Unit 15: The marketing mix: Place
Distribution channel is when the product is manufactured from the place of production to the customer or ratailer
Distribution channel 1
Advantages:
- It is very simple
- Low price if we sell directly to the consumer
- Products can be sold by internet or email
- The consumers may not live near the factory => cannot go there to buy
- It may be expensive to send the products by post
Distribution channel 2
Advantages:
- Can sell large quantities to retailers
- Reduced distribution cost (compared to distribution channel 1)
- No face-to-face with consumers
- Have to share the profit with the retailer
Distribution channel 3
Wholesaler is a person or a business that buy a large quantity of products then resells to the retailer
Advantages:
Advantages:
- Can reduce the storage cost
- Consumer may get a credit =>goods straight away and pay later date
- Small retailer can purchase small quantity of product from wholesaler
- More expensive for small shop to buy the products from wholesaler
- Product may take longer time to reach the shop => Quality of product is decreased
Distribution channel 4
Agent is an independent person or business that is appointed to deal with the sales and distribution of product or range of products
Advantages:
Advantages:
- If the producer don't know the best way to sell products, by using this method they can solve the problem
- Less control on product to the consumers
- Have to share more profit
Methods of distribution
E-commerce
Advantages for business:
- Low cost promotion
- Shop may not need
- Consumer may buy more products
- Competition is very high
- Web design can be expensive
- No face-to-face contact with consumer
Advantages for consumer:
- Don't need to leave house
- Payment by credit
- Buy the products without competition
- Need to access to the internet
- Cannot touch or try the product
- No face-to-face contact so difficult to find the information about the product