Lecure 9- Place/Channel/Distribution

Question 1

What are the options for channel strategy?

Answer 1

Question 2

How do you choose a channel strategy? What do consumers choose a channel based on?

Answer 2

-Understand consumer needs
-Consumers choose a channel based on
* Price
* Product features
* Convenience
* Shopping goals

Question 3

What are advantages of a direct channel?

Answer 3

-Control over environment in which consumer shops
-No need to split commissions with channel
-No channel conflict

Question 4

What are advantages of a indirect channel?

Answer 4

-Implemented instantly, no large upfront costs
-Broad coverage to reach target consumers
-Benefit from core competencies of channel

Question 5

Why is there channel conflict?

Answer 5

• They want higher margins and commissions
• Dont know about product
• Favor competitors products
  -Dont carry entire line
  -Compete for same consumers

Question 6

What is the difference between vertical and horizontal channel conflict?

Answer 6

Vertical:
manufacturer and retailer
Horizontal:
same two retailers

Question 7

How do you address channel conflict?

Answer 7

• Establish rules to mediate conflict before it appears
• Compensating all parties for the sale, regardless of which channel drives the purchase
• Channel exclusivity
• Provide different products

Question 8

What is disintermediation?

Answer 8

Going into the store and then buying online which hurts physical stores. This is an example of a channel conflict