P1- Hw 16 Distribution Flashcards
Distribution
Method of getting a product from producers to customer
Types of distribution
Traditional: producer - wholesaler - retailer - customer
Modern: producer - retailer - customer
Direct: producer - customer
Advantages of each type of distribution
Traditional: don’t pay for storage, buy in larger quantities, producer can focus on producing and mot worry about retailers
Modern: more profit and more control
Direct: keep all profits, keep control, good for fresh produce
Disadvantages of each type of distribution
Traditional: no control, reduces profit
Modern: restricts competition and choice for consumers
Direct: need storage facilities, may not be available at outlets for customers to see
What are channels which use multiple channels known as?
Multi distribution channels
Factors influencing channel
Cost, type of business and product (e.g. fresh produce), location
Social trends influence online distribution
Most products are sold on the internet because it’s easier for customers and can save businesses costs
E commerce
Method of buying and selling goods online
Impulse purchasing
When a customer buys a product without any previous intention to buy it
Long tail
Selling many unique products/items with relatively small quantities sold of each
Intermediary
The individual groups or organisations within a distribution channel
E.g. wholesaler, retailer
Channel of distribution
The route taken by the product as it goes from the producer/manufacturer to the customer
Direct to customer
When a product goes straight from the producer/manufacturer to the customer
Wholesaler
Buy large quantities of supplies and sell them on in smaller quantities- act as an intermediary
Retailer
Organisation that sells goods and services to the public
