1.3.4. Distribution

Question 1

When looking at distribution, what factors must a company consider?

Answer 1

• where p/s is available
• when p/s is available
• what quantity of p/s is needed to satisfy demand?

Question 2

What might happen if distribution factors are not considered?

Answer 2

It may fail to draw attention or satisfy demand.

Question 3

What should distribution networks do?

Answer 3

• encourage repeat purchases
• enable safe delivery
• maximise the number of potential consumers
• ensure quick delivery
• provide market information to producers/retailers
• create a positive relationship between consumer/producer

Question 4

What is a distribution channel?

Answer 4

The flow of organisations that connect a product from producer to consumer.

Question 5

What would expenses be like if a small-scale producer handled distribution alone?

Answer 5

Expenses would be high

Question 6

What is short-channel distribution? (2 stage distribution)

Answer 6

Direct marketing, involves just two organisations in the flow: the producer and the consumer.

Question 7

What type of business uses short-channel distribution?

Answer 7

Businesses that sell large machinery or equipment (a farming company)

Question 8

What is long channel distribution?

Answer 8

Indirect marketing, involves the producer, consumer and several intermediaries along the way e.g. wholesalers, distributors, retailers

Question 9

Three stage distribution?

Answer 9

Producer -> Retailer -> Consumer

Question 10

What type of business used three stage distribution?

Answer 10

E.g. electrical goods manufacturers.

Question 11

Four stage production?

Answer 11

Producer -> Wholesaler -> Retailer -> Consumer

Question 12

What is the aim of a distribution network?

Answer 12

To deliver a p/s on time and in good condition.

Question 13

When choosing the most relevant distribution network, what must businesses consider?

Answer 13

• the product
• the market
• legal restrictions
• customer expectations

Question 14

When choosing the most relevant distribution network, why must businesses consider the product?

Answer 14

The product may need to be introduced through practical demonstrations or explanations, so it would be inappropriate to sell it through general retail outlets.

Question 15

When choosing the most relevant distribution network, why must businesses consider the market?

Answer 15

Products that are extremely specialist or expensive have a relatively small customer base and need to be made available to buyers through a small number of specialist retailers. This is different from general household goods, which have a very wide customer base and can be sold at a large number of outlets.

Question 16

When choosing the most relevant distribution network, why must businesses consider legal restrictions?

Answer 16

The law of the country will determine where certain goods can be sold.

Question 17

When choosing the most relevant distribution network, why must businesses consider customer expectations?

Answer 17

Customers expect to buy certain goods in traditional establishments, such as glasses from opticians.

Question 18

Explain internet distribution?

Answer 18

Consumers expect businesses to offer their products online, which has led to companies offering their products in all sorts of ways (website checkouts, digital payments, online stores etc). These outlets, while digital, are still costs for a business (sponsoring links and placing product in right ‘place’), these outlets may not be physical but they are still places in the distribution network and cost money.