Channels of Distribution Quiz

13 Questions

What are the two components of distribution mentioned in the text?

Channel selection and logistics

In which type of distribution is the product sold everywhere, like Coca-cola in various places?

Intensive distribution

What is the main goal of logistics in distribution?

To arrange for the efficient movement of products

What is the purpose of channel selection in distribution?

To decide the path a product should take to reach the target consumer

What does selective distribution involve?

Selling the product in specific locations to specific consumers

What are the paths of ownership that goods follow as they pass from the producer to the consumer referred to as?

Distribution channels

What is the main reason for a company to opt for selective distribution?

To control the distribution of their product and avoid conflicts in positioning/brand image

What distinguishes exclusive distribution from selective distribution?

The manufacturer makes a deal with one or two retailers to exclusively sell the product in a particular area

What characterizes integrated distribution?

The manufacturer, distributor, or retailer owns both distribution outlets and manufacturing facilities for a product

What is an example of a product that would typically use exclusive distribution?

High fashion clothing

What is the legal obligation if a retailer orders a manufacturer’s product in a selective distribution system?

The manufacturer cannot refuse to sell the product to the store without a valid reason

What benefit does exclusive distribution provide to a manufacturer?

It allows the product to have a prestige image and enables the manufacturer to influence retail strategies

Which company exemplifies integrated distribution?

IKEA

Study Notes

Components of Distribution

Two key components: logistics and channel selection.

Type of Distribution

Intensive distribution involves products, such as Coca-Cola, being sold everywhere to maximize market coverage.

Goal of Logistics

Main purpose of logistics in distribution is to ensure timely delivery of products to the right locations efficiently.

Purpose of Channel Selection

Channel selection aims to determine the most effective route for products from producers to consumers, optimizing cost and reach.

Selective Distribution

Involves distributing a product through a limited number of selected intermediaries to maintain a certain level of quality and service.

Paths of Ownership

Goods follow channels of distribution, referring to the pathways goods take as ownership transfers from producers to consumers.

Reason for Selective Distribution

Companies often choose selective distribution to enhance brand image by associating their products with specific retailers known for quality service.

Exclusive vs. Selective Distribution

Exclusive distribution grants rights to a single retailer in a specific area, while selective distribution involves a few chosen retailers in a broader area.

Integrated Distribution

Integrated distribution combines multiple distribution strategies to achieve a comprehensive approach, coordinating various channels effectively.

Example of Exclusive Distribution

High-end luxury items, such as designer handbags, are typically sold through exclusive distribution to maintain brand prestige.

Legal Obligation in Selective Distribution

Retailers must adhere to specific standards and conditions set by the manufacturer when ordering products within a selective distribution system.

Benefit of Exclusive Distribution

Provides manufacturers with tighter control over branding and pricing, reinforcing brand prestige and consumer loyalty.

Example of Integrated Distribution

Companies like Apple exemplify integrated distribution by combining direct sales through their stores with sales through authorized retailers.