3.4 - Distribution

Question 1

What is a channel of distribution?

Answer 1

A channel of distribution is the route a product takes from the manufacturer or producer to the consumer, usually passing through intermediaries like retailers, wholesalers, or agents.

Question 2

Why is distribution vital to a business?

Answer 2

It ensures that products can reach the consumer effectively, making the product available for purchase and contributing to customer satisfaction.

Question 3

What is direct selling (two-stage channel)?

Answer 3

Direct selling involves the manufacturer selling directly to the consumer, often through e-commerce, door-to-door sales, or telephone sales.

Question 4

What is indirect selling (three-stage channel)?

Answer 4

Indirect selling involves the manufacturer selling to a retailer, who then sells to the consumer. This is common for products like clothes sold in high street stores.

Question 5

What is indirect selling (four-stage channel)?

Answer 5

This involves manufacturers selling to wholesalers, who then sell to retailers, and finally to consumers. This is typical for groceries in supermarkets.

Question 6

What is multi-channel distribution?

Answer 6

Multi-channel distribution involves businesses selling through more than one method, such as online and in-store. It offers flexibility and access to a wider market.

Question 7

What are the advantages of multi-channel distribution?

Answer 7

It allows businesses to reach more customers and gives consumers options to shop in-store or online, depending on their preference.

Question 8

What is a limitation of e-commerce?

Answer 8

Consumers like to see and feel goods before buying, which is not possible with online shopping.

Question 9

What is online distribution?

Answer 9

Online distribution involves the streaming or downloading of media (e.g., games or music) or the purchasing of rights to access media content instead of physical products.

Question 10

What are the benefits of online distribution?

Answer 10

1. Cost savings for businesses (no production of boxed products).
2. Cheaper prices for consumers.
3. Environmentally friendly (no DVDs or CDs).
4. Instant delivery.
5. Can be run anywhere with an internet connection.

Question 11

What are the challenges of online distribution?

Answer 11

1. Requires IT skills to set up and manage.
2. Limited appeal to consumers who prefer physical products.
3. Risk of online content being pirated.

Question 12

Why is online distribution becoming more popular?

Answer 12

1. Consumers find it cheaper and more convenient.
2. It aligns with trends in social media and streaming.
3. Growing services like Spotify and Netflix encourage its use.

Question 13

What is a wholesaler?

Answer 13

A wholesaler buys in bulk from manufacturers and sells smaller quantities to retailers.

Question 14

What role do wholesalers play in distribution?

Answer 14

1. They break bulk to make goods accessible to retailers.
2. They simplify distribution by storing goods and delivering them to retailers.

Question 15

What is an agent?

Answer 15

Agents sell products to consumers on behalf of businesses and are paid commission for their work.

Question 16

How has the internet affected distribution?

Answer 16

The internet makes it easier for producers to sell directly to consumers, reducing costs and allowing access to a global market.

Question 17

How do price comparison sites affect distribution?

Answer 17

They allow consumers to compare prices easily, forcing retailers to be competitive.

Question 18

How does online distribution benefit the environment?

Answer 18

It reduces waste from physical goods like CDs and DVDs and lowers transportation pollution.