1.3.4 Distribution Flashcards
What is a 4-way distribution channel & when is it commonly used for?
4 stages:
Producer, Wholesaler, Retailer,Consumer
Channel is commonly used for products such as groceries, clothing & electronics
What is the 3 stage distribution channel & when is it commonly used for?
Eliminates the wholesaler stage:
Producer, Retailer,Consumer
This channel is often used for products with high demand or where the cost of distribution is high
& Often used for products with high profit margins, where the manufacturer can afford to sell directly to the retailer and still make a profit
What is the 2 stage distribution channel & what is it commonly used for?
Eliminates both wholesaler & retailer stages
Manufacturer selling directly to the end consumer
Commonly used for products that are sold online or through direct sales channels
What changes in distribution are there to reflect social trends?
- Online distribution
- The shift from product based businesses to service based business
What is online distrubution & why has it become increasingly popular?
- Has become increasingly popular due to the convenience & accessibility it offers to consumers
- Many businesses now use drop-shipping which allows them to sell products without holding stock
- Once business has sold products they are shipped from the producer to the customer
- This reduces cost & complexity of distribution making it easier for businesses to sell online
What is meant by shifting from product based businesses to service based businesses & why is it happening more?
- Consumers increasingly value experiences over material possessions & this shift has impacted distribution, as delivery of services is often quite different from delivery of physical products
- Distribution for service-based businesses may involve delivering services to customers directly
- This requires a different set of distribution capabilities than traditional product-based distribution
