Th3.3: ^^ Marketing and Purchasing Economies

Question 1

Buying in bulk

Answer 1

large firms are able to buy in large numbers so may be able to buy their raw materials at a cheaper price than competitors

Question 2

Specialisation

Answer 2

like other areas, businesses can afford to take on specialist buyers and sellers who could be more efficient due to the extra time and knowledge

Question 3

Distribution - Why are large firms able to enjoy preferential rates from transport companies?

Answer 3

because they offer the company a lot of business - can transport in large batches

Question 4

Distribution - What can large businesses also establish?

Answer 4

regional distribution centres which enables them to reduce transport costs by using large transporters over long distances, storing goods in the distribution centre and take stock to individual shops