Y10 BS QEGS Horncastle The Four Ps - Place tutor2u ™ GCSE Business Studies
Things to Think About <ul><li>How do businesses ensure that their product or services reach customers? </li></ul><ul><li>W...
Distribution Channels <ul><li>Products  reach  customers  via a “distribution channel” </li></ul><ul><li>The channel is th...
Wholesalers <ul><ul><li>Buy in large quantities from producers  </li></ul></ul><ul><ul><li>They sell to retailers who can ...
Wholesalers - Example Producer Wholesaler Retailer Customer Sale of Daily Newspapers Newspaper Publisher – e.g. The Sun, T...
Retailers / Agents / Distributors <ul><li>Distributors </li></ul><ul><ul><li>Distributors sell products as a local sales p...
 
Why use both wholesales and retailers? <ul><li>Advantages </li></ul><ul><li>Disadvantages </li></ul>
Why use both wholesales and retailers? <ul><li>Advantages </li></ul><ul><ul><li>Wider distribution – great where expected ...
Direct Marketing <ul><li>Involves a producer selling directly to the end customer  –  i.e. there are no other parts to the...
Why Use Direct Marketing? <ul><li>Advantages </li></ul><ul><li>Disadvantages </li></ul>
Why Use Direct Marketing? <ul><li>Advantages </li></ul><ul><ul><li>No intermediaries (e.g. retailers) to take part of prof...
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Y10 BS - Place - SGS

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Y10 BS - Place - SGS

  1. 1. Y10 BS QEGS Horncastle The Four Ps - Place tutor2u ™ GCSE Business Studies
  2. 2. Things to Think About <ul><li>How do businesses ensure that their product or services reach customers? </li></ul><ul><li>What are the routes to the customer? </li></ul><ul><li>What are the main advantages and disadvantages of the distribution options? </li></ul><ul><li>Relevant may include: costs of distribution; potential sales volume; impact on brand image of product </li></ul>
  3. 3. Distribution Channels <ul><li>Products reach customers via a “distribution channel” </li></ul><ul><li>The channel is the link between seller and buyer </li></ul>Producer Producer Producer Wholesaler Retailer Retailer Customer Customer Customer
  4. 4. Wholesalers <ul><ul><li>Buy in large quantities from producers </li></ul></ul><ul><ul><li>They sell to retailers who can order in smaller amounts – (break bulk) </li></ul></ul><ul><ul><li>Wholesaler buy direct from the producer and add a profit margin onto the price they charge the retailer </li></ul></ul>
  5. 5. Wholesalers - Example Producer Wholesaler Retailer Customer Sale of Daily Newspapers Newspaper Publisher – e.g. The Sun, The Times – who send bulk print runs of newspapers to large depots run by wholesalers Wholesaler (e.g. John Menzies) packs newspapers into bundles for retailers (e.g. newsagents) Retailer (e.g. newsagent; petrol station) displays newspaper in store and delivers to homes The customer is the final buyer
  6. 6. Retailers / Agents / Distributors <ul><li>Distributors </li></ul><ul><ul><li>Distributors sell products as a local sales point </li></ul></ul><ul><ul><li>Usually offer products from several / many producers – customers enjoy greater choice and convenience </li></ul></ul><ul><ul><li>Can buy from wholesalers or direct from producers </li></ul></ul>Producer Retailers / distributers Customer
  7. 8. Why use both wholesales and retailers? <ul><li>Advantages </li></ul><ul><li>Disadvantages </li></ul>
  8. 9. Why use both wholesales and retailers? <ul><li>Advantages </li></ul><ul><ul><li>Wider distribution – great where expected production levels are high </li></ul></ul><ul><ul><li>Distribution costs can be minimised as retailers and wholesalers can collect or accept bulk deliveries. </li></ul></ul><ul><li>Disadvantages </li></ul><ul><ul><li>Profit margins on high volume production is usually lower </li></ul></ul><ul><ul><li>Less control over the way your product is distributed </li></ul></ul><ul><ul><li>Less control over the way that your product is presented to the customer </li></ul></ul>
  9. 10. Direct Marketing <ul><li>Involves a producer selling directly to the end customer – i.e. there are no other parts to the distribution channel </li></ul><ul><li>Various Methods: </li></ul><ul><ul><li>E-commerce </li></ul></ul><ul><ul><li>Door to door selling </li></ul></ul><ul><ul><li>Farmers Markets </li></ul></ul>Producer Customer
  10. 11. Why Use Direct Marketing? <ul><li>Advantages </li></ul><ul><li>Disadvantages </li></ul>
  11. 12. Why Use Direct Marketing? <ul><li>Advantages </li></ul><ul><ul><li>No intermediaries (e.g. retailers) to take part of profits </li></ul></ul><ul><ul><li>Producer can control own marketing </li></ul></ul><ul><ul><li>Reach customers directly </li></ul></ul><ul><ul><li>Don’t use “mass marketing” techniques such as advertising – which can save money </li></ul></ul><ul><li>Disadvantages </li></ul><ul><ul><li>Higher costs of distribution of promotional material </li></ul></ul><ul><ul><li>Costs of making and buying distributional material (e.g. catalogues for Next) and capital (vans/stalls etc.) </li></ul></ul>

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