Presentation on theme: "PLACE. This all about the distribution of the product to the customer. How the firm gets its product to the market."— Presentation transcript:
This all about the distribution of the product to the customer. How the firm gets its product to the market.
CHANNELS OF DISTRIBUTION PRODUCER CONSUMER E.g. Farm Shop, Selling Online 1. Direct Method
2. Modern Method PRODUCER RETAILER CONSUMER
3. Traditional Method WHOLESALER PRODUCER RETAILER CONSUMER
Some products may be sold through agents. Agents provide a link between the buyer and the seller in exchange for a commission. Could be used to enter a foreign market, where a local agent would have more knowledge of the area
Brokers may also be used in the distribution channel. They tend to be used in markets such as insurance and share dealing.
Why use them? Buys in bulk – saves manufacturer money Bear the risk of holding stock Will break down bulk into smaller numbers Provides advice to producer on what is selling well. However, the use of a wholesaler makes it expensive on the customer. WHOLESALERS
Perform 4 functions: breaks down bulk supplies provides information to consumers stores goods and prepares them for sale physically sells to the consumer RETAILERS