Distribution

Question 1

Define the term distribution.

Answer 1

The process of getting the right product or service to the consumer in the right place.

Question 2

How does a four stage distribution channel work?

Answer 2

Manufacturer, wholesaler, retailer, consumer

Some manufacturers prefer to deal with a few wholesalers and sell in large quantities. These wholesalers break bulk orders into smaller quantities that independent retailers will buy. There is aded benefit of going to a wholesaler as they offer trade credit terms to the retailer.

Question 3

How does a three stage distribution channel work?

Answer 3

Manufacturer, retailer, consumer

These are usually used for electric goods. Most manufacturers prefer selling to a retailer as they are spread all over the country which gives the manufacturer the distribution and volume of sales they are looking for. This is used by most mass markets.

Question 4

How does a two stage distribution channel work?

Answer 4

Manufacturer, consumer

Direct marketing, such as solicitors, schools, holiday companies

Question 5

Explain how distribution changes to reflect social trends.

Answer 5

Online distribution
Choice of distribution channel
Changing from product to service- eg not having to own something to use it

Question 6

Explain online distribution.

Answer 6

The internet:

• allows niche products to reach a wider audience
• has low barriers to entry as set up costs are small
• can cater to greater geographically dispersed market than local shops can
• Many transactions happen solely online
• Businesses can be clicks and bricks or just clicks

Question 7

What determines a businesses choice of distribution channel?

Answer 7

Choice of distribution and the method of getting products to the consumer will depend on:

• The nature of the product eg meds need to be sold in a pharmacy
• The market
• Nature of the business
• Size of the business