Lesson Notes By Weeks and Term - Junior Secondary School 2

FIRST TERM

SUBJECT: BUSINESS STUDIES 

CLASS: JSS 2

REFERENCES:

• Business Studies for JSS Bk 2 By O.A. Lawal et’al Publisher: Longman
• WABP Business Studies for JSS Bk 2 By Egba T. Ehiametalor etal Publisher WABP
• Business Studies Work Book for JSS Basic 8 By S. Okioyemi   
• Macmillan JSS 2 Business Studies By Awoyokun A.A et’al.

WEEK EIGHT

Distribution: This is the passing out of something or a product over a wide area.

THE CHAINS/CHANNELS OF DISTRIBUTION

The chain of distribution is made up of channels which goods pass through from the manufacturer before reaching the consumer.

There are basically three different channels of distribution.

1. Direct sales to consumers

PRODUCER    ……………………………………………….  CONSUMER

This diagram illustrates a system in which the producer or manufacturer sells the goods directly to the consumer.

This is common among rural small scale farmers who deals in perishable farm produce such as vegetable, fruits tomato, pepper and poultry farmers who sell eggs.

1. Sales to Consumers through a Retailer

PRODUCER …………………. RETAILER …………………………CONSUMER

This chain is slightly longer than in (a).  Here the producer sells the goods to the consumer through a retailer. This is common where consumers are scattered and it takes long to reach them. The retailer then becomes the sales agents of the producer. Examples include various distributors who sell goods manufactured by companies in Nigeria, such as soft drinks, detergents, cement, e.t.c.

1. Sales to Consumers through a Wholesaler and Retailer

PRODUCER…………WHOLESALER……………..RETAILER………….CONSUMER

This is the longest of all the distribution chains. The longer the channel, the higher the final price paid for the goods to the consumer.  Producers will choose this channel when dealing with a large number of customers.

EVALUATION

1. What is direct sales to customers?
2. Carefully describe chain of distribution.

CHANNELS OF DISTRIBUTION

The channel of production is the means or process through which goods pass from the producer to the consumer.

Manufacturer/producer--- Wholesaler --- Retailer --- Consumer.

The producer/manufacturer: This the individual who creates goods or service.

The wholesaler: This is the trader who buys goods in large quantity from the producer and sells in small quantity to the retailer.

The retailer: This is the trader who buys goods in small quantity from the wholesaler andsells in units or bits to the consumer.

The consumer: A consumer is the end user of goods or services.

MANUFACTURER/PRODUDUER – WHOLESALER – RETAILER – CONSUMER

RETAILERS

Retailing, business activity of selling goods and services directly to consumers. Instead of selling products for resale, a retailer sells goods or services to individuals making purchases for themselves or their families. Some retailing businesses sell a combination of goods and services. For example, an automobile dealership that sells automobiles (goods) may also provide automobile repairs (services).

TYPES OF RETAILERS

Specialty store – This offers a limited number of different product lines, such as women’s clothing or sporting goods, but provide their customers with an extensive selection of brands and styles within each product line. 

Department store - This features a wide variety of different product lines and a selection of merchandise within each line. These large stores have many separate departments that sell different types of merchandise, making a wide variety of goods available to consumers in one place.

EVALUATION

Define channel of distribution.

Functions of each of the channels of distribution

1. Functions of producers.

1. Manufacturing of commodities
2. Sales of goods to the wholesalers
3. Marketing of newly introduced goods
4. Creation of utility.

1. FUNCTIONS OF THE WHOLESALER

The following are the functions of the wholesaler.

1.  He buys goods in large quantities from the manufacturer or producer and sells  them in small quantities to the retailer
2. By buying in large quantities, the wholesaler provides a ready market to the producer.
3. He provides warehousing facilities thereby relieving manufacturers of the problem of carrying large stock of finished goods and thereby tying up capital.
4. He helps to ensure that the retailer is supplied with the right varieties and quantities of goods at the right times.
5. He gives credit  to the retailer
6. He transports goods to the retailer.
7.  He helps to advertise the manufacturer’s products.
8. He helps to keep prices stable by stocking adequate quantities of goods in the warehouse and selling them to the retailers according to demand.

EVALUATION

1. List five functions of the wholesalers.
2. List and explain three functions of the producer

1. FUNCTIONS OF THE RETAILERS

1. Purchase of goods from the wholesalers
2. Breakdown of bulkiness of goods.
3. They sell in bits to the final consumers.
4. They make production complete.
5. They give credit facilities to customers
6. He advises the consumers
7. Advertisement
8. Provision of after sale service.

EVALUATION

List three functions of a retailer.

READING ASSIGNMENT

Macmmillan Business studies JSS 2 by Awoyokun A.A et’al pages 25-26.

WEEKEND ASSIGNMENT

1. Another name for producer is ------ (a) users (b) wholesalers (c) manufacturer (d)clients
2. __________ sells in bulk (a) retailers (b) wholesalers (c) producers (d) consumers
3. __________ buys in unit (a) retailers (b) producers (c) consumers (d) manufacturer
4. Another name for an end user of a product is -------- (a) a producer (b) a consumer (c) a wholesaler (d) a retailer.
5. Who gives credit facility to the consumer? (a) a producer (b) a wholesaler (c) a retailer (d) a consumer.

THEORY

1. Explain how wholesalers break bulkiness.
2. Mention two functions of a producer and wholesaler each.