15. Marketing mix: place

Question 1

Define distribution channels

Answer 1

How a product is passed from place of production to the consumer

Question 2

What is distribution channel 1

Answer 2

Producer > Consumer

Question 3

What is distribution channel 2

Answer 3

Producer > Retailer > Consumer

Question 4

What is distribution channel 3

Answer 4

Producer > Wholesaler > Retailer > Consumer

Question 5

What is distribution channel 4

Answer 5

Producer > Agent > Wholesaler > Retailer > Consumer

Question 6

What are the advantages of distribution channel 1

Answer 6

• Simple
• Lower price if sold directly (cuts of the price of wholesaler etc.)
• Sold via internet

Question 7

What are the disadvantages of distribution channel 1

Answer 7

• Impractical for many products
• Sending products could be expensive

Question 8

What are the disadvantages of distribution channel 2

Answer 8

• Can sell large quantities to retailer
• Reduced distribution costs

Question 9

What are the disadvantages of distribution channel 2

Answer 9

• No direct contact with customers

Question 10

What are the advantages of distribution channel 3

Answer 10

• Reduce storage costs
• Easier for small retailers to buy from in smaller amounts
• Credit available
• Saved transport costs since Wholesaler will bring to retailer

Question 11

What are the disadvantages of distribution channel 3

Answer 11

• Maybe more expensive for small retailer
• Wholesaler may not have full range of products
• Takes longer for fresh produce to reach shops which can reduce quality
• Wholesaler may be far away

Question 12

What are the advantages of distribution channel 4

Answer 12

• Manufacture doesn’t have to have knowledge of local area (due to the agents)

Question 13

What are the disadvantages of distribution channel 4

Answer 13

• Less control over the way product is sold

Question 14

What are the methods of distribution [8]

Answer 14

• Department stores
• Chain stores
• Discount stores
• Supermarkets
• Superstores
• Direct sales
• Mail orders
• E-commerce

Question 15

What are the advantages of e-commerce to the business

Answer 15

• Websites used for worldwide promotion cheaply
• Order can be taken directly
• Consumers can be encouraged to buy more products
• Businesses can also easily purchase goods

Question 16

What are the disadvantages of e-commerce for the business?

Answer 16

• High competition
• Websites design can be expensive
• Higher transportation costs
• No face to face contact with customers
• Consumers (in most countries) have legal right to return goods they have not seen, touched or worn which can add extra costs
• Large warehouses, efficient stocks are essential to not mess up orders
• Not suitable for all business

Question 17

Advantages of e-commerce for the consumers

Answer 17

• Convivence (no need to leave the house)
• Easy to make product comparison
• Payment by credit card is easy
• Easy access to worldwide goods
• Can find cheaper prices

Question 18

Disadvantages of e-commerce for consumers

Answer 18

• Need good internet
• Computer/ system failure result it frustration
• Products cannot be seen touched, seen, tried etc in real life
• No face to face contact with sales staff
• Risk of theft, fraud or identity theft

Question 19

What are the factors affecting distribution channel choice

Answer 19

• Is it a technical product
• How expensive is it
• How often is it purchased
• How perishable is the product
• Where are the competitors products sold
• Location of customers
• Will you be selling abord
• Sold to producer or consumer