Marketing Mix - Place

Question 1

What is a distribution channel?

Answer 1

How a product gets from the production stage to the customer

Question 2

What’s the difference between direct and indirect channels?

Answer 2

Direct channels are where a producer and consumer deal directly with each other whereas indirect channels involve the use of intermediaries between the producer and consumer

Question 3

State an advantage of using short distribution channels

Answer 3

• Keep greater proportion of the profits

- More control over marketing

Question 4

State a disadvantage of using short distribution channels

Answer 4

• Increased distribution costs

Question 5

State an advantage of using long distribution channels

Answer 5

• Reduced costs

Question 6

State a disadvantage of using long distribution channels

Answer 6

• Reduces producers control over marketing

Question 7

What are the four types of intermediaries?

Answer 7

• Retailers
• Wholesalers
• Agents
• Distributers

Question 8

State three reasons why intermediaries may be used

Answer 8

• To reach different areas of the market
• Customers may live too far away to be reached by producers
• Turn small orders into large ones: save money on travel, storage etc

Question 9

What three factors need to be considered when choosing a distribution channel?

Answer 9

• Nature of the product
• The market
• The business

Question 10

State three things short channels may be used for

Answer 10

• Expensive goods
• Customized products
• Services
• Products sold in geographically concentrated markets
• Products bought infrequently by a small number of customers

Question 11

State three things long channels may be used for

Answer 11

• Inexpensive goods
• Small products
• Standardised products
• Goods sold in dispersed markets
• Goods sold frequently to many customers