Chapter 4

Question 1

• is a plan for the distribution and movement of
  products and services from the producer to the customer.
  -is also understood as the process involved in the
  development of new marketing channels

Answer 1

Channel Design

Question 2

is defined as “a chain of linked businesses or individuals
through which a product or service passes from one person or firm to
another.”

Answer 2

channel

Question 3

STAGES IN C H A N N E L P L A N N I N G

Answer 3

Step 1: Analyzing Consumer Needs
Step 2: Setting Channel Objectives
Step 3: Identifying Major Alternatives

Question 4

The first step in channel design decisions is to analyze the consumer needs and
desires of the channel.

Answer 4

Step 1: Analyzing Consumer Needs

Question 5

In this step, businesses need to identify major alternatives for their distribution
channel

Answer 5

Step 3: Identifying Major Alternatives

Question 6

Type of intermediaries

Answer 6

Retailers
Wholesalers
Distributors
Agents/Brokers
Carrying & Forwarding Agents
Logistics service providers

Question 7

Number of Marketing Intermediaries:

Answer 7

Intensive Distribution
Exclusive Distribution
Selective Distribution

Question 8

Different can be considered
based on the nature of the product, target market, and distribution strategy

Answer 8

types of intermediaries

Question 9

: These can include brick-and-mortar stores, online
retailers, department stores, supermarkets, or specialty shops

Answer 9

Retailers

Question 10

: These purchase products in bulk from manufacturers and
distribute them to retailers or other businesses.

Answer 10

Wholesalers

Question 11

: Act as intermediaries between manufacturers and retailers,
specializing in specific industries or geographical areas.

Answer 11

Distributors

Question 13

: facilitate transactions between buyers and
sellers without taking ownership of the products.

Answer 13

Agents/Brokers

Question 14

also known as clearing and
forwarding agents (CFAs) or freight forwarders, they are
intermediaries that handle the logistics of transporting goods,
including customs clearance and arranging for the movement of cargo
across borders.

Answer 14

Carrying & Forwarding Agents:

Question 15

also known as third-party logistics (3PL)
providers- are companies that specialize in managing and optimizing various
aspects of a company’s supply chain, including transportation, warehousing, and
distribution.

Answer 15

Logistics service providers

Question 16

: The decision regarding the number of
marketing intermediaries depends on various factors, such as the complexity of the
product, target market coverage, and distribution efficiency. Options to consider
include:

Answer 16

Number of Marketing Intermediaries

Question 17

: This involves placing products in as many outlets as
possible to maximize market coverage.

Answer 17

Intensive Distribution

Question 18

: It involves granting exclusive rights to a single
intermediary or a limited number of intermediaries in a particular geographic area
or market segment.

Answer 18

Exclusive Distribution

Question 19

: It involves selecting a limited number of intermediaries
based on their ability to effectively reach specific market segments.

Answer 19

Selective Distribution

Question 20

: Each channel member has specific
roles and responsibilities within the distribution process.
The producer and the intermediaries must agree on the terms and
responsibilities of each of the channel members.

Answer 20

Responsibilities of Channel Members

Question 21

Once the major alternatives have been identified, businesses need to evaluate
them based on factors, such as cost, efficiency, market reach, customer
satisfaction, and compatibility with overall business objectives.

Answer 21

Evaluating the Major Alternatives

Question 22

With the help of this criteria, a company can compare the
likely sales, profitability, and cost of different alternatives.

Answer 22

Economic Criteria:

Question 23

If a company is using intermediaries for distributing its
products to consumers, it generally means giving the intermediaries some control
over the marketing of the product.

Answer 23

Control Criteria:

Question 24

Even though the channels involve long-term
commitments, a company tries to keep the channel as flexible as possible
so that it can easily adapt to environmental changes.

Answer 24

Adaptive Criteria:

Question 25

SELECTING CHANNEL PARTNERS

Answer 25

1. Alignment with Business Objectives and Values 2. Market Reach and Customer Access 3. Reputation and Reliability 4. Financial Stability and Growth Potential 5. Technical and Support Capabilities 6. Industry Expertise and Capabilities 7. Sales and Marketing Capabilities 8. Commitment to Collaboration and Communication 9. Compliance and Ethical Standards 10. Flexibility and Adaptability

Question 26

includes efforts in designing capacity- building programmers, training, promotion support, marketing research, hand of course working along with the company sales personnel

Answer 26

MOTIVATING CHANNEL MEMBERS

Question 27

MOTIVATING CHANNEL MEMBERS

Answer 27

1. Align your goals 2. Develop an online training program 3. Introduce a tiered system 4. Provide certification incentives 5. Communicate frequently and keep them up to date 6. Offer high-level support 7. Track and report progress

Question 28

____ _____ are all businesses or individuals involved in the process of moving products from the manufacturer to the end consumer. ______ _____, sometimes called intermediaries or middlemen, work together to complete the various tasks it takes to get a product from production through to sale.

Answer 28

Channel members Channel members

Question 29

This starts at the time the channel member is recruited & continues right through the time that the channel member is associated with the company.

Answer 29

TRAINING CHANNEL PARTNERS

Question 30

TRAINING CHANNEL PARTNERS

Answer 30

•Product knowledge •Sales Techniques •Customer Service •Brand Messaging •Industry Regulations

Question 31

THE POWER OF MOTIVATION

Answer 31

 Referent Power  Expert Power  Legitimate Power  Support Power  Competition Power  Reward Power  Coercive Power

Question 32

– this power emanates( derive) out of the eminent position that the company holds in the industry.

Answer 32

Referent Power

Question 33

– implies that the company has some special knowledge that is value-adding to the channel partner.

Answer 33

Expert Power

Question 34

– enforcing any task expected of the intermediary as per the agreement or contract signed with the company

Answer 34

Legitimate Power

Question 35

– using the channel partners for the distribution of its goods and services has the ability to give additional support to help increase volumes.

Answer 35

Support Power

Question 36

– competition faced by the firm in the market.

Answer 36

Competition Power

Question 38

– company provide the incentives to the channel partners to perform additional task at specific points of time.

Answer 38

Reward Power

Question 39

– the power of ‘threat’ used by the company.

Answer 39

Coercive Power

Question 40

CHANNEL DESIGN COMPARISON FACTORS

Answer 40

•Efficiency •Effectiveness •Capacity •Agility •Consistency •Reliability •Integrity

Question 41

• – the standard definition of input vs. output applies here also.

Answer 41

Efficiency

Question 42

• – the analysis of how well the channel system meets its objectives.

Answer 42

Effectiveness

Question 43

• – channel has been designed for a current volume of business handling a specific number of customers.

Answer 43

Capacity

Question 44

• – the ability to handle changing demand patterns.

Answer 44

Agility

Question 45

• – The channel network should deliver the same level of service day after day or month after month without fail.

Answer 45

Consistency

Question 46

• – a measure of the commitment to the performance of obligations and the certainty with which commitment is met.

Answer 46

Reliability

Question 47

• – channel system may have all qualities described above, but it still have to do business in a fair and above board manner.

Answer 47

Integrity

Question 48

is a strategy that companies use to streamline their operations. It involves taking ownership of various stages of its production process. Companies achieve vertical integration through mergers or acquisitions or by establishing suppliers, manufacturers, distributors, or retail locations rather than outsourcing them. Vertical integration often requires significant initial capital investment.

Answer 48

Vertical integration

Question 49

happens when a company moves a process in- house so as to take control of earlier, or upstream, steps in the supply chain process.

Answer 49

Backward integration

Question 50

by contrast, forward integration is when a company takes ownership of processes further along, or downstream, in the supply chain, perhaps by taking control of distribution or sales of finished goods and services

Answer 50

Forward Integration

Question 51

When a company vertically integrates processes both upstream and downstream, it’s pursuing balanced integration

Answer 51

Balanced Integration

Question 52

–employing existing channel partners like wholesalers & retailers or developing partners like C&F agents and distributors.

Answer 52

Outsourcing

Question 53

Advantages:

Answer 53

 Core competence  Flexibility in operations  Local Strengths  Independent Operations  Threat of replacement  High local knowledge

Question 54

refers to selling goods and services outside of traditional brick-and-mortar stores.

Answer 54

Non-store retailing

Question 55

Non-store retailing includes:

Answer 55

 Selling door-to-door  Selling through Vending Machines  Selling through tele-shopping networks  Selling through catalogues  Other forms of direct selling  Selling through electronic channels

Question 56

are those that use the Internet to sell goods to consumers directly.

Answer 56

Electronic channels