Midterm review 3

Midterm review 3 - Midterm review #3 1) Advantages of short...

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Midterm review #3 1) Advantages of short and long channels a. The more channels the less profit usually i. Through channels you lose customer to producer relationship. ii. Channel members do not care about your product just making a profit iii. More channels causes price to go up. iv. More channels = higher expenses = higher prices = lower profits v. More channels can mean that we can get the product to the consumer quicker vi. Must give channels a good low price because they will sell the product that is going to make them the most money. vii. Channel Members never want to have your product on hand but we always want them to have all the inventory because it saves us money on overhead viii. PUSH – to give your channels incentives so that the push more weight. Sell ten I’ll give you eleven ix. PULL – when channels give customers coupons or incentives to buy: warranty, coupons, rebates, money back. They pull the customers in. x. Direct Selling – people don’t do this because it causes market saturation and once a market is saturated it is hard to expand. 1. After market saturation – we can go out of business or we can find a new use for our product. ex: Arm & Hammer baking soda. b. No reason to add channel unless it adds profitability c. Short channels i. The more unique your product the shorter the channel. 1. People are willing to wait for it and willing to drive far for differentiated products. 2. Ex: wedding dresses d. Long Channels i. Certain products people are not willing to wait a long time for. Ex: wrigleys gum 2) Advertising – inform and educate (AID) a. Attention, Interest, Desire b. This is the Plan part of the 4 P’s c. Explains the benefits and features. i.
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This note was uploaded on 09/08/2010 for the course BUS 130 at San Jose State.

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Midterm review 3 - Midterm review #3 1) Advantages of short...

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