Studied by 6 peoplewhat is a distribution channel
route taken from the producer to the customer
methods of distribution
retailer
wholsaler
agent
retailers
bulk breaking
sell in locations convenient to customers
add value to products by providing other services
features of common retailers
independents
supermarkets
department stores
chain stores
hypermarkets
kiosks
market traders
online retailers
independents
relatively small outlets owned by sole traders
supermarkets
large stores selling many product lines
cheaper than independents as they can afford to buy in bulk from manufacturers
located on cheap land with readily available parking
department stores
large stores split into distinct selling departments
aim to provide good quality products with customer service
chain stores
one owner opens multiple stores selling the same range of goods in many different locations regulated by the same central office with standardised:
products
pricing
store front
store layout
staff uniform
staff training and wages
they specialise in all sorts of product lines by bulk buying direct from manufacturers for low cost of sales
hypermarkets
very large
located on the outskirts of town
sell a wide range of goods
fewer staff
wide product range
cheaper than supermarkets
kiosks
small
limited range of foods
fast food, confectionary, newspapers
low set up costs
minimal overheads
price depends on location
market traders
small time businesses selling goods from market stalls
common
low overheads
cheaper than retailers
some move from one market to another
online retailers
buy goods from manufacturers and sell them online
2 types of e-commerce
business to consumers
business to business
business to consumers (B2C)
ordered online and delivered
click and collect
business to business (B2B)
businesses selling to other businesses
cheapest supplier
B2C - benefits to consumers
cheap due to low costs
24/7
variety and choice
can shop from anywhere
B2B - benefits to businesses
no costs of operating stores
low start up costs
low costs of transaction
less paper needed
payments can be made through online systems
wider market
24/7
choice when locating operations
disadvantages of e-commerce
increased competition
lack of human contact
heavy dependency on delivery services
technical problems
security risk and malware
poor aftersales
customers without internet access and cards are excluded
fake traders are difficult to identify
other distribution methods
direct selling
wholesaling
agents
direct selling
producers market products directly to consumers
methods of direct selling
shopping parties
telephone selling
mail order catalogues
door to door selling
direct response adverts
direct mail
internet
wholesaling
buy from manufacturers and sell to retailers
some break bulk, repack goods, redistribute smaller quantities, store goods and provide delivery services
stocks goods produced by many manufacturers
wholesaling - cash and carry stores
customers come, buy goods, pay cash and take goods
agents
link buyers and sellers
when are manufacturers most likely to use agents
when exporting, as agents reduce risk by knowing the market
what to look at when choosing distribution channels
nature of the product
cost
market
control
nature of the product
different types of products require different distribution channels:
services sold directly to customers
fast-moving consumer goods
high quality ‘exclusive’ products
products needing demonstration
cost
businesses choose the cheapest distribution channels
prefer direct channels
intermediary take share of the profit
bulk buy = lower prices
market
when selling to mass markets - use intermediaries
when targeting smaller markets - target customers directly
overseas markets - use agents
selling to other businesses - use direct channels
control
some producers like to have complete control over distribution
large businesses
more important
greater quantities of produce
benefitted from online selling
small businesses
benefitted from online selling
find it easier to sell to global markets
Note 
Flashcard (20)