place

• what is place

  Place, otherwise known as distribution, is about how a business gets its

  products to its customers. It involves making sure that products are available

  to customers at the right place and time and in the right quantities.
• what is the definition of a distribution channel ?

  The path/route taken by a product as it goes from the manufacturer / producer to the ultimate / final consumer.
• Traditional distribution using a wholesaler:

  Producer > Wholesaler > Retailer > Consumer.

  The manufacturer/producer has the convenience of selling in bulk to wholesalers. The wholesaler has a role in breaking bulk so smaller quantities can be purchased by retailers, usually smaller retailers who cannot afford to bulk buy. More intermediaries can sometimes mean higher prices for end customers due to mark-up/cost plus pricing.
• Distribution via wholesalers

  Delivering to small retailers or bed and breakfast businesses in remote locations would not be economic for large retailers – wholesalers enable the products of the large manufacturers to be sold in a whole variety of outlets.
• break bulk advantages - wholesaler

  • This reduces transport costs
  • The wholesaler holds the stock (expensive), advises on promotion, bears some of the risk and simplifies distribution.
  • Reduced profit margin for producer.
• Modern distribution using a retailer:

  Producer > Retailer > Consumer

  Large retail businesses (oligopolies) like supermarkets can afford to bulk buy straight from the producer and so do not require using wholesalers. Large retailers could buy in bulk and store all goods at their own distribution centres who then deliver produce to different stores located around the UK which can be accessed by customers.
• Direct selling/e-commerce distribution:

  Producer > Consumer

  Direct distribution has increased in popularity due to the growth of communication technology such as the internet. This allows for much cheaper prices due to no intermediaries.
• producer to consumer advantages

  • Close contact with customer = better knowledge of market
  • handling = More profit
• producer to consumer examples

  • mail order catalogues
  • industrial goods – B2B
  • vending machines
  • factory / farm shops
  • teleshopping
• selling through agents

  • Operate in most channels
  • Provide a link between sellers and buyers. They are not employed by the company but sell the products or services for a commission.
• what is the definition of multi-channel distribution

  Where a business uses more than one type of distribution

  channel. For example, Apple sells phones via its website using

  e-commerce, through its own stores and through retailers such as

  Carphone Warehouse.
• why use a multichannel distribution

  Using a multichannel strategy will increase the number of potential customers and therefore increase sales and profit.
• multichannel distribution disadvantage

  It will also increase costs as more resources will be needed and the business must make sure there is enough demand for its products and services to make the investment worthwhile.
• omni - channel distribution definiton

  • Businesses will attempt to make their multi-channel distribution consistent by using the same branding, image and processes to give customers the same buying experience, whatever channel they choose.
  • Physical stores, websites, e-mails, social media messaging all show the same messages, offers, and products.
  • It helps to create customer loyalty and provides a continuous experience for the customer.
• what will finding the right distribution depend on ?

  • Type of product
  • Reaching the target market
  • Quantity and frequency
  • Geographical location
  • Keeping costs to a minimum
  • Degree of control > gain a competitive advantage
  • Keep up to date with social and technological trends