1.3.4 Distribution 🛒 Flashcards
What is distribution ?
The delivery of goods from the producer to the consumer
Why is distribution important ?
Makes it convenient for customers - making goods and services available to the market
What are the four distribution channels?
Manufacturer - consumers
Retailer - consumer
Wholesaler - retailer
consumer
Agent/broker - wholesaler- retailer consumer
What are retailers and what is retailing?
Businesses that sell goods straight to consumers
What are the three ways retailers may distribute goods?
- Buy large quantities of goods from wholesalers and sell them in small quantities to consumers - breaking bulk
- Sell at locations That are convenient like supermarkets with large parking spaces
- Add value to providing other services like packaging or delivery
What is an agent or broker?
And intermediary that brings together buyers and sellers
What are some ways changes in distribution may reflect social trends?
Changes in growth in online shopping
extending product range
opening hours
growth in use of TV shopping channel
What are the three ways there may be changes in distribution to reflect social trends?
What are the 2 examples of e-commerce ?
- OnLine distribution selling -
e-commerce - Use of electronic systems to sell goods and services - B2C - Business sells goods to customers directly
- B2B - when a business provides their services to another business to help promote their operations
What are the four benefits to consumers of online distribution?
24/7
large amount of choice
cheaper
can shop 🏬 from anywhere wherever they want
What are the benefits of a business to use online distribution?
Less start-up costs less fix cost as you don’t have a physical premises
lower cost when processing transactions as systems are automated
Businesses have more choice where they want to locate
Papers needed for documents like receipts
online payments can be made through credit cards or PayPal
Can reach a wider market good for globalisation
What are the four ways we can choose the appropriate distribution channel?
The nature of products - services directly given to customers and No need to hold stock
fast moving consumer goods
Products that need explanation or demonstration like financial products
- Cost - or choose the cheapest distribution channel in the most direct one without agents or brokers because they take a share of profit more expensive
- The market - Mass use Intermediaries
Small market- directly? Agent - knows market better - control - Good because it’s important to have control over where you just to beat your products somewhere good so image isn’t damaged
What is the negatives of online distribution
- Increase the competition as you’re competing with those overseas and there is an increase of low price high choice of goods
- customers lack face-to-face contact me lack trust
- cannot control the delivery quality of delivery of goods
- customers cannot touch smell taste good before purchasing maybe to dissatisfaction
- security needs- may be hacked
What is government expenditure?
The amount spent by the government on its provision of public services
What are the effects of changes in government expenditure on the business? negatives ?
- ✅ If the government spends more than arises in taxes then they’ll be an increase in spending of the economy- as customers will have more disposable income
which will lead to an increase in demand and sales causing more job security
increasing employment to meet demand increasing GPD 
❌ However this may lead to inflation ( demand pull ) or a large increase in interest rates to prevent this
What happens if the government spends less in a specific public sector?
Business has Lack funds to maintain business
affecting its ability to provide goods to the market causing
a lack of demand unable to retain profit to keep employee - increase in unemployment
decreasing disposable income decreasing GDP and economic growth
