Consider the advantages and disadvantages of the following two
options for distributing GT products. Recommend the option GT
should choose. Justify your answer.
Relevant points might include:
Disadvantages
|
Advantages
|
|
Harder to expand
sales if using the
same channels
and not new ones
May sell many
competing goods
in shops alongside
GT toys
|
Already established
channel of
distribution and
links with retailers
Easier to use in
store promotions as
already has
relationship with
retailer
Lower delivery
costs compared to
online
|
Continue selling
to large shops
|
May lose existing
customers if they
want to see and
handle toys before
buying
May not have a
cost-effective
delivery network
available
|
Sell to a wider
range of customers
Customers can
access all the range
of products
Lower price as no
retail profit margin
Possibly allows
prices to be
reduced to make
the toys more
competitive
|
Only sell its
products online
|
Level 1 (1–3 marks)
1 mark for each L1 statement (max of 3 marks)
E.g. Lower price as no retail profit included.
Level 2 (4–6 marks)
Detailed discussion of the advantages and disadvantages of each option.
1 × L2 explanation can gain 4 marks and a further mark can be awarded for
each additional L2 explanation (max 6 marks)
E.g. Lower price as no retail profit included so this may attract more
customers leading to higher sales of toys and profit for GT. However, GT
may lose existing customers if they prefer to feel and see the toys to check
they are suitable for their children before buying. This may reduce the sales
of toys to existing customers and result in a lowering of toy sales for GT. (4
marks for L2 answer plus 1 application mark for referring to the purchase of
toys for their children).
Level 3 (7–10 marks)
For L3 to be awarded there need to be at least 2 L2 marks awarded and
then a recommendation which justifies which channel of distribution to
choose.
7–8 marks for some limited judgement shown in recommendation as to
which channel of distribution should be chosen and/or why not the
alternative channel chosen.
9–10 marks for well justified recommendation as to which option will be the
best channel of distribution to choose and why not the alternative channel.
Award up to 2 additional marks for relevant application.
Possible application marks: manufacturer of toys; toys sold to large toy
shops throughout country Y; 200 different designs; teddy bears; toy cars;
building blocks; suitable for babies/young children; toys also exported;
Marketing manager wants to only sell toys online; toys manufactured using
batch production; design and packaging of toys need to be adapted for
each different export market; sells well designed toys of high quality;
education and safety of children are GT’s main priorities; recent price
increases have resulted in falling sales, selling online will help prevent any
communication barriers.
There may be other examples in context, which have not been included
here.