1
Introduction to Business
Chapter 12: Distributing and Promoting Products and Services
12.1 The Nature and Functions of Distribution (Place)
Distribution (place) includes the efficient managing of the acquisition of raw materials by the
factory and the movement of products from the producer or manufacturer to business-to-
business users and consumers. Place includes such activities as location selection, store layout,
atmosphere and image-building for the location, inventory, transportation, and logistics.
Logistics activities are usually the responsibility of the marketing department and are part of
the large series of activities included in the supply chain.
Distribution channels are the series of marketing entities through which goods and services
pass on their way from producers to end users. Distribution systems focus on the physical
transfer of goods and services and on their legal ownership at each stage of the distribution
process. Channels reduce the number of transactions and ease the flow of goods.
12.1 Review Questions
1. What is the role of distribution?
2. What facets does the role of distribution include?
3. Define the following terms
a. Distribution Channels
b. Marketing Intermediaries
c. Agents
d. Industrial Distributors
e. Wholesalers
f. Retailers
4. Types of marketing intermediaries.
5. What do brokers do?
6. Do agents or brokers own or take possession of goods?
7. What industries do industrial distributors serve?
8. Historically, what are wholesaler’s function?
9. What two groups do retailers sell two?
10. What marketing intermediaries most often appear in the distribution channels?
11. What is at the end of the distribution channel, and who do they include?
12. What do nontraditional channels help differentiate, and what do they provide?
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13. Who would benefit from using nontraditional channels?
14. Why do distribution channels exist?
15. How do distribution channels reduce the number of transactions?
16. What are ways channels make distribution easier?
17. Define the following terms
a. Sorting Out
b. Accumulating
c. Allocating
18. What is allocating at a wholesale level called?
19. What does the second channel of distribution do?
20. Do channel members also store merchandise?
12.2 Wholesaling
Wholesalers typically sell finished products to retailers and to other institutions, such as
manufacturers, schools, and hospitals. The two main types of wholesalers are merchant
wholesalers and agents and brokers. Merchant wholesalers buy from manufacturers and sell to
other businesses. Agents and brokers are essentially independents who provide buying and
selling services. They receive commissions according to their sales and don’t take title
(ownership) of the merchandise.
12.2 Review Questions
1. What are the two mains or wholesalers?
2. How do wholesalers differ from agents and brokers?
3. What are manufacturers’ representatives also known as?
4. Who do manufacturers’ representatives represent?
5. What do manufacturers’ representatives function as?
6. Do manufacturers’ representatives take title or possession of the merchandise?
7. How are manufacturers’ representatives paid?
8. Who do brokers bring together? Are they like agents?
12.3 The Competitive World of Retailing
Some 15 million Americans are engaged in retailing. Retailing can be either in-store or
nonstore. In-store retail operations include department stores, specialty stores, discount stores,
off-price retailers, factory outlets, and catalog showrooms. Nonstore retailing includes vending
machines, direct sales, direct-response marketing, home shopping networks, and internet
retailing. The most important factors in creating a store’s atmosphere are employee type and
density, merchandise type and density, fixture type and density, sound, and odors.
For more free, peer-reviewed, openly licensed resources visit OpenStax.org.
Introduction to Business
Chapter 12: Distributing and Promoting Products and Services
12.1 The Nature and Functions of Distribution (Place)
Distribution (place) includes the efficient managing of the acquisition of raw materials by the
factory and the movement of products from the producer or manufacturer to business-to-
business users and consumers. Place includes such activities as location selection, store layout,
atmosphere and image-building for the location, inventory, transportation, and logistics.
Logistics activities are usually the responsibility of the marketing department and are part of
the large series of activities included in the supply chain.
Distribution channels are the series of marketing entities through which goods and services
pass on their way from producers to end users. Distribution systems focus on the physical
transfer of goods and services and on their legal ownership at each stage of the distribution
process. Channels reduce the number of transactions and ease the flow of goods.
12.1 Review Questions
1. What is the role of distribution?
2. What facets does the role of distribution include?
3. Define the following terms
a. Distribution Channels
b. Marketing Intermediaries
c. Agents
d. Industrial Distributors
e. Wholesalers
f. Retailers
4. Types of marketing intermediaries.
5. What do brokers do?
6. Do agents or brokers own or take possession of goods?
7. What industries do industrial distributors serve?
8. Historically, what are wholesaler’s function?
9. What two groups do retailers sell two?
10. What marketing intermediaries most often appear in the distribution channels?
11. What is at the end of the distribution channel, and who do they include?
12. What do nontraditional channels help differentiate, and what do they provide?
For more free, peer-reviewed, openly licensed resources visit OpenStax.org.
, 2
13. Who would benefit from using nontraditional channels?
14. Why do distribution channels exist?
15. How do distribution channels reduce the number of transactions?
16. What are ways channels make distribution easier?
17. Define the following terms
a. Sorting Out
b. Accumulating
c. Allocating
18. What is allocating at a wholesale level called?
19. What does the second channel of distribution do?
20. Do channel members also store merchandise?
12.2 Wholesaling
Wholesalers typically sell finished products to retailers and to other institutions, such as
manufacturers, schools, and hospitals. The two main types of wholesalers are merchant
wholesalers and agents and brokers. Merchant wholesalers buy from manufacturers and sell to
other businesses. Agents and brokers are essentially independents who provide buying and
selling services. They receive commissions according to their sales and don’t take title
(ownership) of the merchandise.
12.2 Review Questions
1. What are the two mains or wholesalers?
2. How do wholesalers differ from agents and brokers?
3. What are manufacturers’ representatives also known as?
4. Who do manufacturers’ representatives represent?
5. What do manufacturers’ representatives function as?
6. Do manufacturers’ representatives take title or possession of the merchandise?
7. How are manufacturers’ representatives paid?
8. Who do brokers bring together? Are they like agents?
12.3 The Competitive World of Retailing
Some 15 million Americans are engaged in retailing. Retailing can be either in-store or
nonstore. In-store retail operations include department stores, specialty stores, discount stores,
off-price retailers, factory outlets, and catalog showrooms. Nonstore retailing includes vending
machines, direct sales, direct-response marketing, home shopping networks, and internet
retailing. The most important factors in creating a store’s atmosphere are employee type and
density, merchandise type and density, fixture type and density, sound, and odors.
For more free, peer-reviewed, openly licensed resources visit OpenStax.org.
