place - term two Flashcards
what is place
place is primarily concerned with the process of distributing the product from where it is made to the consumer
what are distribution channels
refer to how the goods/service get to the customer
what is channel choice
refers to how much of the product is made available
distribution channels (info)
- routes taken to get the product from the factory to the customer
-the process by which a product is made available to a consumer
what are the four most commonly used channels of distribution
producer - consumer (direct)
producer - retailer - consumer (indirect)
producer - wholesaler - retailer - consumer (indirect)
Distribution channel: producer - consumer
- this is the simplest channel
- involves no intermediaries
- Virtually all services, from tax advice to car repairs, use this method
producer - retailer - consumer
A retailer is an intermediary who buys from the producer and resells to customers.
This channel could be used for bulky or perishable products such as furniture or fruit.
EXAMPLES: David jones, JB HI-FI
producer - wholesaler - retailer - customer
This is the most common method used for the distribution of consumer goods.
A wholesaler is an intermediary who buys in bulk from a producer, and then sells in smaller quantities to retailers.
Producers will use the services of a wholesaler when a large number of retailers sell the product and the producer finds it difficult to deal with them all
channel choice - process
Is the process by which a product is accessed by consumers
The choice of channel of distribution depends on the location of the business’s market or market coverage
what does channel choice include
Intensive distribution: saturate the market with its product
Selective distribution: select moderate amount of outlets to sell product
Exclusive distribution: select narrow amount of outlets
what is intensive distribution
Product is widely available
Easily accessible to the market/consumers
Increase product awareness (high visibility)
Loses its prestige
Product becomes common
Generally low prices and profit margins
what is Selective distribution
The product is restricted in its accessibility
Becomes available in stores that suit the product’s target market
Creates a sense of exclusivity due to limited availability
It restricts access to a wider market
The business cannot control how the product is marketed across its non-branded stores
what is exclusive distribution
A very narrow form of distribution
It creates a strong sense of prestige because of its exclusivity and thus higher prices
Allows the business direct control over all aspects of marketing, customer service, sales and pricing
Reduces potential for increased sales as the location of the stores may not be accessible to all consumers
Limits exposure of the product -whereas intensive/selective distribution ensures that the product is seen across more stores
