2:5 - Place

Question 1

What is the channel of distribution?

Answer 1

The way the goods are passed from manufacturer to consumer.

Question 2

What are the four main parties involved in a channel of distribution?

Answer 2

Manufacture, wholesaler, retailer, consumer

Question 3

Name all three channels of distribution

Answer 3

Traditional method
Modern method
Direct method

Question 4

Traditional method

Answer 4

Involves the product being passed through two middlemen before going to the consumer.

Producer>Wholesaler>Retailer>Consumer

Advantages:
* Consumer gets it at their price
* Wholesaler can sell their products for a lower price because they’re selling in bulk
Disadvantages:
* There can be a delay in the delivery

Question 5

Modern Method

Answer 5

Involves the wholesaler and the retailer deals directly with the manufacturers.
Producer>Retailer>Consumer

Advantages:
* Can earn large discounts and sell at low price
* Can buy in bulk
Disadvantages:
* Wholesaler isn’t needed and won’t make profit.

Question 6

Traditional Method

Answer 6

Channel distributes the goods directly from the manufacturer to the consumer.
Producer>Customer

Advantages:
* Higher profit
* Profit goes straight to the producers
Disadvantages:
* Sometimes it can be very expensive