8

Question 1

margin

Answer 1

• for each benefit and function that a channel member provides they will want to be paid

Question 2

unit cost

Answer 2

how much did it cost me to produce the item

Question 3

$ margin

Answer 3

profit we make on an individual item

Question 4

two equations

Answer 4

percent margin = $ margin/selling price

$ margin= selling price - unit cost

UNIT COST= COGS

Question 5

what are the three parts to channel stewardship?

Answer 5

• mapping the industry channels
• building and updating the channel value chain
• aligning and influencing the channel system

Question 6

what is mapping the industry channels?

Answer 6

• understanding how and why the channel is structured
• is the initial step that a channel steward takes, researching and understanding the roles of all external forces at play including what competitors are doing

Question 7

what are the four forces affecting channel strategy?

Answer 7

1. customer wants and needs - looking beyond needs and considering other elements around the purchase
2. channel capabilities and costs - all activities used to fulfill customer demand
3. channel power and influence- distribution power of different players
4. competitive postures and actions- everything related to what the competition is doing and can do

Question 8

in the channel context, where can power come from?

Answer 8

• having unique pdt
• having market access and intelligence

Question 9

what is building an updating the channel?

Answer 9

1. Analyzing channel options to build or rebuild the channel structure.
2. Crafting channel strategy tailored to market segments.
3. Aligning forms with customer needs to establish channel distribution systems.

Question 10

direct vs indirect?

Answer 10

-direct: The manufacturer goes directly to the customer with no intermediary
- indirect: every other channel that includes an intermediary

Question 11

what are the four key differences between indirect and direct?

Answer 11

size and distrib: few and concentrated
= nature of PDT: Complex
= role of PDT in end: fewer requirements
=nature of PDT firm: more established and more credible
indirect
= many and dispersed
= simpler
= needs to be bundled; financing
=less established and less credibility

Question 12

what are the three decisions that we need to make about intensity of distribution in building the channel?

Answer 12

• intensive: aimed at having a PDT available in every outlet (commodity)
• selective: achieved by screening dealers to eliminate all but a few in a single area (north face)
• exclusive: established one or few dealers within a given area (prestige)

Question 13

what are the three-channel structures?

Answer 13

1. integrated- 1 company owns every layer
2. franchised- supplier determines business decisions
3. arm’s length - independently owned at each step

Question 14

in an integrated network, what are the three trade-offs? what intermediaries do they go through?

Answer 14

-supplier → company owned distrib center→ company-owned retail outlets
- high cost
- potentially higher costs
- potentially lower coverage

Question 15

in a franchised network, what intermediaries do they go through?

Answer 15

supplier → distributor (exclusive to the company) → independently owned but franchised retail outlet

Question 16

in an arms-length network, what are the three tradeoffs? what are the intermediaries?

Answer 16

supplier → multi-brand distributor → multi-brand retailer
- low control
- potentially lower cost
- high coverage

Question 17

aligning and influencing the channel system, what is it?

Answer 17

makes sure that the roles of the different channel partners are evolving constantly in keeping up with the needs of the company’s target customers

Question 18

hard power vs soft power?

Answer 18

• hard: unique pdt/tech/brand (supplier power) vs market access and intelligence (retailer)
• soft: trust and commitment

Question 19

when would you see a company use soft power? hwo can you build hard overtime?

Answer 19

when a small store with a bigger brand (a lot of power) and you do not really have anything
- so overtime you need to grow hard power by creating own branded PDT, create an assortment wth smaller brands and build more stores

Question 20

channel conflict? when do they happen?

Answer 20

a clash of goals and methods between distribution channel members
- conflicting goals
- fail to fulfill expectations
- having ideological differences

Question 21

channel partnering

Answer 21

the joint effort of all channel members to create a supply chain that serves costers and creates a competitive advantage

Question 22

dual distribution

Answer 22

suppliers use both direct and indirect channels to reach the same or different customers

Question 23

what are the two types of conflicts?

Answer 23

• horizontal: happens between firms at the same level of the channel (two car dealers)
• vertical: occurs between different levels of the same channel (Home Depot and black decker)

Question 24

how can you reduce horizontal conflict from the producer’s perspective?

Answer 24

you can not give everyone the sane thing that causes. price competition so you. have to give each retailer a slightly different model/version

Question 25

how can you reduce vertical conflict?

Answer 25

• producers can sell from their website and make it cheaper since retailers take margins but that creates competition between retailers and suppliers
• reduce by never selling below the MSBP unless that model goes out of style
• also feature retailer and partners giving them extra promotion

Question 26

strategic channel alliance

Answer 26

• leads one companay using anthers marketing channel
• I have ambition as a supplier but I do not have the cpabailier to get there so you get a second companies expertise
• ex: Starbucks bottling drinks they needed a retailer to do that