Distribution

Question 1

Ways that affect the transportation method

Answer 1

Channel of distribution
type of product
cost- cheapest may not be the most cost effective
Reliability- traceability (Knowing where the shipment is at all times
Customer service
methods used by competition

Question 2

Transportation method for food

Answer 2

Importer would employ agent to take orders from wholesalers
Importer will bulk-deliver product to wholesalers
wholesales break delivery down to send to retailers

Question 3

Function of channel members

Answer 3

Sorting out- separating products for different uses
Accumulation- creating small production batches into amounts big enough to be worth shipping
Allocation- Breaking down large shipments into smaller amounts
Assorting- combing collections of products that will appeal to groups of buyer

Question 4

What do wholesalers do?

Answer 4

Negotiate with suppliers

some promotional activities

Question 5

Different types of retail outlets?

Answer 5

supermarkets
Department stores
Telemarketing

Question 6

Crucial factors to retail success

Answer 6

Location
Buying the right goods in the right quantities
offering right level of service
Store image
Atmospherics (Physical elements of the shop design)
Product mix
EPOS-electric point of sale e.g.self checkout
loyalty cards

Question 7

Considerations made when selecting channels

Answer 7

Single channel (Provides more security) or multiple(widely available)
Location of customers- some channels will be unavailable, eg. internet not viable in many African countries
Compatibility with the firm- e.g.. small manufacturers may become overwhelmed by large retailer
Nature of the goods
storage and distribution
Geographical
Import and export costs

Question 8

Horizontal and vertical integration

Answer 8

Horizontal integration- Buying out members across a given level
Vertical integration- buying out members above or below in the distribution chain

Question 9

Channel conflict

Answer 9

member wants to maximise its own profit or power e.g.. Disneyland Paris bypassing travel agents

Question 10

Channel management techniques- Refusal to deal

Answer 10

One member refuses to do business with one or more other members

Question 11

Channel management techniques- tying contracts

Answer 11

The suppliers demands that the channel member carries other products as well as the main one.
Most of the contracts are illegal

Question 12

Channel management techniques- Exclusive Dealing

Answer 12

Manufacturer may prevents a wholesaler from carrying the competitors products. Often used so ‘price guarantees’ can be honoured

Question 13

Channel management techniques- Restricted sales territories

Answer 13

Intermediaries are prevented from selling outside a given area- prevents competition in their own area.