2.4 Marketing Mix - Place

Question 1

What are the different channels of distribution?

Answer 1

Traditional Channel
Modern Channel
Direct Channel

Question 2

Describe the different channels of distribution used to support growth?

Answer 2

Traditional Channel:
The “middle man” is used to apply a profit mark-up which added to the final price but in return they are able to buy bulk at a lower price and sell to smaller shops as small shops don’t need to hold high stock levels

Modern Channel:
Large Superstores buy direct and organise their own distribution. Their huge buying power allows them to negotiate a high discount

Direct Channel:
By cutting the wholesaler and the retailers, firms can offer better deals and promote themselves through advertising. They also have very low overheads (no rents on the high street)

Question 3

What is the difference between Wholesalers and Retailers?

Answer 3

Wholesalers:
Buying large quantities of products from suppliers but selling it in smaller volumes to retailers

Retailers:
Shops that sell to a customer the products they have purchased from other companies

Question 4

What are the Distribution Channels?

Answer 4

1. Manufacturer - Wholesaler - Consumer (indirect)
2. Manufacturer - Wholesaler - Retailer - Consumer (indirect)
3. Manufacturer - Retailer - Consumer (indirect)
4. Manufacturer - Consumer (direct)

Question 5

How do businesses select the right channels of distribution?

Answer 5

The business will consider the following factors:
The nature of the product
The costs
The action of competitors
Where customers are based

Question 6

Define Channels of Distribution

Answer 6

A chain of businesses that pass through goods or services until it reaches the end consumer