chapter 12

Question 1

What is the value delivery network?

Answer 1

made up of company, suppliers, distributors, and consumers
-upstream channels and downstream/distribution channels

Question 2

Why do we need intermediaries?

Answer 2

better and more organized distribution, less # of contacts

Question 3

What are the key functions played by intermediaries?

Answer 3

-information: gathering and distributing information about consumers, producers, and other actors and forces

-promotion: developing and spreading persuasive communication about an offer

-contact: finding and engaging customers and prospective buyers

Question 4

When do we have channel conflict?

Answer 4

-want higher margins and commissions
-donʻt know much about your product
-donʻt carry entire product line
-favor competitorʻs products
-donʻt pass through price promos to customers
-compete for same customers

Question 5

What are two channel conflict types? Give some examples.

Answer 5

vertical conflict = between different levels of the same channel (ex. McDonalds vs. itʻs franchises)

horizontal conflict = occurs among firms at the same level of the channel (ex. Store A vs. Store B selling same product)

Question 6

What is disintermediation?

Answer 6

occurs when product or service producers cut out intermediaries and go directly to final buyers OR when radically new types of channel intermediaries displace traditional ones