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Distribution Channels
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Direct Distribution
Advantages: Maximum control over the sales process, direct customer feedback, greater profit margins. Disadvantages: Requires significant investment, limited reach, intensive management required.
Indirect Distribution — Single-Level Channel
Advantages: Broader market reach, reduced distribution costs, benefit from the expertise of intermediaries. Disadvantages: Less control over the sales process, reduced profit margins, dependence on intermediaries.
Indirect Distribution — Two-Level Channel
Advantages: Access to wider markets, intermediaries share the marketing and distribution burden, increased distribution efficiency. Disadvantages: Complexity in coordination, higher costs than direct distribution, potential for channel conflict.
Indirect Distribution — Three-Level Channel
Advantages: Extremely wide distribution, specialized handling by different parties, retailers' support in promotion. Disadvantages: Highly complex channel, more vulnerable to conflicts, less control over brand image and pricing.
Dual Distribution
Advantages: Expanded market presence, diversified distribution strategies, targets multiple customer segments. Disadvantages: Risk of channel conflict, complex coordination required, possibility of brand dilution.
Selective Distribution
Advantages: Partnering with few selected intermediaries, maintaining more control over the brand, higher sales effort per store. Disadvantages: Limited market coverage, risk of alienating interested retailers, may lead to higher consumer prices.
Exclusive Distribution
Advantages: Highly controlled distribution, builds strong brand image, retailers provide exceptional service. Disadvantages: Very limited market reach, dependence on few retailers, potential for supply chain disruptions.
Intensive Distribution
Advantages: Maximum market coverage, convenience for customers, can lead to high sales volume. Disadvantages: High competition among retailers, diluted brand exclusivity, could lead to lower prices and margins.
Horizontal Distribution
Advantages: Enables companies to share distribution networks, benefits from collaboration, potential cost savings. Disadvantages: Requires high level of trust among companies, risk of anticompetitive behaviour, may dilute brand identity.
Online Distribution
Advantages: Global reach, reduced overhead costs, open 24/7. Disadvantages: High competition, requires digital marketing expertise, logistics can be complex.
Catalogue Distribution
Advantages: Appeals to specific audiences, can be tailored to niche markets, physical reminder of the brand. Disadvantages: Less immediate than online shopping, incurs printing and mailing costs, hard to measure effectiveness.
Multi-channel Distribution
Advantages: Diversifies sales avenues, increased market reach, caters to different shopping preferences. Disadvantages: Can be complex to manage, risk of inconsistent customer experience, channel conflicts may arise.
Omnichannel Distribution
Advantages: Unified customer experience across all channels, increases customer engagement, may lead to higher customer loyalty. Disadvantages: Requires high level of coordination, might need significant technology investment, complex data management.
Reverse Logistics Distribution
Advantages: Enables product returns and recycling, improves customer satisfaction, can recover value from returned products. Disadvantages: Can be cost-intensive, logistics can be complicated, requires a process for assessing returns.
Direct Selling
Advantages: Personalized customer service, direct feedback from customers, higher margins without retail overhead. Disadvantages: Scalability issues, relatively high cost of customer acquisition, heavily reliant on salesforce skill.
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