Distribution channel decisions have a major economic impact because distribution costs, many of which do not even appear in the firm’s income statement, often exceed the costs of producing a good or service

Distribution channel decisions

Part 1: Review Questions

  1. Analyze in detail why customers won’t buy a good or service unless it is conveniently available when and where they want to buy it.
  2. Distribution channel decisions have a major economic impact because distribution costs, many of which do not even appear in the firm’s income statement, often exceed the costs of producing a good or service. Choose an airline and decide if they have a strong or weak distribution channel. Defend your answer.
  3. A clear understanding of one’s target market is essential for planning and implementing an effective promotional program. Explain why this statement is true.
  4. New media, including the Internet, email, and Smart cell phones, are predicted to revolutionize ad spending because their results—like those for direct marketing programs—can often be directly measured. Using the airline industry as your frame of reference, discuss which of the media mentioned in the preceding statement are measurable. Which metric or metrics would you suggest using to measure effectiveness, sales, inquiries, ad clicks, etc?

Part 2: Channel Selection Matrix Using Excel

As a marketing manager for a major airline, you are faced with a distribution dilemma. Your current distributors are coming up for their annual review and you must produce analytics for a meeting that rates their performance. Here is your chart:

Current Performance and Criteria

.Criteria listed on a chart with different weightings and channels.

Your supervisor is pleased with most of the criteria that you have used on the Excel spreadsheet above but feels there is duplication between some of the criteria, i.e. consumer acceptability, dependability, cost of getting the channel up to speed, and overhead costs. You also discovered that other airlines rate their channel members’ overall scores much higher and have been more profitable in the past year. Your challenge is to create new criteria to substitute for the above and assign values using scores 1 through 5, along with new weights for these new criteria. In addition, Channel B feels their performance numbers were unfairly assessed. Using the Microsoft Excel template linked below, enter an analysis of the new criteria and data with your recommendation based on quantitative channel assessment.

In a Microsoft Word document, provide your channel selection rating and overall rating. Provide sound rationale for your selections. Include a copy of your edited spreadsheet table (either copy and paste or include screenshots) in the document. You may need to save your document in landscape orientation to fit all the content onto the page.

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