Unit 14 : Place

Question 1

3 Roles of Place Decisions in the Marketing Mix

Answer 1

1. products should be available when and where customers need them
2. wrong place, low sales and profits
3. the place must be convenient for consumers

Question 2

Define Distribution Channels

Answer 2

how a product is passed from the place of production to the customer

Question 3

Distribution Channel 1

Answer 3

producer → consumer

Question 4

4 Advantages of Distribution Channel 1

Answer 4

1. very simple
2. suitable for products which are sold out of factories
3. lower price for consumer ( cuts out retailer )
4. products can be sold by mail order / internet

Question 5

3 Disadvantages of Distribution Channel 1

Answer 5

1. impractical as consumers don’t usually live near factories
2. not suitable for fragile goods as they can’t be sent by post
3. not cost effective as sending products by post is expensive

Question 6

Distribution Channel 2

Answer 6

producer → retailer → consumer

Question 7

3 Advantages of Distribution Channel 2

Answer 7

1. manufacturer sends large stock to retailers
2. cheaper transportation costs as all products go to one place
3. low storage costs for manufacturer

Question 8

2 Disadvantages of Distribution Channel 2

Answer 8

1. no direct contact with consumers, hard to create customer loyalty
2. price is higher than direct selling as retailer has to cover costs and make a profit

Question 9

Distribution Channel 3

Answer 9

producer → wholesaler → retailer → consumer

Question 10

3 Advantages of Distribution Channel 3

Answer 10

1. reduces storage costs for small retailers
2. small quantities, transport costs are low
3. wholesalers can give feedback to producers on what sells well

Question 11

5 Disadvantages of Distribution Channel 3

Answer 11

1. more expensive to buy from wholesaler then manufacturer
2. wholesaler might not have everything a retailer wants
3. takes longer to get to consumer
4. huge gap between manufacturer and customer
5. consumer prices are higher than direct selling as retailers and wholesalers need profit

Question 12

Distribution Channel 4

Answer 12

producer → agent → wholesaler → retailer → consumer

Question 13

3 Advantages of Distribution Channel 4

Answer 13

1. agents know profitable places / prices to sell in other markets which manufacturers may not know
2. agents provide advice on how to survive new markets
3. gives manufacturer some control over way product is sold

Question 14

2 Disadvantages of Distribution Channel 4

Answer 14

1. manufacturers lose control over amount of product sold to consumers
2. higher costs for consumers as agents also need to cover expenses

Question 15

9 Methods of Distribution

Answer 15

e-commerce, department stores, discount stores, chain stores, superstores, independent retailers, direct sales, supermarkets, mail order

Question 16

Define E-Commerce

Answer 16

selling of goods and services through the internet

Question 17

Define Department Stores

Answer 17

large stores with wide varieties of products

Question 18

Define Discount Stores

Answer 18

stores with wide range of products but with discounts

Question 19

Define Chain Stores

Answer 19

2 or more stores with the same name / characteristics

Question 20

Define Superstores

Answer 20

large out of town stores with wide range of products

Question 21

Define Independent Retailers

Answer 21

single stores that offer local, personalised services

Question 22

Define Direct Sales

Answer 22

products sold directly from manufacturer to consumer

Question 23

Define Supermarkets

Answer 23

retail grocery stores

Question 24

Define Mail Order

Answer 24

customers use catalogues / magazines and order by post