Chapter 10.2

Question 1

ꕤExplain the meaning of Distribution?

Answer 1

• Need to have distribution policy so that it knows how and where products need to be distributed.
• Distribution is about how the business gets its products to its customers.

Question 2

Discuss the meaning of the distribution channel ?

Answer 2

• is the path which the product is moved from the producer to the consumer
• it starts with the producer and ends with the final customer
• the main aim of the distribution function is to ensure that the right product is available at the right time.
• Three kinds of distribution channels
• The service provider
• Intermediaries
• Customers

Question 3

Discuss the meaning of intermediaries?

Answer 3

• All the people that fall into the distribution process between the producer and the consumer
• Are wholesalers, retailers, agent and brokers
• Organizations involved in the distribution channel are known as immediaries

Question 4

What are The different types of intermediaries ?

Answer 4

• Wholesalers primarily sell goods to retailers
• Retailers market directly to the final consumer
• Agents sell products on behalf of manufacturers for a commission

Question 5

What is the role of the intermediaries in the distribution process ?

Answer 5

• Finding and locating buyers on behalf of the producer
• Help in promoting the product
• They can achieve greater sales by using intermediaries
• Intermediaries are specialists in selling, so the producer may be able to reach a wider audience.

Question 6

What are the different types of distribution channels ?

Answer 6

• Manufacturer/Producer -consumer
• Manufacturer/Producer -retailer-consumer
• Manufacturer/Products -wholesaler-retailer- consumer
• Manufacturer/Producer-wholesaler
• Manufacturer/producer-agent-retailer-consumer

Question 7

What is the difference between !!!

Direct and Indirect channel of distribution?

Answer 7

Direct channel of distribution :

• Carries all the risks
• Involves producer and consumer
• Full control over the product and marketing
• Provides feedback immediately

Indirect channel of distribution

• Risks are carried to intermediaries during distribution of the product to, customer
• There are middlemen between producer and consumer
• Very little feedback from customers
• Transportation is taken care of by intermediaries

Question 8

Reasons why manufacturers may prefer to make use of the direct distribution method ? :

Answer 8

• Manufacturers have control over the product and the marketing
• Direct contact with customers for feedback and improvements.
• Can achieve better end user price as no intermediary costs

Question 9

Reasons why manufacturers may prefer to make use of the indirect distribution method ? :

Answer 9

• Transportation and storage is taken care of by intermediaries
• Don’t have to deal with customer complaints
• Enjoy benefits of bulk orders from wholesalers
• Better marketing coverage is achieved