1.3.4 Flashcards
What is a three-stage distribution channel?
A three-stage distribution channel involves the manufacturer selling directly to the retailer, who then sells to the consumer.
Examples include electrical goods like toasters and kettles.
Why do manufacturers prefer to sell to retailers?
Manufacturers prefer to sell to retailers to achieve distribution and volume of sales across the country.
This strategy helps manufacturers ensure their products are accessible to consumers.
What types of products typically use a four-stage distribution channel?
Products such as food and sweets typically use a four-stage distribution channel.
This includes selling in bulk to wholesalers, who then supply retailers.
What role do wholesalers play in the distribution process?
Wholesalers break bulk orders into smaller quantities for independent retailers and can offer trade credit terms.
This benefits small retailers who may not have the cash flow to purchase large quantities.
Describe a two-stage distribution channel.
In a two-stage distribution channel, products are bought directly by the consumer from the manufacturer, with no intermediaries involved.
This can include factory outlet shops.
What is direct marketing?
Direct marketing refers to products being sold directly from the manufacturer to the consumer, such as through mail order catalogues.
Examples include the Next Directory and factory shops.
What is the main benefit of the Internet in distribution?
The main benefit of the Internet is that niche products can reach a wider audience with low barriers to entry.
This allows businesses to cater to geographically dispersed markets.
What factors influence the choice of distribution channel?
Factors include the nature of the product, the market, the nature of the business, and the size of the business.
For instance, medicines must be sold in pharmacies.
True or False: In a three-stage distribution channel, the manufacturer handles after-sales service.
False.
Manufacturers often prefer to avoid dealing with after-sales service.
Fill in the blank: A two-stage distribution channel can include _______.
factory outlet shops.
What are ‘clicks and bricks’ businesses?
Businesses that operate both online and in physical locations.
An example is Amazon, which has both an online presence and physical stores.
What is an example of a product that needs to be sold in a pharmacy?
Medicines.
They require careful oversight by trained pharmacists.
What is the benefit of selling through factory outlet shops?
Factory outlet shops allow manufacturers to sell directly to consumers without intermediaries.
This can lead to reduced costs and increased access for consumers.
