T9 - place (distribution)

Question 1

Distribution channels (3)

Answer 1

1. direct distribution
   - producers deal directly with their customers
   * bread from bakery
2. indirect distribution
   - producers rely on other orgs to help them get their product to end users
3. marketing intermediaries
   - orgs who act in the distribution chain b/w producer and end user

Question 2

Market coverage decn - who to distribute it through - market coverage(3)

Answer 2

1. intensive distribution
   - distributes via every suitable intermediary
   * products that should be available in many places for consumer convenience
2. exclusive distribution
   - distribute through a single intermediary for any given geographic region
   - consumers only buy from these stores after lots of consideration
   - exclusivity might add to the product’s appeal (eg. prestige cars, designer furniture)
3. selective distriution
   - distributes through intermediaries chosen for specific reasons
   - eg. might add value
   - appropriate for if the consumer wants to compare prices and products - this intermediary will act as a differentiating factor

Question 3

Consumer product distribution channels (5)

The bigger the number, the more intermediaries in the chain

Answer 3

1. producer deals directly with consumer
   * Domino’s Pizza
2. Producer, retailer then to consumer (or deal directly as well)
   - can examine goods before purchasing if with a retailer
   * hotels
   * airline tickets
3. producer, wholesaler, retailer, consumer
   - common for goods sold in high volumes through numerous retailers
   - producers sell more but deal with less people
   * groceries
   * mass-marketed clothing
4. producer, agent, wholesaler, retailer, consumer
   * exports b/c agent would know about international laws
5. producer, agent/broker, consumer
   - common in financial services

Question 4

B2B product distribution channels (4)

Answer 4

1. producer, organisational buyer
   - most b2b transactions
   - business buyers would want to deal directly with producer to get the most personalised products and better assistance/relationship
2. producer, industrial distributor, organisational buyer
   - industrial distributors act similar to retailers
   - they buy commonly used goods from producers and resell to organisational buyers
   * Staples sells stationery and office products
3. producer, agent, organisational buyer
   - agent matches producers and organisaitonal buyers and gets commission
4. comibines 2+3 ==> producer, agent, industrial distributor, organisational buyer
   - agent takes commissions on sales it secures with industrial distributors, then they sell to organisational buyers

Question 5

Types of specialty retailers (4)

Answer 5

1. speciality stores
   - narrow range of product types
   - offer great variety w/in those product lines
   * Sportsgirl
   * Jewellers
2. category killers
   - focus on particular product category
   - low prices, wide varietyu of products within the category
   * JB Hi-Fi - electronics
   * Toys R Us - toys
3. off-price retailers
   - retailers that sell manufacturers’ seconds, excess supply and returns for low price
   * DFO
   * outlet stores
4. pop-up stores
   - retailers appearing for short period of time to sell particular type or themed product
   * Olympics merchandise stores

Question 6

Types of general-merchandise retail stores (7)

- wide variety of products

Answer 6

1. convenience stores/corner shops
   - residential areas
   - long opening hours
   - high prices
   * 7-11
2. supermarkets
   - large range of food and grocery items
   * Coles
3. discount stores
   - self-service
   - low prices, high turnover
   * Big W
4. department stores
   - large stores
   - wide range of products
   - specialist departments
   * Myer
5. showrooms
   - large retail facilities
   - put products in simulated real-life settings
   * IKEA
6. hypermarkets
   - combine products and characteristics of supermarket and discount store
   * Tesco
7. supersotres
   - supermarket lines plus range of other things carried by department stores
   * Costco

Question 7

Agent and brokers

Answer 7

Agents
- engaged by buyers/sellers on ongoing basis to represent them in negotiations with other marketing channel participants

Brokers

• engaged on short-term or one-off basis to negotiate on behalf of buyers/sellers
• usually specialist knowledge and well established contacts

Question 8

Wholesaler functions and description

Answer 8

• handles exchanges where products are bought for resale, inputs in other products or other business use
• excludes transactions with end consumers
• deal with large volumes

Question 9

Types of wholesalers (2)

Answer 9

1. merchant wholesalers
   - full (perform all wholesaling activities) or limited (only do some things such as drop shipping, cash and carry)
   - not owned by the producer
   - take ownership of the product and sell to retailers
2. manufacturer wholesalers
   - owned by producer itself
   - sales branches or sales offices