5.6 - promotion and distribution Flashcards
Distribution channel
How the ownership of a product passes from the producer to the final Customer.
Wholesalers
Break bulk; they buy in large quantities from a producer and sell to retailers
Retailers
Shops that sell direct to the customer
e-commerce
involves online trading
M-commerce
Online trading via a mobile phone
Direct marketing
When there is a direct link from the producer to the customer with no intermediaries
Intermediary
A link in the distribution chain between the producer and the customer.
distribution channel -3
-producers
-wholesalers
-retailers
Ways of connecting distribution channels -4
-Mail-order
-Telesales
-Online selling via e-commerce and m-commerce
-Direct marketing
Mail-order
produce a catalogue and customers order from these instead of retail outlets.
Telesales
a business sells products over the telephone in order to persuade the customer to purchase
Online selling via e-commerce and m-commerce
many businesses sell their products online or via mobile apps with some having no physical stores.
Direct marketing
occurs when there is a direct link from the producer to the customer with no intermediaries with telesales,mail order and online selling.
‘multi-channel operation’
a mixture of physical and online stores
e + m commerce advantages -3
-Customers can order at anytime
-Customers can order from home
-Customers can order from anywhere in the world potentially
e + m commerce disadvantages -3
- able to distribute to a much wider range
- able to handle returned goods
- insure security of the site
level of distribution - level zero
no intermediaries between producer and customer
level of distribution - One level
when there is one intermediary between producer and customer.
level of distribution - Two levels
when there are two intermediaries between the producer and the customers.
Intermediaries in distribution - advantages -2
- immediate access to a
wholesaler - allows customers
to purchase a range of products
Intermediaries in distribution - disadvantages -2
- intermediaries will want to make a profit
- producer also loses control of the product
Selecting the right distribution channel - Costs
comparing selling directly to selling through intermediaries.
Selecting the right distribution channel - lack of control
looking at how much control the business wants to retain over how the product is distributed.
Selecting the right distribution channel - The product
will consider where and how customers are expected to purchase.
Importance of getting distribution right factors
- sales
- image
- Costs of distribution
advantage of internet -2
- small businesses expand
- easier to reach customers anytime
advantage of stores -2
-advice available
-the range of products.
disadvantage of stores -2
-more expensive
-over time manufacturers -likely increase direct distribution.
