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Terms in this set (29)
What's the definition of agent or broker?
An intermediary that brings together buyers and sellers.
What's the definition of breaking bulk?
Dividing a large quantity of goods received from a supplier before selling them on in smaller quantities to customers.
What's the definition of direct selling?
Producers selling their products directly to consumers.
What's the definition of distribution?
The delivery of goods from the producer to the consumer.
What's the definition of distribution channel?
The route taken by a product from the producer to the customer.
What's the definition of e-commerce?
The use of electronic systems to sell goods and services.
What's the definition of intermediaries?
Links between the producer and the consumer.
What's the definition of retailer?
A business that buys goods from manufacturers and wholesalers, and sells them in small quantities to consumers.
What's the definition of wholesaler?
A business that buys goods from manufacturers and sells them in smaller quantities to retailers.
Some producers market their products to consumers, for example services are sold directly, name examples.
Banks, solicitors, hairdressers and dentists.
One distribution channel is manufacturer> consumer, what does this mean and name examples.
It means products/services are sold directly to the customer. Direct marketing. Examples are car washing and some manufacturers have their own websites.
One distribution channel is manufacturer>retailer> consumer, why do most manufacturers sell in a retailer.
Because retailers are all over the country and can generate the sales volumes they want.
One distribution channel is manufacturer>retailer> consumer, what type of market is this mainly used in and typically what could the retailers be?
Mostly used in a mass market. Retailers could be shops, department stores, supermarkets and online retailers.
One distribution channel is manufacturer>wholesaler>retailer> consumer, why do some manufacturers prefer to deal with wholesalers and what can wholesalers offer to small retailers?
They can sell their products in large quantities and wholesalers can offer trade credit.
One distribution channel is manufacturer> agent/broker>wholesaler>retailer> consumer, why are manufacturers likely to use an agent?
Some may want to sell in another country, so they may use an agent in that country. The agent speaks the language and understands regulations. They act as a middle man between the manufacturer and foreign wholesaler.
One distribution channel is manufacturer> agent/broker>wholesaler>retailer> consumer, having an agent increases the supply chain what effect can this have?
It can push up the price to the final consumer.
For choosing the appropriate distribution channel, the nature of the product is an important factor why?
Different types of products may require different distribution channels. For example products that need explanation or demonstration such as technical products might need to be sold by an expert. Whereas, most services are sold directly like hairdressing.
For choosing the appropriate distribution channel, the cost is an important factor why?
Businesses normally choose the cheapest distribution channels, they also prefer direct channels. This is because if intermediaries are used they will take a share of the profit.
For choosing the appropriate distribution channel, the market is an important factor why?
Producers selling to mass markets are likely to use intermediaries. In contrast, businesses targeting smaller markets are more likely to target customers directly. For example a building contractor in a small town will deal directly with customers.
For choosing the appropriate distribution channel, the control is an important factor why?
For some producers its important to have complete control over distribution. For example producers of exclusive products do not want to see them being sold in downmarket outlets as this might damage their image.
One change in distribution to reflect social trends is online distribution, name 3 benefits to the consumer of online distribution.
Can shop 24/7, generally a huge amount of choice and people can shop from anywhere.
One change in distribution to reflect social trends is online distribution, name 3 benefits to the business of online distribution.
Lower start up costs, more choice of where to locate their operations and they can serve their customers 24/7.
Name 4 examples of B2C- (business to consumer) e-commerce include services.
Tickets for air, rail and coach travel, click and collect services, access to online films and audio and hotel rooms.
In B2B (business to business) e-commerce businesses can use specialist software to purchase resources, what does this software help?
It helps to find the cheapest supplier and carries out all the paperwork.
Name 4 negatives of online distribution.
Increasing competition, security risk from hackers, consumers can't inspect goods before purchasing and the exclusion of customers without internet access.
One change in distribution to reflect social trends is changing from product to service, name an example of this.
To watch a film people could buy a DVD sold in a retail outlet. Although, now there are streaming apps and film channels such as Netflix.
Name four benefits to consumers of online distribution.
Its cheaper because online retailers often have lower costs, consumers can shop 24/7, there is generally a huge amount of choice and people can shop from anywhere if they have access to the internet.
Name eight benefits ti businesses of online distribution.
E-tailers may not have to meet the costs of operating stores, lower start up costs, lower costs when processing transactions, less paper is needed for documents, payments can be made and received online using credit cards, B2C businesses can offer goods to a much wider market, can serve customers 24/7 and businesses have more choice of where to locate their operations.
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