Distribution channels

Question 1

What is an intermediary

Answer 1

a business acting as a link between producer and consumer

Question 2

Margin

Answer 2

the potential amount that could be added to selling price

Question 3

Manufacturer - Consumer

Answer 3

• Supplies to customer using their own resources

- Access to full retail margin

Question 4

Manufacturer - Retailers - Consumer

Answer 4

• Enables the business to make economic BULK deliveries which keep costs down.
• Purchasing in bulk allows retailers be competitive with their pricing (benefiting the final customer)

Question 5

Manufacturer - Wholesaler - Retailer - Consumer

Answer 5

• Delivering to smaller businesses eg resturants would not be economic.
• Wholesalers may run promotions on behalf of the business (who benefit from this)

Question 6

What is a distribution Channel?

Answer 6

The path taken by a product as it goes from manufacturer to final customer

Question 7

Factors affecting choice of distribution channel

Answer 7

• Marketing objectives
• Place
• Time (are products perishable?)
• Cost
• Distribution
• Control
• Legal factors

Question 8

Conclusion

Answer 8

The more effective the businesses distribution channel is the more profit the will make in time. In turn this will have a positive impact on others involved in the business such as shareholders and employees.