UNIT 3 - Chap 14: The Marketing Mix: Place

Question 1

What is the definition of the Distribution Channel?

Answer 1

The distribution channel is the means by which a product is passed from the producer to the customer​

Question 2

What is the definition of the Producer?

Answer 2

The company who makes the goods ​

Question 3

What is the definition of a Wholesaler?

Answer 3

Buying from producers in large quantities and sell in smaller quantities to retailers ​

Question 4

What is the definition of Retailers?
Retailers-

Answer 4

Buying goods from either the producer or wholesaler and sell to consumers​

Question 5

What is the definition of a Agent?

Answer 5

Sells products on behalf of the producer

Question 6

What are 2 benefits of DC 1 (producer to consumer) (2)

Answer 6

1. Lower price for customers as it cuts out the wholesaler and retailer
2. Suitable for fresh produce as if it is sold direct to customer, it is delivered quicker and therefore fresh and better quality

Question 7

What are the 2 drawbacks of DC 1 (producer to consumer) (2)

Answer 7

1. Impractical for many products as the consumer may not live close to the factory and so not convenient to go there to buy the product ​
2. Delivery fees are high to send to customer. ​

Question 8

What is the 1 benefits of DC 2 (producer, retailer, consumer) (1)

Answer 8

1. Reduced delivery costs compared to selling directly to consumers.

Question 9

What are the 2 drawbacks of DC 2 (producer, retailer, consumer) (2)

Answer 9

1. The producer has no direct contact with customers so may lead to a lack of personal customer service​
2. The price is often higher than ‘direct selling’ as the retailer also has to cover its costs and make a profit ​

Question 10

What are the 2 benefits of DC 3 (producer, wholesaler, retailer, consumer) (2)

Answer 10

1. Wholesaler saves storage space for small retailers and reduces storage costs ​
2. Wholesaler may give Trade credit to the retailer. Improves the retailer’s cash flow ​

Question 11

What are the 2 drawbacks of DC 3 (producer, wholesaler, retailer, consumer) (2)

Answer 11

1. May be more expensive for a retailer to buy from a wholesaler rather than the producer ​
2. Takes longer for fresh produce to reach the retail store so may not be as good of quality ​

Question 12

What are the 2 benefits of DC 4 (producer, agent, wholesaler, retailer, consumer) (2)

Answer 12

1. Producer may not know the best way to sell product in other countries. E.g. due to language/cultural barrier​
2. Agents will be aware of local conditions and will be in the best position to select the most appropriate places to sell​

Question 13

What are the 2 drawbacks of DC 4 (producer, agent, wholesaler, retailer, consumer) (2)

Answer 13

1. The agent will take a proportion of the profit, so less revenue for the producer ​
2. The producer has less control over the way the product is sold to consumer. ​