Distribution channels
Products may move directly or through wholesalers, retailers and agents.
CAIE IGCSE Business 0264 - Paper 1
3.3.3 Marketing mix - place
Topical Past-Paper Questions
Why it’s here: Distribution channels and choosing how products reach customers.
Key concepts to revise
The main ideas to know for 3.3.3 Marketing mix - place.
Direct distribution
Selling directly gives control and customer contact but may limit reach.
Intermediaries
Wholesalers and retailers provide storage, access and specialist knowledge.
Choosing a channel
Cost, product type, control and customer location affect the decision.
Exam material
Past-paper questions
Past-paper question
0450/11/M/J/24
[6] marks
CFG is a social enterprise. It buys cocoa beans from local farmers and then uses the beans to make chocolate. Being ethical is important to the business. CFG has developed a new chocolate bar. The Marketing Manager plans to use skimming as its pricing method, and retailers as its distribution channel for the new product. He knows there are many legal controls over marketing that might affect a business.
d) Explain one advantage and one disadvantage to CFG of using retailers as its distribution channel for the new product. [6] Advantage: Explanation: Disadvantage: Explanation:
Past-paper question
0450/12/O/N/23
[6] marks
Paolo wants to start up a business making cakes . He plans to sell all of his products to a wholesaler. Paolo knows the packaging for his products will be important. He has prepared some financial and sales data. An extract from this data is shown in Table 1.1. Paolo is considering using crowdfunding as a source of finance. He knows the business will also need working capital .
Extract from Paolo’s financial and sales data
Table 1.1
| Average price per cake | $6 |
|---|---|
| Average cost per cake | $4 |
| Forecast average number of cake sales per day | 50 |
(e) Do you think selling to a wholesaler is the best channel of distribution for a start-up business to use? Justify your answer. [6]