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Marketing Channels 8th edition Rosenbloom - Solutions
Throughout our discussion of the many variables affecting channel choice, we cited a number of heuristics about how these variables are likely to influence channel structure. What useful purpose does this serve? What dangers does it hold?
Best Buy Co., the largest consumer electronics retailer in the world, is famous for its giant 40,000 square-foot “big-box” stores. This channel has served Best Buy well over the years as the end of the first decade of the Twenty-first century, Best Buy made a channel design decision that
Vending machines have existed as a mechanical channel for distributing a variety of products for many decades. Traditionally the typical products found in vending machines were soft drinks, candy, cigarettes, and snack foods. But in recent years the variety of products sold through vending machine
Quaker Oats Co. made the most disastrous decision in the company’s history when it acquired the Snapple Beverage Corp. After several years of horrible financial results, Quaker sold its Snapple division at a loss in excess of a billion dollars. What went wrong? Pundits point to several factors,
Marketing channels should be designed to make products and services conveniently available to customers, how, when, and where they want them. This is exactly what several franchises such as Cousins Submarines Inc., Tasti D-Lite LLC frozen yogurt, and Toppers Pizza Inc. intend to do by changing
C.F. Martin & Company, located in Nazareth, Pennsylvania, is recognized by guitar enthusiasts as the manufacturer of the finest steel string acoustic guitars in the world. Martin is to guitars what Mercedes or even Rolls Royce is to auto- mobiles in the minds of the target market at which the
Chrysler Group LLC. and Fiat SpA announced that they would partner to bring the subcompact Fiat 500 to be sold in the U.S. sometime in 2011. The Fiat 500 will be positioned as a direct competitor to BMW AG’s Mini Cooper. The Fiat 500 will be sold through a select group of about 165 Chrysler
Giant pharmaceutical manufacturers such as Merck & Company and Pfizer have traditionally relied heavily on the doctor-to-patient channel to promote their products. In essence, this channel structure focuses attention on reaching doctors through extensive use of the drug maker’s outside
Are selection decisions always the result of changes in channel structure? Explain.
In discussing the means available to secure prospective intermediaries as actual channel members, the chapter suggests that the offer of a “partnership” by the producer or manufacturer could serve as a strong inducement. What does this mean?
What is the relationship between intensity of distribution and the amount of emphasis given to selection?
Discuss several sources that the channel manager can use to help locate prospective channel members.
What is a potential problem with the use of the sales force as a means for finding prospective channel members?
Is it possible to develop a truly universal list of selection criteria for appraising prospective channel members? What are some of the problems one might encounter in attempting to develop such a list?
Briefly describe each of the 10 general criteria for selecting channel members that can be used as a starting point for developing more specialized lists of channel member selection criteria.
What are some of the specific incentives that the manufacturer can use to secure channel members?
Apple, with its almost 300 company-owned stores, uses independent intermediaries, which it refers to as “third-party resellers.” For its Mac computers, Apple is very careful about the intermediaries it selects to become members of its distribution channel. Once selected, Apple makes a
Bill Harding, the national sales manager for a major appliance maker, realized that the company would have to add more wholesale distributors in at least a half-dozen major territories on the East Coast and in the Midwest to keep up with the growth in those markets. Bill knew he needed good
The Rust-Oleum Corporation is world-renowned for its anticorrosive coatings for virtually any application, for use on everything from heavy industrial equipment to consumer patio furniture. The company sells its industrial products through wholesalers (industrial distributors) and its consumer
John Paul Mitchell Systems, Inc., a manufacturer of specialized high-quality hair care products, has made it a policy to sell its products only through “hair care professionals.” Only better beauty salons and specialty stores are selected by the company to represent its products. Yet somehow,
New Balance has developed a strong reputation as a serious and leading manufacturer of high performance and high-quality athletic footwear. Its use of technology to produce state-of-the art running shoes and cross-trainers has earned the respect of many world-class athletes who rely on New Balance
Master Lock is perhaps the nation’s best-known name in padlocks. Master Lock padlocks are sold intensively at the retail level through a wide range of stores, including hardware stores, home centers, automotive stores, bicycle shops (for bi- cycle padlocks), drugstores, supermarkets and many
The subdimension of who participates in buying decisions may be of importance to the channel manager. Under what conditions might this be the case?
The category of market variables was cited in Chapter 6 and the present chapter as one of fundamental importance to channel design. Explain why this is so.
In this chapter, a four-dimensional framework was used for analyzing markets in relation to channel design strategy. Define each of these dimensions.
In this chapter it was pointed out that market geography is subject to changes. Why should the channel manager be concerned with such changes?
If information indicates that the market size is increasing, what kinds of questions should this pose for the channel manager?
What is efficient congestion? How does this relate to market density? Is this relationship as Straight forward as it seems?
The market behavior dimension was broken down into four subdimensions in this chapter.Define each of these subdimensions.
Discuss the major issues facing the channel manager with respect to where buyers make their purchases.
Identify any changing patterns of how consumers (or industrial buyers) purchase goods with which you are familiar. Trace the effects that these changes may have on the channel structure.
There is an old saying that predates the marketing concept by perhaps 100 years: “The customer is king.” This is usually interpreted to mean that businesses should remember that the only reason they are in business is to serve the customer, because without customers there would be no business.
The number of consumers subscribing to cable television services in the U.S. had declined significantly by the end of the first decade of the twenty-first century. In the third quarter of 2010 alone, almost 120,000 consumers discontinued their cable subscriptions and the pace of decline is expected
By the end of the first decade of the twenty-first century, the anti-junk food movement had really begun to take hold in the U.S. Of particular concern was the sale of junk food through vending machines in schools. The easy availability of salty snacks, candy and sodas made easily available from
Airports may be where the real action is in retailing. At least this is the impression one might get by observing some recent developments. Bloomingdale’s was one of the first major retailers to open a branch in an airport when its clothing and gift boutique opened at JFK International Airport in
Goya Foods Inc. produces and markets Hispanic foods sold mainly through supermarkets throughout the U.S., especially those that serve markets with large Hispanic populations. The company, based in Secaucus, New Jersey, has enjoyed strong sales growth in recent years. What is so different about the
For decades, giant big-box retailers like Walmart supercenters, Best Buy, Home Depot, Staples, Target and many others emphasized building bigger and bigger stores with broader assortments of merchandise and low prices to attract customers. But in recent years, customers pressed for time and having
Avijit Mohan was really upset about the poor job the three department stores were doing with his line of fine brass products from India. “They just put the stuff out on the floor as though they were cheap trinkets that the customer buys on impulse. Don’t they realize that this merchandise has
Discuss the distinction between channel management and channel design.
What particular facets of the Cisco Systems case indicate effective leadership in motivating the firm’s channel members?
Even if a marketing channel has been carefully designed in such a way that its structure reflects a near-optimal allocation of distribution tasks, the channel cannot be expected to “run” by itself. Discuss this statement.
An effective information flow in the channel is all that is needed to inform the channel manager of the needs and problems of channel members. Do you agree or disagree? Discuss.
What are some of the major sources of interaction that exist in the typical channel communications system?
Discuss the major features of the four approaches for finding out about channel member needs and problems discussed in this chapter.
Compare and contrast the major features of cooperative arrangements, partnerships and strategic alliances, and distribution programming as approaches for motivating channel members.
Discuss the differences between a conventional channel and a channel based on a distribution programming arrangement.
Discuss the concept of leadership as it applies to motivating channel members.
What are some of the problems faced by the channel manager in attempting to exercise leadership to motivate channel members in the interorganizational setting of the marketing channel?
Steinway & Sons has manufactured the world’s best pianos for well over a century. Steinway sells its pianos in the U.S. through less than 75 carefully selected dealers. The quality of Stein- way pianos is unquestionably very high, but for a time Steinway’s management of its channel could make
The ubiquitous Bic razors, cigarette lighters, and, of course, ballpoint pens are sold by more than 100,000 supermarkets, drugstores, and other mass merchandisers in the United States. Bic Corporation has traditionally relied on large numbers of mass marketers to sell these products. Can Bic
Harley-Davidson Inc. is one of the world’s most well recognized companies because of its famous motorcycles—often referred to as “Hogs” by bike enthusiasts. During most of the 1990s, Harley motorbikes were in short supply, so Harley’s 600 independent dealers had no trouble moving the
Mary Robinson, vice president of marketing for a famous men’s dress shirt manufacturer, had spent three months working on the in-store promotional campaign to be used for the new all cotton, easy-care shirt line. The campaign stressed an unusual point-of-purchase fixture: a life-sized cardboard
For decades, McDonald’s was almost universally admired as the leader in the fast-food industry. Its franchise system was the envy of virtually all the other fast-food chains. But at the start of the new millennium, problems that had been festering during the late 1990s began not only to undermine
GTE’s Sylvania Lighting Division introduced “Prestige Partnership,” a program aimed at helping its 2,200 distributors do a more effective job of marketing Sylvania products. In particular, the program will help the distributors locate market segments for which Sylvania products are especially
Film District, a newly-formed film studio and distributor worked out a deal with Netflix, Inc. to stream new movies over the Internet just a few months after they are released on DVDs. Under the terms of the agreement, new movies from Film District will be licensed exclusively to Netflix instead of
Toyota Motor Corporation took extraordinary care in developing the channel and selecting the dealers for its Lexus luxury cars. The attention to detail in setting up the channel for the Lexus is reminiscent of the kind of care Toyota gives to the building of its cars. In fact, standards for the
The product, price, promotion and logistics variables may be viewed by the channel manager as resources in helping secure a higher level of channel member cooperation. Discuss the statement.
Discuss the role of the marketing channel in providing after-sale service.
Discuss the importance of gaining channel member support in building market acceptance for a new product.
Is it practical to elicit channel member input into the manufacturer’s product planning and development process? What problems might this create?
Fitting new products to the channel members’ assortments may sometimes be a problem. When might this be the case?
Discuss the product life cycle stages and the basic implications of each stage for channel management.
Under which conditions might a seemingly simple product deletion decision create possible adverse reactions on the part of channel members?
Discuss the relationship between strategic product management and channel management. Is one of these areas more important than the other? Explain.
Explain the role played by channel management in the implementation of product differentiation and product positioning strategies.
What are some of the channel management problems that can arise when pursuing product line expansion and contraction strategies, trading-up and trading-down strategies and a product brand strategy that uses both national and private brands?
With the widespread use of e-books, such as Amazon.com’s Kindle, book publishers are faced with a tough channel decision: should they introduce the conventional hardcover and the e- book versions simultaneously or delay release to the e-book channel until after the hardcover has had a chance to
RadioShack, with over 6,500 locations worldwide, has been struggling for a number of years with an image of being “old-fashioned” or “out of touch” with new technologies. RadioShack was viewed by tech-savvy consumers as a place to buy odds-and-ends electrical items, such as adaptors and
Toddler University Inc. is the name of a shoe company that makes children’s footwear. The company grew from almost nothing to sales exceeding $25 million. The secret of Toddler University’s success, according to some industry observers, is a unique product design that can drastically reduce
Procter & Gamble has become so concerned about the proliferation of private-label products that it has taken the extraordinary step of suing one of its own channel members that sells private labels as well as large volumes of P&G products. The firm in question, F&M Distributors Inc., operates over
Expensive sunglasses, ranging in price from $50 to $200 or even higher in some cases, have become quite the rage. Ray-Ban, one of the leaders of the pricey sunglasses phenomenon, was joined by numerous other manufacturers, such as Oakley Inc., which specializes in expensive sunglasses for skiers,
Even famous and iconic Fortune 100 companies sometimes manufacture defective products that end up on the shelves of thousands of retailers. This is what happened to Johnson & Johnson, one of the world’s leading manufacturers of patent medicines. In 2009, J&J withdrew from retailer shelves
Private-label products sell in supermarkets typically for about 10 to 20 percent less than national brands, yet the profit margins realized by supermarkets are usually about 10 to 15 percent higher than for national brands—so, supermarkets like private-label brands. But in recent years, there has
The basic factors to consider in developing pricing strategies are market variables, internal cost and competitive forces. Do you agree or disagree? Explain.
What is the underlying factor responsible for possible differing reactions of consumers versus channel members to a manufacturer-initiated price incentive? Explain.
Why is participation in the gray market attractive to many distributors and dealers? Discuss.
Free riding, though profitable for some types of dealers, can be detrimental for manufacturers, full-service dealers and even consumers. Do you agree or disagree? Explain.
What should be the role of the channel manager in formulating the manufacturer’s pricing policies and strategies?
Explain the concept of “buying distribution services” as it applies to channel pricing strategy.
How might different classes of channel members, rival brands and special arrangements between the manufacturer and channel members affect pricing strategies?
What is meant by conventional norms in margins? How does this concept affect channel pricing policy?
Discuss the issues involved in channel pricing to account for margin variations on different models in a product line, price points and product variations.
Discuss the problems associated with the manufacturer’s attempt to exercise price control in the channel. How should the manufacturer deal with these problems?
Why might major changes in the manufacturer’s pricing policies or terms of sale create havoc for the channel members? How might the manufacturer mitigate the negative effects of such changes?
Discuss some alternative strategies available to the manufacturer contemplating the passing of price increases through the channel.
Apple CEO Steve Jobs has been quoted as saying: “We don’t know how to build a sub-$500 computer that is not a piece of junk.” Job’s disdain for the under $500 price point for personal computers reflects his belief that price should not be the driver of product developments. Through much of
A sales representative from a wholesaler of sporting goods called on a sporting goods retailer in the middle of the summer. The salesman was particularly fond of the new line of exercise equipment from a major manufacturer his company was now carrying. He went through his presentation of showing
Amazon.com became the world’s largest e-book seller by offering new bestselling books for a fixed price of $9.99 regardless of the fame and popularity of the author or the prestige of the publisher. But some publishers have balked at Amazon’s e-book pricing strategy. They believe that over
Tina Anderson talked to knowledgeable salespeople about the pros and cons of a variety of cameras, discussed the various features and handled the cameras to see how they felt while at the Camera Store, a full-service camera shop at a regional shopping mall. She decided to buy a Konica Minolta
Anheuser-Busch InBev and MillerCoors LLC control about 80 percent of the U.S. beer market. Most of the beer distributed by both companies is sold through independent beer distributors who, in turn, sell the beer to retailers, restaurants and bars. Anheuser-Busch InBev, which had been acquired by
Aris Isotoner, a division of Sara Lee Corporation, is one of the world’s largest manufacturers of gloves. It was the first company to put gloves in boxes and its four-way stretch fabric, which enables it to offer one-size-fits-all for most of its products, has made it unique in the industry. But
Gillette, now a division of Procter & Gamble, has developed its own iPhone application called “uArt.” This app enables consumers to upload a picture of themselves and then use the Gillette Fusion razor (your finger that shows up as a Fusion razor on the iPhone screen) to virtually shave and
Explain the rationale for including selling support by resellers in a distribution channel as a major tool for implementing promotional strategy.
Why is the success of a manufacturer’s overall promotional strategy dependent to a significant extent on channel member cooperation?
Regardless of the specific promotional strategies that the manufacturer uses, a higher level of channel member cooperation is more likely to be gained if these strategies are part of an overall program of channel member support. Discuss this statement.
Discuss the pros and cons of following promotional strategies from the manufacturer’s and channel member’s viewpoints: (a) Cooperative advertising, (b) Promotional allowances, (c) Slotting fees, (d) Displays and selling aids, (e) In-store promotions, (f) Contests and incentives, and (g)
Because the manufacturer’s major objective in instituting a training program for channel member salespeople is to get them to give preferential treatment to the firm’s products, the manufacturer should design training programs that are, in effect, “commercials” for its particular products.
Should coercive power be the basis for developing a sales quota program for channel members?
How might the use of missionary sales people foster conflict rather than cooperation in the channel?
Discuss the rationale for using trade shows as a basis for obtaining promotional support from channel members.
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