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Marketing Final Exam

Existing competition choosing a direct channel may be

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Unformatted text preview: hoice. A geographically concentrated market is appropriate for direct selling through a direct sales force. Markets that are more widely dispersed may need more intermediaries. Generally, a very large market requires more intermediaries. Also, if there is lots of existing competition, choosing a direct channel may be less difficult and more profitable. PRODUCT FACTORS. Products that are more complex, customized, and expensive tend to benefit from shorter and more direct marketing channels. Product life cycle also plays a role. In fact, the choice of channels may change over the life of the product. As products become more common and less intimidating to potential users, producers tend to look for alternative channels. Finally, fragile and perishable products require a shorter channel that involves less handling. PRODUCER FACTORS. Producers with large financial, managerial, and marketing resources are better able to use channels that require fewer intermediaries. More direct channels may also be used by producers who wish to control pricing, positioning, brand image, and customer support. PTS: 1 REF: 208-210 Communication KEY: CB&E Model Distribution OBJ: 13-4 TOP: AACSB MSC: BLOOMS Synthesis 10. Name and briefly describe the three levels of distribution intensity. Give examples of two products that logically would be distributed at each level of intensity. ANS: INTENSIVE DISTRIBUTION is aimed at maximum market coverage. The manufacturer tries to have the product available in every outlet where the potential customer might want to buy it. If a buyer is unwilling to search for a product, the product must be placed closer to the buyer. If the product is of low value and is frequently purchased, a lengthy channel may be required. Candy, gum, cigarettes, soft drinks, and any other type of convenience good or operating supply would be distributed intensively. SELECTIVE DISTRIBUTION is achieved by screening dealers to eliminate all but a few in any geographic area. Because only a few retailers are selected, the consumer must be willing to seek out the product. Shopping goods such as DKNY clothing and some energy drinks are distributed selectively. Recently, a high-tech form of selective distribution has emerged whereby products are pushed through to the membership of exclusive virtual social networks. EXCLUSIVE DISTRIBUTION entails establishing one or a few dealers within a given geographic area. This is the most restrictive form of market coverage. Because buyers may have to search or travel extensively to purchase the product, exclusive distribution is usually limited to consumer specialty goods, a few shopping goods, and major industrial equipment. Some products distributed exclusively include Rolls-Royce automobiles, Chris-Craft power boats, and Pettibone tower cranes. PTS: 1 REF: 210-211 Communication KEY: CB&E Model Distribution OBJ: 13-4 TOP: AACSB MSC: BLOOMS Synthesis 11. A retail clothing store in a small northwest Georgia community is the sole dis...
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