(PAPER 1) 1.3.4 Distribution

Question 1

Distribution definition

Answer 1

How to get the product to the right place for customers to make their purchases- physical or online

Question 2

Distribution channel definition

Answer 2

the route taken by a product from the producer to the customer

Question 3

Distribution outlet definition

Answer 3

Where the product is actually sold e.g. the shop

Question 4

People involved in the distribution channel

Answer 4

1. Producer- makes the product/service
2. Agent- specialises in certain goods and sells/advertises
3. Wholesaler- typically buys and stores large quantities of several producers’ goods then breaks into the bulk deliveries
4. Retailer- buys from wholesalers and sells to customers
5. Consumer- buys the product/service

Question 5

4 types of distribution

Answer 5

• Zero level- producer > consumer
• One level- producer > retailer > consumer
• Two level- producer > wholesaler > retailer > consumer
• Three level- producer > agent > wholesaler > retailer > consumer

EXAMPLES:
• zero level e.g. E-bay, Amazon, Dominoes
• one level e.g. Walmart, bookers
• two level e.g. Cosco, sainsburys, Aldi
• three level e.g. specialised markets- antiques

Question 6

Changes in distribution to reflect social trends

Answer 6

• Online distribution
+ more convenient for customers
+ less money spent on the maintenance of a shop e.g. heating
- can’t physically touch the product or try it on
- delivery time and shipping costs may sometimes be a deterrent
• Changing from product to service

Question 7

why may these vary between businesses

Answer 7

mass market- more channels

niche market- less levels

Question 8

in order for a business to choose the right channel of distribution for its product, it will need to consider the following…

Answer 8

1. NATURE OF THE PRODUCT: type of product will depend on how many intermediaries may be used
2. COST: the more intermediaries the less profit the producer makes
3. THE MARKET: mass or niche? 2 levels is best to get the product out across the country
4. CONTROL: control over reputation. more control= 0 levels

Question 9

benefits to customers and businesses of online distribution

Answer 9

COSTOMERS:
\+ convenience
\+ 24/7/365
\+ wide variety of products to choose from
\+ delivered to the door
\+ saves time and effort

BUSINESSES: 
\+ less costs (staff, rent)
\+ faster to distribute 
\+ wide range of products can be displayed
\+ high audience 
\+ easier to promote

Question 10

in the UK 82% of people bought items online in 2019 compared with 53% in 2008. calculate the % change

Answer 10

% change = new-old/old x100

82-53/53 x100= 54.72%