place

Question 1

channel

Answer 1

path that lets products to flow from producers to end users

intermediaries make this possible

Question 2

options for channel strategy (2)

Answer 2

1. retailer → any organization selling directly to consumers
2. wholesaler → buying from manufacturer, selling to retailers

Question 3

how to choose a channel strategy (4)

Answer 3

consumers choose channel based on
- price
- product features/assortment/fit
- convenience/costs (location, search costs, shipping, returns)
- shopping goals (social, experiential)

Question 4

advantages of direct channel (6)

Answer 4

1. control over environment in which consumer shops
2. offer consistent brand image
3. manage service, product displays, complementary offerings
4. collect consumer data smoothly
5. no need to split commissions with channel
6. no channel conflict

Question 5

advantages for indirect channel (disadvantages of direct channel) (3)

Answer 5

1. implemented instantly, no large upfront costs
2. broad coverage to reach target consumers
3. benefit from core competencies of channel

Question 6

why is there conflict? (6)

Answer 6

• intermediaries want higher margins/commissions
• retailers don’t know much about your product
• favor competitor’s products over yours in the same store
• don’t carry the entire product line
• don’t pass through price promotions to final customers
• compete for the same consumers

Question 7

vertical channel conflict

Answer 7

conflict between different levels within the same channel

(manufacturer & wholesaler/retailer OR wholesaler & retailer)

Question 8

horizontal channel conflict

Answer 8

conflict between members at the same level (like two retailers)

Question 9

how to address channel conflict? (5)

Answer 9

1. establish rules to mediate conflict before it appears
2. compensating all parties for the sale, regardless of who drives the purchase by consumers
3. provide different products (like different cuts or patterns)
4. provide different sizes (in bulk for costco; individual for others)
5. channel exclusivity

Question 10

pros of e-commerce (5)

Answer 10

1. variety of product selection, sizes, personalization
2. low cost of inventory, can sell low-volume/niche products
3. lower prices
4. more efficient product comparison
   (considerable information available)
5. convenience: shop from anywhere, anytime

Question 11

cons of e-commerce

Answer 11

1. shipping costly/time intensive
2. inconvenience of returning products
3. cannot touch, feel, try product
4. not a social hub