Distribution and Planning The 4 th P of the Marketing Mix - Place

Vocabulary to Know Channel Of Distribution Intermediaries Wholesalers Rack Jobbers Drop Shippers Retailers Brick & Mortar Retailers E-tailing Agents Direct Distribution Indirect Distribution

Distribution The path a product takes from producer or manufacturer to the final user.

Channel Members. Intermediaries (Middle Men) Any business involved in moving the products from the manufacturer to the final user. Are valuable because they often have expertise in areas that producers do not have. These areas include: Displaying Merchandising Creating Locations

Classified by whether or not they take ownership of the goods and services. Merchant Intermediaries (Merchants) Take ownership of products and services Ex. Retail Store Agent Intermediaries (Agents) Do not take ownership of the product or services Ex. Real Estate Agent

Merchant Intermediaries Wholesaler Buy large quantities of goods from manufacturers, store the goods, and then resell them to other businesses. Rack Jobbers Manage Inventory and Merchandising Drop Shippers Owned but never physically handle the products. Retailer Sell goods to the final consumer for personal use. Brick and Mortar Sell goods to the customer from their own physical stores. Non Physical Retailers Automatic retailing, Direct Mail and Catalog retailing, TV home shopping, and online retailing (e- tailing).

Agents Primary function is to bring the sellers and the buyers together. They are not connected with the buyer or seller. Examples of Agents Travel Agents, Brokers, Real Estate Agents, Independent Manufacturer’s Representatives. Agent Intermediaries

Channels of Distribution are classified into 2 categories Direct and Indirect Channels Direct distribution Occurs when the goods or services are sold from the producer directly to the customer; no intermediaries are involved. Indirect distribution Involves one or more intermediaries.

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