Distribution Flashcards
Distribution channel
a way to get the right products to the right customers at the right place at the right price (utility)
Supply Chain
refers to the various firms involved in performing the activities required to create and deliver a product or service to customers or industrial users
Time Utility
making products available at the time the consumer wants to purchase them
Place utility
making products available in the locations that the customer wants them
Form Utility
customising products to the consumers particular needs
Exchange efficiencies
making transactions as simple and cheap as possible by establishing and managing efficient exchange processes
Possession utility
enabling customers to possess the product eg using different payment methods
Direct Distribution
No intermediaries. consists of manufacturer selling directly to consumers
eg. wine > online customer
Indirect distribution
One intermediary= letter box > Mitre 10 > consumer
Two intermediaries= confectionery > wholesaler > retail outlet > customer
three intermediaries= flower grower > export agent > flower auction > florist > customer
Dual Distribution
using more than one distribution channel at the same time
eg retail and online = direct and indirect
Middleman
any intermediary between the manufacturer and end user
Agent or Broker
Any intermediary with legal authority to act on behalf of the manufacturer
Wholesaler
An intermediary who sells to other intermediaries, usually to retailers, usually applies to consumer markets
Retailer
An intermediary who sells to consumers
Distibutor
An imprecise term, usually used to describe intermediaries who perform a variety of distribution functions including selling, maintaining inventories, extending credit, and so on.
Dealer
A more imprecise term than distributor that can mean the same as distributor, retailer, wholesaler etc
Main Channel intermediary Functions
Transnational: buying, selling, risk taking
Logistical: Assorting, Storing, Sorting, Transporting
Facilitating: financing, grading, marketing info and research
Horizontal Channel intergration
bringing organisations at the same level of operation under a single management structure
eg retailer buys out a competing retailer
Vertical channel intergration
bringing different stages (levels) of the marketing channel under a single managemnet structure
eg. wholesaler buys a retailer or transport channel
Vertical marketing system
a marketing channel in which all stages (levels) occur under a single management
eg. a postal company owns post boxes, post offices and all transport channels
Franchising
an approach to business in which one party ( afranchiser) licenses the business model to another party ( a franchise)
eg mcDs
Horizontal conflict
between firms at the same level of the channel
eg between a retailer and reatailer
Vertical Conflict
between different levels of the same channel
eg btw wholesaler and retailer
Disintermediation
cutting out the middleman
eg dealing with customer directly via internet
Distribution Intensity
Low, Exclusive
One or a few dealers within a given area
eg designer clothes, new car
Distribution Intensity:
Selective, Middle
Several dealers within a given area
eg domestic flights, childs bike, mobile phone
Distribution Intensity:
High, Intensive
Large number of dealers within a given area
eg dog food, newspaper, bread
