3.16 - Place Flashcards
What is Distribution?
Component within marketing mix that defines both physical location where a product is available as well as distribution channel it has travelled through from manufacturer to consumer
What is a Distribution Channel?
The route to market that a product takes from producers to the final customer
What are Intermediaries?
Middle people within the distribution channel (wholesalers, retailers and agents)
What are Wholesalers?
Buy products in bulk from manufacturers and sell them in smaller quantities to retailers
What are Retailers?
Shops who sell to customers
What are the different Distribution Channels?
Direct Selling (0 level channel) - Manufacturer to Consumer
Indirect Selling (1 level channel) - Manufacturer to Retailer to Consumer
Direct Selling through an agent (1 level channel) - Manufacturer to Agent to Consumer
Indirect Selling (2 level channel) - Manufacturer to Wholesaler to Retailer to Consumer
What are the factors that determine the Distribution Channel of a product?
Nature of the Product
Market
Business
Legal issues
What does the Distribution Channel factor Nature of the Product depend on?
Fragile? - product with a short life
Desired image - essential intermediaries to be relevant for a product
Technical or Complex? - sold by specialist distributors/agents
Customised - Direct distribution work best here (end consumer specification)
Type of product - convenience, shopping, speciality
What does the Distribution Channel factor Market depend on?
Spread Geographically?
Involve selling overseas?
Extent and nature of competition? - Which distribution channels do competitors use?
What does the Distribution Channel factor Business depend on?
Size and scope
Marketing objectives
Does it have established distribution network or does it need extend its distribution option?
How much control does it want over distribution? - The longer the channel - less control is available?
What does the Distribution Channel factor Legal issues depend on?
Limitations on sale?
What are the risks if an intermediary sells product to an inappropriate customer?
