Week 6: Managing Marketing Channels

Question 1

What is a channel of distribution?

Answer 1

links manufacturers and consumers
- completes all activities (incl info) that helps result in sale and delivery incl making contact with buyers, negotiating, servicing the product, financing, transportation and storage

Question 2

Explain a direct marketing channel and when they would be appropriate

Answer 2

Manufacturer sells directly to consumer by performing all marketing functions and uses own sales force

Includes direct sales, online and telemarketing

Used when:

• type of selling requires expertise, negotiation, executive decision-making
• type of product is high-value, high knowledge or complexity
• demand for few customers
• customers concentrated geographically
• want control over product offering
• customers expect it

Question 3

Explain an indirect marketing channel and when they would be appropriate

Answer 3

Manufacturer sells through distributor/wholesaler or other representatives.

Used when:

• type of selling required is generalist with little negotiation or lower-level decision-making
• type of product is low-value, basic and uncomplex
• customers want to buy a range of products so intermediaries can sell from many companies
• many customers demanding
• wide geographic dispersion

Question 4

Describe the sales cycle.

Answer 4

Tasks performed throughout the sales process
=> Lead generation
- triggered by sales call, customers response to direct mail or request for information, initial contact with prospect made

=> Lead qualification
- potential customer is screened, need for product, buying interest, time frame for purchase

=> Bid and proposal
- preparation of bid and proposal to meet customer requirements

=> Negotiation and sales closure
- negotiation of price, terms and conditions and contract agreement

=> Fulfilment
- delivery, configuration, customisation, installation

=> Customer care and support
- post-sale problem resolution, guidance and ongoing contact to ensure customer retention, loyalty and growth

Question 5

Briefly describe some of the roles of distributors

Answer 5

• inventory management, product assembly, design services
• contact (reach customers)
• provide inventory and supporting activities (credit, JiT delivery, order processing)
• assemble/manufacturing