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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.
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?
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
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.
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).
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
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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- Fall '13