13: Distribution Flashcards
1
Q
Intensive distribution (1)
A
- Selling a product in as many outlets as possible
2
Q
Selective distribution (1)
A
- Selling a product at select outlets in specific locations
3
Q
Exclusive distribution (1)
A
- Selling a product in as many outlets as possible
4
Q
3 types of distribution (3)
A
- Intensive (e.g. Coca Cola)
- Selective (in the middle)
- Exclusive (e.g. Gucci)
5
Q
Distribution (2)
A
- The process of getting a product to the right place
- For customers to purchase
6
Q
Barriers to Entry (3)
A
- Factors that make it hard for new firms
- To break into an existing market
- E.g. strong brand loyalty to the current market leader
7
Q
Impulse Purchasing (3)
A
- Buying in an planned way
- To be succesful, needs maximised distribution
- I.e. Bold display, close to the till
8
Q
Wholesaler (3)
A
- The middleman
- Between the producer and the retailer
- Used in traditional 4 stage distribution
9
Q
Long Tail (4)
A
- The huge number of tiny businesses
- Appealing to minority tastes
- That can find a profitable existence online
- Because they can target the whole world
10
Q
Impulse purchase firms incentivise retailers by…. (2)
A
- Offering them big profit margins
- Giving out eye catching display units
11
Q
For new firms, place is _____________
As ____________________________ is never easy (2)
A
- The toughest of the 4P’s
- Persuading retailers to stock an unproven product
12
Q
A
-
13
Q
5 Types of Distribution (5)
A
- 4 stage (Physical)
- 3 stage (Physical)
- 3 stage (Online)
- 2 stage (Physical)
- 2 stage (Online)
14
Q
4 Stage Definition (2)
A
- Producer - Wholesaler - Retailer - Consumer
- Used by small producers who cannot achieve distribution in big chains
15
Q
4 Stage Advantages (4)
- Each __________________ is ________________
- So can ____________________________ than firms ______________
- Can _________an ________________ without _________________________ to ________________
- __________ = _______________ = ___ = ___________ = _____
A
- Each member of distribution channel is specialised in what they do
- So can operate at much lower costs and more efficiently than firms trying to do it all
- Can access an additional customer base without investing in a sales and marketing program to capture new business
- Greater reach = Higher sales volumes = EOS = Lower unit costs = Margin
16
Q
4 Stage Disadvantages (4)
- _____________ / unable to _____________________
- As __________________________
- May lose ________________________
- Less ___________________
- So more ____________________e.g. _____________
A
- Lower profit margins / unable to charge competitve price
- As wholesaler and retailer apply a % mark-up
- May lose control over brand image/percieved quality
- Less control of market position
- So more vulnreable to external factors, e.g. changes in supply
17
Q
3 Stage (Online) Definition (2)
A
- Producer - Retailer - Consumer
- Producers selling directly on e-commerce platforms, e.g. ebay
18
Q
3 Stage (Online) Disdvantages (4)
- Lose the _______________________
- Especially important with _____________________
- Due to avaliability of _________________
- ___________________ must __________ = ______________
A
- Lose the “experience” aspect of product purchase
- Especially important with luxury products to justify high price
- Due to avaliability of price comparison sites
- Undifferentiated products must price very low = Low profit margins
19
Q
3 Stage (Online) Advantages (4)
- Can reach ____________________________ without _____________________ to ________________
- __________ = _______________ = ___ = ___________ = _____
- _____________ can give ____________________
- So can _____________________________
A
- Can access an additional customer base without investing in a sales and marketing program to capture new business
- Greater reach = Higher sales volumes = EOS = Lower unit costs = Margin
- Online analytics can give valuable data on consumer habits
- So can easily adjust marketing, pricing strategy etc…
20
Q
3 Stage (Physical) Definition (2)
A
- Producer - Retailer - Consumer
- Larger producers who cut the wholesaler and deliver directly to retail chains
21
Q
3 Stage (Physical) Disdvantages (4)
- May lose _____________________
- Resulting in less ___________________
- So more ___________________ e.g. ________________
- Subject to ________________________
A
- May lose control over brand image/percieved quality
- Less control of market position
- So more vulnreable to external factors, e.g. changes in supply
- Subject to tough negotiation from retail outlets
22
Q
3 Stage (Physical) Advantages (2)
- Eliminates the __________________ = ______________
- Can offer _________________ = ______________________ = ________________ = ___ = ___________
- Can reach ____________________________ without _____________________ to ________________
- __________ = _______________ = ___ = ___________ = _____
A
- Eliminates the expense of using a wholesaler = Higher profit margins
- Can offer more competitive price to retailer = more incentive for retailer to entice consumer demand = High sales volumes = EOS = Low unit costs
- Can access an additional customer base without investing in a sales and marketing program to capture new business
- Greater reach = Higher sales volumes = EOS = Lower unit costs = Margin
23
Q
2 Stage (Physical) Definition (2)
A
- Producer - Consumer
- Becoming your own retailer, i.e. opening stores
24
Q
2 Stage (Physical) Disdvantages (5)
- Harder to ___________________
- Without _______________________ provides
- So may take __________________ to build _______________
- Selling i_________________ due to __________
- So less to ____________________________ etc….
A
- Harder to reach potential customers
- Without the network an established distributor provides
- So may take considerable marketing effort to build customer base
- Selling in store is very expensive due to fixed costs
- So less to invest into product development, training, advertising etc….
25
Q
2 Stage (Physical) Advantages (4)
- Absolute control of _________________________ etc…
- So more ____________________________
- ____________ = _______________
- Which can __________________________ etc…
A
- Absolute control of pricing, customer experience, display etc…
- So more control of brand image/percieved value
- No middleman = Higher profit margins
- Which can finance spending on advertising, R and D, training etc…
26
Q
2 Stage (Online) Definition (2)
A
- Producer - Consumer
- Selling direct to consumers online, e.g. using a website
27
Q
2 Stage (Online) Disdvantages (5)
- Harder to ___________________
- Without _______________________ provides
- So may take __________________ to build _______________
- Lose the _______________________
- Especially important with _____________________
A
- Harder to reach potential customers
- Without the network an established distributor provides
- So may take considerable marketing effort to build customer base
- Lose the “experience” aspect of product purchase
- Especially important with luxury products to justify high price
28
Q
2 Stage (Online) Advantages (4)
- Absolute control of _________________________ etc…
- So more ____________________________
- ____________ = _______________
- Which can __________________________ etc…
A
- Absolute control of pricing, customer experience, display etc…
- So more control of brand image/percieved value
- No middleman = Higher profit margins
- Which can finance spending on advertising, R and D, training etc…
