Distribution channels GOOD

Question 1

What are distribution channels?

Answer 1

Ways a business can distribute their product

Question 2

What are the distribution channels available to a business?

Answer 2

Manufacturer-wholesalers-retailers-customers
Manufacturer-retailers-customers
Direct to consumer

Question 3

Example of businesses having multiple distribution channels

Answer 3

Nike have physical stores and they sell to retaulers to sell in their stores
Related to Place

Question 4

Manufacturer-wholesalers-retailers-customers + and - and info

Answer 4

Wholesalers sell producys in bulk to a network of retailers and retailers sell product to customers
+ Larger network of buyers - Lets business reach lots of customers quickly
- Less interaction with customers - worse/less customer service
- Profit sharing - Wholesalers and retailers take a cut of profit so customers are likely to pay higher prices so less competitive on price

Question 5

Manufacturers-retailers-customers + and - and example

Answer 5

E.g. Tesco
+ Lower prices - Business cutting out the middle man
+ Control over shops (retailers) - Choose which shops customers can buy products from e.g. Luxury brand won’t choose Tesco
- Hard to contact retailers (esp for start ups) - Harder for business to reach as many people and could take longer to sell a businesses products
- Higher logistics costs - Higher delivery and logistics costs if they have to deliver all products to a retailer themselves

Question 6

Direct to consumer info and + and -

Answer 6

Cheapest channel for consumer, often done by businesses using their own website
+ Nobody else takes a cut - No intermediaries taking cut of profit/business can charge same prices and have higher margin
+ E-commerce - Becoming easier to reach more consumers directly with e-commerce and m-commerce - Many businesses don’t need physical stores
- Hard to reach customers - Business has to invest time and profit into setting up new stores or their own website