Question

Question 1

Since the late 1990s, Apple allows consumers to buy its products online via the Internet through its Apple Online Store. Suppose you were to purchase an Apple product from the Apple Online Store (http://store.apple.com/us).

Identify the channels members as a producer, wholesaler, and/or retailer.

Classify the channel strategy used by Apple and its channel members as direct or indirect.

Answer 1

Channel member identification is particularly helpful when there are multiple channels. Apple too have multiple channels of distribution and sales. However, the question here is only based on the online store of Apple.

This online store acts as the retailers for Apple. Their e-commerce division (or a similar name for it) will act as the retailer. The produce is Apple themselves. The question of wholesaler does not matter much because on any orders placed by consumers, Apple would ship the products by themselves however, we can probably consider their logistics division as the wholesaler. They would likely do it from their own distribution center. Thus to summarize, the producer will be Apple themselves, the wholesalers is also Apple’s logistics division, and the retailer is Apple’s e-commerce division.

This channel strategy (online store) is a direct channel for Apple. The company also sells products through external channels such as Amazon, BestBuy, etc. This is because they are a different entity from Apple. Also the fact that these channels use a distinct supply chain network where the products are manufactures, then shipped to distributors, then goes to the wholesalers, then eventually end up at these retailers. But the Apple online store is pretty straight forward and upon an order, the ship directly to the buyer’s location. This makes the channel a direct channel from producer to consumer.