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Questions and Answers

What is the underlying concern of Dealer A regarding the manufacturer's requirement to carry a full line of products?

Increased inventory costs

Inefficient use of storage space

Reduced profit margins

Loss of autonomy in product selection (correct)

What is the implication of the distributor's statement 'We can try, but we can’t sell ‘dogs’?

The distributor is unable to sell all products

The distributor has limited product knowledge

The distributor lacks sales effort

The distributor is unwilling to sell weak products (correct)

What is the main concern of the manufacturer regarding the distributor's sales effort?

Insufficient sales promotion (correct)

Inadequate customer data

High channel margins

Lack of product knowledge

What is the primary goal of a push strategy in marketing?

To encourage intermediaries to stock products Signup and view all the answers

What is the main difference between push and pull marketing strategies?

Channel focus Signup and view all the answers

What is a potential consequence of a multichannel approach to marketing?

Conflicting channel interests Signup and view all the answers

What is the primary objective of trade promotions?

To incentivize intermediaries Signup and view all the answers

What is the main benefit of using online channels in a multichannel approach?

Increased customer reach Signup and view all the answers

What is an example of a company that has undergone disintermediation?

Amazon Signup and view all the answers

When is direct selling more suitable?

When manufacturer-customer direct contacts are relatively small Signup and view all the answers

What type of control is achieved through vertical integration?

Vertical control Signup and view all the answers

What is the term for the strategy of controlling more of your product's supply chain?

Vertical integration Signup and view all the answers

What type of conflict occurs between different levels of a distribution channel?

Vertical conflict Signup and view all the answers

What is another term for direct selling?

Direct marketing Signup and view all the answers

When is direct selling not suitable?

When there are many customers with small orders Signup and view all the answers

What is the term for the process of a manufacturer taking over the tasks of a distributor?

Verticalization of distribution channels Signup and view all the answers

What is a key characteristic of channel decisions?

They are often structural, long-term, and sticky Signup and view all the answers

What is the main benefit of superior channel strategy?

Sustainable competitive advantages Signup and view all the answers

What is one of the main objectives of Channel Management?

To reduce distribution costs Signup and view all the answers

What is the significance of distribution breadth in the success of new brands?

It plays the largest role Signup and view all the answers

What is the primary role of channel intermediaries?

To participate in the flow of products from manufacturers to customers Signup and view all the answers

What is the main benefit of increasing distribution breadth?

It increases sales more than discounting, advertising, and features/displays Signup and view all the answers

What is the relationship between distribution and other marketing strategies?

They interact with each other, increasing their effectiveness Signup and view all the answers

What is the definition of a distribution channel?

A set of firms or individuals who participate in the flow of products from manufacturers to customers Signup and view all the answers

Study Notes

Channel Conflicts

Divergent interests between manufacturers, distributors, and dealers can lead to conflicts
Manufacturers want dealers to carry a full line of products, while dealers may want to cherry-pick products
Distributors may want to concentrate on strong products, while manufacturers want them to focus on new products and developing new markets

Multichannel Conflicts

Conflicts can arise between different channels used to reach customers (e.g., direct sales, online sales, retailer sales)
Example: a customer may be able to buy a product directly from the manufacturer or through a retailer

Push vs. Pull Strategies

Push strategy: manufacturer tries to get intermediaries to stock and promote their products
Pull strategy: manufacturer tries to get customers to demand their products directly

Trends in Distribution Channels

Disintermediation: trend towards removing intermediaries from the distribution channel (e.g., Amazon)
Verticalization of distribution channels: manufacturer takes over tasks of distributor or vice versa
Vertical integration: manufacturer controls more of the supply chain

Channel Management

Channel decisions are often structural, long-term, and difficult to change
Superior channel strategy can lead to sustainable competitive advantages
Importance of channel management: reduction of distribution costs, image of the channel, cooperation, and flexibility

Objectives of Channel Management

Reduction of distribution costs
Image of the channel
Cooperation and steering of channels
Flexibility and time to market

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