Channels

Question 1

What is a marketing channel?

Answer 1

The route through which goods, services, information, and money flow as part of exchanges.

Question 2

Why are marketing channels important?

Answer 2

They transform, distribute, and sort goods/services, making them available to consumers where and when needed.

Question 3

What is a traditional marketing channel?

Answer 3

A linear system where goods flow down from producer to consumer, adding value at each step.

Question 4

What role does a wholesaler play in a marketing channel?

Answer 4

Wholesalers add value by sorting, breaking down, and distributing large goods blocks in smaller packages.

Question 5

What role does a retailer play in a marketing channel?

Answer 5

Retailers add value by sorting, holding, and presenting goods specifically for their consumer market.

Question 6

What is the role of an agent in a marketing channel?

Answer 6

Agents act as brokers or facilitators, handling transactions without taking possession of goods.

Question 7

What are the four flows that occur in a marketing channel?

Answer 7

Goods/services, payment, communication, and information.

Question 8

How can marketing channels become complex?

Answer 8

They may involve thousands of participants at multiple levels and across multiple markets.

Question 9

What is vertical integration in a marketing channel?

Answer 9

When a company extends its role in the channel, such as a retailer taking over wholesale roles.

Question 10

What is the ‘sort’ function in a marketing channel?

Answer 10

The process of organizing goods based on end-use and the value required to meet consumer needs

Question 11

Why is communication especially important in tourism channels?

Answer 11

It helps reach a global market, informing potential tourists of offerings before they arrive.

Question 12

How does a traditional multi-pipeline system operate in a marketing channel?

Answer 12

Goods move down from manufacturers through wholesalers, breaking into smaller lots to serve retail markets efficiently, common in FMCG sectors.

Question 13

What are inventory costs in traditional distribution systems?

Answer 13

Costs include holding goods that are unsold, plus losses from spoilage or becoming unsaleable, increasing total distribution expenses.

Question 14

How do platform systems differ from traditional channels?

Answer 14

Platforms store goods near production, dispatch individually, and lower inventory costs despite higher dispatch expenses.

Question 15

How are bank services distributed?

Answer 15

Banks shifted from branches to online/mobile services, lowering costs and improving access.

Question 16

How do tourism channels attract visitors?

Answer 16

By creating foot traffic with attractions that prompt stops and increase engagement.

Question 17

What are potential payment flow failures in channels?

Answer 17

Non-payment, delays, excessive retention of value, and risky long payment terms.

Question 18

Why is export channel research vital?

Answer 18

Complex export markets, like China, need careful research to prevent distribution issues.

Question 19

How does bargaining power affect value retention?

Answer 19

Powerful channels may keep too much value, harming suppliers; limit exposure to 20% per customer.

Question 20

Why might exporters face partial payments?

Answer 20

Currency shifts reduce payment value, risking revenue in foreign markets.

Question 21

How to prevent cash flow issues from late payments?

Answer 21

Limit extended terms; delayed payments add risk, especially if partners face financial issues.

Question 22

What are the three broad groups through which market communications move?

Answer 22

1) Channels for goods and services,
2) Dedicated communications channels,
3) Non-dedicated channels (e.g., traditional and social media).

Question 23

How can features of a product like a Samsung TV be communicated at the point of sale?

Answer 23

By activating the product (e.g., switching it on), allowing consumers to experience its features directly.

Question 24

Why is delivering communications down the goods and services channel advantageous?

Answer 24

It is self-targeting, reaching consumers who are already interested in purchasing.

Question 25

What role does point-of-sale communication play in FMCG?

Answer 25

It must effectively convey the product message, often making the entire sale decision within seconds.

Question 26

How do marketers support decision-making at the point of sale in FMCG markets?

Answer 26

Through packaging, product display, and point-of-sale presentation.

Question 27

What elements are included in a market communications plan for FMCG products?

Answer 27

Market definition, segmentation, targeting, positioning, and stimulus to purchase.

Question 28

What three parts should a design brief include?

Answer 28

1) Product and communication goals,
2) Location requirements,
3) Available resources for implementation.

Question 29

What does the design brief aim to activate in consumers?

Answer 29

Passively acquired knowledge that triggers purchase action at the point of sale.

Question 30

What is a trade interview, and why is it valuable?

Answer 30

A conversation with channel members to gain insights, often more valuable than consumer surveys due to channel experience.

Question 31

How should one conduct an effective trade interview?

Answer 31

At the subject’s workplace, limit topics, encourage conversation, and observe carefully.

Question 32

Why is channel feedback essential in new product development?

Answer 32

Channel participants often have practical, up-to-date market knowledge, especially in retail.

Question 33

How can marketers keep up with market trends effectively?

Answer 33

By establishing relationships and actively gathering insights from channel participants.