Definitions
Business
a combination of factors of production to make products (goods and services) which satisfy people's wants
Give one advantage of distribution channel 1
>> This distribution channel is very simple. It involves manufactures selling their products directly to the consumer.
>> It is suitable for products, such as certain types of food products, which are sometimes sold straight from the farm.
>> There is a lower price if sold direct to customers - cuts out wholesaler/retailer.
>> Products can be sold by mail order catalogue or via the internet
Give one disadvantage of distribution channel 1
>> Impractical for most products because the consumers probably do not live near to the factory and could not go there to buy the products.
>> This method may not be suitable for products which cannot easily be sent by post.
>> It may be very expensive to send the products by post and therefore it will not be cost effective.
Name one method of distribution
Marketing
management process responsible for identifying, anticipating and satisfying consumers' requirements profitably. The role of marketing: Identifying customers needs through market research. Satisfying customer needs by producing and selling goods and services.
Give one advantage of distribution channel 1
>> This distribution channel is very simple. It involves manufactures selling their products directly to the consumer.
>> It is suitable for products, such as certain types of food products, which are sometimes sold straight from the farm.
>> There is a lower price if sold direct to customers - cuts out wholesaler/retailer.
>> Products can be sold by mail order catalogue or via the internet
Give one disadvantage of distribution channel 1
>> Impractical for most products because the consumers probably do not live near to the factory and could not go there to buy the products.
>> This method may not be suitable for products which cannot easily be sent by post.
>> It may be very expensive to send the products by post and therefore it will not be cost effective.
Name one method of distribution
department stores, chain stores, discount stores, superstores, supermarkets, independent retailers, direct sales, mail order, internet/e-commerce
Marketing mix
A term which is used to describe all the activities which go into marketing a product or service. These activities are often summarized as the four Ps - product, price, place and promotion.
Give one advantage of using a wholesaler and retails as intermediaries
>> Wholesaler saves storage space for small retailer and reduces storage costs
>> Small retailers can buy products in small quantities from wholesaler. If they bought loads they might go off if they have a short shelf life
>> Wholesaler may give credit to retailer
>> Wholesaler may deliver to small retailer - saving on transport costs
>> Wholesaler can give advice to small retailers AND manufacturers about what is selling well.
Give one disadvantage of using a wholesaler and retails as intermediaries
>> May be more expensive for the small shop to buy from a wholesaler than if they bought straight from the manufacturer.
>> Wholesaler may not have the full range of products to sell.
>> Takes longer for fresh produce to reach the shops and so it may not be as good quality.
>> Wholesaler may be a long way from the small shops
What affects deciding the distribution channel?
what type of product is it?
is the product very technical?
how often is the product purchased?
how expensive is the product?
how perishable is the product?
where are the customers located?
where do the competitors sell their products?
Distribution channel
The means by which a product is passed from the placed of production to the customer.
Give one advantage of using a retailer as the only intermediary
>> Producer sells large quantities to retailers
>> Reduced distribution costs compared to distribution channel 1
Give one disadvantage of using a retailer as the only intermediary
>> No direct contact with customers
What affects deciding the distribution channel?
what type of product is it?
is the product very technical?
how often is the product purchased?
how expensive is the product?
how perishable is the product?
where are the customers located?
where do the competitors sell their products?
Agent
An independent person or business that is appointed to deal with the sales and distribution of a product or range of products.
Give an advantage of using an additional intermediary such as an agent
>> Manufacturer may not know the best way to sell the product in other markets
>> Agents will be aware of local conditions and will be in the best position to select the most effective places in which to sell
Give one disadvantage of using an additional intermediary such as an agent
>> The producer has less control over the way the product is sold to customers.
What is a superstore?
very large out-of-town stores which sell a wide range of food and non-food products