10.3: Channel Design Decisions Flashcards
What is the first step in designing a marketing channel?
The first step in designing a marketing channel is analyzing consumer needs to determine what target consumers want from the channel.
What factors should be considered when balancing consumer needs against the feasibility and costs of meeting these needs?
Companies must consider the resources and skills needed to provide the desired services, the resulting costs for the channel and higher prices for consumers, and customer price preferences.
Why do some companies position themselves on higher service levels?
Some companies position themselves on higher service levels because customers are willing to pay higher prices for better service, creating a differentiated value proposition compared to competitors.
What are the four main steps in marketing channel design?
The four main steps in marketing channel design are: 1) analyzing consumer needs,
2) setting channel objectives,
3) identifying major channel alternatives
4) evaluating the alternatives.
What are the three strategies for determining the number of marketing intermediaries to use at each level?
The three strategies are:
1) intensive distribution,
2) exclusive distribution,
3) selective distribution.
What is intensive distribution?
Intensive distribution is a strategy in which products are stocked in as many outlets as possible, typically for convenience products and common raw materials that need to be readily available for consumers.
What is exclusive distribution?
Exclusive distribution is a strategy where the producer gives only a limited number of dealers the exclusive right to distribute its products in their territories, often used for luxury brands to maintain a distinctive positioning and ensure greater dealer support and customer service.
What is selective distribution?
Selective distribution is a strategy that uses more than one but fewer than all of the intermediaries willing to carry a company’s products, allowing for the development of good working relationships with dealers, better-than-average selling efforts, and enhanced brand image.
What are the three criteria for evaluating major channel alternatives?
The three criteria for evaluating major channel alternatives are:
1) economic criteria,
2) control criteria
3) adaptability criteria.
What challenges do international marketers face in designing distribution channels?
International marketers face challenges such as:
differences in numbers and types of intermediaries,
varying retailing practices,
unique distribution systems in each country,
distribution infrastructure and supply challenges in emerging markets.
How do distribution systems and retailing practices vary across countries?
Distribution systems and retailing practices vary across countries in terms of the numbers and types of intermediaries, the scale of retail chains, and the specific methods of selling products.
For example, large-scale retail chains dominate in Canada and the U.S., while small, independent retailers are more common in countries like India and Indonesia.
What are some examples of how companies have overcome distribution infrastructure and supply challenges in emerging markets?
Examples include Domino’s Pizza digging wells and installing water-treatment plants in Nigeria for clean water, Burger King investing in its own local cattle ranch in South Africa, and Nestlé launching a floating supermarket to serve the Amazon River basin in northeast Brazil.
