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Business_A-level_Edexcel

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  1. 1-marketing-and-people

    1-1-meeting-customer-needs
    3 主题
  2. 1-2-market
    5 主题
  3. 1-3-marketing-mix-and-strategy
    5 主题
  4. 1-4-managing-people
    5 主题
  5. 1-5-entrepreneurs-and-leaders
    6 主题
  6. 2-managing-business-activities
    2-1-raising-finance
    4 主题
  7. 2-2-financial-planning
    4 主题
  8. 2-3-managing-finance
    3 主题
  9. 2-4-resource-management
    4 主题
  10. 2-5-external-influences
    3 主题
  11. 3-business-decisions-and-strategy
    3-1-business-objectives-and-strategy
    4 主题
  12. 3-2-business-growth
    4 主题
  13. 3-3-decision-making-techniques
    4 主题
  14. 3-4-influences-on-business-decisions
    4 主题
  15. 3-5-assessing-competitiveness
    3 主题
  16. 3-6-managing-change
    3 主题
  17. 4-global-business
    4-1-globalisation
    5 主题
  18. 4-2-global-markets-and-business-expansion
    5 主题
  19. 4-3-global-marketing
    3 主题
  20. 4-4-global-industries-and-multinational-corporations
    3 主题
  21. 5-exam-technique
    5-1-the-exam-papers
    4 主题
  22. 5-2-business-studies-skills
    1 主题
  23. 5-3-structuring-your-responses
    5 主题
  24. 6-pre-release-preparation
    2025-pre-release-music-industry
    9 主题
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Types of distribution channels

  • Distribution channels refer to the various intermediaries through which goods/services move from the manufacturer to the end customer 

Common distribution channels

Flow chart depicting three types of distribution channels: four-stage (producer, wholesaler, retailer, consumer), three-stage (producer, retailer, consumer) and two-stage (producer, consumer).
The three different types of distribution channels businesses can use to move products from the manufacturer to the end consumer

Four-stage distribution channel

  • A traditional channel consists of four stages: producer, wholesaler, retailer and consumer

  • This channel is commonly used for products such as groceries, clothing and electronics

    • For example, The Coca-Cola Company produces the soft drink and then sells it to a wholesaler, which in turn sells it to a retailer

    • The retailer then sells the soft drink to the end customer

Three-stage distribution channel

  • The three-stage distribution channel eliminates the wholesaler stage, with the producer selling directly to the retailer

  • This channel is often used for products with high demand or where the cost of distribution is high

  • This channel is often used for products with high profit margins, where the manufacturer can afford to sell directly to the retailer and still make a profit

    • For example, Toshiba produces laptops and sells them directly to retailers such as Currys, which then sell them to the end customer 

Two-stage distribution channel

  • The two-stage distribution channel eliminates both the wholesaler and retailer stages, with the manufacturer selling directly to the end consumer

  • This channel is commonly used for products that are sold online or through direct sales channels

    • For example, Ryanair sells its service (passenger tickets) directly to the end customer on its website 

  • Changes in distribution have been impacted by social trends such as the growth of e-commerce and the shift from product-based businesses to service-based businesses

  • By understanding these trends, businesses can adjust their distribution strategies to better meet the needs of their customers and stay competitive in the marketplace

 The growth of e-commerce

Explanation

Example

  • Online distribution has become increasingly popular due to the convenience and accessibility it offers to consumers 

  • Many businesses now use drop shipping, which allows them to sell products without holding stock

    • Once the business has sold the products, they are shipped directly from the producer to the customer

    • This reduces the cost and complexity of distribution, making it easier for businesses to sell online

  • Amazon is known as a third-party logistics provider

  • It provides businesses with the infrastructure and online marketplace that allows them to reach a wider audience and increase sales without having to invest in their distribution infrastructure

  • Many businesses now generate the bulk of their sales by selling on Amazon

The shift from product-based businesses to service-based businesses

Explanation

Example

  • Consumers increasingly value experiences over material possessions, and this shift has impacted distribution, as the delivery of services is often quite different from the delivery of physical products

  • Distribution for service-based businesses may involve delivering services to customers directly, such as through a mobile app or website

    • This requires a different set of distribution capabilities than traditional product-based distribution

  • Uber delivers a taxi service through a mobile app

    • The distribution involves matching drivers with customers in real time

    • The service is distributed directly to the end consumer without the need for wholesalers or retailers

    • With no need for wholesalers or retailers, business costs are reduced, and profitability may increase

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