Distribution Channel Decisions

Question 1

Effective Distribution Channel

Answer 1

Makes right quantities, right product, right place, right time, to satisfy target customer

Question 2

Marketing Channel

Answer 2

a set of interdependent organisations in the process of making product or service available for use or consumption

Question 3

3 ways middlemen improve market efficiency

Answer 3

1. functional efficiency - specialization and economies of scale (selling)
2. scale efficiency - large quantity purchases
3. transaction efficiency - variety of selection

Question 4

Distribution Channel Objectives (6)

Answer 4

1. Increase availability of the good or service to potential customers
2. Satisfy customer requirements by providing high levels of service
3. Ensure promotional effort
4. Obtain timely and detailed market information
5. Increase cost-effectiveness
6. Maintain flexibility

Question 5

Product Availability

Answer 5

Coverage of relevant retailers, in-store positioning, coverage of geographic markets

Question 6

Meeting customer service requirements (5)

Answer 6

1. Order cycle time
2. Dependability
3. Communication
4. Convenience
5. Post-sale services

Question 7

Promotional Effort - important when: (3)

Answer 7

1. marketing technically complex, expensive goods
2. market is highly competitive
3. sustaining competitive advantage based on superior quality or customer service

Question 8

Market information

Answer 8

Needed in particular for highly competitive industries with rapid changes in product technology and customer preferences

Question 9

Flexibility

Answer 9

Easy to switch channel structures without generating economic or legal conflicts

Question 10

Merchant Wholesalers

Answer 10

Take title to the goods they handle; sell primarily to other resellers, industrial and commercial customers

Question 11

Agent Middlemen

Answer 11

Include manufacturer;s representatives and brokers. Also sell to other resellers but to not take title of the goods. Usually specialize in selling function working on commissions

Question 12

Retailers

Answer 12

Sell directly to ultimate customer. Usually take title of goods, and are compensated by margin

Question 13

Facilitating Agencies

Answer 13

Include advertising agencies, market research firms, collection agencies, transport; specialize on one or more marketing functions, work on fee for service

Question 14

Online retailer key capabilities

Answer 14

Ability to attract traffic to their sales platform, making transaction as easy as possible, using online connection to cross sell and up sell

Question 15

Omnichannel Retailing

Answer 15

Multichannel approach to retailing with focus on creating seamless consumer experience

Question 16

Obstacles to channel integration (8)

Answer 16

1. Non-integrated tech platforms
2. Disparate sources of data
3. Organizational structure
4. Complexity of customer journey
5. Lack of budget
6. Company budget
7. Lack of marketing skills
8. Lack of senior level buy in

Question 17

B2B Online Intermediary One-to-One

Answer 17

A company has an online store (Walmart)

Question 18

B2B Online Intermediary Many-to-Many

Answer 18

Companies join together in wider B2B marketplace (Amazon)

Question 19

Consumer Goods/Services 3 Strategies of Retail Coverage

Answer 19

1. Intensive - maximum availability, lack of retailer support, convenience goods
2. Exclusive - Single match retailer with clientele closely, risky with 1 retailer, specialist goods
3. Selective - Limited, adequate coverage, infrequently purchased goods

Question 20

Franchise Systems (4)

Answer 20

1. Manufacturer Retailer - automotive and fuel
2. Manufacturer Wholesaler - Coke selling syrup to bottlers
3. Wholesaler Retailer
4. Service sponsor retailer - fast food

Question 21

Sources of Channel Power (5)

Answer 21

1. Economic
2. Referent
3. Coercive
4. Expert
5. Legitimate

Question 22

Channel Control Strategies (2)

Answer 22

1. Pull Strategy - manufacturer builds selective demand and brand loyalty to promote economic rewards in return for cooperation
2. Push Strategy - Direct inducements to gain cooperation from wholesalers or retailers

Question 23

Good Distribution

Answer 23

Customers won’t buy the product unless it is conveniently available when and where they want to buy it