1.3.4 Distribution

Question 1

What is a distribution channel?

1

Answer 1

• Route a product takes from producer to consumer

Question 2

What are intermediaries?

1

Answer 2

• Businesses between producer and consumer in distribution channel

Question 3

What does a traditional physical channel involve?

1

Answer 3

• Sell products to wholesalers who act as suppliers to small retailers

Question 4

What is the benefit of traditional physical channel?

1

Answer 4

• ^Selling prices as wholesalers and retailer add own mark-up

Question 5

What is the benefit and drawback of selling direct to retailer?
2

Answer 5

• Save on wholesalers markup

- Tough negotiations w retail chains on price/credit terms

Question 6

What is the benefit and drawback of selling as your own retailer?
2

Answer 6

• Producers have complete ctrl over how their products sold

- ^Fixed costs running stores

Question 7

What is the main benefit of selling direct online?

1

Answer 7

• Consumers buy straight from them = keep full price paid

Question 8

What is an example of online retail and a drawback of this?

2

Answer 8

• eBay

- Fees

Question 9

How has the growth of e-commerce helped small producers?

1

Answer 9

• Reach global audience in a way that other channels couldn’t offer

Question 10

What are the types of distribution channels?

5

Answer 10

• Traditional physical channel
• Direct to retailer
• Be your own retailer
• Direct online
• Online retailer

Question 11

What does a wholesaler do?

1

Answer 11

• Breaks bulk down from container lorry loads into manageable parcels