IGCSE Business C14 Marketing Mix Place

Recap: Marketing & Marketing Mix

Multiple Choice

Intangible items that have monetary value and satisfy needs and wants

• Goods

• Services

• Marketing

• Tangible

Multiple Choice

Businesses that buy products to use in their operations; also called the business-to-business market (this can be abbreviated as b-to-b or b2b).

• consumer market

• producer/industrial market

• target market

• Marketing mix

Multiple Choice

What does USP stand for?

• Unique selling product

• Unique selling point

• Unique selling promotion

• Unique selling place

Multiple Choice

When customers keep buying the same brand again and again instead of choosing a competitor brand, we call it as

• Brand name

• Brand image

• Brand loyalty

• Branding

Multiple Choice

The marketing mix will emphasis four particular elements often referred to as the 4Ps, they are....

• product, place, promotion and price

• product, piece, promotion and price

• product, place, pride and price

• player, place, promotion and price

• product, place, piece and pride

Multiple Choice

The product life cycle shows the different stages that a product passes through and sales that can be expected at each stage

• True

• False

Multiple Choice

What is the MAIN purpose of using a PLC?

• to help with staffing issues

• to improve customer service

• to help make better marketing decisions over time

• to lift salaries for directors

Multiple Choice

Definition - Businesses will charge similar prices to other businesses. Is an example of...

• Penetrative Pricing

• Competition Pricing

• Cost-Plus Pricing

• Competitive Pricing

I will be able

to………

Key Words

Distribution channel; Agent

The Marketing mix – Place

Explain and apply knowledge on:
•

The role of place decisions in the marketing
mix

•

Advantages and disadvantages of different
channel

•

How to recommend and justify an appropriate
distribution channel in given circumstances

11/06/2023

Key words

Keywords

Definition

Distribution channel The means by which a product is passed from the place of production to

the customer

Agent

An independent person or business that is appointed to deal with the sales
and distribution of a product or range of products

The role of place decisions in the marketing
mix

• Place (or its more common name “distribution”) is about how a

business gets its products to the customers.

• The objective of distribution is to make products available in the right

place at the right time in the right quantities.

• Consumers should be able to get to the product easily, and the

product has to be in the right place

• Getting distribution right is a key part of being competitive.

Distribution channel

The means by which a product is passed from the place of production
to the customer

Multiple Choice

Paths, or routes, that goods or services take from the producer to the ultimate consumer or industrial user

• Direct channel of distribution

• Indirect channel of distribution

• Channels of distribution

• Industrial distributor

Distribution channel 1-Direct to customer

This channel is also common when selling directly from one manufacturer to another
manufacturer, e.g: car component sold directly to the car producer.

Advantages

Disadvantages

Very simple

Impractical for most products due to factory
location being away from the customers

Suitable for products such as certain types of
products directly sold from the farm

Not suitable for product which can not be easily
sent by post

Lower price – cuts out wholesaler and retailer

May not be cost effective to send products by
post or courier

Products can be sold by mail order catalogue or
via internet

Multiple Choice

The channel that goes from Producer to Consumer is considered:

• Direct

• Indirect

• Sales Agent

• None of the above

Multiple Choice

Which of the following is direct distribution?

• factory outlets

• farmers market

• shopping malls

• grocery stores

Multiple Choice

In a direct channel there are intermediary businesses that perform some of the marketing functions.

• True

• False

Multiple Choice

In a direct channel, the producer sells directly to the final consumer

• True

• False

Multiple Choice

What is the most common channel of distribution for large industrial goods?

• Producer to retailer to consumer

• Producer to wholesaler to retailer to consumer

• Producer to agent to industrial distributor to user

• Producer to industrial user

Multiple Choice

Producer - Consumer is most likely to be used by a manufacturer of:

• chocolate bars

• DVD players

• mass produced cars

• specialist racing cars.

Multiple Choice

One of the advantages of the channel of distribution shown in the previous question is that:

• a large delivery can be broken into a smaller quantity

• the absence of intermediaries helps to keep the price down

• the producer does not have the cost of holding stocks

• the consumer can see the products that are for sale.

Multiple Choice

A farmer grows vegetables & sells directly to consumers. The reason for this decision is:

• the products need to be explained to the consumers

• a high quality image will be needed as goods are expensive

• the products are perishable

• the products will be purchased infrequently.

Multiple Choice

A computer manufacturer decides to open a chain of shops to sell products. The reason is:

• it is much cheaper to open and run a chain of shops

• existing shops were prepared to accept lower profit margins.

• the manufacturer wants to control the product marketing

Distribution channel 2-Using retailer as the
only intermediary

Most common when the retailer is large (e.g.:large supermarket) or when the products are
expensive (e.g.: jewellery, furniture, etc.)

Advantages

Disadvantages

Large quantities to be sold to retailers

No direct contact with customers

Reduced distribution cost compared to selling
directly to customers

Higher price than ‘direct selling’ – to cover the
cost and profit for retailers

Multiple Choice

Uses intermediaries to get the product from the manufacturer to the end users

• nonstore retailer

• indirect channel

• multi-channel retailer

• direct channel

Multiple Choice

The use of intermediaries enables producers to make larger profits because intermediaries

• help to reduce the per-unit costs of goods.

• enable producers to use direct distribution.

• increase the number of retailer-to-producer contacts.

• may sell more than the producer could sell on its own.

Multiple Choice

Which of the following is not an intermediary?

• Retailer

• Wholesaler

• Producer

• Agent

Multiple Choice

Visiting a retail store to purchase a product would be considered which distribution channel?

• indirect

• direct

• marketing

• automobile

Multiple Choice

If a product, such as an ice cream, is purchased frequently it is likely to be:

• distributed using personal selling

• distributed through many retail outlets

• sold directly from the factory to consumers

• distributed from producer to wholesaler direct to consumers

Multiple Choice

Department stores and grocery stores are examples of

• wholesalers

• producers

• distributors

• retailers

Distribution channel 3-Using a wholesaler and
retailer as intermediaries

Wholesaler performs the function of breaking bulk.
Breaking bulk: wholesalers buy products in large quantities and then divide up the inventory into
much smaller quantities for retailers to buy

Without wholesaler

With wholesaler

Multiple Choice

Agents, wholesalers, and retailers are all types of

• producers

• e-tailers

• intermediaries

• distribution channels

Multiple Choice

These intermediaries buy large quantities of goods, store goods, and sell to retailers.

• agents

• consumers

• producers

• wholesalers

Distribution channel 3-Using a wholesaler and
retailer as intermediaries

Advantages

Disadvantages

Reduced storage cost for retailers due to less
storage space needed

Higher price maybe charged by the wholesalers
to retailers compared to buying directly from
manufacturer

Retailers can purchase fresh products in small
quantities from wholesalers to prevent waste

Limited product ranges available from the
wholesaler

Retailers may get credit facility from wholesalers

Quality concern for fresh product as it takes
longer to reach the customer

Reduced transport cost as wholesaler delivers to
small retailers

Wholesalers may be a long way from the small
shops

Wholesaler can give advice about which product
on demand to retailer as well manufacturer

Higher price charged to customers to cover costs
and profit for wholesalers and retailers.

Multiple Choice

An advantage for producers in using the producer-to-wholesaler-to-retailer-to-consumer distribution channel is that

• wholesalers do not take title to the goods.

• it enables them to control channel activities.

• wholesalers usually buy in large quantities.

• it enables them to reach large retailers directly.

Multiple Choice

One disadvantage of the channel of distribution: Producer - Wholesaler - Retailer -Consumer is

• the profit taken by intermediaries helps to keep prices low

• the producer loses control over how the product is marketed

• the producer has to hold high stocks of the finished goods

• consumers find it hard to return faulty goods to the firm

Multiple Choice

All of the following are part of the normal role of wholesalers except:

• breaking bulk quantities to smaller deliveries to retailers

• offering credit facilities to the retailers

• arranging delivery of the product to retailers

• putting goods on display for the consumers

Multiple Choice

One disadvantage of the channel of distribution: Producer - Wholesaler - Retailer -Consumer is

• the profit taken by intermediaries helps to keep prices low

• the producer loses control over how the product is marketed

• the producer has to hold high stocks of the finished goods

• consumers find it hard to return faulty goods to the firm

Distribution channel 4-Using an additional
intermediary such as an agent

•An agent is an independent person or business that is appointed to deal with the sales and
distribution of a product or range of products

•Agent is commonly used when firms are exporting their products to a foreign country.

•Agent is compensated through the additional amount on the price to cover its expenses or
commission on sales

Advantages

Disadvantages

Manufacturer will be assisted to sell the product
in other market

Producer have less control over the way product
is sold to customers

Agents knows the local condition and able to
identify the most effective place to sell the
products

Multiple Choice

One of the advantages of using agents for selling goods in foreign markets is that:

• the agent will not take a profit from the sale of goods

• the producer will have more direct contact with consumers

• the agent will have knowledge of local market conditions

• the producer will have complete control over product sales.

Methods of distribution

Method of distribution

Description

Department stores

Large stores, in the center of towns or cities selling wide variety of
products from wide range of suppliers

Chain stores

Two or more stores with the same name and characteristics

Discount stores

Retail stores offering wide range of products often of a similar type,
many branded products, at discount prices

Superstores

Very large out-of-town stores which sell a wide range of food and non-
food products

Supermarkets

Retail grocery stores with dairy produce, fresh meat, packaged food and
non-food departments

Independent retailers

Single shops, often small, that offer a local, personalized service with
often high price.

Methods of distribution Cont’d

Method of distribution

Description

Direct sales

Manufacturers directly sell products to customers (consumer or another
business)

Mail order

Customers look through catalogue or magazine and order by post,
telephone or internet.

Internet/e-commerce

Products are viewed on the business’s website or other specialist
website (e-bay, Alibaba, etc.) and ordered through internet, phone or
mail

Multiple Choice

This distribution channel consist of large stores, in the center of towns or cities selling wide variety of products from wide range of suppliers

• Chain stores

• Department stores

• Discount stores

• Super stores

Multiple Choice

Ali Baba and e-bay are examples of

• Superstores

• Direct sales

• Mail order

• E-commerce

Selecting the distribution channel to use

Selection of distribution channel to use will depend on:

• The type of product it is: if it’s sold to producers of other goods, distribution would either be

direct (specialist machinery) or wholesaler (nuts, bolts, screws etc.).

• The technicality of the product: as lots of technical information needs to be passed to the

customer, direct selling is usually preferred.

• How often the product is purchased: if the product is bought on a daily basis, it should be sold

through retail stores that customers can easily access.

• The price of the product: if the products is an expensive, luxury good, it would only be sold

through a few specialist, high-end outlets, for example, luxury watches and jewellery.

• The durability of the product: if it’s an easily perishable product like fruits, it will need to be sold

through a wide amount of retailers to be sold quickly.

• Location of customers: the products should be easily accessible by its customers. If customers are

located over the world, e-commerce (explained below) will be required.

• Where competitors sell their product: in order to directly compete with competitors, the

products need to be sold where competitors are selling too.

Multiple Choice

Businesses must consider what factors when determining distribution costs?

• channel(s) used

• inventory costs

• transportation method

• all of the above

I have been

learning
to………

Key Words

Distribution channel; Agent

Explain and apply knowledge on:
•

The role of place decisions in the marketing
mix

•

Advantages and disadvantages of different
channel

•

How to recommend and justify an
appropriate distribution channel in given
circumstances