Channels of Distribution

Hershey’s Chocolate Bar & Apple iPhone 14

CHANNELS OF DISTRIBUTION:

ASSIGNMENT: Choose two different branded products and create a chart to show their (i)
Channel of Distribution (ii) For each product explain (a) the type (level) of Distribution
(intensive/selective/exclusive) - and (b) the Channel or path the good will take. You MUST
provide the reasoning behind your decision.

EXAMPLE

Apple iPhone 14
Channel of Distribution
Channel A manufacturer/ producer directly to
the consumer. Selling products at the production
site. Apple offers its goods directly to customers
through Apple Stores. Stores are essential for the
customer experience, supporting the service
industry, and enabling large-scale branding. To
reach its target customers and consumers, Apple
uses a variety of distribution methods, including
direct and semi-direct, company-owned stores
and other authorized partners. This means that
Apple views its business strategy through the
prisms of its iPhone sales when making
decisions. And Apple's stores are the best venues
showcasing its technology.
Level of Distribution
Apple employs a selective distribution
strategy, which includes some
exclusivity and may reduce market
penetration. This indicates that Apple
only has approved shops who are able to
sell their items. Despite the wide variety
of retailers previously mentioned, Apple
is picky in its distribution, refusing to
permit well-known retailers like Sears &
Beyond to sell their products. Apple has
significantly focused on its distribution
channels & the result is seen with the
evident success as decisions related to
distribution makes the products available
to the consumers at accessible locations
thereby creating value. These retailers
are specifically left out since they don't
reach specified customers. Thus ensuring
“The right product at the right price
available in the right place to be bought
by.
The Path of the Product
Apple creates the majority of its
products in California, but the
remainder is manufactured all
over the world. Apple has to
collaborate with numerous
manufacturers all around the
world since its devices have a lot
of intricate components and it
would be challenging for one
company to build them all.
Foxconn and Pegatron, two major
assemblers in China, receive
components created by experts in
each part from all over the world
and assemble into the finished
product. Due to China's lower
cost of living and labour,
significantly lowers Apple's cost
of goods. The products are
subsequently distributed through
various channels to people all
around the world. This is how
Apple is able to generate huge
amounts of sales through direct
and indirect distribution channels
worldwide.