I like using T-charts for revision. Here are the ones I have created and use with my pupils for the advantages and disadvantages of the Channels of Distribution:
| Channel A “Direct Channel” | |
| Advantages to firm | Disadvantages to firm |
| Ø Fastest way to market Ø Highest profit margin Ø Have control over product | Ø Expensive to open many branches Ø Customers need to physically come to store (geography may be an issue) |
| Channel B – Manufacturer – Warehouse – Outlet - Consumer | |
| Advantages to firm | Disadvantages to firm |
| Ø Helps reduce unneeded stock Ø High volume of sales | Ø Low profit margin Ø Can damage brand value/image Ø Customers may not want “old styles” |
| Channel C – Manufacturer – Wholesaler – Retailer - Consumer | |
| Advantages to firm | Disadvantages to firm |
| Ø High sales/volume Ø Wholesalers hold stock, reducing risks& costs for firms | Ø Low margins/discounts Ø Less control over product (i.e. advertising & shelve placement) |
| Channel D – Manufacturer – Retailer - Consumer | |
| Advantages to firm | Disadvantages to firm |
| Ø Wide customer base Ø Increased sales Ø Retailers may do promotions for the firm Ø Customers can buy in small quantities | Ø High competition for retail space Ø Have to “pitch” to retailer Ø Delivery costs to retailer by road/rail Ø Less control over marketing mix |
| Channel E - Manufacturer – Etailer - Consumer | |
| Advantages to firm | Disadvantages to firm |
| Ø Cheap overheads Ø Wide customer audience Ø Can sell 24/7 | Ø Massive competition Ø High advertising spend needed to let customers be aware of products Ø Postage delivery costs |
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