Chapter No 1: Marketing Channel Structure and Function

Discussion Question:

Q6. Describe hoe the necessary channel flow performance differs when selling or servicing an ultrasound machine (a piece of medical equipment) when targeting two different segments of buyer: (a) a hospital emergency room and (b) an academic medical researcher on a tight government-funded budget using the machine foe laboratory research. Answer:
In this question we targeting two different segment the first one is the buyer of the ultrasound machine for hospital emergency room and the other one buyer of the ultrasound machine for academic medical researcher but the problem is there is tight government funded budget, because of the tight government funded budget we choose a channel through which reduce the cost of the machine. For the first segment the buyer need ultrasound machine for the emergency room. The producer needs a proper channel through which they supply the machine to the customer. The customer has no time because they need machine for the emergency room. Customer finds a proper channel to purchase the machine on time so they buy from the retail store. For the first buyer select this marketing channel because the buyer find more facilities in this channel for buying the ultrasound machine. Now the second buyer want to purchase the machine for the academic purpose so they find the channel which is easy to purchase the machine they have no budget so they buy from the direct from the producer to reduce the cost. In this question we see two type of buyer who needs a machine for different purpose for their requirement the both buyer select the different channel to purchase the machine. The marketing channel is made for the customer for buying the product according to their need.

Q7. Should a channel manager always seek to target the maximum possible number of segments to sell to? Why or why not? Answer:
In this question manager focused on the targeting the segment in lager number or the less numbers segmented. Channel manager seek to the segment which is in less number but give the high profit, Channel manager can find this segment through proper channel analysis. Through channel analysis the manager made the initial design of the channel and management process. Channel manager selected the limited segment because of they want to available the product to that segment where the demand of the product is high. Limited segment have a limited distribution channel so the channel cost can be minimize and the profit is increased because the target segment is selected who pay more for the product.

Q8. The service on high- end automobiles is of very good quality: timely and done by polite and competent professionals at service facilities that give the auto owner access to many amenities (free refreshment, free loaner cars etc). In what sense can there be a demand-side gap in this service channel? Answer:
The demand side gap is means that at least one of the service output demands is not being appropriately met by the channel .The output is may be undersupplied or oversupplies in both cases of under or over supplies create problem. When the product is undersupplied which means the customer is dissatisfied and they want more good services. When the product is oversupplied which means that the customer get all services which they want but that services are costly, which lead to increase in the price of the product. In this question the automobiles company provides very good quality to the customer and facilitate with free refreshment, free loaner cars etc. all of this facilities but the customer not purchase the cars because the supply is too much but there is no demand of the product. The demand side gap is created because the supply is more but demand is less. This gap can be reduce by adopt different strategies.

Q9. Explain how not keeping up with advances in distribution channel technology (e.g., information technology advances, warehouse management techniques, database management tools etc) can cause an otherwise well-working channel to developed a supplyside gap? Answer:
The relationship of the buyer and seller who are agreeing on the amount, mode and timing of payment. And the each purchase involves ordering of, valuation of and payment for goods and services. When we made any product first we check how many consumer are acquired that product so we made the product for the consumer. This check is helpful to know that how many supplies are required of the product in the market. So company made the product according to this requirement and the extra cost are not charge by the company. When the cost is control by the company they produce the product according to the requirement then supply is not less in the market. The product is available to the customer according to the demand then the supply-side gap can be minimized. On the supply side gap which means that at least one of the flows in the channel of distribution is at too high cost. Increases the cost of one element can cause reduce the supply of the product. According to the question why the supply of the distribution channel technology is less and not includes the advances in the technology like information technology advances, warehouse management techniques, database management tools etc. Because in which one of the element have a very high cost and the distribution channel not control the cost so that s why the supply in the technology is less. To overcome this problem to reduce the cost of the product and made some strategies to cover up the supply side gap.

Q10. Why is it important to understand channel power sources and channel conflict sources? Why can we not simply design a zero-based channel and be done with the channel analysis process? Answer:
The power sources is its the ability to control the decision variables in the marketing strategy of another member in a given channel at a different level of distribution. The channel power is important in sense that implement of the optimal channel design. The channel is made of different entities which depend upon each other but it is not necessary that the incentive is same of these entities. In the company the incentive is not a big problem when the channel members are independent. But if all the channel members do not work properly the whole company are bear the loss. All the member are independent in the company so how the optimal channel design are implement in the company without looking at the incentive, to resolve this problem the channel power is used to further one channel member s individual end. The channel power is influence the channel member to do their job in the optimal channel design. When the channel member is doing their job properly then they delivers demanded service more accurately and reduce the cost of the company. Channel conflict are generating when one channel member s action prevent the channel from achieving its goal. Channel conflict is made from differences between the channel member s goal and objective, from disagreement over the domain of action and responsibility of the channel, from the differences in the perception of the marketplace. Through the channel conflict the performance of the channel member can reduce and they are not working properly and not perform the function which is made by the optimal channel design for the channel members. To reduce this problem the manager used the source of the channel power. Firstly the channel manager must be able to identify the sources of channel conflict. Secondly the manager must take action to manage and reduce those channel conflict. It is important in sense that if any channel conflict is exist in the channel member they do not perform their task properly which reduce the company profit. It is necessary to identify that conflict and reduce that conflict. Why we not simply maintained the zero-base channel because in zero-based channel we are not focus on the proper channel through which the product are deliver to the consumer and company not know in which areas product are used in large no. Company used the channel analysis process through this process company deliver the product through proper channel and also knows that from which area the company earns more income. Using the proper channel company is able to make a network in the market and attract the consumers that s way we do not used the zero-based channel.