What are distribution channels?
Summary
TLDRThis script explores distribution channels, the pathways businesses use to deliver products to consumers. It outlines three main types: direct sales, through retailers, and via wholesalers and retailers. Factors influencing channel choice include distribution costs, market nature, and the producer's desire for marketing control. Examples like Dell Computers for direct sales and large retailers for modern distribution are provided. The script challenges viewers to consider the best distribution methods for products like double-decker buses, washing powder, and dog herbal remedies, encouraging further learning at learnloads.com.
Takeaways
- 🔗 Distribution channels are the pathways businesses use to deliver products to consumers.
- 🛒 There are three main types of distribution channels: direct to consumer, via retailers, and via wholesalers and retailers.
- 🏭 Direct sales are suitable for niche products with low volume sales and can be facilitated through online platforms, mail order, or manufacturer-owned shops.
- 🛍️ Retailer distribution involves large retailers purchasing goods directly from manufacturers and selling to consumers, leveraging bulk buying power for discounts.
- 🛒 Wholesaler and retailer distribution is a traditional method where wholesalers buy in bulk from producers and sell to various retail businesses.
- 💼 The choice of distribution method is influenced by distribution costs, market nature, and the producer's desire for marketing control.
- 🚚 Using intermediaries like wholesalers can reduce delivery costs for producers but also means sharing profit with each intermediary in the chain.
- 🏬 Direct selling can be attractive if customers are willing to visit a producer's outlet, as seen with 'pick your own' fruit farms.
- 🌍 High volume, mass-market products are typically distributed through retailers due to the wide consumer base.
- 🏭 Industrial goods with a small customer base may consider direct distribution due to the simplicity of reaching fewer customers.
- 🎯 Some producers prefer direct distribution for the control it offers over product promotion and pricing strategies.
Q & A
What is the definition of distribution channels?
-Distribution channels are the means by which businesses get products to their consumers, involving links in a chain of distribution as products are sold between different businesses on their way to the final consumer.
How many main types of distribution channels are there?
-There are three main types of distribution channels: direct to the consumer, to the consumer via retailers, and to the consumer via wholesalers and retailers.
What are the examples of businesses that sell directly to the consumer?
-Well-known examples of businesses that sell directly to the consumer include direct line insurance and Dell computers.
What is the advantage of selling products through large retailers?
-Large retailers have enough buying power to negotiate bulk discount prices with producers, which benefits the producer by allowing them to focus on making the product without needing complicated distribution systems.
How does distribution via wholesalers and retailers work?
-In this type of distribution channel, wholesalers purchase in bulk from producers and then sell smaller batches to many different retail businesses, such as independently owned convenience, grocery stores, and pet shops.
What factors influence the choice of distribution method?
-Decisions about distribution methods are influenced by the cost of distribution, the nature of the market, and the extent to which the producer wishes to control how products are marketed.
Why might a producer choose to sell directly to the consumer?
-A producer might choose direct selling if customers are willing to come to a factory shop or outlet controlled by the producer, which can reduce the cost of distribution and give the producer more control over marketing.
What is the significance of the market size in choosing a distribution method?
-High volume mass market products need to be sold to a large number of customers, making distribution through retailers more feasible, while direct distribution becomes more viable for products with a smaller customer base.
How does using intermediaries affect a producer's control over product promotion and pricing?
-Using intermediaries like wholesalers and retailers means handing over some control over promotion and pricing to these intermediaries, which can be advantageous for promotion but may not always align with the producer's marketing strategies.
What are the potential benefits and drawbacks of using intermediaries in distribution?
-Benefits include reduced delivery costs as fewer deliveries are needed, while drawbacks include the need to share profits with intermediaries and potentially less control over how products are marketed.
Can you suggest the best way to distribute double-decker buses, washing powder, and herbal remedies for dogs based on the script?
-Double-decker buses might be best distributed directly to public transport authorities or via specialized vehicle retailers. Washing powder, being a high-volume consumer good, is likely best sold through retailers. Herbal remedies for dogs could be distributed directly if targeting a niche market or via pet specialty stores for broader reach.
Outlines
📦 Understanding Distribution Channels
This paragraph explains the concept of distribution channels, which are the methods businesses use to deliver products to consumers. It outlines three main types of distribution channels: direct to the consumer, via retailers, and via wholesalers and retailers. Direct sales are suitable for niche products with low volume sales and can occur online, through mail order, or in manufacturer-owned shops. Retailer distribution involves large retailers purchasing goods from manufacturers and selling to consumers, offering benefits like bulk discounts. The traditional distribution channel through wholesalers and retailers involves at least two intermediaries, allowing manufacturers to reach small retail businesses without high transport costs. Factors influencing the choice of distribution method include distribution costs, market nature, and the producer's desire for marketing control. Examples like direct line insurance, Dell computers, and 'pick your own' fruit farms are given to illustrate direct sales, while the necessity of intermediaries for high-volume consumer goods like toothpaste is discussed.
🛒 Choosing the Right Distribution Strategy
The second paragraph delves into the decision-making process for selecting a distribution channel, emphasizing that choices are influenced by cost, market characteristics, and the level of marketing control desired by the producer. It invites the audience to consider the best distribution methods for specific products: double-decker buses, washing powder, and herbal remedies for dogs. The paragraph reinforces the idea that distribution strategies must be tailored to the product type and market conditions, suggesting that different products may benefit from different channels. It also directs interested individuals to 'learnloads.com' for further information.
Mindmap
Keywords
💡Distribution
💡Distribution Channels
💡Direct Sales
💡Retailers
💡Wholesalers
💡Chain of Distribution
💡Intermediaries
💡Cost of Distribution
💡Market Nature
💡Control Over Marketing
💡Industrial Goods
Highlights
Distribution channels are the means by which businesses get products to their consumers.
There are three main types of distribution channels: direct to the consumer, via retailers, and via wholesalers and retailers.
Direct sales can be made online, through mail order, or through shops owned by the manufacturer.
Businesses selling direct do not rely on shops or other intermediaries to sell their product.
Well-known examples of direct sales include direct line insurance and Dell computers.
Distribution via retailers involves large retailers purchasing goods from manufacturers and selling to consumers.
Large retailers have buying power to negotiate bulk discount prices with producers.
Producers benefit from concentrating on making the product without needing complicated distribution systems.
Distribution via wholesalers and retailers involves at least two intermediaries.
Wholesalers purchase in bulk from producers and sell smaller batches to retail businesses.
Using wholesalers is effective for manufacturers to get products stocked in small retail businesses without high transport costs.
Decisions on distribution methods are influenced by the cost of distribution, the nature of the market, and the producer's desire for marketing control.
Producers using intermediaries like wholesalers and retailers reduce the number of deliveries needed.
Intermediaries seek to make a profit, which means the purchase price they pay is less than what producers might charge if selling direct.
Direct selling can be attractive if customers are willing to come to a factory shop or outlet controlled by the producer.
High volume mass market products are often distributed through retailers due to the large customer base.
Producers of industrial goods may consider direct distribution because they have a small number of customers.
Using intermediaries means handing over some control over promotion and pricing to them.
For some producers, only direct distribution provides the control over marketing they seek.
Distribution channel decisions are influenced by cost, market nature, and the producer's marketing control preferences.
Transcripts
what are distribution
channels distribution channels are the
means by which businesses get products
to their
consumers distribution involves links in
a chain of distribution as products are
sold between different businesses on
route to the final consumer there are
three main types of distribution channel
one direct to the consumer two to the
consumer via retailers three to the
consumer via wholesalers and
retailers let me say a little about each
of these firstly
direct Niche products with relatively
low volume sales are often sold direct
direct sales could be made online
through mail order or through shops
owned by the
manufacturer businesses selling direct
do not rely on shops or other
intermediaries to sell their product
well-known examples of businesses that
sell direct to the consumer are direct
line insurance and Dell
computers distribution via
retailers large retailers often purchase
goods from manufacturers and sell on to
Consumers this method of distribution is
sometimes called modern
distribution products reach consumers
via one
intermediary large retailers have enough
buying power to to negotiate bulk
discount prices with producers the
producer benefits by being able to
concentrate primarily on making the
product without needing complicated
Distribution Systems to supply thousands
or millions of
customers producers just distribute to a
much smaller number of
retailers distribution via wholesalers
and
retailers this type of distribution
Channel involves at least two
intermediaries wholesalers and retailers
this is sometimes called traditional
distribution wholesalers are businesses
that purchase in considerable bulk from
producers and then sell smaller batches
to many different retail businesses for
instance independently owned convenience
grocery stores and Pet Shops usually buy
their stock from
wholesalers using wholesalers is an
effective way for manufacturers to get
products stocked in small retail
businesses without having the transport
cost involved in making small deliveries
to each of
them what factors will influence which
method of distribution is
chosen decisions are influenced by the
cost of distribution the nature of the
market and the extent to which the
producer wishes to control how products
are
marketed as already mentioned an
advantage to producers of using
wholesale saers and larger retailers is
that far fewer deliveries need to be
made than would be needed if the
delivery were straight to the consumer
this reduces the cost of
distribution on the other hand each
intermediary involved in the chain of
distribution seeks to make a profit the
purchase price that retailers and
wholesalers pay is inevitably less than
the price that producers might charge if
they were selling direct to the
consumer if customers are prepared to
come to a factory shop or some other
Outlet controlled by the producer then
DirectX selling might look attractive a
classic example of this is the pick your
own Fruit
Farm high volume mass market products
have to be sold often to a very large
number of customers there's no such
thing as a local toothpaste manufacturer
for instance the market for this sort of
goods is National or possibly
International for that that reason it
usually makes sense to distribute M
market products through
retailers on the other hand if a market
has a smaller number of customers direct
distribution becomes more
feasible producers of industrial goods
like airplanes or industrial robots May
seriously consider direct distribution
because they have a small number of
customers getting these products to the
consumer is in some ways far less
complex than delivering consumer Goods
to millions of
people whenever a producer uses an
intermediary to sell its products it's
handing a degree of control over
promotion and price to the intermediary
this may be to the advantage of the
producer being stocked in an established
national retail chain can mean that the
product is well
promoted on the other hand the way that
an intermediary like a retailer markets
a product may not suit the produc
producer for some producers only direct
distribution provides them with the
control over marketing that they
seek so to sum up distribution channels
are the means by which businesses get
products to their consumers there are
three main types of distribution on
channel Direct via retailers via
wholesalers and
retailers decisions made about how a
product is distributed are influenced by
the cost of distribution the nature of
the market and the extent to which the
producer wishes to control
marketing you might like to try this
activity suggest with reasons the best
way to distribute the following products
a double decker buses B washing powder C
herbal remedies for
dogs to find out more visit learn
loads.com
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