Chapter 23~Chain Of Production Flashcards
Wholesaler?
A Buisness that buys in bulk (breaking bulk) from the manufacturer and sells in smaller quantities to the retailer e.g Musgraves
Retailer?
A person who buys goods and services from manufactures or wholesalers and sells them in small quantities to the consumer at a profit
Franchise?
A franchise exists when the owner of a business gives permission to another person to set up a branch of their business in another location in return for a fee e.g subway, Costa
Production?
Combining the four factors of production so that goods and services are made that the consumer wants
3 types of industries?
- extractive industry
- construction&manufacturing industry
- service industry
Extractive industry?
Businesses that take or extract raw materials from the land e.g forestry the sea e.g fishing the air e.g wind power
Constructive&manufacturing industries ?
Construction: building of houses
Manufacturing: make finished products
Service industry?
Provides a service e.g transport
3 types of production ?
1) primary production: extractive industry e.g wood
2) secondary production: constructive&manufacturing
3) tertiary production: service industry
Chain of production for a wooden table?
Forest/wood – carpenter – furniture shop
3 Considerations when choosing a channel of distribution
- type of good, are they perishable?
- speed
- distance , imported or exported
3 examples of channels of distribution
MANUFACTURER MANUFACTURER MANUFACTURER
CONSUMER RETAILER WHOLESALER items bought in a factory e.g Waterford CONSUMER RETAILER glass factory shop Furniture shop
Buys from furniture CONSUMER
factory. Local shop buys
from musgarves
Why would the wholesaler be omitted from the channel of distribution?
- storage may not be required
- if it is important to get to the consumer quickly
- short shelf life
Why would the wholesaler and retailer be omitted from the channel of distribution ?
- if the products were customised
* technology advances mean you can buy online and get it delivered
3 functions of a wholesaler
- buy in large quantities from manufacturer
- sells in smaller quantities (breaking bulk)
- sells wide range of goods
Independent retailer / unit shop?
Sole traders who operate small family shops often family owned e.g newsagents
Multiple store?
Number of branches and sells one product e.g HMV
Chain store?
Number of branches and sells different products e.g dunnes
Supermarket?
Large self service retailer with a number of branches e.g supervalue
Voluntary retail group?
Group of retailers who agree to buy their stock from on particular wholesaler only, prices are cheaper due to bulk buying, benifits from group advertising e.g spar
Department store?
Large store selling different goods, divided into departments specialising in a particular product e.g brown Thomas, house of Fraser
Discount stores?
Large quantity of one product sold a low prices e.g power city
Mail order firms?
Retailers sell through post e.g little wood
Shopping centres?
Big buildings in which there are a lot of small. Medium and large stores selling a wide variety of goods
Large amounts of parking
E.g dundrum
4 functions of a retailer?
- Sells goods in small quantities to the consumer, breaking bulk
- sells wide range of good from different manufacturers
- may provide delivery service
- may offer online sales to customers
Advantages and disadvantages of vending machines
Advantage:
•operates 24 hours a day
Disadvantage:
• may be vandalised
2 Advantages of franchising?
- little risk attached to starting a business this way because the business is already successful in other locations
- the name is the business would be well known
2 disadvantages of franchising?
- the new owner must pay money to the original owner each year which reduces the profits
- sometimes the owner cannot make major decisions without permission
Channel of distribution?
The method used to get goods and services from the producer to the consumer
