Distribution

This section explains Distribution covering, Distribution Channels, Factors Affecting Choice of Distribution Channel, Changes in Distribution to Reflect Social Trends, Online Distribution and Changing from Product to Service.

Distribution Channels

Distribution refers to how a product or service reaches the final customer. The distribution channel is the route taken by a product from the producer to the end-user.

Main Types of Distribution Channels

Direct to Consumer (Zero-level)

• Producer → Consumer
• No intermediaries involved.
• Often used in e-commerce, mail order, or direct services.
• Example: A local bakery selling directly through its website.

One-Level Channel

• Producer → Retailer → Consumer
• Common in retail – helps reach a wider customer base.
• Example: A clothing manufacturer selling via a department store.

Two-Level Channel

• Producer → Wholesaler → Retailer → Consumer
• Typically used for mass-market, low-cost goods (e.g. household items).
• Allows bulk breaking by wholesalers.

Factors Affecting Choice of Distribution Channel:

• Nature of the product (e.g. perishability, complexity)
• Control over brand/image
• Cost implications
• Customer habits

Changes in Distribution to Reflect Social Trends

Businesses must adapt distribution methods to meet changing customer expectations and technology-driven behaviours.

Online Distribution

• Increasingly common due to growth in e-commerce.
• Businesses sell products/services directly through websites, apps, or marketplaces (e.g. Amazon, Etsy).
• Reduces costs (e.g. fewer intermediaries, no need for physical retail).
• Offers 24/7 access and convenience for consumers.
• Also allows for digital distribution of products like software, music, and e-books.

Advantages:

• Wider reach
• Lower overheads
• Greater convenience and customisation

Challenges:

• High competition
• Logistical complexity (e.g. delivery times, returns)

Changing from Product to Service

As part of a shift in business models and consumer demand, many firms now offer services instead of (or alongside) physical products.

Examples:

• Streaming instead of DVDs (Spotify, Netflix)
• Software as a Service (SaaS) instead of physical installation (e.g. Microsoft 365)
• Subscription models (e.g. beauty boxes, meal kits)

This shift affects distribution:

• No need for physical stock or transport
• Distribution becomes digital or ongoing, focused on user experience, speed, and reliability
• Enables personalisation and recurring revenue

Summary Table