now use drop-shipping = allows them to sell stock without holding it
- once the business has sold the products, they are shipped directly from the producer to the customer
- this reduces the cost and complexity of distribution, making it easier for businesses to sell online
6
Q
Explanation of the changes in distribution to reflect social trends: the shift from product-based businesses to service-based businesses
A
- increase in consumers valuing experiences over material possessions which has shifted distribution
- distribution of service-based businesses may involve delivering services to customers directly, such as through a mobile app or website
- this requires a different set of distribution capabilities than traditional product-based distribution
