Chapter-13 Flashcards
Marketing mix: place and promotion
What are channels of distribution?
Channels of distribution refer to the methods by which a product moves from the producer to the final consumer.
Who is a wholesaler?
A wholesaler is a business that buys products in bulk from producers and then sells them to retailers.
Who are middlemen in the channels of distribution?
Middlemen are intermediaries in the distribution process, such as wholesalers and retailers, who help move products from producers to consumers.
Who is a retailer?
A retailer is a shop or outlet that sells goods and services to the final consumer.
What is direct selling?
Direct selling is when a producer sells a product directly to the final consumer without using any middlemen.
What factors influence the choice of a distribution method?
1) Cost – Businesses must consider transportation costs. They need to decide whether to buy their own delivery vehicles or hire a distribution firm. While cheaper methods save costs, they may lead to delays or damage to goods.
2) Nature of the product – Some goods require special delivery conditions. For example, frozen foods need temperature-controlled transport, fragile items require minimal handling, and perishable goods like milk need fast delivery.
3) The market – If the market covers a large area, wholesalers can help by buying in bulk from producers and supplying retailers with smaller quantities.
What is Promotion?
Promotion refers to marketing activities used to communicate with customers and potential customers. It aims to inform and persuade them to buy a business’s products.
What are the different distribution channels and their advantages and disadvantages?
- Producer → Consumer
✅ Advantages:
The producer earns all the profit.
Full control over the marketing mix.
Fastest way to get products to consumers, ideal for perishable goods.
Direct contact with consumers provides market research opportunities.
❌ Disadvantages:
Consumers cannot try the product before purchase.
High delivery costs for widespread customers.
Storage and promotional costs are fully paid by the producer.
- Producer → Retailer → Consumer
✅ Advantages:
Consumers can see and try the product before buying.
Retailers share inventory and advertising costs.
Retailers are more accessible to consumers.
❌ Disadvantages:
Retailers take a portion of the profit.
Producers lose some control over marketing.
Producers bear delivery costs to retailers.
Retailers may sell competitors’ products too.
- Producer → Wholesaler → Retailer → Consumer
✅ Advantages:
Wholesalers buy in bulk and break stock into smaller units for retailers.
Wholesalers handle advertising and transport costs.
Storage costs are covered by the wholesaler.
Helps producers reach a larger market.
❌ Disadvantages:
Wholesalers take a share of the profit.
Producers lose further control over marketing.
- Producer → Agent → Wholesaler → Retailer → Consumer
✅ Advantages:
Agents have market expertise, especially in foreign markets.
They help find wholesalers and retailers willing to buy the product.
❌ Disadvantages:
Another middleman reduces the producer’s profit.
What are the Aims of Promotion?
1) Attracting attention – making consumers aware of the product or reminding them it exists.
2) Persuading consumers – encouraging them to buy the product.
3) Highlighting advantages – explaining how the product is better than competitors’ products.
4) Building a brand image – creating and developing brand identity.
5) Encouraging retailers – convincing wholesalers and retailers to stock the product.
6) Reassuring consumers – addressing concerns after a product-related issue.
What is Advertising?
Advertising is paid-for communication with consumers using printed and visual media. Its aim is to inform and persuade consumers to buy a product.
What is Persuasive Advertising?
Persuasive advertising aims to convince consumers to buy a firm’s product instead of a competitor’s product.
What is Informative Advertising?
Informative advertising provides information about a product to consumers to create awareness and attract interest.
What is e-commerce?
E-commerce is the use of the internet and other technologies by businesses to market and sell goods and services to customers.
What are the opportunities of e-commerce for businesses?
1) Increased market: The business can sell its goods and services worldwide.
2) Reduced costs: Savings on staffing and shop-related costs.
What are the threats of e-commerce for businesses?
Increased competition: Competitors can come from any part of the world.
What are the opportunities of e-commerce for consumers?
1) Convenience: Consumers can order products from home anytime.
2) Wider choice: Consumers can access products not available in local shops.
3) Better information: Websites provide product details and reviews.
4) Lower prices: Global competition reduces prices.
What are the threats of e-commerce for consumers?
1) Fraud: Websites may take money and not deliver goods.
2) Unfamiliarity: Consumers may hesitate to buy from unknown businesses.
Hacking: Personal or bank details might be stolen.
3) No personal service: No face-to-face contact between consumer and seller.
4) Returning items: Can be inconvenient and expensive.
