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CHANNELS OF DISTRIBUTION - Coggle Diagram
CHANNELS OF DISTRIBUTION
Producer -> consumer
Disadvantages
Possibly high delivery cost (if sold in wide areas)
Storage cost high
Can't see/test product
Promotional activities paid by producer
Advantages
Producer fully controls marketing mix
Quickest to get product to customers (good for fresh food products)
Producer keeps all profit
Producer has direct contact with consumer => more market research opportunities
Producer -> retailer -> consumer
Disadvantages
Producer lose some control of marketing mix
Producer pays delivery costs to retailers
Retailers take some profit
Retailers migh sell competitors' product alongside with yours
Advantages
Retailer pays inventory costs
Retailer pays for advertising & promotional activities
Consumer can see/test product
Retailers more convenitently located
Producer -> wholesaler -> retailer -> consumer
Disadvantages
Losr more control over marketing mix
Lose more profit
Advantages
Transport cost to retailer paid by wholesaler
Wholesaler pays for storage costs
Wholesalers advertise & promote product
Producer sells goods in a larger market (tks to wholesalers - able to reach out to more consumers)
Whole salers buy in bulk -> breaks down into smaller quantities for retailers
Producer -> agent -> wholesaler -> retailer -> consumer
Disadvantages
Even more profit is lost
Advantages
Agent has specialist knowledge (beneficial for foreign market) -> finds wholesalers & retailers who are willing to buy product