1.3.4 Distribution

Cards (7)

  • Four stage distribution channel (typical)
    producer, wholesaler, retailer, consumer
    groceries, clothing and electronics
  • Wholesaler
    business that buys from manufacturer in bulk and sells in smaller quantities to retailers - COSTCO
  • Three stage distribution channel
    producer, retailer, consumer
    products with high demand
    high profit margins
    Toshiba sells to Currys, to consumers
  • Two stage distribution channel
    manufacturer selling to consumer
    products sold online
    Ryanair
  • Changes in distribution to reflect social trends so business' can adjust their distribution strategies to better meet the needs of their customers and stay competitive in the marketplace
  • Online distribution and its change to reflect social trends
    convenient
    drop-shipping, which allows them to sell products without holding stock
    • Once the business has sold the products, they are shipped directly from the producer to the customer
    • This reduces the cost and complexity of distribution, making it easier for businesses to sell online
    • AMAZON
  • The Shift from Product-based Businesses to Service-based Businesses
    consumers value experiences over material possessions delivering services to customers directly, such as through a mobile app or website
    • This requires a different set of distribution capabilities than traditional product-based distribution
    • UBER delivers taxi service through mobile app
    • businesses' costs reduce
    • profitability increases