chapter 14 Flashcards
define distribution channel
distribution channel is the means by which a product is passed from the place of production to the customer
describe distribution channel 1
producer to the consumer
describe distribution channel 3
producer to wholesaler to retailer to consumer
describe distribution channel 2
producer to retailer to consumer
describe distribution channel 4
producer to agent to wholesaler to retailer to consumer
what are the advantages of distribution channel 1
- simple, producer sells directly to consumers
- suitable for perishable products
- reduces middlemen costs
what are the disadvantages of distribution channel 1
- impractical, consumers are not normally living near to producers
- may not be suitable if we cant send out by post
- expensive
what are the advantages of distribution channel 3
- wholesaler saves storage spaces for retailers
- small retailers can purchase in small quantities
- wholesaler may give credit to retailers
what are the disadvantages of distribution channel 2
- no direct contact with consumers
- price is often higher than direct selling as retailers comission is involved
what are the advantages of distribution channel 2
- producers sells large quantities to retailers
- reduced distribution costs
what are the disadvantages of distribution channel 3
- expensive to retailers compared to buying it directly from manufacturers
- wholesaler may not have a full range of products
- wholesalers may be long away from retailers
what are the advantages of distribution channel 4
- manufacturers may not know the best way to sell the product in other markets
- agents will be aware of the local conditions
what are the disadvantages of distribution channel 4
- producer has less control over the way the product is sold to consumers
define agent
agent is an independent person or business that is appointed to deal with the sales and distribution of a product or range of products
what are the different methods of distribution
department stores, chain stores, discount stores, super stores, super markets, independent retailers, direct sales, mail order, internet ( e-commerce)
describe the department store
large stores, usually in the centre of towns and cities, which sell a wide variety of products from a wide range of suppliers
describe the chain stores
two or more stores which have the same name and the same characteristics
describe the discount store
retail stores offering a wide range of products, many branded products at discount prices. often the product ranges are of similar types of products
describe super stores
very large out of town stores which sell a wide range of food and non food products
describe supermarkets
retail grocery stores with dairy produce, fresh meat, packaged food and non food departments
describe independent retailers
single shops, often small, that offer a local, personalised service, prices are often high
describe direct sales
products are sold directly from the manufacturer to the customer, who may be a consumer or another business
describe mail order
customers look through a catalogue or magazine and order by post. orders can often be places by the telephone or internet
describe internet/ e- commerce
instead of looking at a catalogue, consumers view the goods on the business’s website and then order on the internet or possibly by telephone or mail
