Topic 14 - Place Flashcards
Factors Affecting the Channel of Distribution
- Finance available
- Desired image for the product
- Stage of product life cycle
- Legal restrictions
- Shelf life of the product
- Technical qualities of the product
E-commerce - Direct Selling
Selling products using the internet.
Advantages:
- Customers can be reached 24/7
- An entire range of products can be shown online
- Online discounts can be offered
- Customer comments can be displayed
Disadvantages:
- Time consuming to design attractive, high quality websites
- Customers may be wary of providing their personal details online
- Access to the internet is necessary
- Customers need to wait for products to arrive and pay for delivery costs
Mail Order - Direct Selling
Selling products using a catalogue which is usually sent to the customer.
Advantages:
- Credit facilities are often offered to customers
- Customers can browse products and place orders from home
- Money is saved on staffing and store costs
Disadvantages:
- Catalogues are expensive to produce
- Not environmentally friendly
- Debt may be incurred
Direct Mail - Direct Selling
Letters, leaflets and brochures are posted directly to the customer.
Advantages:
- Specific market segments can be targeted
- Large amount of customers can be targeted
Disadvantages:
- May be perceived as junk mail
- Mailing lists can quickly become out of date
Personal Selling - Direct Selling
A salesperson sells products directly to customers.
Advantages:
- A demonstration or explanation of the product can be given
- Customer feedback can be gathered
Disadvantages:
- May annoy customers
- Expensive due to staffing costs and commission
Shopping Channels - Direct Selling
Selling products on the TV using dedicated shopping channels.
Advantages:
- Products can be modelled and demonstrated
- Short-term bargain prices can encourage customers to purchase
Disadvantages:
- Customers need to watch the channel to be targeted
- Customers need to wait for products to arrive and pay for delivery
Retailers
Advantages:
- Located close to customers
- Products are promoted
- Products are bought in bulk
- Sales assistants are employed to sell products
Disadvantages:
- Cut of profits is taken
- Product will face competition from other products stocked by the retailer
- Price of product may be altered so image of the product may be altered
Superstores - Retailer
Supermarkets that sells many goods and services in one place.
Advantages:
- Open 24/7
- Huge range of products is offered to customers
Disadvantages:
- Lack of competition can lead to poor quality products
Convenience Supermarkets - Retailer
Supermarkets in convenient locations.
Advantages:
- Cater for the changing needs of customers
- Prices can be slightly higher
Disadvantages:
- Limited choice of products
- High levels of waste as it it harder to predict customer numbers
Retail Parks - Retailer
Large shops located near good infrastructure and free parking.
Advantages:
- Infrastructure attracts customers
- Often near restaurants and cinemas which increase footfall
- Large product range on offer
Disadvantages:
- Limited choice of stores
- Customers need access to transport
Online Retailers - Retailer
Retailers that operate online.
Advantages:
- Products can be sold to a worldwide market
-Products can be sold 24/7
Disadvantages:
- Customers can’t try or touch the product before buying
- Delivery charges may put some customers off
Discount Stores - Retailer
Shops that sell products at lower prices.
Advantages:
- Attracts customers
Disadvantages:
- Limited product range
- May have a negative image
Department Stores - Retailer
Large shops that sell a variety of items.
Advantages:
- Can target many markets
- Central locations can attract customers
- Can benefit from impulse buying
Disadvantages:
- High rent costs
- Staff supervision can be difficult
Wholesalers - Manufacturers
Advantages:
- Wholesaler carries out promotions
- Can get rid of products as soon as they are produced
- Wholesalers buy in bulk which saves deliveries
- Packaging and display of goods is carried out by the wholesaler
Disadvantages:
- Cut of profits is taken
- Loss of control of which retailers the product is sold to
- Loss of control about how the product is marketed
Wholesalers - Retailers
Advantages:
- Wholesalers carry out promotions
- Can trial small amounts of new products without being left with unsold inventory
- Can save on storage facilities as smaller amounts of inventory are purchased
Disadvantages:
- Wholesalers add on a margin of profit
- The same products are offered to competitors of the retailer
- May miss out on exclusivity deals offered by the manufacturer
