Distribution Flashcards
What is distribution
One of the four elements of the marketing mix. Involves the ways in which a product reaches the end customer.
What is a distribution channel
Moves a product through stages from production to final consumption. Distribution channels can have more than one stage.
What are the four main kinds of distribution channel intermediary
- Retailers
- Wholesalers
- Distributors
- Agents
What is a retailer
Retailer is the final step in the chain - deals directly with the customer.
Focused on consumer markets
What are some advantages of retail distribution?
- Convenience for Customers
- Retailer handles final transaction
- Often broad geographical coverage.
- Retailer holds stock.
What is a wholesaler
Wholesalers buy in large quantities from producers to sell them to retailers.
What are advantages of using a wholesalers
- Reduces the producers transport costs (fewer trips to wholesaler rather than many journeys to retailers)
- Retailers can order in smaller amounts from wholesalers.
What is a distributor
Distributors distribute products and serve as a local sales point. Usually specialise in a particular industry (eg. building supplies).
What is an agent
Specialist type of distributor, does not hold stock.
What is direct distribution
Where a producer and consumer deal directly with each other without the involvement of an intermediary.
What is indirect distribution
Involves the use of intermediaries between the producer and cosumer
Advantages of indirect distribution
Geography- customers may live too far away to be reached directly.
Business may have a lack of retailing expertise.
What is multichannel distribution
Using more than one type of distribution channel.
What are the benefits of multichannel distribution
Allows more target market segments to be reached
Enables higher profits- e.g. if retail store has no stock, customer can buy online
What are the drawbacks of multichannel distribution
Can be complex to manage.
Potential for channel ‘conflict’
