3.4.9

Distribution Decisions

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Place

Place (or location) is about when and where a product (or service) is available to the people buying it.

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Distribution channels

  • The different ways that a business can distribute their product are called different “distribution channels”.
  • Some potential distribution channels for businesses are:
    • Manufacturer-wholesalers-retailers-customers.
    • Manufacturer-retailers-customers.
    • Direct to consumer.
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Businesses can have multiple distribution channels

  • For example, Nike have their own physical stores, but they also sell online and sell to retailers for them to sell in their stores.

Manufacturer-Wholesalers-Retailers-Customers

A business can distribute their product via wholesalers. Wholesalers sell products in bulk to a network of retailers and then retailers sell the products to customers.

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Large network of buyers

  • Wholesalers already have a large network of buyers.
    • This lets a business reach a lot of customers quickly.
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Less interaction with customers

  • A downside of using wholesalers is that the business will not have much personal interaction with customers.
    • This can lead to worse customer service.
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Profit sharing

  • Another downside is that both wholesalers and retailers take a cut of the profit. This means that customers are likely to pay higher prices.
    • This may make the business less competitive on price.

Jump to other topics

1What is Business?

2Managers, Leadership & Decision Making

3Decision Making to Improve Marketing Performance

4Decision Making to Improve Operational Performance

5Decision Making to Improve Financial Performance

6Improving Human Resource Performance

7Analysing the Strategic Position of a Business

8Choosing Strategic Direction

9How to Pursue Strategies

10Managing Strategic Change

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