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Business level 3 - Unit 29: Assignment 2
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business level 3 unit 29 assignment 2 - P2, M2
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Unit 29: Understanding retail – Elizabeth HammondIntroducton of distributon –
Distribution is the method in which a business,i generally retailers,i use to transfer products from the
manufacturer to the store in order to sell them to customers. It is essential within the retail industry;
this is because it ensures that products reach the shelves of any type of retail store,i whether that is
an independent store or a multiple operator.
Distributions ofers the consumer a choice of how they would like to receive their goods; this is
something that did not exist many years ago,i which is why it has now become a fundamental part of
the way in which the industry works. Distribution of goods can be carried out in several ways such as
via sea,i air,i rail or road.
Distribution must be efectively and efciently managed and fulflled in regard to the products
specifcations such as shelf life or demand from consumers. For example,i if a product is perishable
then the distributor must ensure that it arrives at the required destination within the time bracket of
it being unparished; but they must also allow time for it to be sold and consumed,i meaning they
have to get the products there quickly. This is the case in circumstances such as the distribution of
milk; this is because it must reach the retailers and customers immediately afer the production
process is complete as it has a short shelf life. On the other hand,i products that are not perishable
such as clothing do not have to be distributed as rapidly as they have an almost eternal shelf life.
“Product distribution (or place) is one of the four elements of the marketing mix. Distribution is the
process of making a product or service available for use or consumption by a consumer or business
user,i using direct means,i or using indirect means with intermediaries”
– htps://en.wikipedia.org/wiki/Distribution
The main challenge of distribution is ofering the right product at the right time in the right place. If a
business fails to do this then:
31% of customers will purchase goods from a diferent store,i
26% of customers will substitute for a diferent brand
24% of customers will either delay their purchase or never purchase the product.
Movement of goods from manufacture to retailer to consumer –
There are many diferent distribution channels that are available for businesses to use; however,i a
lot of business will use multiple channels. Organisations between the manufacturer and the
customer are referred to as intermediaries. Examples of the types of intermediaries are:
Retailer – A retailer is a business that sells goods to the public in generally small quantities
for use or consumption as opposed to resale. However,i these can also be owned by the
manufacturer or wholesaler.
Wholesaler – A wholesaler is a business that sells goods in large quantities at costs below
the general retail price. They typically sell to a retailer for resale however,i some goods can
just be bought for immediate use or consumption. These can range from a generic ‘cash and
carry’ to a fully functioning wholesaler that ofer services such as credit,i delivery or advice
services.
Agent – An agent is generally a self-employed individual that provides a particular service for
another business,i typically involving the organisation of transactions between two parties.
These can represent the manufacturer,i retailer or wholesaler.
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