lesson 4

Question 1

Using intermediaries benefit (6)

Answer 1

-choosing to sell through intermediaries eg. wholesalers and retailers
-makes the product more widely available
-increasing accessibility for customers
-therefore more customers may purchase the product
-increase in sales volume
-link to EOS

Question 2

Using intermediaries drawback (5)

Answer 2

-However, intermediaries may have higher levels of buyer power
-this means that they will be able to dictate terms to the business
-eg. lower prices and longer periods of trade credit
-therefore reducing cash inflows
-link to liquidity

Question 3

direct distribution benefit (6)

Answer 3

-choosing to sell direct to customers
- increases the amount of control over the customer experience
-able to offer better customer service
-increased differentiation from competitors
-increased customer loyalty
-more price inelastic

Question 4

direct distribution drawback (5)

Answer 4

-however, selling direct to customers requires high investment
-as the business will need to set up their own distribution network
-they will need to purchase non-current assets
-eg. stores or delivery vans
-link to liquidity