Distribution 1.3.4 Flashcards
what is distribution
one of the 4 traditional elements of the marketing mix - it highlights the ways in which a product reaches the end consumer
what is the aim of effective distribution
to make products available in the right place at the right time in the right quantities
what influences the methods of distribution that are used
the target market, when and how this product is preferred to be purchased, the availability and delivery of the product
what does a distribution channel do
moves a product through the stages from production to consumption
what do distribution channels with more than 1 stage involve
intermediaries
what are the purposes of distribution channels
- provides a link between production and consumption
- can gather market information
- can find and communicate with potential buyers
- shares risk taking
what are the 4 types of distribution channels
- retailers
- wholesalers
- distributers
- agents
where do retailers come in the distribution chain?
last - they deal directly with the customer
what are retailers focused on (give some examples)
focused on consumer markets/needs (e.g. Sainsbury’s, John Lewis etc.)
why does distributing products via retailers incur a loss of margin
the retailer will add their own ‘mark-up’
advantages of using retailers
- convenience for customers
- broad geographical location
- Retailer handles stock and financial transactions
what do wholesalers do
‘break bulk’ - they buy in large quantities from producers to sell in smaller quantities to retailers
an advantage of using wholesalers
reduces the producer’s transport costs
how do wholesalers make money
buying at a lower price from the producer then adding a profit margin onto the price paid by the retailer
what do distributers do
sell on products and serve as a local sales point from many producers
what are agents
specialist distributors who do not hold stock and instead operate in tertiary sectors (earn commission through travel, insurance etc.)
what is direct distribution
when the producer and consumer deal directly with each other (no intermediaries)
what is indirect distribution
involves intermediaries between the producer and consumer)
what is multi-channel distribution
when a business uses more than 1 type of distribution channel
give an example of a multichannel distribution
A branded consumer product (e.g. Apple) may be distributed via retail stores alongside selling directly to customers using online stores (e-commerce)
benefits of using multi-channel distributions
- allows more target market segments to be reached
- enables higher revenues
drawbacks of using multi-channel distributions
- potential for channel conflict
- complex to manage
- pricing strategy may become confsued
