ASZ is a public limited company. It makes a range of garden tools such as digging forks and wheelbarrows using production methods which have not changed for many years. ASZ sells all of its products to a wholesaler. The Marketing Director is considering changing the channel of distribution by selling products directly to retailers. The Operations Director has prepared some revenue and cost data to help make decisions (see Table). ASZ is planning to introduce new technology which will change production methods.
- ASZ TABLE.JPG (27.51 KiB) Viewed 274 times
01 Do you think ASZ should change its channel of distribution? Justify your answer. [6]
Possible KN Points:
• Have lots of contacts OR customers
• Able to focus on other tasks
• Wholesalers buy in bulk
• Lower administration costs OR no additional employees
• Can keep more of the profit per item
• Needs to develop links with each retailer
• Can gain direct feedback from its customers
• More control of marketing mix
• May need to employ extra workers to manage paperwork