Distribution

Question 1

Distribution

Answer 1

which refers to the location where consumers can buy products from.

Question 2

Distribution channels

Answer 2

Two stage: producers —> consumers

Three stage: producers —> retailers—-> consumers

Four stage: producers —> wholesalers —> retailers —> consumers

Question 3

Wholesalers

Answer 3

Wholesalers usually buy from manufacturers
and sell to retailers.

They may redistribute in smaller quantities, store goods and provide delivery services and repack products.

Question 4

Retailers

Answer 4

Businesses that buy goods from manufacturers and sell them to consumers.

-They break bulk, buying in large quantities and then sell small to consumers.
-They sell in convenient locations for consumers
-They may add value to products. Ex changing packaging.

Question 5

Agents or brokers

Answer 5

Used by producers using 3 or 4 stage channels?

Agents/ brokers are used to link buyers and sellers

Question 6

Choosing the appropriate distribution channel

Answer 6

-The nature of the product:
Services are sold directly to consumer.
Fast-moving goods (cereal) can’t be sold directly to consumers unit per unit, bulk has to be broken by wholesalers/ retailers.
Products that need explanation, need to be sold by a specialist. Ex, car.

-Cost:
Business want to use as less channels as possible, to keep as much of the profit.

-The market:
Producers selling to mass market usually involves intermediaries.
Niche/small markets usually target directly the costumer.

-Control:
For some producers is important to have control of their products.
Ex, producers don’t want high quality products to be sold in supermarkets, because they can damage their image.

Question 7

Changes in distribution methods

Answer 7

-Online distribution