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theme 1 booklet 8 1/2- distribution - Coggle Diagram
theme 1 booklet 8 1/2- distribution
distribution channels
manufactor of goods/ often use more than one channel
the process In getting the right product or service to the consumer in the right place at the right time
for a product to be successful it must be accessible and available. ease for the consumer to buy
how manufacturers get products to the consumer
manufacturer>consumer
direct method of distribution intermediaries are used and products are sold directly from the manufacturer to the consumer
manufacturer>retailer>consumer
three stages manufacturers like to sell into retailing as the retailers are spread over all the country giving them the volume of sales they are looking for.
applies to mass markets products such as Cadburys and retailers could be shop, department store, online retailers
manufacturer>wholesaler>retailer>consumer
four stages- manufacturers may prefer to deal with just a few wholesalers (warehouses) and sell in larger quantities. manufacturer will sell to warehouses that will go to their retailer and then the consumer.
wholesalers break bulk orders into smaller quantities that independent retailers will buy, wholesalers can offer trade credit (buy now pay later)
this method is usually used by small retailers
manufacturer>agent>warehouse>retailer>consumer
some manufacturers who wish to sell into another country may use an agent in that other country
the agent will speak that language and understand regulations
the agent is the middle person between the manufacture and the foreign wholesaler making it simple to sell to another country
however, it makes the supply chain longer which can push up the price to the consumer
changes in distribution to reflect social trends
benefits to consumers of online distribution
online distribution
THE USE OF ONLINE DISTRIBUTION CAN DEPEND ON THE TYPE OF CONSUMER SINCE SOME CUSTOMERS DO NOT TRUST OR HAVE THE SKILLS TO USE ONLINE RETAILING. SOME CUSTOMERS PREFER TO ORDER/BUY DIRECTLY
they can cater to a wider geographical market than traditional local shops
however not everyone may want to buy online
there are low barriers to entry as set up costs are small e.g. can be set up at home
businesses selling in a niche market are able to reach a wider audience
also known as e-commerce - the use of electronic systems to sell goods and services
it can be cheaper as online retailers have lower costs
consumers can shop 24/7
huge amount of choice
people can shop anywhere once they access the internet
benefits to businesses of online distribution
e-tailers may not have to meet the costs of operating in store so they are lower overheads. this reduces the costs of setting up and reduces overheads
staff are not needed as ordered are processed automatically so this lowers costs
world wide and can sell 24/7 so more revenue
businesses can choose to locate there warehouse in areas where costs are low.
BUSINESSES NEED TO UPDATE THEIR WEBSITE REGULARY AND SECURE TO PREVENT CUSTOMER DATA BEING STOLEN. THIS DEPENDS ON VIRUSES/FAILURES AND SOME CUSTOMERS MAY NOT BE E-TAILER FRIENDLY PREFER TO SHOP IN STORE.
changing from product to service
some businesses that used to sell products are now selling services and this has impacted distribution
for example, CD's and films are downloadable via the internet
distribution is the process of getting the right product or service to the right place