distribution
- Created by: Hetal M
- Created on: 23-04-17 13:48
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- distribution
- distribution channels
- link between production and consumption
- gather market information
- communicate promotional offers
- financing the inventory
- retailers
- final step in the chain - deals directly to customer
- focused on consumer markets
- broad geographical coverage
- retailer chooses final price
- holds stock
- producer - retailer - customer
- wholesalers
- next after production
- bulk buy and sell smaller quantities to retailers
- reduce producers transport cost - fewer journeys
- make money by selling at lower prices
- distributors
- specialise in a particular industry
- distributors hold stock
- offers from many producers = greater choice
- producer - distributor - customer
- agents
- producer - agent- customer
- tertiary sector - travel, insurance, publishing
- sales achieved by comission
- don't hold stock
- multichannel distribution
- using more than one type of channel
- reach more target market segments
- products are more available
- enables higher revenue
- channel conflict
- complex to manage
- pricing strategy becomes confused
- direct distribution
- producer deals directly to consumer
- more control over distribution, display and running of shop
- online
- producer keeps all of the selling price
- high profits = finance the advertising and product devlopment
- indirect distribution
- involves intermediaries between producer and consumer
- used if people live far geographically, better use of resources, different segmentations can be reached by different channels
- involves intermediaries between producer and consumer
- marketing mix = distribution (place)
- retailers key issues = opportunity costs and risks
- shelf space is limited = not easy holding stock
- manufacturers need to know if its a planned or impulse purchase
- choosing appropriate distributors
- companies need to choose the right distributor
- e.g. expensive brand needs to be distributed to a certain location to a certain demographic
- retailers have control over which products are held where
- companies need to choose the right distributor
- traditional, physical channel
- producer - wholesaler - retailer - consumer
- usually sell to wholesalers
- sell onto smaller independent shops
- smaller producers find it hard to achieve distribution in big chains
- profit added by wholesalers = final retail price
- sell onto smaller independent shops
- direct to retailer
- getting rid of the middle men
- sells directly to big chains
- more cost effective
- tough negotiation for the right price and credit terms
- large retailers = get discount for large orders
- distribution channels
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