9609 · 3.3.6
Place (channels of distribution) flashcards
Revision flashcards for Cambridge 9609 Place (channels of distribution) (syllabus 3.3.6). Flip, recall, then mark a real past-paper question.
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What is a channel of distribution?
The route a product takes from the producer to the final consumer. It can be direct (no intermediaries) or indirect (with intermediaries like wholesalers and retailers).
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Define 'intermediary'.
A business or individual that links the producer to the consumer. Examples include wholesalers, retailers, and agents. They add value but also add a cost layer.
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What is the primary function of a wholesaler?
To buy goods in large quantities (bulk) from producers and sell them in smaller quantities to retailers. This function is known as 'breaking bulk'.
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Explain 'disintermediation'.
The removal of intermediaries from a distribution channel, often facilitated by e-commerce, which allows producers to sell directly to consumers and retain a larger profit margin.
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What is a multi-channel distribution strategy?
Using a combination of different distribution channels to reach a wider market. For example, selling through a physical store, a website, and also through independent retailers.
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What is channel conflict?
Tension or disagreement among members of a distribution channel. For example, when a manufacturer's direct online sales are seen as competing with its own retail partners.
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What is intensive distribution?
A strategy where a product is made available in as many outlets as possible. It is suitable for low-price, high-volume convenience goods like soft drinks or newspapers.
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What is selective distribution?
A strategy of using a limited number of outlets in a geographical area to sell products. It is common for shopping goods like home appliances or clothing, where consumers are willing to travel to a specific store.
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What is exclusive distribution?
A strategy where the producer gives only one retailer the right to sell its products in a specific geographic area. This is used for luxury goods to maintain brand image and exclusivity.
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Direct channel?
Manufacturer → Customer (own website, factory shop, direct sales force).
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Indirect channel?
Uses intermediaries — e.g. Manufacturer → Wholesaler → Retailer → Customer.
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Retailer role?
Bulk breaking, display, advice, location convenience, credit.
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Wholesaler role?
Bulk buying from producer, storage, delivery to retailers.