Place / Channels of distribution

• What is the channel of distribution?

  The path from producer to consumer
• What are the three most common channels of distribution?

  Producer to consumer, producer to retailer, producer to wholesaler
• What is a direct channel of distribution?

  Producer sells directly to the consumer
• What is a pro of the direct channel of distribution?

  No wholesaler or retailer involved
• What is a con of the direct channel of distribution?

  Higher distribution costs due to small volumes
• Why might consumers buy in smaller quantities through a direct channel?

  They are purchasing directly from the producer
• What marketing issue might arise for producers using a direct channel?


  Low consumer awareness of the product
• What is the second channel of distribution?

  Producer to retailer to consumer
• What is a pro of the producer to retailer channel?

  Retailers have high consumer reach
• What is a con of selling through retailers?

  Producers do not receive full consumer price
• What is the third channel of distribution?

  Producer to wholesaler to retailer to consumer
• What is a pro of the wholesaler channel?

  Wholesalers buy in bulk, ensuring sales
• How does selling to a wholesaler affect distribution costs?

  Distribution costs may be lower due to bulk sales
• What is a risk of using the wholesaler channel?

  Producers are far from the consumer
• What is an evaluation point for choosing a distribution channel?

  It depends on finances and profit potential
• What should producers consider regarding stock volume?

  High stock volume may require multiple channels
• What is a benefit of using multiple channels of distribution?

  Increased exposure and cash flow
• Why is the retailer's reputation important for producers?

  A low-end retailer can cheapen the product's image
• How can a good retailer reputation benefit producers?

  It can enhance the product's luxurious image
• What are the pros and cons of the direct channel of distribution?

  Pros:

  • No wholesaler or retailer involved
  • Potential for lower prices

  
  

  Cons:

  • Higher distribution costs
  • Low consumer awareness
  • Small purchase volumes
• What are the pros and cons of the producer to retailer channel?

  Pros:

  • High consumer reach through retailers
  • Less marketing burden on producers

  
  

  Cons:

  • Producers do not receive full consumer price
  • Potentially high distribution costs
• What are the pros and cons of the producer to wholesaler to retailer channel?

  Pros:

  • Wholesalers buy in bulk, ensuring sales
  • Lower distribution costs due to bulk sales
  • Less marketing cost for producers

  
  

  Cons:

  • Producers receive less profit per sale
  • Higher prices may lead to lower sales
  • Producers are distanced from consumers
• What factors influence the choice of distribution channel?

  • Financial capability to manage distribution
  • Volume of stock produced
  • Reputation of retailers and e-tailers