Place: Distribution Channels Flashcards

All 16 cards in this deck

Give one advantage to a business of distributing through retail stores rather than only online.

Any one of: customers can see, test and take away the product straight away; staff can give advice and service.

What is e-commerce?

The buying and selling of products and services using devices connected to an electronic network such as the internet.

How does e-commerce help a business access wider markets?

Customers anywhere in the country or the world can buy online at any time, not just those near a shop, so the business can reach many more customers.

Give one drawback to a small business of using e-commerce.

Any one of: customers cannot see or try the product before buying; the costs of a website, payment handling, delivery and returns; more global competition.

What is a channel of distribution?

The route a product takes from the producer to the customer, e.g. through a retailer, or sold directly to customers online.

Give two examples of physical distribution channels.

Selling through shops/retailers and mail order or catalogues.

Give two examples of digital distribution channels.

Any two of: downloads (e.g. music, e-books, apps or games); streaming (e.g. films and TV); online services such as banking or insurance. No physical product is moved.

Give one advantage to a producer of including a wholesaler in its distribution channel.

The producer's storage costs are likely to be lower.

What is digital distribution?

Delivering a product or service electronically, by download, streaming or an online service such as banking, so no physical item is moved.

How is digital distribution different from selling online with home delivery?

Selling online (e-commerce) can still mean physically delivering the goods; in digital distribution the product or service itself is delivered electronically, e.g. downloaded or streamed.

What does 'breaking bulk' mean?

A wholesaler buying large quantities from producers and selling them on in smaller amounts to retailers.

Give the three main routes a product can take through a physical distribution channel.

Producer to customer (direct); producer to retailer to customer; producer to wholesaler to retailer to customer.

When is a producer most likely to sell directly to its customers?

When it has few customers it can deal with itself, e.g. a small craft business or a firm selling to other businesses.

What is physical distribution?

Moving physical goods from the producer to the customer, e.g. through shops or by delivery to the customer's home.

Give one advantage to a business of digital distribution.

Any one of: there is no physical product to deliver, so costs are lower; customers receive the product straight away; customers can buy at any time of day.

Give one disadvantage to a business of digital distribution.

Any one of: not every product can be delivered digitally; some customers have no internet access; content can be copied and shared illegally, so sales are lost.