Place/distribution - aishscbusinessstudies

By Jemima , Michael , Claus and Jeremy
 Place/distribution
 The process of distributing the product from where it is made to the consumer.
 Distribution channels - the channels by which a product is moved from the place of
manufacture to the consumer.
 Intermediary- a business that purchases the final product and then takes on the responsibility
of selling this product to the consumer.
 There are three channels of distribution:
 Producer to consumer- where the good or service is produced by an individual/organisation
and is then passed directly onto the consumer. There are no intermediaries.
 Advantages: It allows the producer to maintain control over all areas of the product and provides the
producer with a direct point of contact with consumers,.
 Produce to retailer to consumer- where the good is produced and then passed on to the
retailer who passes it onto consumers.
 Advantages: Allows the producer to concentrate on manufacturing. There is greater
distribution and access to the good.
 Producer to wholesaler to retailer to consumer- where the good is produced and then passed
on a wholesaler who sells part of the stock to the retailer who passes it onto consumers.
 Advantages: allows the produce to hold lesser amounts of idle stock. Marketing and sales tend
to be the responsibility of the retailer so less costs.
 1. Intensive distribution: This occurs when the business wishes to
saturate the market with its product. Consumers can shop at local
outlets and be able to purchase the product. e.g. Convenience
goods, such as milk
 2. Selective distribution: This involves using only a moderate
proportion of all possible outlets. Clothing, furniture and electrical
appliances are often distributed using this method.
 3. Exclusive distribution: This is the use of only on retail outlet for a
product in a large geographic area. This method is commonly used
for exclusive, expensive products. E.g. Roll Royce
 Physical distribution is all those activites concerned with the
efficient movement of the product from the producer to the
customer. Physical distribution is therefore the movement of the
products themselves through their channels of distribution. It is a
combination of several interrelated functions, including
transportation, warehousing and inventory control
 Warehousing is a set of activities involved in receiving, storing and
dispatching goods.
 Inventory control is a system that maintains quantities and
varieties of products appropriate for the target market
 Place or Distribution: Are activities that make the products
available to customers when and where they want to purchase
 Channels of distribution or marketing channel: The routes taken
to get the product from the factory to the customer
 Market coverage: Refers to the number of outlets a firm chooses
for its product
 Physical Distribution: All those activities concerned with the
efficient movement of the products from the producer to the
 1.
Outline the four most commonly used distribution channels
 2. Describe ONE of the three channel choices that a business
has to cover the market