Chapter 1

Question 1

Why the growing importance of marketing channels?

Answer 1

1. The explosion of information technology and E-commerce
2. A greater difficulty in gaining a sustainable competitive advantage
3. The growing power of distributors, especially retailers in marketing channels
4. The need to reduce distribution costs

Question 2

Disintermediation

Answer 2

reduction of number of intermediaries (Amazon/Ebay)

Question 3

Reintermediation

Answer 3

evolution of a new type of intermediary

Question 4

Gatekeepers

Answer 4

Act as buying agents for customers rather than

as selling agents for manufacturers

Question 5

What is a marketing channel?

Answer 5

External contactual organization that management operates to achieve its distribution objectives

Question 6

What is a channel manager?

Answer 6

Anyone in a firm or organization who is involved in marketing channel decision making

Question 7

How does marketing channel strategy relate to the rest of the marketing mix?

Answer 7

Product: Limited ability to gain and hold competitive advantage
Price: Price wars erode profitability & provide unstable basis for sustaining competitive advantage
Promotion: Expensive and short-lived
Place (distribution): Marketing channels support & enhance other Ps to meet demands of target markets

Question 8

The change of focus to channel strategy

Answer 8

• Creates competitive advantage with long-term viability
• Builds strong relationships between manufacturers and channel members
• Based on trust, confidence, and people power

Question 9

Channel Strategy and Logistics Management

Answer 9

Part of distribution variable

• Concerned with entire process of starting and operating contactual organization
• Formulated before logistics management
• Focused specifically on providing product availability at appropriate time & place

Question 10

Marketing Channel Flows

Answer 10

• Product
• Negotiation
• Ownership
• Information
• Promotion

Question 11

Product Flow

Answer 11

• Manufacturer
• Transportation
• Wholesalers
• Retailers
• Consumers

Question 12

Negotiation Flow

Answer 12

Manufacturer Wholesaler Retailer Consumer

Question 13

Ownership Flow

Answer 13

Manufacturer

-Wholesaler RetailerConsumer

Question 14

Information Flow

Answer 14

• Manufacturer
• Transportation
• Wholesalers
• Retailers
• Consumers
• And then reverse from consumer up to manufacturer

Question 15

Promotion Flow

Answer 15

• Manufacturer
• Advertising Agency
• Wholesalers
• Retailers
• Consumers
• Consumers then go back to retailers and wholesalers go back to ad agencies

Question 16

Factors that determine the role of intermediaries

Answer 16

Technology -> Internet

Economic Considerations -> Specialization & Division of labor, Contactual Efficiency

Question 17

Distribution Tasks

Answer 17

Distributed Inter-organizationally

Question 18

Production Tasks

Answer 18

Distributed intraorganizationally

Question 19

Channel Structure

Answer 19

The group of channel members to which a set of distribution tasks has been allocated

Question 20

Ancillary Structure

Answer 20

The group of institutions that assist channel members in performing distribution tasks