Midterm3_StudyGuide.doc - 1 1. New Venture Distribution:...

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1. New Venture Distribution: E-Commerce and the Entrepreneur What are distribution channels/channels of distribution? Path or 'pipeline' through which goods and services flow in one direction (from vendor to the consumer), and the payments generated by them flow in the opposite direction (from consumer to the vendor). A distribution channel can be as short as being direct from the vendor to the consumer or may include several inter-connected (usually independent but mutually dependent)intermediaries such as wholesalers, distributors, agents, retailers. Each intermediary receives the item at one pricing point and moves it to the next higher pricing point until it reaches the final buyer. Also called channel of distribution or marketing channel. What are value-delivery networks? Another word for a distribution channel. What are intermediaries? Perform some kind of work in bringing the product and its ownership closer to the final consumer. Why are intermediaries important? Intermediaries add value by filling the following gaps: Time, space, variety, quantity, information How is the length of a marketing channel determined? The number of channel members determines the length of a marketing channel. What is a hybrid distribution channel/multi- channel distribution system? What are advantages, what disadvantages? Advantages - Each new channel expands market coverage. Opportunity to tailoring market offering to diverse segments. Disadvantages - Harder to control. Can create horizontal and vertical channel conflict. What is direct/indirect distribution? How do both differ from each other? Direct distribution has no intermediaries (catalogs, telephone, and internet). Indirect distribution is with intermediaries (direct sales force). What is distribution concept testing ? Why is it important? 1
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It is important to identify best means to distribute new venture market offerings to target niche markets. What is disintermediation? Why is disintermediation important for new ventures? Occurs when product and service producers cut out intermediaries and go directly to final buyers. In the world of e-commerce, size matters less than speed and flexibility. The internet is creating new ways of doing business and has made disintermediation more common. How do new venture size, speed, and flexibility relate to the success of new ventures? How do they relate to the success of established firms? In the world of e-commerce, size matters less than speed and flexibility. The most successful companies embrace the Internet as a mechanism for transforming their companies and for changing everything about the way they do business. What are benefits of selling on the Internet? Open 24/7, Enhance customer service through interactivity, educate and
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This note was uploaded on 09/08/2010 for the course BUS 131D at San Jose State University .

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Midterm3_StudyGuide.doc - 1 1. New Venture Distribution:...

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