Ex. 2.5. Why do manufacturers prefer to use indirect channels to bring their products or services to the customer? What are advantages of the direct distribution channel?

Ex. 2.6. Fill in the gaps with appropriate terms from the box.

Agent (3) Customer (5) Intermediary Manufacturer (7) Retailer (4) Wholesaler (3)

When a ___ 1 __ involves a middleman or ___2___ to sell its product to the end ___3___, it is said to be using an indirect channel. Indirect channels can be classified into three types:

§ One-level Channel (__4__ to ___ 5 ___ to ___6___): Retailers buy the product from the __7___ and then sell it to the ___8___. One level channel of distribution works best for the ___ 9 ___ dealing in shopping goods like clothes, shoes, furniture, toys, etc.

§ Two-Level Channel (_ __ 10 ___ to ___ 11 ___ to ___ 12 ___ to ___13___): Wholesalers buy the bulk from the ___ 14 ___, breaks it down into small packages and sells them to retailers who eventually sell it to the end customers. Goods which are durable, standardized and somewhat inexpensive and whose target audience is not limited to a confined area use two-level channel of distribution.

§ Three-Level Channel (__ 15_ __ to __16___ to _ __ 17 __ to ___ 18 ___ to ___19___): Three level channel of distribution involves an ___20__ besides the ___ 21__ _ and ___ 22___ who assists in selling goods. The ___23___ comes handy when goods need to move quickly into the market soon after the order is placed.

Ex. 2.7. Complete the following table.

Verb	Concrete Noun	Abstract Noun
Assist
		Buying
Consume
		Distribution
Mediate
		Packaging
Produce
	Retailer
		Sale
	Wholesaler

Ex. 2.8. Fill in the gaps with appropriate prepositions if necessary.

The main aim ___1___ trade is to supply goods ___2___ the consumers living ___3___ distant places. As goods and services move ___4___ the producer ___5___ the consumer, they may have to pass ___6___ various people. ___7___ example, a farmer grows ___8___ apples. Once the apples get ripened he sells the apples ___9___ an agent ___10___ the city. The agent collects the apples ___11___ the farmer, packs ___12___ them, and sells them ___13___ a wholesaler. The wholesaler then distributes them ___14___ various retail fruit vendors ___15___ the city ___16___ selling smaller quantities. Finally, the consumers (if they need them) purchase the apples ___17___ those vendors. Thus, while coming ___18___ the producer, the product reaches ___19___ the consumers ___20___ passing ___21___ several hands ___22___ an agent, a wholesaler and a retailer. All these three are called middlemen. These middlemen are connecting links ___23___ producers ___24___ goods, ___25___ one hand, and consumers, ___26___ the other. They perform ___27___ several functions such ___28___ buying, selling, storage, etc. These middlemen constitute ___29___ the channels ___30___ goods’ distribution.

Thus, a distribution channel is the route ___31___ which goods move ___32___ producers ___33___ ultimate consumers.

Ex. 2.9. Put the following examples of distribution to the correct column.

1) Company owned retail outlets

2) Dealing with limited products, yet desiring to cover a wide market

3) Distributing goods as soap, rice, wheat, clothes, etc.

4) Door to door selling

5) Internet selling

6) Mail order selling

7) Selling cars through company approved retailers

8) Telemarketing