Place Flashcards
How do firms make sure their products are available to consumers at the right place?
They need to choose the most appropriate channel of distribution.
What does the most appropriate choice of channel distribution depend on?
Depends on things like
Where the consumer is likely to shop
How many consumers want their products to reach
How quickly they want the product to get to the consumer
How much customer service the consumer will need
What do wholesalers do?
Buy products in bulk and store them in a warehouse.
What do retailers do?
Sell products to consumers.
What does telesales mean?
Selling products to consumers via phone.
How does selling to wholesalers work?
(Common channel of distribution)
Manufacturers sell products to a wholesaler, then consumers or retailers buy the products from the wholesaler.
This channel is good for maufacturers that make lots of a particular product and don’t need to communicate much with the consumer.
What are the benefits of selling to wholesalers?
Means the manufacturer gets bulk orders and doesn’t have to store lots of stock.
Wholesaler will already have customers so products can reach lots of potential consumers quickly.
What is the problem with selling to wholesalers?
Consumers may get lower levels of customer service compared to other channels.
How does selling directly to retailers work?
Manufacturer can provide the retailer with product knowledge so the retailer can provide better customer service. So customers have higher satisfaction with the products.
What are the benefits of selling directly to retailers?
Can help to promote products
Products are sold in more places so more potential customers are exposed to them.
What is a disadvantage of selling directly to retailers?
Can be hard for new firms to persuade many retailers to stock their products.
How does selling directly to consumers work?
Can be done via telesales.
Often the cheapest channel for the consumer. Channel is good for firms who don’t have loads of customers or firms selling one-off items.
What is bad about selling directly to consumers?
Can be time consuming for firms to sell products to individual customers.
Also have to arrange delivery of the goods, which can be difficult and expensive if the customers are in lots of different places.
