the marketing mix: place

Question 1

examples of distribution channels

Answer 1

• direct to consumer
• retailer as only intermediary
• retailer and wholesaler as intermediary
• retailer and wholesaler and agent as intermediary

Question 2

direct to consumer advantages

Answer 2

• simple
• profit margins of intermediaries cut
• suitable for perishable items
• items can be sold through mail order catalogues or via the internet

Question 3

direct to consumer disadvantages

Answer 3

• consumer may live far from production site
• some products are not easy to transport through mail
• transportation costs may be high

Question 4

retailer advantages

Answer 4

• producer can sell large quantity to retailers
• reduced distribution costs as compared to direct channel

Question 5

retailer disadvantages

Answer 5

• no direct contact with consumers
• might have to increase prices to maintain profits as retailers need to be paid

Question 6

wholesaler advantages

Answer 6

• wholesaler saves storage space for retailer and reduces storage costs
• retailer can buy perishable items from wholesaler in small quantities when required
• wholesalers can give credit to retailers
• advice flows from producer to retailer about what is selling well

Question 7

wholesaler disadvantages

Answer 7

• more expensive to produce from wholesaler than straight from retailer
• consumer price higher as need to cover costs of both wholesaler and retailer
• takes longer time for the products to reach
• wholesaler may not have full range of products to sell

Question 8

agent advantages

Answer 8

• agents better at selling products in other markets as have best knowledge in pricing and distribution

Question 9

agent disadvantages

Answer 9

• producer has less control over the way the product is sold to the consumer

Question 10

methods of distribution

Answer 10

• chain stores
• department stores
• hypermarkets (superstores)
• supermarkets
• internet (E Commerce)
• mail orders
• independent retailers
• direct sales

Question 11

factor affecting method chosen

Answer 11

• type of product: perishable/non perishable
• frequency with which the product is bought
• how competitor’s sell their products
• where the market is located
• who is buying the product: producer/consumer
• value of product
• where majority of customers are located