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Questions and Answers
What is a key consideration in establishing channel objectives?
What is a key consideration in establishing channel objectives?
- Determining market segments to serve (correct)
- Directly marketing perishable products
- Identifying major channel alternatives
- Minimizing shipping distance
Why do perishable products require more direct marketing?
Why do perishable products require more direct marketing?
- To minimize shipping distance
- To target different market segments
- To avoid delays and dangers associated with repeated handling (correct)
- To reduce repeated handling
What type of products are usually sold directly by company sales representatives?
What type of products are usually sold directly by company sales representatives?
- High unit value products
- Non-standardized products (correct)
- Bulky products
- Products requiring installation or maintenance services
Why are bulky products like building materials sold through channels that minimize shipping distance?
Why are bulky products like building materials sold through channels that minimize shipping distance?
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For which type of products, like custom-built machinery, do middlemen lack the requisite knowledge?
For which type of products, like custom-built machinery, do middlemen lack the requisite knowledge?
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Why are high unit value products often sold through a company sales force?
Why are high unit value products often sold through a company sales force?
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Study Notes
Channel Objectives and Constraints
- Channel objectives should be stated in terms of targeted service output levels, considering multiple segments with differing service output levels.
- Effective channel planning involves determining which market segments to serve and the best channels to use in each case.
- Each producer develops its channel objective in the face of several constraints.
Channel Objectives Vary with Product Characteristics
- Perishable products require more direct marketing due to the dangers associated with delays and repeated handling.
- Bulky products (e.g., building materials, soft drinks) require channels that minimize shipping distance and handling.
- Non-standardized products (e.g., custom-built machinery, specialized business forms) are sold directly by company sales representatives due to middlemen's lack of knowledge.
- Products requiring installation and/or maintenance services are usually sold and maintained by the company or exclusively franchised dealers.
- High unit value products are often sold through a company sales force rather than through middlemen.
Identifying Channel Alternatives
- After defining the target market and desired service output level, a company should identify its channel alternatives.
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