Place

Question 1

Place or Channels to Market

Answer 1

• Where consumers buy products.
• There are many different and varying places people can purchase goods.
• Marketers call these places channels to market.
• They serve for physical distribution, logistical and facilitating functions

Question 2

Functions of a Marketing Channel

Answer 2

Get product from manufacturers to end users 
	• Take title / buy goods
	• Hold Stock
	• Matching 
	• Location
	• Financing
	• After Sales Service 
	• Selling
	• Advice

Question 3

Types of channels

Answer 3

Wholesalers/Cash and carries/Membership clubs: Sell to businesses 
	• Agents or Brokers: Do not take title
	• Retailers: Sell to consumers
	• “Sheds” 
	• Franchises
	• Auctions
	• Vending machines

Question 4

Wholesalers/Cash and carries/Membership clubs

Answer 4

an entity which purchases large volumes of goods & products from manufacturers, stores in warehouses & sells in bulk to retailers or customers.

• is responsible to link the brand to the retailers and acts as an aggregator of various products that the brand has.
• they sell in bulk quantities. - -
• have large depots where they stock the products from various brands.

Question 5

Agents or Brokers: Do not take title

Answer 5

person or a company that acts as an intermediary between buyers and sellers.

• Brokersexist not just in the financial markets, but in the real estatemarket, the commoditiesmarket, the artmarket– even the boatmarket.

Question 6

Retailers

Answer 6

the one who sells goods/services directly to consumers for their personal or non-business use.

• business entities which act as an intermediary between producer & consumer of goods. - purchase goods/services from wholesaler or distributor and sells to end customers at marked-up prices.
• intermediaries between consumer and wholesalers (or manufacturers).

Question 7

Franchise

Answer 7

the act of a body (franchisor) allowing another body (franchisee) to use its trademark and name to carry on the business activity. T

• his is made available in the form of a license from the franchisor permitting the franchisee to use the business’s name and resources.
• The franchisee may also use other resources of the franchisor such as their business processes, knowledge etc.
• This helps the franchisee to better sell the product or service under the franchisor’s name.

Question 8

Auctions

Answer 8

a market in which buyers indicate the highest price they are willing to pay and sellers indicate the lowest price they are willing to accept.
A trade occurs when the buyer and seller agree on a price.

Question 9

Vending machines

Answer 9

located at various public places for the customers. Tourist places, bus stations, metro or railway stations, airports etc are equipped with vending machines which give customers quick access to products, without manual intervention.

Question 10

Channel organisation

Answer 10

Conventional distribution channels
- Independent, but working together

Vertical market systems

• ‘distribution channel
• structures in which producers, wholesalers, and retailers act as a unified system. One channel member owns the others, has contracts with them, or wields so much power that they must all cooperate

Question 11

Vertical Integration Management

Answer 11

The degree to which the manufacturing units, supplier physical channel and the final consumer distribution centers are under the ownership of the company.

Question 12

Market Coverage

Answer 12

• Mass Market: to cover as many targets / segments as possible as intensively as possible
- E.g. tesco

• Selective: To target market less intensively
○ E.g. ikea

• Exclusive: Limited coverage of market / perhaps one store or authorized dealer

Question 13

Power in the Marketing Channel

Answer 13

Traditionally power held by the manufacturers who were custodians of brands.
However, channel changes have meant that retailers and e tailers have wrestled power from the manufacturer.

Question 14

Channel Management: Push and pull strategies

Answer 14

Push
• Personal selling 
• Co-operative advertising 
• Trade promotions 
• Trade allowances, margins, etc. 

Pull
• Consumer advertising
• Consumer promotions

Question 15

Changing Channels to Market

Answer 15

• Channel Intermediaries
• Disintermediation
• Re-Intermediation

Question 16

Channel Intermediaries

Answer 16

Distribution of goods takes place by means of channels, and the intermediaries are the independent groups or organizations within the channel that make the product available for consumption.

There are four main types of intermediary:

• agents,
• wholesalers,
• distributors, and
• retailers.

Question 17

Re-Intermediation

Answer 17

the reintroduction of an intermediary between a goods producer and consumers. While disintermediation removes elements form the supply chain, reintermediation adds new elements to the supply chain.

Question 18

direct distribution

Answer 18

Transfer of goods from manufacturer directly to consumers

Question 19

indirect distribution

Answer 19

when there are a number of agents, distributor being one of them, between the manufacturer and the consumer

Question 20

Limitations of disintermediation strategies

Answer 20

○ 1. There is an increase in the internal workload.
§ creating more work for yourself

○ 2. It can increase costs.
§ increase internal costs. You absorb a number of costs and fees with disintermediation, from payment process fees and postage to vehicle maintenance and administrative costs.

○ 3. Your distribution channels are reduced.
§ in the number of available marketing channels.