Marketing Mix

Question 1

Define direct distribution

Answer 1

Channel where a producer and consumer deal directly with each other without the involvement of an intermediary

Question 2

Define indirect distribution

Answer 2

Involves the use of intermediaries between the producer and consumer

Question 3

Name the types of distribution channel intermediaries

Answer 3

Retailers

Wholesalers

Distributors

Agents

Question 4

What are the advantages of having an intermediary?

Answer 4

+ spreading of costs
+ spreading risk of sales
+ established intermediary has a strong customer base
+ intermediaries may communicate promotional offers
+ intermediaries help gather information

Question 5

What are the disadvantages of having an intermediary?

Answer 5

• dependent upon intermediary

- sacrifice some of your potential profit

Question 6

Explain what a retailer is

pros and cons

Answer 6

focused on consumer markets

\+ convenience for customers
\+ retailer holds the stock
\+ after sales support (e.g. returns)
\+ retailer chooses the final price
\+ wider geographical reach to customers

• sacrifice profit margin

Question 7

Explain what a wholesaler is

pros and cons

Answer 7

buys in bulk
sells to retailer in lower quantities

+ reduce the producer’s transport costs (one journey to wholesaler instead of many journey’s to retailers)
+ retailers can order in smaller amounts from wholesaler

Question 8

Explain what a distributor is

Answer 8

distribute products
usually specialise in particular industry
different from agents in that they hold stock

+ offer products from many producers = greater choice

Question 9

Explain what an agent is

Answer 9

Specialist form of distributor
Does not hold stock
Earn commission based on sales achieved
Tend to operate in tertiary industry
e.g.: travel, insurance

Question 10

What are the parts of the design mix?

Answer 10

Function:
Reliability

Economic manufacture:
Can it be made and sold profitably

Aesthetics:
How does it appeal to customers?

Question 11

What is meant by ethically sourced?

Answer 11

Ethically sourcing is a process that has recently become more popular due to a change in consumer tastes. A product is ethically sourced if workers are working in safe working conditions, are treated well and paid fair wages. It also implies that the supplier is respecting the environment during the production process.

Question 12

What are the tasks of promotion?

Answer 12

Informing and persuading consumers

Question 13

What are the types of methods that a business can use for marketing?

Answer 13

advertising (online& offline)
sales promotion& merchandising
personal selling
public relations/ publicity/ sponsorship
direct marketing

Question 14

What are the benefits of effective branding?

Answer 14

branding builds customer loyalty
adds significant value
able to charge higher price& demand is more price inelastic

Question 15

What is direct marketing?

Answer 15

Promotional material directed through mail, email, social media or phone to individuals or businesses

Question 16

What is advertisements?

Answer 16

Paid-for communication in media.

Question 17

What is the aim of PR?

Answer 17

Achieving favourable publicity about the business and improving the image of the company.

Question 18

What is sales promotion?

Answer 18

short-term incentives to increase sales