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Place (Short Distribution Channels: (Industry products, Few customers,…
Place
Short Distribution Channels:
Industry products
Few customers
Expensive, complex goods
Infrequent sales
Bespoke (custom made) products
Bulky products
Services
Long Distribution Channels
Consumer products
Manny customers
Inexpensive, simple goods
Frequent sales
Standard products
Small products
Goods
How to get the product from factory to customer.
Direct Selling (0-level channel):
manufacture ----> customer The internet has made it easier for producer to sell direct to the customer this is called e-commerce.
Indirect Selling (1-level channel)
:
manufacture ----> retailer----> customer
Direct selling through an agent (1-level channel)
: manufacture ----> agent ----> consumer
Indirect Selling (2-level channel)
wholesaler ----> retailer----> consumer This is a traditional distribution channel used for conveniences goods, eg fast food chains
Business choose a channel of distribution to suit their needs:
More profitable to sell direct, because retailer and wholesales do not take a slice of the profit.
On the other hand it is easier to use intermediaries, especially for conveniences goods.
The fewer intermediaries in the distribution chain, the more control a manufacture has over how it products are sold.
UK retailers trends have changed in recent years, as retailers have found cheaper more effective ways of distributing their products. Out-of-town retail parks, concessions (shops within shop), and mail order catalogues have cheaper overheads than high street stores and often offer customers other benefits, such as free parking.