Channel Design (14) Flashcards
The process of designing the ideal channel structure for a brand involves determining…
it is strategic
What role distribution needs to play in helping the brand achieve its objectives
Which types of channels are needed
What intensity of distribution makes sense for the brand
Which specific channel partners to use
What is dual distribution?
blending direct and indirect channels
Most brands will practice ____-distribution
dual
What is intensive distribution?
distribution through every possible channel
you can buy a Coke at just about any restaurant, grocery or convenience store in the world. Brands like Coca Cola want a presence everywhere they can have one.
What is selective distribution?
choosing multiple but not all possible distributors for their products
Why selectively distribute?
ir products. Often the reason for this level of intensity is to maintain the brand image they have carefully built.
Rolex is a brand that uses selective distribution. A manufacturer of watches that can cost thousands (even tens of thousands) of dollars, Rolex is a premium, luxury brand that conveys status to the wearer.
exclusive distribution, which occurs when a brand chooses a ______ distribution partner or just ______ per market.
single, one
When a brand uses more than one channel — direct and indirect or multiple indirect channels — _______ between channel members is a certainty.
conflict
why does conflict occur between channel members?
because channel members can interfere with each other’s objectives.
Consider a brand’s direct sales force that does not have the ability to discount prices when selling to customers. In the same market, selling the brand’s same products, is an indirect channel partner that can buy product to resell at a 50 percent discount. In head-to-head selling situations, the channel partner can choose to discount prices to win every sale. While the brand’s product is sold either way, the outcome is a disgruntled direct sales force that loses commissions, bonuses, or income every time the channel partner makes a sale.
Conflict can occur over…
- pricing,
- discounting,
- the requirement to use certain systems or procedures, - the failure of either part to promote products,
- proper inventory levels,
- margins,
- logistical issues.
When a conflict is severe, one or both parties will do something, and the responses to conflict usually fall into one of several categories.
What are the conflict categories?
loyalty voice neglect aggression exit
Match each conflict category with its definitions:
loyalty voice neglect aggression exit
- expressing the dissatisfaction and having discussions about how to resolve it
- taking action, openly or covertly, to harm the other partner in the relationship
- ignoring the conflict and accepting the relationship consequences, which are usually negative
- leaving the relationship
- staying together despite the conflict; this will occur when the relationship history is good.
- voice
- aggression
- neglect
- exit
- loyalty
the ecommerce era, selling online has been a source of much channel ______
conflict
Which action a brand or distributor takes in response to conflict has a lot to do with which one has the most _____.
power
In distribution relationships, power is rarely distributed equally.
If the brand relies on revenues from a channel partner, who has more power?
If the channel partner relies on the brand for resources or expertise, who has more power?
the channel partner
the brand has the upper hand
