1. 134 Distribution AS Edexcel New Specification 2015 Business
By Mrs Hilton for

3. From the specification
a) Distribution channels
b) Changes in distribution to reflect social trends:
online distribution
changing from product to service

4. Guidance from Edexcel

5. Lesson Objectives
To be able to explain the main distribution channels and identify which would be the most appropriate for different products or services
To be able to discuss the changes in distribution channels which reflect social trends of online distribution and changing from product to service
To be able to answer sample exam questions based on the topic area

6. Starter Match the product to the selling location
Which one is regulated by law?
clothes
pottery
online
insurance
Factory outlet
groceries
Supermarket
Small independent shop
Prescription medicines
dealership
Pharmacy – prescription medicines is the only one regulated by law
Mail order
pharmacy
Retailer website
catalogue
hypermarket
Convenience store
shoes
car

7. Distribution channels

8. Distribution channels
Distribution is the process in getting the right product or service to the consumer in the right place.
Distribution is one of the 4Ps of marketing “place”.

9. Manufacturer Consumer Retailer Consumer Warehouse Retailer Consumer
Distribution channels © Sarah Hilton
Agent
Warehouse
Retailer
Consumer

10. Manufacturer > Consumer
Two stage e.g. holiday companies that do not use agents and factory outlets
Direct marketing
This means that products are sold directly from the manufacturer to the consumer
For example Mail order catalogues like the Next Directory
Factory shops e.g. Denby pottery shop
Services straight to the consumer e.g. solicitor
Online from the manufacturer e.g. the Handmade scotch egg company
Denby Pottery shop

11. Manufacturer> Retailer > Consumer
Three stage e.g. electrical goods such as toasters and kettles
Most manufacturers like to sell into a retailer. As the retailers are spread all over the country it gives the manufacturer the distribution and volume of sales they are looking for
The manufacturer can get the product to where the consumers can buy it by using retailers
Applies to most mass market products such as corn flakes
Retailers could be; shop, department store, supermarket, co-operative, independent or convenience stores and online retailers such as Amazon

12. Manufacturer> Wholesaler>Retailer>Consumer
Four stage e.g. food and sweets
Some manufacturers prefer to deal with just a few wholesalers and sell in larger quantities or they may sell to a wholesaler as well as many retailers.
Wholesalers “break bulk” orders into smaller quantities that independent retailers (Like small local food shops) will buy
The added benefit of a wholesaler is they can offer trade credit terms to the small retailer

13. Manufacturer> Agent>Wholesaler>Retailer>Consumer
Some manufacturers who wish to sell into another country may use an agent in that country
The agent will speak the language and understand regulations, importing and tax
The agent is a middle man between the manufacturer and the foreign wholesaler
They can make selling in another country very simple
The Disadvantage is this makes the supply chain longer which can push up the price to final consumer
Agents and Brokers
Wholesale agents and brokers make up a major portion of the wholesale trade industry. Agents and brokers differ from merchant wholesalers in that they do not purchase or take ownership of the goods they buy and sell. Instead, the agent or broker will arrange for the sale of goods between the merchant wholesaler and the retailer and will generally earn his money by receiving a fee for the arrangement of the sale.

14. Changes in distribution to reflect social trends

15. Online distribution
The main benefit of the Internet is that niche products can reach a wider audience e.g. Scottish salmon direct from an inverness fishery link to website
Low barriers to entry as set up costs are small
Can cater to a far greater geographically dispersed market than traditional local shops
Many transactions happen solely online such as purchasing tickets and software upgrades

16. Changing from product to service
This is the concept that you do not have to own something to be able to use it e.g. music – not a physical product like a CD but an experience like a song you sing to yourself

17. Sample question 1
12 marks
Levelled answer so it requires an evaluation
Case study on next slide

18. Read the whole article here

19. Answer question 1

20. How to level and mark a 12 mark question

21. Series of videos
Don’t just sit passive through the videos, make notes, pause them to review the information and ask if you have any questions…

22. Revision Video

23. A final video

24. Glossary
Distribution channel; The chain of businesses through which a good or service passes until it reaches the end consumer. A distribution channel can include wholesalers, retailers, distributors and the internet.
Wholesaler; A business that sells goods to retailers
Retailer; A business that sells goods to consumers
Agent; A Foreign sales agent is a business which represents products from another business in a new country
The chain of businesses or intermediaries through which a good or service passes until it reaches the end consumer. A distribution channel can include wholesalers, retailers, distributors and even the internet.