Chapter 6: Designing the Marketing Channel – Flashcards
Unlock all answers in this set
Unlock answersquestion
Channel Design
answer
Decisions involving the development of new marketing channels either where none had previously existed or to the modification of existing channels
question
Choosing a channel
answer
1. Provide best coverage for target market 2. Satisfy the buying requirements of the target market 3. Maximize potential revenues and minimize costs
question
Who engages in channel design
answer
1. Firms 2. Wholesalers 3. Retailers
question
Channel Design Phases
answer
1. Recognize the need 2. Set & coordinate distribution objectives 3. Specify distribution tasks 4. Develop alternative channel structures 5. Evaluate relevant variables 6. Choose the "best" channel structure 7. Select channel members
question
Specifying distribution tasks
answer
- Outlining distribution tasks is specific and situationally dependent on the type of firm - Distribution tasks are a function of the distribution objectives and the types of firms involved
question
Developing alternative channel structures
answer
1. Number of levels in the channel 2. Intensity at the various levels 3. Types of intermediaries at each level
question
Number of levels
answer
- Range from 2-5 or more - Number of alternatives is 2 or 3 choices
question
Limitations in number of levels
answer
- Particular industry practices - Nature & size of the market - Availability of intermediaries
question
Intensity at the various levels
answer
Relationship between intensity of distribution dimension & number of retail intermediaries used in a given market area
question
Categories of Variables
answer
1. Market 2. Product 3. Company 4. Intermediary 5. Environmental 6. Behavioral
question
Market Variables
answer
1. Geography (location, size, distance from producer) 2. Size (number of customers) 3. Density (number of buying units per unit of land area) 4. Behavior (who, how, when, and where)
question
Product Variables
answer
1. Bulk & Weight 2. Perishability 3. Unit Value 4. Degree of Standardization 5. Technical vs. Nontechnical 6. Newness
question
Company Variables
answer
1. Size 2. Financial Capacity 3. Managerial Expertise 4. Objectives & Strategies
question
Intermediary Variables
answer
1. Availability 2. Cost 3. Services
question
Environmental Variables
answer
1. Economic 2. Sociocultural 3. Competitive 4. Technological 5. Legal
question
Behavioral Variables
answer
- Develop congruent roles for channel members - Be aware of available power bases - Attend to the influence of behavioral problems that can distort communications
question
Challenges with choosing the "best" channel structure
answer
1. Management is incapable of knowing all possible alternatives 2. Precise methods for calculating the exact payoffs of each alternative structures do not exist
question
Decision Criteria
answer
1. Setup 2. Risk 3. Profit 4. Ability to grow
