Place Flashcards
What are the overall channels of distribution for organisations?
-manufacturer —> customer
-manufacturer —> retailer —> customer
-manufacturer —> wholesale —> retailer—> customer
What are the different factors influencing choice of distribution channel?
-the product
-desired image of the product
-finance available
-legal restrictions
-stage of product life cycle
-technical qualities of a product
Describe the product as a factor influencing choice of distribution channel?
Perishable products such as fruit and veg need a fairly direct method to retailers so they dont go out of date
Describe the desired image of the product as a factor for influencing choice of channel?
Certain products have images that dictate where they can be sold
Describe finance available as a factor for influencing choice of channel?
Businesses may not have the finance to set up distribution directly to the consumer
Reliant on wholesaler or retailer to distribute their product
Decribe legal restrictions as a factor influencing choice of channel?
Some products can’t be sold through certain channels
Describe the stage of the products life cycle as a factor influencing channel choice
Products may only be sold in exclusive outlets at the beginning of a product life cycle
But may also be sold in discount during the decline stage
Describe the technical qualities of a product as a factor influencing the choice of channel
If products are highly technical they may need to be demonstrated which means personal selling is best
What are the 5 main methods of direct selling? (Manufacturer —> customer)
-e-commerce
-mail order
-direct mail
-personal selling
-shopping channels
What are the advantages of e-commerce?
-customers in the global market can be reached 24/7
-convenient for customers as they can order from home
-online discounts can be offered to attract customers and encourage sales
-product info and reviews can sway purchasing decisions
What are the disadvantages of e-commerce?
-can be time consuming and expensive to design attractive, high quality websites
-customers are wary of giving personal details online
-subject to technical failures and customers need internet to access
-customers need to wait for the products to arrive and have to pay delivery fee
what are the advantages of mail order?
-save finance on staffing and store costs
-customers can shop from home and browse for a product at times that suit them
-credit facilities are often offered to the customer
What are disadvantages of mail order?
-catalogues can be expensive to produce
-a level of bad debt might be incurred for the customer
-producing catalogues is not environmentally friendly
What are advantages of direct mail?
-specific target markets can be reached
-a wide geographical area can be targeted and reached by placing leaflets inside newspapers/magazines
What are advantages of personal selling?
-someone can demonstrate the product being sold and give an explination
-feedback on products can be collected from customers
What are disadvantages of personal selling ?
-customers may not be keen to listen as they may be annoyed by this type of method
-high staffing costs and commission make this type of method expensive
What are advantages of to shopping?
-customers can see products being demonstrates and modelled
-customers can be encouraged to buy on impulse due to short term bargain prices
What are disadvantages of to shopping?
-customers need to watch the channel in order to be targeted
-customers need to wait for the products to arrive
What are advantages for the manufacturer of using a retailer?
-the retailer stores goods, displays them and marks prices
-retailers provide demonstrations and info on products and promote for the manufacturer
-larger retailers often buy in bulk from manufacturer mearning increased sales
-retailers are more accessible as they are located close to customers
What are disadvantages for the manufacturer of using a retailer?
-the prod fury to will face competition from other products stocked by the retailer
-retailer mat alter the price of the product which may have a bad affect on product imaged
-retailer will take a cut of the profits as they are the ‘middle man’
What are types of retailers?
-convenience stores —> due to changing work patterns and lifestyle changes there has been an increase in smaller supermarkets
-hypermarkets —> these stores sell many goods under one roof
-online retailers —> rather than setting up their own website, manufacturers will sell through retailers such as Amazon
What are the advantages for the manufacturer if using a wholesaler?
-wholesaler will package and display products, saving the manufacturer time and costs
-wholesaler carries the risk of product going out of fashion as manufacturer get rid of product as soon as they are produced
what are the disadvantages for the manufacturer of using a wholesaler?
-wholesaler will take some of the product from the manufacturer as they are acting as middle man
-the manufacturer will lose control of how the product is marketed and sold
What are advantages for the retailer of using a wholesaler?
-retailers can benefit from promotions offered by the wholesaler they may not have got from the manufacturer
-retailers can trial smaller orders of newer products so they wont have large levels of unsold invetory
What are the disadvantages for the retailer of using a wholesaler?
-the wholesaler offers the same product to the retailers competitors so other areas of marketing mix have to be relied on
