Channels of distribution

• what does a distribution channel do?

  It provides a link between the producer and the consumer. A distribution channel might have just two layers (producer and consumer), but it might have other layers, such as a retailer and a wholesaler.
• What is a wholesaler?

  A wholesaler typically buys and stores large quantities of several producers' goods and then breaks into the bulk deliveries to supply retailers with smaller quantities. For small retailers with limited order quantities, the use of wholesalers makes economic sense
• What is a retailer?

  Retailers are commonly found in consumer markets such as clothing and electrical goods. Producers such as Sony, Panasonic, Canon sell their goods directly to large retailers and e-retailers such as Amazon, Tesco and Carphone Warehouse who then sell onto the final consumer
• What is direct marketing?

  Direct marketing has no intermediary levels. The manufacturer sells directly to customers. An example of a direct marketing channel would be an Adidas factory outlet store. Apple High street stores are another example of direct marketing. Many holiday companies also market directly to consumers online, bypassing a traditional retail intermediary - the travel agent.
• What is e-commerce?

  E-commerce is the term give to the purchase of products and services online. An outdoor clothing company such as Mountain Warehouse has high street retail outlets but increasingly it will sell its products to consumers online through its own website and via third party websites such as Amazon and E-bay.
• Benefits to e-commerce

  • Access to more customers thus chances of increased market share/profit.
  • Access to customer information, thereby allowing the organisation to target products/marketing to those most likely to buy.
  • Can gain customer feedback thereby can change things to gain better customer satisfaction.
  • Customers can shop 24/7 which gives the organisation maximum time for customers to buy.
  • Can show entire product line thereby increasing customer choice.
  • E-commerce opens up international markets to firms as overseas customers can view products for sale online.
• what are the 4 channels of distribution?

  Retail, wholesale, direct, online.

  A) wholesaler

  B) retailer

  C) retailer

  D) producer

  E) consumer/customer

  
• what are the factors to consider when choosing a channel of distribution

  • product type
  • finance available
  • legal restrictions
  • image of product
  • e-commerce