Edexcel-Distribution 1.3 Flashcards
Distribution
To make products available in the right place,quantities and time
What is distribution influenced by
Target market segment
Distribution channel
Moves products from production to final consumption
Retailers
Final step
Focus on consumers
Deal directly with consumers
E.g. of retailers
department store
convenience store
Franchises
Wholesaler
Buy large quantities at low prices from producers and sell smaller quantities with a profit margin to retailer
E.g. of wholesalers
Newsagent
Distributor
Distribute products and serve as local sales point. Holds stock and offer many products.
E.g. of distributor
Building supplies
Agent
specialist type of distributor, does not hold stock
E.g. Of agent
Travel and insurance
Online distribution
Allows consumers to directly purchase through online platforms
Online distribution advantages
Lower costs
Wider reach of consumers
Online distribution disadvantages
Increased competition
Consumers become dependent on only online platforms
Changing from product to service Aspects that need to be considered
Clear understanding of consumers wants and needs
Focus on providing value to consumers
Changing from product to service advantages
Flexibility
Wider choice of products
Changing from product to service disadvantages
Expensive
Time consuming
Three different types of distribution
Four stage
Three stage
Two stage
Four stage
Used with groceries, electronics and clothing
Three stage
Eliminates the Wholesaler stage
Often used with products with high demand or high costs of production
Two stage
Eliminates both the wholesaler and retailer
Commonly used for selling products online
Growth of Ecommerce
Online distribution increasingly popular due too convenience and accessibility
Drop shipping is used so businesses dont have to hold stock and sell directly from producer to consumer
Shift from product to service based
Consumers value experience over material possessions
Involves delivering services to customers directly through apps and websites
