Places Flashcards
Distribution channels definition and examples
Distribution channels - by which a product is passed from the place of production to the consumer
Direct to consumer
Manufacturer- wholesaler- retailer- customers
Manufacturer- retailers- customer
Manufacturer- agent- wholesaler- retailer- customers
Wholesaler
An organisation where they buy products from manufacturers in large quantities and divide the inventory into smaller quantities for the retailers to buy
Retailers
An organisation that sells directly to customers
Advantages of wholesaler
Large network of buyers, easier to get your product in the public
Saves storage costs for small retailers
Wholesalers may give credit to retailers
Wholesaler may pay for transportation costs
Wholesaler can also say what is selling well and what isn’t to retailers and manufacturers
Disadvantages of wholesaler
More expensive for the retailer than to buy directly from the manufacturer
Takes longer for fresh produce to reach the shops (may not be as fresh)
Consumer price will also be higher
Manufacturer- retailers- customers
Advantages and disadvantages
Advantages
- Controls over which shops so they can react there target market
- Lower prices retailers are more likely to put lower prices because we don’t have the middle man
Disadvantages
- hard to contact retailers
- Higher cost to deliver the goods to the retailers
Products that are used on a daily basis are more likely to use this channel
M commerce
Buying goods online with a mobile phone eg: app
M= mobile phone, how to remember
E commerce
Buying goods eletronically on the internet
Direct to consumer
Advantages and disadvantages
Advantages
Nobody takes the cut
Can charge low prices
Simple distribution channel
Great to keep fresh produce fresh
Disadvantages
Don’t have a lot of recognition
Heavy advertisement is needed
Impractical for customers to go to the factories
transportation costs will be high
A product that is more technical will be the best use of this channel as the manufacturer can give more information about the product (aircraft engines)
A product that is fresh
Advantages of M, E commerce
Reaches more customers (globally)
Easy and cheap to set up
Sell direct to consumer
Can reach target markets
Disadvantages of using M,E commerce
Increased competition
Goods are hard to judge
Agent definition and advantages and disadvantages
An independent business that appointed to deal with the sales and distribution of a product
Advantages
- manufacturer may not know the best way to sell the product in other markets
- agents will be aware of local conditions, therefore more effective places to sell
Disadvantages
- less control over the way the product is sold to the customer
Social media marketing
A form of using the internet and social media to advertise your products by sharing and creating content
