Distribution Channels

Question 1

What is distribution channel/ chain of distribution

Answer 1

Consists of all the businesses through which a good passes from the producer to the end consumer

Question 2

Intermediary/intermediaries aka middlemen (5)

Answer 2

Businesses in the distribution channel
Agent
Broker
Wholesaler
Retailer
Distributor

Question 3

Why do you have to choose the right distribution channel

Answer 3

1impact on the price of the product
2 availability for the consumers
3 the speed at which the product reaches the consumer

Question 4

Direct / indirect distribution channels

Answer 4

Direct - consumer buys goods from the manufacturer without the intervention of an intermediary (farmers market)
Indirect- contain just one intermediary or they can be a long chain of middlemen spaning through several countries

Question 5

Deciding which type of distribution channel to choose

Answer 5

The needs of the target market and the nature of the product (lenght)

Question 6

International trade

Answer 6

When a distribution channel includes more than one country

Question 7

Domestic trade / home trade / internal trade

Answer 7

Distribution channels that stay within the borders of a country
The exchange of domestic goods within the borders of a country

Question 8

Benefits of domestic trade (6)

Answer 8

1 trading domestically is cheaper for a business
2 no tariffs and export licences to get
3 exchange rate fluctuations do not affect the price of the goods or raw materials
4 lower transportation cost
5 same language - better communication, laws and regulations are better understood
6 knows the culture and habits of the country - MARKET CONDITIONS AND BUSINESS RISK

Question 9

Wholesale trade

Answer 9

Buying goods in large quantities ( in bulk) from producers or dealers and selling them on to retailers, larger institutions, manufacturers

Question 10

Services offered by wholesalers

Answer 10

1 benefits from economies of scale
2 physical distribution of goods - logistics services —> dont need to invest in transportation vehicles and deal with transportation management
3 owning large warehouses / distribution centres - store goods
4 offering additional services
5 offering credit to retailers

Question 11

Retail trade

Answer 11

Goods are sold directly to consumers in smaller quantities
Higher prices than wholesaler prices
Larger varieties of goods

Question 12

Retail outlet

Answer 12

Any place (physical or virtual) that sells goods to consumers

Question 13

Types of retail outlets

Answer 13

Factory outlet
Shopping mall
Department store
Kiosk
Vending machine
Discount store
Specialty store
Chain store

Question 14

According to their use of the internet to sell things

Answer 14

1 brick-and-mortar store
2 click-and-mortar
3 e-commerce —> e-tailers

Question 15

Trends in retail

Answer 15

Consumer confidence -crisis, uncertain future, retailers struggle to sell goods
Consumer behaviour

Question 16

Multi- modal shopping / omnichannel

Answer 16

Online shopping as well as physical stores

Question 17

Conscious consumerism / ethical consumption

Answer 17

Investing money in companies whose values they share

Question 18

Boycott

Answer 18

To stop buying or using the goods as a form of protest

Question 19

Experiential retail / experiential shopping

Answer 19

Spending on experiences ( concerts) instead of buying things
Shopping into more of an experience - canada goose, testing products, buzz on social media
Trying to create immersive virtual experience - nike