1.3.4 Distribution

Question 1

What is distribution

Answer 1

The process of getting the right product or service to the consumer in the right plaxe

Question 2

What is the distribution channel?

Answer 2

Is the process a product travels through during the stages from production to final consumption

Question 3

Main types of intermediary in distribution channels

Answer 3

• retailer- usually the final step
• distributor (sell on) products and serve as a local sales point
• wholesaler
• agent

Question 4

Benefits of shorter chain

Answer 4

Prices might be lower due to shorter length of chain

Shorter lead time

Question 5

Drawbacks of shorter chain

Answer 5

Could have risk of lower quality or less checks

Question 6

Benefits of longer chain

Answer 6

Potentially better quality checks at each stage

Question 7

Drawbacks of longer chain

Answer 7

Prices can be higher because each intermediary takes a % (for customer)

Longer lead time

Question 8

What could affect a business and it’s distribution decisions?

Answer 8

1. Market
2. Cost
3. Geographical location
4. Type of product
5. Degree of control
6. Quantity and frequency of purchases

Question 9

What is a multi-channel distribution?

Answer 9

Involves a business using more than one type of distribution channel

Question 10

Benefits of multi-channel distribution

Answer 10

1. Allows more target market segments to be reached

2. Customers increasingly expect product to be available via more than one channel

Question 11

Drawbacks of multi-channel distribution

Answer 11

1. Potential for channel ‘conflict’ eg competing with retailers by all’s selling direct
2. Can be complex to manage

Question 12

Key changes in distribution reflecting social trends

Answer 12

1. Sales of service via mobile device particularly media content
2. Widespread adoption of e-commerce by households reducing high street ratio sales
3. Adding population with significant disposable income
4. Mass customisation reducing need to stick holding in distribution channel