LECTURE 9 - PLACEMENT: CHANNEL STRATEGY

Question 1

define place (distribution) the third P

Answer 1

distribution refers to where products are sold and how they are delivered to consumers
- supply chain: businesses and services that supply raw materials and help move products to customers (upstream and downstream channels)

Question 2

steps in channel design

Answer 2

• analyze market needs: identify customer service, price, and product assortment needs
• set channel objectives: align with company goals, product types, and the environment
• choose a distribution strategy
  
  • intermediaries: company sales force, agencies, industrial distributors
  • number of intermediaries: number of intermediaries: intensive, selective or exclusive distribution

Question 3

why use channel members?

Answer 3

Intermediaries add value by improving efficiency, offering:
- contacts, experience, specialization, scale and information
- functions: promotion, negotiation, distribution, financing, and risk management

Question 4

channel organization types: conventional

Answer 4

independent channel members

Question 5

channel organization types: vertical

Answer 5

unified system where producers, wholesalers, and retailers collaborate
- corporate VMS: one firm owns other members
- contractual VMS: firms contract with each other
- administered VMS: one firm controls the channel due to power (eg. Wal-Mart)

Question 6

define channel organization types: horizontal

Answer 6

companies at the same level join forces for mutual gain (eg. Star Alliance)

Question 7

channel conflict - horizontal conflict

Answer 7

between firms at the same level

Question 8

channel conflict - vertical conflict

Answer 8

between firms at different levels

Question 9

channel conflict - disintermediation

Answer 9

bypassing intermediaries, often via the internet

Question 10

multichannel distribution system

Answer 10

• a firm uses multiple channels to each customers, offering increased reach and sales opportunities but risking inconsistent customer experiences and channel conflict

Question 11

channel structure for consumer products - direct channels

Answer 11

sell directly to consumers

Question 12

channel structure for consumer products - indirect channels

Answer 12

use retailers and intermediaries

Question 13

retailers and their benefits - time utility

Answer 13

provide goods when needed

Question 14

retailers and their benefits - place utility

Answer 14

offer goods close to consumers

Question 15

retailers and their benefits - form utility

Answer 15

customize packaging to meet consumer needs

Question 16

retailers and their benefits - exchange efficiencies

Answer 16

reduce the number of contacts producers must manage

Question 17

the wheel of retailing theory

Answer 17

retailers often start with low-cost, low-status operations.
- over time, they upgrade services and raise prices, leaving room for new low-cost entrants to repeat the cycle

Question 18

distribution strategy - intensive distribution

Answer 18

as many distributors as possible (eg. soft drinks)

Question 19

distribution strategy - selective distribution

Answer 19

a few selected distributors (eg. Puma)

Question 20

distribution strategy - exclusive distribution

Answer 20

one distributor per territory (eg. Lamborghini)

Question 21

retailing trends - flagship stores:

Answer 21

central, iconic locations

Question 22

retailing trends - concept stores

Answer 22

curated, themed selections

Question 23

retailing trends - pop-up stores

Answer 23

temporary stores, often for limited-time promotions (eg. adidas)

Question 24

retailing trends - low-price stores

Answer 24

emerging retailers focusing on low prices (eg. shein)

Question 25

electronic channels - autobytel

Answer 25

connects car buyers with dealers

Question 26

electronic channels - orbitz

Answer 26

online travel booking platform