2.2.4 Place

Question 1

Place:

Answer 1

• related to making products and services available to customers when and where those customers want them
• related to how goods and services reach customers

Question 2

Advantages for a producer selling directly:

Answer 2

can control the distribution of their products and prices that are charged

Question 3

Disadvantages for a producer selling directly:

Answer 3

can become increasingly difficult to sell directly to a large number of customers

Question 4

Benefits of indirect channels of distribution:

Answer 4

• make it easier for producers to distribute their products
• make it more convenient for consumers to buy those products

Question 5

Retailer:

Answer 5

• a business that sells goods to the public, often in a physical shop
• The producer distributes its product to a retailer, which then offers the product for sale

Question 6

Methods of retailing:

Answer 6

• manufacturer → retailer → customer
• retailer → customer

Question 7

Benefits of retailing:

Answer 7

• customers have the opportunity to browse and try products
• retailing offers point-of-sale promotion e.g. displays
• retailers can provide customers with help and advice
• many customers enjoy the experience of shopping in a retail store

Question 8

What must a business consider when choosing a site as which to locate a retail store?

Answer 8

• cost
• proximity to competitors
• proximity to the labour market
• proximity to resources and transport links

Question 9

E-tailer:

Answer 9

• a retailer that sells products and services to customers using an online store
• A producer distributes a product to an e-tailer, which then offers it for sale to its customers on its website
• E-tailers do not need to own or rent physical shops, although some choose to do so

Question 10

Methods of E-tailing:

Answer 10

• manufacturer → customer
• manufacturer → 3rd party e-tailer → customer

Question 11

Benefits of E-tailing:

Answer 11

• businesses do not have to rent or own an expensive retail space
• customers can buy at any time of any day
• businesses can access customers around the world
• small businesses are able to compete with larger businesses without needing retail space
• they can offer a wide range of products as they are not limited by the size of a shop
  they may allow small producers to sell through their website for a fee
  their prices are often lower, as they do not have to pay for a physical shop

Question 12

direct channel of distribution:

Answer 12

• only involves the producer and the customer
• The producer sells products directly to customers in a physical shop, using a website or through the post

Question 13

Disadvantages of etailing:

Answer 13

• customers need to have internet access
• customers cannot pay by cash
• goods need to be delivered, so customers must be willing to wait
• items cannot be seen in person before purchasing them

Question 14

E-commerce:

Answer 14

• E-commerce refers to the buying and selling of goods and services online. It includes any transactions between businesses carried out online
• E-commerce therefore covers a wider range of online transactions compared to e-tail since e-tailers only sell to the public