Understand the Role of Retailing in the Distribution of Goods and Services (P2, M2, D1)
Task 1 - Describe the distribution process through different channels from the manufacturer through to the customer for the following; an independent retailer and a multiple retailer. (P2)
A channel of distribution is a network of organisations that, combined, perform all the functions required to link producers with consumers. Retailers need to offer right product at the right place at the right time. If the product that a consumer wants is not available then 31% of consumers will buy from a different store, 26% will buy a different brand and 24% will delay their purchase, or not purchase at all.
There are many possible distribution channels. All begin at the manufacturer and end at the customer. For example;
Independent retailer (Anjay’s Newsagents – Stamford Square stores, Ashton)
Anjay is a small independent trader with a simple distribution system;
Producer – wholesaler – retailer – consumer
He will use different wholesalers to get the best deals for his customers but overall will charge more than a supermarket as he cannot get the economies of scale. Anjay will arrange and pay for the goods to be delivered to him, making costs higher.
Multiple Retailers (Marks and Spencer)
M&S are a multiple retailer their distribution will be on a more grand scale due to the vast amount of sales they make per day; Producer – retailer – consumer
However the multiple retailer will use RDC’s to break bulk and make the supply chain more efficient. They will also use technology to ensure that shelves are full for example; track deliveries, use EPOS – automated stock ordering. They have their own transport vehicles fitted with tracking systems.
Task 2 - Select two products or services from different sectors and compare the methods used to distribute them. (M2)
Fresh Produce Distribution | Clothing Distribution | * Suppliers take appropriate care of product, it arrives in stores well looked after as each piece of fruit/vegetable is fragile * Value is
A channel of distribution is a network of organisations that, combined, perform all the functions required to link producers with consumers. Retailers need to offer right product at the right place at the right time. If the product that a consumer wants is not available then 31% of consumers will buy from a different store, 26% will buy a different brand and 24% will delay their purchase, or not purchase at all.
There are many possible distribution channels. All begin at the manufacturer and end at the customer. For example;
Independent retailer (Anjay’s Newsagents – Stamford Square stores, Ashton)
Anjay is a small independent trader with a simple distribution system;
Producer – wholesaler – retailer – consumer
He will use different wholesalers to get the best deals for his customers but overall will charge more than a supermarket as he cannot get the economies of scale. Anjay will arrange and pay for the goods to be delivered to him, making costs higher.
Multiple Retailers (Marks and Spencer)
M&S are a multiple retailer their distribution will be on a more grand scale due to the vast amount of sales they make per day; Producer – retailer – consumer
However the multiple retailer will use RDC’s to break bulk and make the supply chain more efficient. They will also use technology to ensure that shelves are full for example; track deliveries, use EPOS – automated stock ordering. They have their own transport vehicles fitted with tracking systems.
Task 2 - Select two products or services from different sectors and compare the methods used to distribute them. (M2)
Fresh Produce Distribution | Clothing Distribution | * Suppliers take appropriate care of product, it arrives in stores well looked after as each piece of fruit/vegetable is fragile * Value is
References: Sainsburys Staff Training video, Produce Distribution TU clothing documentary, BBC, 2009