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11-11 Lecture - AEM 2400 Lecture Channel Design Market...

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11/11/09 AEM 2400 Lecture Channel Design Market coverage Best satisfy buying requirements o Info o Convenience – Coca-Cola, vending machines o Variety o Services Most profit o Profit allocation by channel – graph in textbook o Furniture store chains, independent furniture stores, department store chains o Independent furniture stores – twice the amount of profit as sales Channel Relationships Conflict o Vertical: Slotting allowances – fee that retailers generally charge for manufacturers to develop a new slot in the distribution system of the retailer – find a slot in the warehouse for the product – causes problems for small manufacturers Diverting – Give promotion to one retailer but not to another. The retailer with the promotional price sells the product for a slightly higher price to retailers who do not receive promotion. DWL because transportation. Sales representatives at manufacturer cannot sell any product to the retailer buying from the promotion retailer.
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