Chapter 6

Question 1

Channel Designs

Answer 1

Decisions involving the development of new marketing channels either where none had previously existed or to the modification of
existing channels

Question 2

Channel Design Paradigm

Answer 2

1. Recognize the need for channel design decision
2. Set & coordinate distribution objectives
3. Specify distribution tasks
4. Develop alternative channel structures
5. Evaluate relevant variables
6. Choose the “best” channel structure
7. Select Channel Members

Question 3

When to Make a Channel Design Decision

Answer 3

• Developing a new product or product line
• Aiming an existing product at a new market
• Making a major change in some other component of the marketing mix
• Establishing a new firm
• Adapting to changing intermediary policies that may inhibit attainment of distribution objectives

Question 4

Distribution Objectives

Answer 4

Setting distribution objectives requires knowledge of which, if any, existing objectives & strategies may impinge on these distribution objectives.

Question 5

Channel Structure Dimensions

Answer 5

1. Number of levels in the channel
2. Intensity at the various levels
3. Types of intermediaries

Question 6

Variables Affecting Channel Structure

Answer 6

1. Market
2. Product
3. Company
4. Intermediaries
5. Environment
6. Behavioral

Question 7

Market Variables

Answer 7

Geography, Size, Density (# of buying units per unit of land area) and Behavior (who, how, when, and where?)

Question 8

Product Variables

Answer 8

Bulk & Weight
Perishability
Unit Value
Degree of Standardization
Technical versus Nontechnical
Newness

Question 9

Company Variables

Answer 9

Size, Financial Capacity, Managerial Expertise, Objectives & Strategies

Question 10

Intermediary Variables

Answer 10

Availability, Cost, Services

Question 11

Environmental Variables

Answer 11

Economic, Sociocultural, Technological, Competitive, and Legal factors

Question 12

Behavioral Variables

Answer 12

• Develop congruent roles for channel members.
• Be aware of available power bases
• Attend to the influence of behavioral problems that can distort communications.

Question 13

Why is choosing an optimal channel structure

not possible?

Answer 13

1. Management is incapable of knowing all possible alternatives.
2. Precise methods for calculating the exact payoffs associated with each alternative structures do not exist.
   BUT Techniques exist for developing more exact methods.