This presentation explains in detail one of the four p's of marketing mix that is Place.
Other 3 P's of marketing mix will be uploaded later.
Keep following for more detailed presentations on business and Economics.
2. INTRODUCTION
• A product needs to be sold through the correct channel and be available at the right
place so that customers do not move onto competitors products.
• A distribution channel is the means by which a product is passed from the producer
to the customer.
• Means through which products are sold include departmental
stores,supermarkets,direct sales,internet etc.
• There are four channel of distribution.
3.
4. CHANNEL1:DIRECTTOCONSUMERS
• Producers sell their products directly to consumers.
• It is suitable for food products. E.g. Products sold directly from the farm.
• There is no wholesaler or retailer profit and hence the product is usually sold at a low
price.
• Products can be sold directly through the internet.
• However, some products can not be sold through the internet or sent through
delivery.
• It can be expensive to sent each item separately.
• Many people may not have access to farms or factories to buy the products directly.
5. CHANNEL2: RETAILDISTRIBUTION
• The producer sells the product to retail outlets who then sell it to the consumers.
• E.g. Supermarkets.
• Producers sell large quantities to retailers.
• Reduced distribution costs as compared channel 1 due to no need of sending the
products separately.
• However, there will now be no direct contact with the customers.
• Prices are usually high as the retailer covers his cost and sells at a price where he is
making a profit.
6. CHANNEL3: WHOLESALEDISTRIBUTION
• Wholesaler is a person or company that sells goods in large quantities at low prices,
typically to retailers.
• In this channel, wholesalers buy products from producers in large quantities and sells it to
retailers.
• It saves storage space for small retailers.
• Products with short shelf life can be bought in a fresh condition by retailers.
• Wholesaler can deliver products to retailers, reducing transport costs.
• However, the price is usually high.
• Wholesaler may not have full range of products.
• Retailers may find it expensive to buy from wholesaler rather than the producer.
7. CHANNEL4:DISTRIBUTIONTHROUGHAGENTS
• An agent is a person or business that looks after the sales and distribution of a
product. The agent sells on behalf of the producer.
• Producer is able to expand into markets where they had minimum knowledge.
• Agents know the market conditions well and so are able to sell the products
accordingly.
• However, the producer has no control on how the product is being sold.
• Prices would be very high due to profits of the agent , retailer , wholesaler and the
producer.
8. SELECTINGTHE BESTDISTRIBUTIONCHANNEL
• There are a number of question which need to be answered while choosing the best
distribution method which are:
• What type of product it is?
• Is the product technical?
• Where the competitors sell the products?
• How often is the product purchased?
• Is the product perishable?
• Where are the customers located?