Distribution channels

Question 1

What is distribution?

Answer 1

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

Question 2

What can distribution be linked to?

Answer 2

The 4p’s of the marketing mix ‘place’

Question 3

What is an example of a manufacturer to consumer distribution?

Answer 3

Services straight to the consumer such as a solicitor.

Question 4

What is an example of a manufacturer to retailer to consumer distribution?

Answer 4

Mass market goods like kettles and toaster which could come from a department store or a supermarket.

Question 5

What is an example of a manufacturer to wholesaler to retailer to consumer distribution?

Answer 5

Food and sweets.
Some manufactures prefer to sell to large wholesalers in large quantities. Wholesalers then break these large quantities and sell to local retailers.

Question 6

What is the benefit of online distribution?

Answer 6

• Niche products can reach a wider audience.
• low barriers to entry as start up costs are small.
• Can reach geographical markets rather than local shops.
• Many transactions happen online.

Question 7

What is an agent?

Answer 7

A foreign sales agent who represents products from another business in a new country.

Question 8

What are the pros and cons of the producer to consumer path?

Answer 8

Pros:
- Don’t need to pay a retailer or wholesaler, can have lower prices which will increase demand and sales.

Cons:
- Likely the consumer will buy smaller quantities unlike a wholesaler.
- There will be higher distribution costs as customers will be in multiple places.
- Need to do more marketing to raise awareness of product.

Question 9

What are the pros and cons of the producer to retailer to consumer path?

Answer 9

Pros:
- Can overcome higher marketing costs as retailers have higher reach as they are well known and will be in multiple locations.

Cons:
- Wont receive full profit as you will need to pay retailer.
- High distribution costs if selling to multiple retailers.

Question 10

What are the pros and cons of the producer to wholesaler to retailer to consumer path?

Answer 10

Pros:
- Wholesalers buy in bulk.
- lower distribution costs as you may sell to fewer wholesalers.
- Less risk as wholesaler will deal with selling the product once it is sold to them.
- Includes retailer so can benefit to marketing capabilities of retailers.

Cons:
- Both retailer and wholesaler will want a cut in the profits.
- Lack of control as they aren’t involved with the consumer.