State four consequences of eliminating wholesalers from the chain of distribution

5/11/2021

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State four consequences of eliminating wholesalers from the chain of distribution. (4mks)

Four consequences of eliminating wholesalers from the chain of distribution.

Manufactures may be forced to open up additional distribution outlets, which might increase their costs thereby lowering their profits.
The removal of wholesalers will in effect decrease the cost of distribution, hence higher profits to the producers.
Producers will not specialize since they will also be carrying out the distribution function, hence they will not enjoy the economic advantage of specialization.
Prices may be unstable in their absence since they help in stabilizing prices by storing large quantities of the produce.
Producers may need to establish additional storage facilities, which were previously provided by wholesalers, hence requiring them to raise more capital.
Retailers will be forced to buy in bulk thereby requiring them to have more capital, which may not be available.
Retailers may be forced to pay cash thereby requiring them to increase their capital base.
Manufacturers may be forced to break bulk, since the retailers may not be able to buy in large quantities.
Retailer may be forced to establish warehouse, which would require additional investment.

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Outline four factors that may make a producer to by-pass the wholesaler when distributing goods.

21/12/2020

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Outline four factors that may make a producer to by-pass the wholesaler when distributing goods.

Factors that may make a producer to by pass the wholesaler when distributing goods include:

Having own retail outlet.
Dealing in perishable goods like bread which require shorter channels.
Dealing in technical goods which require elaborate after sales services.
Consumers and retailers buying in large qualities.
Need to keep price of goods low.
Limited geographical spread of the market.
Government policy.
When the production is in small quantity.
Where the producer has enough storage facilities.
When goods are produced on order.

Outline four factors that may make a producer to by-pass the wholesaler when distributing goods.

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Amboseli Roses is a horticultural company producing flowers. Explain six factors that may influence the choice of a channel for distributing its products.

17/12/2020

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Amboseli Roses is a horticultural company producing flowers. Explain six factors that may influence the choice of a channel for distributing its products.

Factors that may influence the choice of a channel for distributing flowers include:

Nature of the flowers - flowers are perishable and therefore need a short channel in order to be distributed quickly.
Cost. The cost of different channels of distribution should be considered and the cheapest channel used.
Nature of the market. If consumers are widespread, then agents may be necessary to reach them.
Tastes and preferences of consumers. Consumers may have specific preferences which might require the personal attention of the producer hence use of a shorter channel.
Competition. Where competition is high, the producer will have to close to the consumers and will therefore use a short channel of distribution.
Quantity. If the quantity of flowers to be sold is large, then more middlemen may be required.
Availability of technical personnel. If the producer does not have the required technical personnel, then he may have to use a longer channel.

Amboseli Roses is a horticultural company producing flowers. Explain six factors that may influence the choice of a channel for distributing its products.

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Explain five benefits that a member country may get from economic integration.

16/12/2020

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Explain five benefits that a member country may get from economic integration.

Benefits that a member country may get from economic integration include:

Large market — The country gets additional market to sell her goods and services.
Promotion of peace — member countries have a deeper understanding of each other thus enhancing peace.
Increased mobility of factors of production. Labour, entrepreneurship and capital will to and from other countries with minimum restriction.
Improved infrastructure — There is likelihood that member countries will improve their infrastructure.
Opportunity to deal with any deficits in production — Member countries can get what they don’t have from other countries.
Increased variety of goods and services — due to increased range of gods at the disposal of the citizens of the member countries, they are able to satisfy varied needs since they have a wider choice.
Shared research information and common services — This reduces the cost of doing business and improves production by eliminating duplication.
Creation of employment. This is a result of increased economic activity.
Encourages specialization. Member countries concentrate on what they can produce better.
Increased economic bargaining power, This may lead to better balance of payment and terms of trade.

Explain five benefits that a member country may get from economic integration.

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State four problems associated with development planning.

16/12/2020

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State four problems associated with development planning.

Problems associated with development planning include: Inadequate data

Inadequate funds
Inadequate supply of specialists
Political instability/conflicts
Conflict of interests
Inaccurate data
Overambitious plans
Natural catastrophes
Lack of political goodwill

State four problems associated with development planning.

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Explain five circumstances that would influence a producer to use wholesalers in distributing farm produce. (10 marks)

13/12/2020

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Explain five circumstances that would influence a producer to use wholesalers in distributing farm produce.

Where the producer lacks adequate storage The wholesaler may relieve the producer of the storage costs
Where goods require bulk breaking. The wholesaler may re-package the goods in smaller quantities as required by customers.
Where there is need to prepare goods for final sale. The wholesaler may pack. brand. blend, grade sort and weigh goods to the relief of flic producer.
Where the market is wide and the goods have to be distributed far. The wholesaler will reach the consumer more easily.
Where the producer would want feedback on the market status. The wholesaler may reach consumers through the retailers and get feedback regarding the product more easily.
Where the producer would want to engage wholesaler to assist with advertising so as to save on costs.
Where the producer wants to sell in bulk since the wholesalers can afford to buy in large quantities.
Where the producer lacks transport. the wholesaler would relieve him of the cost.
Where it is the government policy to distribute through wholesalers then the producer would have no choice.
Where the marketing risks are high since the wholesalers can bear some of the risks.
Where flic producer wants to concentrate/specialize in production. then the distribution can be handled by wholesalers.
Where the producer needs to maintain fewer records by dealing with wholesalers who are few.

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State four types of complaints that a consumer organization may receive from consumers. (4 marks)

11/12/2020

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Types of complaints that a consumer organization may receive from consumers.

poor quality of goods and services/ damaged
incorrect weight and measures
unfair pricing
poor hygienic conditions
Expired goods
Non- compliance to building regulations
Contra- band items. Prohibited goods
Harmful goods
Hording
Misleading advertisement
Environmental pollution
Technological sides effects
Breach of contract

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Musi Enterprises are considering to market their imported products direct to consumers.Outline five reasons that may be influencing them to make this decision. (10 marks)

10/12/2020

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Musi Enterprises are considering to market their imported products direct to consumers.Outline five reasons that may be influencing them to make this decision.

It may that the goods are produced according to customer specifications
The firm may be having their own retail outlet/distribution facilities.
The market may be localized/near (in terms of geographical location).
The goods may be expensive and middlemen cannot be able to stock them.
The goods may be of a technical nature/require after sales services.
The goods may be perishable (and the firm may want to deliver them fast to the consumer).
The firm may want to have direct contact with customers/get immediate feedback/create good impression.
Where customers order for goods direct from the trader/firm
If there are no middlemen
Where government policy requires goods to be sold directly to consumers.
Where the goods imported are in small quantities.
Where the size of the market is small.
Where the firm would maximize profits by selling directly to consumers.
When there is stiff competition.
Where the rest of distributors time in middlemen make the price of products high/expensive

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Outline four disadvantages that a manufacturer would suffer if wholesalers were eliminated from the chain of distribution. (4 marks)

8/12/2020

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Disadvantages that a manufacturer would suffer if wholesalers were eliminated from the chain of distribution

Disadvantages to the manufacturer if wholesalers are eliminated from the chain of distribution include:

Manufacturer will have to break bulk;
Incur cost of storage;
Incur cost of transporting goods to the retailers;
Incur cost of advertising I promoting products;
Bear risks associated with distribution eg. damages, fall in prices;
Manufacturer will have to prepare goods for sale eg. blending, branding, sorting etc;
Manufacturer will have to carry out market research;
Manufacture will have to give credit to retailers who are many.

disadvantages that a manufacturer would suffer if wholesalers were eliminated from the chain of distribution

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Explain five factors that Chuma Steel Manufacturers may consider when choosing a channel for distributing their products. (10 marks)

24/11/2020

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Factors that Chuma Steel Manufacturers may consider when choosing a channel for distributing their products

Factors that Chuma steel manufacturers may consider when choosing a channel for distributing their products include:

The geographical spread of customers.
If the customers are spread over a wide area, then a longer channel would be preferable.
Durability of the steel products.
Since steel products are not easily spoilt, long channels can be used in their distribution.
Level of competition.
Shorter channels should be used if competition is so stiff.
Resources and size of the firm.
If the firm has limited resources and only serves a small market, then a shorter channel is ideal.
Government policy.
Chuma steel manufacturers must adhere to government regulation on the distribution of steel products.
Marketing risks.
Where marketing risks are higher, more middlemen should be involved to spread such risks.
Availability of intermediaries.
Chuma Steel Manufacturers can only use channels where intermediaries are available.
Pricing of the steel products.
Shorter channels will be preferred where the prices are to be kept low by avoiding the intermediaries.

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Outline four factors that Chemichemi Dairies would consider when selecting a channel to distribute their fresh milk.

31/5/2020

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Answer

Factors that Chemichemi dairies would consider before selecting a
channel to distribute their fresh milk include:

Length of the channel due to perishability of the milk.
The geographical spread of their customers.
The resources at the firms’ disposal like milk c ling plants,distribution vans
Pricing of the milk and cost of the channel.The nature of competition.
The prevailing market risks.
The government policy on milk distribution.
Needs to free storage space.

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KCSE BASED BUSINESS STUDIES Q & A

State four consequences of eliminating wholesalers from the chain of distribution

State four consequences of eliminating wholesalers from the chain of distribution. (4mks)

Outline four factors that may make a producer to by-pass the wholesaler when distributing goods.

Outline four factors that may make a producer to by-pass the wholesaler when distributing goods.

Amboseli Roses is a horticultural company producing flowers. Explain six factors that may influence the choice of a channel for distributing its products.

Amboseli Roses is a horticultural company producing flowers. Explain six factors that may influence the choice of a channel for distributing its products.

Explain five benefits that a member country may get from economic integration.

Explain five benefits that a member country may get from economic integration.

State four problems associated with development planning.

State four problems associated with development planning.

Explain five circumstances that would influence a producer to use wholesalers in distributing farm produce. (10 marks)

Explain five circumstances that would influence a producer to use wholesalers in distributing farm produce.

State four types of complaints that a consumer organization may receive from consumers. (4 marks)

Types of complaints that a consumer organization may receive from consumers.

Musi Enterprises are considering to market their imported products direct to consumers.Outline five reasons that may be influencing them to make this decision. (10 marks)

Musi Enterprises are considering to market their imported products direct to consumers.Outline five reasons that may be influencing them to make this decision.

Outline four disadvantages that a manufacturer would suffer if wholesalers were eliminated from the chain of distribution. (4 marks)

Disadvantages that a manufacturer would suffer if wholesalers were eliminated from the chain of distribution

Explain five factors that Chuma Steel Manufacturers may consider when choosing a channel for distributing their products. (10 marks)

Factors that Chuma Steel Manufacturers may consider when choosing a channel for distributing their products

Outline four factors that Chemichemi Dairies would consider when selecting a channel to distribute their fresh milk.

Answer

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