chapter 14: marketing mix, place

mv

Distribution Channel

Means by which a product is passed from the place of production to the customer.

Channel 1: Direct to consumers

( **Manufacturer sells products** **directly to consumer**)

(i.e. car components to car factory)

Channel 2: Using a retailer as the only intermediary

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(Producer **sells to retailers which sell to consumers)**

(i.e. farms selling food to big supermarkets)

Channel 3: Using a wholesaler and retailer as intermediaries

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(**Producers sell to wholesalers** – which buy in bulk and then divide their stock into smaller quantities and sell them to retailers)

Channel 4: Using an additional intermediary such as an agent

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A manufacturer hires an agent (person or business) that will sell products on behalf or manufacturer

Methods of distribution

* department stores
* chain stores
* independant retailers
* direct sales
* internet/e-commerce
* mail order
* supermarkets

E-commerce

Selling of goods and services through the internet

Selecting which distribution channel to use

* Type of product
* Is it technical?
* How often is it purchased?
* How expensive is it?
* How perishable is it?
* Where are customers located
* Where do competitors sell