Distribution(1.3.4)

Question 1

What is distribution?

Answer 1

refers to making products/services available to customers when and where they need it

Question 2

What is retailing?

Answer 2

selling good/service in a physical shop

Question 3

What is e-tailing?

Answer 3

retailing through the internet

Question 4

What are channels of distribution?

Answer 4

the route a product takes from producer to consumer

Question 5

What are the types of channels of distribution

Answer 5

four stage distribution channel
three stage distribution channel
two stage distribution channel

Question 6

Four stage distribution channel

Answer 6

producer—>wholesaler—>retailer—>customer
e.g. factory—>Costco—>Morrisons—>customer

Question 7

Three stage distribution channel

Answer 7

producer—>wholesaler—>retailer
eliminates wholesaler stage so producer sells directly to retailer
often used for products with high demand or where the cost of distribution is high
often used for products with high profit margins where the producer can afford to sell directly to retailer and still make profit

Question 8

Two stage distribution channel

Answer 8

producer—>customer
eliminates wholesaler and retailer with producer selling directly to consumer
commonly used for products that are sold online or through direct sales channels

Question 9

Wholesalers

Answer 9

buy in large quantities from producers
break into smaller quantities to sell to retailers
reduce producers transport costs ( fewer journeys to wholesalers than many journeys to retailers)

Question 10

What are intermediaries?

Answer 10

business between producer and the consumer in a distribution channel
e.g. wholesalers and retailers

Question 11

What is a producer?

Answer 11

an individual, business or organisation responsible for creating goods or services to satisfy consumer needs and wants

Question 12

What is a wholesaler?

Answer 12

business or intermediary that purchases goods in bulk from producers or manufacturers and resells them in smaller quantities

Question 13

What is a retailer?

Answer 13

business that sells goods or provides the service directly to consumers for personal use
are the final link in the distribution chain connecting producer or wholesaler to end customer

Question 14

Four stage distribution

Answer 14

traditional physical channel
a traditional channel consists of four stages producer wholesaler retailer and then consumer
is commonly used for products such as groceries clothing and electronics

Question 15

Traditional distribution channel

Answer 15

many producers use this method of distribution​
this method of distribution allows smaller firms to achieve a wide distribution across many outlets this happens because at the wholesalers and retail stages they will add their own mark up on the product

Question 16

Factors that influence distribution

Answer 16

type of product, services directly to consumers, exclusive/designer chose outlets carefully
speed, perishable goods
cost
distance

Question 17

Direct to retailer

Answer 17

three stage
involves the producers’ bypassing wholesalers and selling products directly to retailers
the retailer then sells the goods to the final consumer through their outlets. This approach eliminates one intermediary in the supply chain, making the process more streamlined
however this opens the producer up to tougher negotiations from retail outlets in terms of price and potential credit terms

Question 18

direct to retailer advantages

Answer 18

faster delivery to consumers, products reach retailers more quickly improving supply chain efficiency and allowing products to be available to consumers quickly
improved profit margins, by cutting out the wholesaler both the manufacturer and retailer can potentially enjoy higher margins due to less price inflation as wholesalers have not added their markup to the product

Question 19

Be your retailer

Answer 19

allows producers complete control over how products are sold
producers will then be able to showcase key strengths of their products and distribute their product to the consumers in what they believe would be the best ways possible
however there is a large initial outlay of capital in order to create these stores as well producers also taking on the high running costs of a physical store

Question 20

Be your own retailer advantages

Answer 20

complete control over the brand, can control ow brand is presented to consumers
higher profit margins, by cutting out intermediaries business can retain full profit from the sales
direct customer relationships, business can interact directly with customers, gaining valuable insights into wants needs and behaviour

Question 21

Direct online

Answer 21

producers can set up own websites
consumers can buy directly from producer
allows producers to keep full selling price paid by consumer
however setting up a website can come with significant cost
however some consumers could be uncomfortable buying products online without having inspected the product physically

Question 22

Direct online advantages

Answer 22

lower operation costs, no need to maintain physical store reducing overhead costs
wider market reach, can sell globally without constraints of physical location, available 24/7
higher profit margins, lower costs allow the business to retain all profits and reduce costs at the sane time

Question 23

Online retailer

Answer 23

for small producers allows them to sell products globally but without large capital outlay required to build and market a website
however selling products through eBay and Amazon will mean with each product sold through their platforms the small business will incur a small fee per item sold

Question 24

Changes in distribution to reflect social trends

Answer 24

changes in distribution have been impacted by social trends such as the growth of online retailing and the shift from product-based businesses to service-based businesses
by understanding these trends businesses can adjust their distribution strategies to better meet the needs of their customers and stay competitive in the marketplace

Question 25

Online retailing social trends

Answer 25

online distribution has become increasingly popular due to the convenience and accessibility it offers to consumers
many businesses now use drop-shipping which allows them to sell products without holding stock
once the business has sold the products they are shipped directly from the producer to the customer
this reduces the cost and complexity of distribution, making it easier for businesses to sell online

Question 26

From producer to service social trends

Answer 26

There has been a shift from product-based businesses to service-based businesses
consumers increasingly value experiences over material possessions and this shift has impacted distribution as the delivery of services is often quite different from the delivery of physical products
distribution for service-based businesses may involve delivering services to customers directly such as through a mobile app or website
this requires a different set of distribution capabilities than traditional product-based distribution