Marketing Final Exam

Distribution simpler by reducing the number of

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Unformatted text preview: ower average production costs. OVERCOMING DISCREPANCIES. Several discrepancies such as quantity, assortment, time, and space can be overcome by using marketing channels. Channel members help to bridge the gaps these discrepancies create. CONTACT EFFICIENCY. Channels make distribution simpler by reducing the number of transactions required to get products from manufacturers to consumers. PTS: 1 REF: 202-203 Communication KEY: CB&E Model Distribution OBJ: 13-1 TOP: AACSB MSC: BLOOMS Synthesis 5. One important reason channel members are included between producers and users is to increase contact efficiency. How do channel members increase contact efficiency? Use the following two scenarios to illustrate your answer: (1) Assume that there are 2,000 business students who need to buy textbooks from eight textbook publishers. How many transactions must take place? (2) Assume the first scenario, but now one campus bookstore is acting as an intermediary. Now how many transactions must take place? ANS: Channels make distribution simpler and more efficient by reducing the number of transactions required to get products from manufacturers to consumers. In the provided example, the first scenario requires 16,000 transactions (2,000 students 8 publishers). In the second scenario, only 2,008 transactions are necessary (1 bookstore 8 publishers + 2,000 students 1 bookstore). Clearly, a significant reduction in transactions takes place if intermediaries are added to the system. PTS: 1 REF: 203-204 Communication KEY: CB&E Model Distribution OBJ: 13-1 TOP: AACSB MSC: BLOOMS Synthesis 6. Intermediaries must perform three basic functions. Name these functions and describe the activities involved in each function. ANS: TRANSACTIONAL FUNCTIONS include contacting and promoting (contacting potential customers, promoting products, soliciting orders), negotiating (determining how many goods or services to buy and sell, transportation types, delivery times, and payment method and timing), and risk taking (assuming the risk of owning inventory). LOGISTICAL FUNCTIONS include physical distribution (transporting and storing goods to overcome temporal and spatial discrepancies), storing (maintaining inventories and protecting goods), and sorting (overcoming discrepancies of quantity and assortment by sorting out, accumulating, allocating, and assorting). FACILITATING FUNCTIONS include researching (gathering information about other channel members and consumers) and financing (extending credit and other financial services to facilitate the flow of goods through the channel to the final consumer). PTS: 1 REF: 205 Communication KEY: CB&E Model Distribution OBJ: 13-2 TOP: AACSB MSC: BLOOMS Synthesis 7. Compare and contrast the channels for consumer products with the channels for business and industrial products. ANS: Channels are diagrammed in Exhibit 13.3 and Exhibit 13.4.Manufacturers can route products to consumers four different ways: • Direct channel: no intermedia...
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