Question 4 (a) In marketing distribution, explain what is meant by the following terms: Efficiency. Adjusting discrepancy of assortments.

nts. Routinisation of transactions. Postponement.

You are expected to provide clear and easy to follow explanations of each element.

Efficiency You should state for example that efficiency improves the means (and result) of reaching the target customer by centralising distribution in intermediaries the ideal number of layers in the distribution chain is a function of costs of communication, effectiveness/ efficiency of institutions and quality of contact.

Adjusting discrepancy of assortments For adjusting discrepancy of assortments, answers should have mentioned the sorting of goods in order to bridge the discrepancy between goods made by the producers (traditionally, large quantity and limited variety) and those that consumers demand (usually, small quantity of a wide variety of goods).

Routinisation of transactions The explanation of routinisation of transactions should have referred to the standardisation of exchanges with customers. When the same transaction takes

place week after week, channel members repeat and follow the same procedures and then it forms routinisation of transactions.

Postponement Ppostponement should have referred to delaying changes in the form and identity of a product to the latest possible point in the marketing process, and its inventory location to the latest possible point in time. If any of these explanations was missing or incomplete candidates were penalised marks.

(b) Critically assess the benefits to firms of using these concepts. Each of these elements should have been listed and critically assessed. Under efficiency, concepts such as utility, costs, quality of information and costs of communication should have been discussed.

Under adjusting discrepancy of assortments, concepts such as increases in utility for producers and consumers should have been discussed.

Under routinisation of transactions, answers should have covered the fact that this technique leads to cost savings and standardisation of goods and services (e.g. reordering).

Under postponement, the fact that this reduces the risks and costs associated with uncertainty should have been mentioned. You should also have noted that it may reduce risk and increase the level of utility to both producer and
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consumer. But it should be noted that postponement has its costs, for example, reduced profit margin (after all, intermediaries will only be ready to take up this risk if they are compensated for it), loss of control and so on.