Lecture 7 - Place (Channels of Distribution)

Question 1

what is a distribution channel

Answer 1

• a chain of businesses through which a good or service passes until it reaches the end consumer
• its purpose us to move products to consumers

Question 2

what are the functions of channel intermediaries

Answer 2

• reconcile the needs of producers/consumers
• reduce distribution costs and efforts
• improve accessibility
• provide specialist services

Question 3

what are the 4 types of intermediary

Answer 3

• agents
• wholesalers
• distributors
• retailers

Question 4

what are agents

Answer 4

• they are an independent individual or company who’s main function is to act as the primary selling arm of the producer
• they make profits from commissions and don’t actually own the product

Question 5

what are wholesalers

Answer 5

• they take title to the goods that they are intermediaries for
• they are independently owned, and they own the products they sell
• wholesalers -> retailers -> consumers

Question 6

what are distributors

Answer 6

• similar to wholesalers, but with one key difference. they only carry complementary product lines (e.g. either Pepsi or coke, not Pepsi and coke)
• they maintain close relationships with their suppliers and customers

Question 7

distribution channels for consumer goods

Answer 7

1. producer
2. agent
3. wholesaler
4. retailer
5. consumer

Question 8

what are the 3 stages of channel strategy

Answer 8

• channel selection
• distribution intensity
• channel integration

Question 9

what is channel selection

Answer 9

• how to get the product to the consumer
• market factors
• producer factors
• product factors
• competitive factors

Question 10

what are the 3 types of distribution intensity

Answer 10

• intensive
• selective
• exclusive

Question 11

what is channel integration

Answer 11

• its about how the combination of different channels will deliver value whilst taking cost into consideration

Question 12

what are the forms of channel distribution

Answer 12

• physical
• virtual
• multichannel

Question 13

what are the ethical issues in channel distributuon

Answer 13

• abuse of power by
  – retailers
  – wholesalers
  – manufacturers
• grey markets

Question 14

sources of conflict in channel distribution

Answer 14

• differences in goals
• differences in desired product lines
• multiple distribution channels

Question 15

ways to avoid and resolve conflict in channel distribution

Answer 15

• training
• developing a partnership approach
• improving performance