Place/Distribution

Place or distribution are activities that make the products available to customers when and where they want to purchase them

Distribution channels or marketing channels: Are the routes taken to get the product from the factory to the customer.

1. Producer to customer. This is the simplest channel and involves no intermediaries. Virtually all services, from tax advice to car repairs, use this method. (image)

2. Producer to retailer to customer. A retailer is an intermediary who buys from producers and resells to customers. This channel is often used for bulky or perishable products such as furniture or fruit. (image)

3. Producer to wholesaler to retailer to customer. This is the most common method used for the distribution of consumer goods. A wholesaler is an intermediary who buys in bulk, from the producer, then resells in smaller quantities to retailers. (image)

4. Producer to agent to wholesaler to retailer to customer. An agent distributes products to wholesalers but never owns the product. Agents are paid a commission by the producer. Usually agents are used for inexpensive, frequently used products. A business that does not have any sales representatives will often use an agent instead (image)

Non-store retailing — that is, retailing activity conducted away from the traditional store — is gaining in popularity. Methods such as door-to-door selling, mail-order catalogues, party-plan merchandising and vending machines have been used for a number of years.

It also include both e and m-commerce. Translation - online shopping as another form of distribution as it can travel from the warehouse rather than to a physical retail location saving both emissions and $$$

a) E-commerce refers to the buying and selling of goods and services via the internet. The web is revolutionising the way consumers shop. Consumers who are ‘time poor’ prefer the convenience of shopping online. Other consumers like being able to shop around for the cheapest price or have the opportunity to select from a wide range of products at a time that suits them. Back in 2000, less than 1% of retail sales came from e-commerce. However, online sales have climbed each year since then, and by 2016 online sales made up about 8% of total retail sales.

b) Mobile commerce (m-commerce) refers to the buying and selling of goods and services through wireless handheld devices such as smartphones and tablets. While m-commerce is actually still only a small proportion of commerce generally, it is a very fast-growing proportion.

Physical distribution is the movement of the products themselves through their channels of distribution. It is a combination of several interrelated functions, including transportation, warehousing and inventory control.

TWI - Eco's TWI trade weighted index (things you need to trade) or tyres wear in

Transport

The method of transportation a business uses will largely depend on the type of product and the degree of service the business wishes to provide. The four most common methods of transportation are rail, road, sea and air.

Warehousing

Warehousing is a set of activities involved in receiving, storing and dispatching goods. A warehouse acts as a central organising point for the efficient delivery of products.

Inventory

Customers find it frustrating when a product they wish to purchase is ‘out of stock’, and a business that repeatedly allows this to happen will lose sales and market share. To avoid this, businesses may implement an inventory control system. If a business carries too much stock on its inventory, it will experience high storage costs. However, too little stock results in lost sales or ‘stock-out costs’. The goal of inventory is to find the correct balance between these two situations.

2011

Q1 Which of the following products is most likely to have an exclusive channel for distribution?

(A) Computers

(B) Soft drinks

(C) Mobile phones

(D) Designer jewellery

2014

Q8

A business has shifted from intensive distribution to more selective distribution. What is the most likely reason for this?

(A) To increase market share

(B) To decrease personal selling strategies

(C) To reposition products as higher quality

(D) To expand the number of intermediaries

2015

Q21

A producer of gourmet ice-creams chooses selective distribution for her products.

(a) Why might the producer have chosen selective distribution for her products? 2 marks

(b) Outline ONE physical distribution issue that will need to be considered. 2 marks

2016

Q22

(b) With reference to the information, recommend a strategy for promoting game B. 3 marks

(c) With reference to the information, recommend a strategy for distributing game C. 3 marks

2017

Q5 A manufacturer sells her organic meals only to major supermarkets.

Which distribution channel has the manufacturer chosen?

A. Exclusive

B. Intensive

C. Selective

D. Warehousing