Unit 5.6 - place Flashcards
Define place.
Where the product is available to be purchased
Define distribution channel.
How the ownership of product passes from the producer to the final customer
Name the different channels of distribution. (10)
Producer - wholesaler - retailer - consumer (traditional)
Producer - retailer - consumer (modern)
Producer - consumer (direct)
Producer - wholesaler - consumer
E-commerce
M-commerce
Catalogues
Telephone sales
TV sales
Price comparison websites
Define wholesaler.
Buy products in large quantities and sell to retailers in smaller quantities
Define retailer.
Sells directly to customers
Define intermediary.
Businesses between the producer and the consumer
Name the advantages (3) and disadvantages (2) of the channels of distribution.
Producers can reach more consumers using intermediaries(wholesaler/retailer)
Consumers have goods available locally
May lead to environmental benefits
Goods may be more expensive as intermediaries add to the costs/price
Less control over the marketing of products
Explain the difference between e and m commerce.
E commerce involves the buying and selling of goods and service via the internet whereas m commerce involves buying goods and services via hand-held mobile devices such as smartphones
Name the advantages (6) and disadvantages (6) of using e and m commerce for a business.
Access a wider market
Trade 24/7
Increase sales
Expand without a new physical store
Encourage customers to visit stores
Lower costs as physical store not required
Initial start up costs are high
Costs may increase for packaging, delivery, returns
Can negatively impact reputation if there are issues online
More storage space required
Potential for fraud
Customers may want to test the product
Name the advantages (6) and disadvantages (5) of using e and m commerce for a customer.
They can see images of products so can compare many products relatively easily
Orders can be placed 24/7 so they are not restricted to traditional shop opening hours
The price of the item by many sellers can be compared easily on one screen
There is no need to travel so costs are saved on transportation and parking
It is possible that prices are cheaper because the seller has lower costs, especially if they do not run a physical store
The internet provides a wider choice from a variety of sellers
Customers can’t inspect goods to see if they meet their needs
Images may be misleading, so quality can be difficult to judge – the quality of the item received may not be as expected
There may be delays in receiving goods meaning that they do not arrive in time for when they are needed
If goods do need to be returned, additional postal costs could be incurred
There is the risk of fraud occurring, e.g. goods not being sent even though payment has been made
Define multi channel distribution.
Using more than one route to distribute goods
Name the advantages (3) and disadvantages of using multi channel distribution.
It allows the business to reach a wider number of customers
It provides the customers with the convenience of being able to shop in a way that suits them
It helps the business to be able to maximise their sales which in turn will lead to an increase in profits
There are increased costs for the business as they will need more resources to be available, for example, they may need to employ IT specialists to help design the website
There must be enough demand for its products and services to make the investment worthwhile
There may be consistency issues – a business will need to make sure that their customers have the same buying experience whether they are purchasing their products in store or online
Name the reasons a business offers a variety of methods to sell their goods. (5)
Compete with rivals who may be using a range of methods
Maximise sales by widening the market beyond high streets
Maximise profits by closing expensive, surplus stores
Provide customers with the choice on how they buy and the convenience to do so when it is most convenient
Gain customer loyalty
