6.1 B Entreprenurship

6.1 B Entreprenurship

By Juan Cervantes

• ​Manufacturer to Retailer to Consumer

Review: Channels of Distribution

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• ​Manufacturer to Consumer

• ​Manufacturer to Agent to Wholesaler to Retailer to Consumer

• ​Manufacturer to Wholesaler to Retailer to Consumer 

Learning Objective

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• LO 6.1-2

• Apply channels of distribution to the specific needs of various types of businesses.

Subject | Subject

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​Distribute Goods and Services

• Distribution increases the value of goods and services by getting them to customers when and where they are needed.

• Retail businesses, service businesses, and manufacturing businesses will choose different channels of distribution based on the needs of their businesses.

• Those needs can vary based on the size of the market, the type of product or service, and customer needs and wants.

Subject | Subject

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​Retail Business

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Retail businesses have many ways of selling products. As the owner of a retail business, you can distribute products in various ways.

• Offer your product to consumers in a convenient location and during convenient hours.

• Use catalogs, fliers, and other advertisements to reach customers who live outside the area. Take orders by phone or fax and ship them directly to customers.

• Create a website. People with access to the Internet can visit your website to learn about your products and make online purchases.

Service Business

• Most entrepreneurs who own service businesses sell their services directly to customers.

• These businesses have a single, direct channel of distribution because the production and consumption of a service happen at the same time.

• example, electricians, restaurant owners, and lawyers deal directly with the people who purchase their services.

• It is important for a service provider to offer the service when it is needed by the customer to maximize the value of the service. If the service cannot be provided when needed, the customer will look for another provider.

• Some service businesses, such as film developers, use retail stores to distribute their services

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Manufacturing Businesses

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• Manufacturers usually don’t sell directly to customers.

• Instead, they make their products and then sell the products to other businesses, such as retailers.

• The retail store then sells to the final consumer.

Some manufacturers distribute their products very broadly and use all possible channels of distribution. Other manufacturers distribute their products through selected outlets only. For example, high-priced cosmetics usually are sold in exclusive department stores, whereas inexpensive cosmetics are sold in discount stores and drugstores.

is the original, creative work of an artist or inventor and may include such things as songs, novels, artistic designs, and inventions. Intellectual property can be distributed in a number of ways. Songs and artistic designs may be distributed through outlets such as the radio or art museums. Consumers can also purchase intellectual property through retailers. But you no longer have to make a trip to the store to do so. You can get intellectual property delivered online instantly. Songs can be purchased and downloaded to MP3 players and other mobile devices from music sites such as Rhapsody. You can purchase and download digital e-books directly to your reader, tablet, or laptop or have books shipped to you from Amazon’s website. The Internet has revolutionized the way creative and artistic works are distributed.

Intellectual Property

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Open Ended

Why are channels of distribution different for different types of businesses?

Stem: Different types of distribution is important because there are

​Scenario

You plan to open a kite shop in a beach resort town. You will sell custom-made kites as well as kites you plan to import. You know that you will have customers during the spring and summer when families are visiting the beach, but you are looking for ways to increase sales during the off-season when there are very few visitors to the area.

Subject | Subject

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Open Ended

Scenario ?

Describe ways that you can distribute your products that will increase sales during the off-season.