WK 7: Place

Question 1

Define Distribution Channel:

Answer 1

Chain that exists between producers and consumers.

Question 2

Define intermediaries

Answer 2

Key orgs that make up the distribution channel.

Question 3

Elements of a Good/Bad DC?

Answer 3

Good DC:

• Products available at wanted time.
• Available in locations wanted.
• Customised products to needs.
• Transactions efficient, cheap and simple as possible.

Bad DC:
- Add costs, reduce efficiency, create delays.

Question 4

Define intensive, exclusive and selective distribution:

Answer 4

Intensive distribution: distributes products via every suitable intermediary .

Exclusive distribution: distributes products through a single intermediary for any given geographic region.

Selective distribution: distributes products through intermediaries chosen for some specific reason.

Question 5

Business to Consumer DC’s:

Answer 5

1) Producer -> Consumer
e.g. Apple, Dell, Dominos. Directly to consumer via websites, outlets.
In addition to making the product, must effectively manage distribution and deal with customers 1 on 1.

2) Producer -> Retailer -> Consumer
e.g. Dell, Apple.
Used by big firms, as prefer to deal with producers rather than wholesalers.

3) Producer -> Wholesaler -> Retailer -> Consumer
e. g. Goods sold in high volumes through numerous retailers e.g. groceries, mass-marked clothing.

4) Producer -> Agent/Broker -> Wholesaler -> Retailer -> Consumer
e. g. exports, as complexities of many legal, regulations and cultural require an agent.

5) Producer -> Agent/Broker -> Consumer
e. g. financial services industry

Question 6

Business to Business DC’s:

Answer 6

1) Producer -> Organisational Buyer

2) Producer -> Industrial distributor -> Organisational Buyer
e. g. ID fulfil same role as retailer: purchase commonly used, then sell to org buyer.

3) Producer -> Agent -> Organisational Buyer
Agent is intermediary who plays matchmaker between producers.

4) Producer -> Agent -> Industrial Distributor -> Organisational buyer
Combination of all.

Question 7

Define Supply-chain management

Answer 7

Managing marketing channels based on ongoing partnerships among distribution channel members that create efficiencies and deliver value to customers.

Question 8

Define horizontal / vertical channel integration

Answer 8

Horizontal Channel Integration: orgs at the same level combined under one management structure e.g. when a retailer buys out a competitor.

Vertical Channel Integration: different stages of the distribution channel combined under one management structure e.g. when a wholesaler buys a retailer or a transport business.

Question 9

Define franchising

Answer 9

Franchising: type of business where right to sell products/use main elements of a business model are licensed by one party to another.

Question 10

Major activities in distribution of goods:

Answer 10

Physical distribution: movement of physical products from producers to consumers via a range of activities.

Just-in-Time (JIT): Inv management involves holding only stock about to be used or sold.