Distribution (1.3.4)

Question 1

What is Distribution?

Answer 1

Products in the right place at the right time in the right quantities

Question 2

What are distribution channels?

Answer 2

Refers to the various intermediaries (middle people) through which goods/services move from the manufacturer to the end customer

Question 3

What are the 3 Distribution Channels?

Answer 3

Manufacturer-Wholesaler-Retailer-Customer (4 stage)
Manufacturer-Retailer-Customer (3 stage)
Manufacturer-Customer (2 stage)

Question 4

What is a Manufacturer?

Answer 4

Producer of a Product e.g. Apple, Nike, Dyson

Question 5

What is a Wholesaler?

Answer 5

Sells manufactured items to other businesses (retailers) in bulk e.g Costco

Question 6

What is a Retailer?

Answer 6

Sells manufactured items to customers e.g. ASOS

Question 7

What is a consumer?

Answer 7

Person who uses or eats product or service

Question 8

What is the four stage distribution channel?

Answer 8

-Traditional channel consists of four stages: Manufacturer, wholesaler, retailer and consumer.
-This channel is commonly used for products such as groceries, clothing and electronics.

Question 9

What is the three stage distribution channel?

Answer 9

-Eliminates the wholesaler stage with the producer selling directly to the retailer.
-Often used for products with high demand or where cost of distribution is high
-Often used for products with high profit margins where a manufacturer can afford to sell directly to retailer and still make a profit

Question 10

What is the two stage distribution channel?

Answer 10

-Eliminates both the wholesaler and retailer stages with the manufacturer selling directly to the end consumer.
-Channel is commonly used for products that are sold online or through direct sales channels.

Question 11

How many distribution channels will businesses use?

Answer 11

Businesses will use multiple distribution channels to maximize sales

Question 12

How has distribution been changed/ impacted by social trends?

Answer 12

1. Growth of e-commerce: Online distribution has become increasingly popular due to convenience for consumers. Many businesses now use drop-shipping which allows them to sell products without holding stock
2. Shift from product-based businesses to service-based businesses: Consumers increasingly value experiences over material possessions. By delivering services directly to customers its more a service-based approach.