24 Questions
What is the primary goal of evaluating major alternatives in distribution channels?
To select the most economically superior and adaptable channel
What is the key characteristic of selective distribution?
Using more than one but fewer than all of the intermediaries willing to carry the company's products
What is a major concern for companies when using intermediaries in distribution channels?
The level of control given to intermediaries
Why do companies generally prefer to retain control over the product's marketing?
To maintain as much control as possible over the product's marketing
What is the primary consideration for companies when evaluating channel alternatives from an economic standpoint?
The likely sales, costs, and profitability of each channel alternative
What is the main advantage of selective distribution over intensive distribution?
It allows for a stronger relationship with selected intermediaries
What is the primary goal of adaptability criteria in evaluating channel alternatives?
To maintain flexibility to adapt to environmental changes
What is the main difference between exclusive distribution and selective distribution?
Exclusive distribution uses only one intermediary, while selective distribution uses more than one but fewer than all
What is the primary goal of intensive distribution?
To ensure maximum brand exposure and consumer convenience
What is the main characteristic of exclusive distribution?
Producers limit the number of dealers who have the right to distribute their products
What is the primary objective of evaluating channel alternatives?
To select the most suitable channel structure
What is the role of marketing intermediaries in the distribution process?
To contribute to the overall success of the business
What is the purpose of selecting channel members?
To attract and retain qualified intermediaries
What is the main benefit of selective distribution?
Selecting a few qualified intermediaries
What is the primary advantage of intensive distribution?
Maximum brand exposure and consumer convenience
Why do producers opt for exclusive distribution?
To maintain exclusivity and control over distribution
What is a characteristic of a conventional distribution channel?
Each member operates independently to maximize its own profits.
What is the main goal of each member in a conventional distribution channel?
To maximize its own profits, potentially at the expense of the overall system's profits.
What is an example of a horizontal marketing system?
Two companies at the same level of the distribution channel coming together to pursue a new marketing opportunity.
What is the benefit of a horizontal marketing system?
It enables companies to combine their financial, production, or marketing resources to achieve more than what they could individually accomplish.
What is the result of each member operating independently in a conventional distribution channel?
Potential conflicts and lack of coordinated efforts within the channel.
What type of distribution channel is characterized by a lack of coordination among channel members?
Conventional Distribution Channel.
What is the purpose of a horizontal marketing system?
To leverage each other's strengths and resources to capitalize on new marketing opportunities.
What is an example of companies that may work together in a horizontal marketing system?
Two companies that are competitors or non-competitors.
Study Notes
Distribution Strategies
- Selective distribution involves using more than one but fewer than all of the intermediaries willing to carry the company's products, allowing for strong relationships and control over distribution.
- This strategy ensures a better-than-average selling effort and is suitable for companies seeking a balance between control and reach.
Evaluating Major Alternatives
- Evaluating major alternatives involves assessing different channel options against economic, control, and adaptability criteria.
- Economic criteria consider likely sales, costs, and profitability of each channel alternative.
- Control criteria evaluate the degree of control retained by the company versus the intermediaries.
- Adaptability criteria consider the flexibility to adapt to environmental changes.
Number of Marketing Intermediaries
- Intensive distribution involves stocking products in as many outlets as possible, suitable for convenience products and common raw materials.
- Exclusive distribution limits the number of dealers to maintain exclusivity and control, often used for luxury brands and high-end products.
- Selective distribution involves using more than one but fewer than all of the intermediaries willing to carry the company's products.
Conventional Distribution Channel
- A conventional distribution channel consists of independent producers, wholesalers, and retailers, each operating as a separate business with the goal of maximizing its own profits.
- Each member operates independently, prioritizing their own interests over the collective interests of the channel.
Horizontal Marketing Systems
- Horizontal Marketing Systems refer to a channel development where two or more companies at the same level of the distribution channel come together to pursue a new marketing opportunity.
- This collaboration allows companies to combine their financial, production, or marketing resources to achieve more than what they could individually accomplish.
- The companies involved in a horizontal marketing system may include competitors or non-competitors, and they may work together on a temporary or permanent basis.
This quiz covers the concept of selective distribution, its benefits, and how it impacts the number and type of intermediaries involved in the distribution process.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
