Theory question 106
DistributionOJ Ltd is a consumer goods manufacturing firm. They sell to retail outlets throughout the country. The company intends to increase its market share. (a) Explain the following terms in relation to the company's business activities: (i) Demand; (ii) Products; (iii) Market; (b) Outline two types of distribution channels the company could adopt. (c) State three functions each of the following channel members the comapny could use; (i) wholesaler; (ii) retailer.
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(a)(i) Demand: the quantity of OJ Ltd's goods that consumers are willing and able to buy at a given price.
(ii) Products: the consumer goods OJ Ltd makes and offers to satisfy customers' needs.
(iii) Market: all the actual and potential buyers of OJ Ltd's goods across the country.
(b) Any two: direct channel (OJ Ltd → consumer, e.g. company shops or online); indirect channels (OJ Ltd → retailer → consumer; OJ Ltd → wholesaler → retailer → consumer; OJ Ltd → agent/distributor → wholesaler → retailer → consumer).
(c)(i) Wholesaler, any three: buys in bulk (breaks bulk); stores goods; finances the producer; gives credit to retailers; transports goods to retailers; gives market information.
(ii) Retailer, any three: sells in small quantities to consumers; stocks a variety of goods; gives credit/delivery to customers; gives product information and advice; displays goods; passes consumers' feedback back up the channel.
Give each point as a full sentence, with an example where possible.