QUESTION1)
1.1 You are needed to identify five flows in the marketing channel and describe the direction of each.
1.2 Based on the flows indentified in 1.1 describe why the concept of channel flows is more useful for a better understanding of channel management.
1.3 ROCKAUTO.COM is the leading online auto parts store which prides itself in offering the huge selection of auto parts, everyday low prices, fast shipping, and an easy-to-use website. Some ROCKAUTO.COM advertisements have even claimed that this online auto parts store is ‘head and shoulders’ above any brick and mortar auto parts store. The company's slogan, “All the Parts Your Car Will Ever Need”, suggests that customers have all the choice they could possibly want from ROCKAUTO.COM and that they need look no further than this online auto parts store to satisfy all their needs. You are required to analyse ROCKAUTO.COM’s claim and establish if you agree with what is stated. In your answer you should make reference to whether customers seeking auto parts may need other channel options, the implications of multiple channels and to indentify how each member in the distribution channel adds value.
QUESTION2) Discuss the fundamental channel management issues associated with recessionary, inflationary and deflationary periods in the economy.
QUESTION3)
3.1 Identify and discuss the behavioural problems that can have a negative effect on communication in the marketing channel.
3.2 Bill Schwartz, the owner of Newvalue Supply, a medium-sized wholesaler of plumbing supplies, was furious after completing a call with the sales manager of Jefferson Industries, the manufacturer of a very profitable line of high-quality faucets that Newvalue had been selling for several years. “That guy is now going to start selling the big home center accounts directly,” fumed Bill Schwartz to his son Paul. “We’ve worked real hard to establish this line and then, when it finally gets going with some real volume, Jefferson wants to cut us out,” he continued. Discuss the possible underlying causes of the conflict that seems to be emerging in this situation.
QUESTION4)
4.1 Movie studios are experiencing a dilemma lately when it comes to planning their future channel strategy for the distribution of their films. Electronic distribution is very profitable because of the typical R25 cable companies are charging consumers to rent a movie. The studios get to keep about 70% of that. DVDs are less profitable. The usual gross margin received by studios on the sale of DVDs is about 30%. But there’s a catch, even though electronic channels for distributing movies are growing rapidly, ‘old fashioned’ DVDs still account for approximately 70% of film profits. So, while electronic distribution holds great promise, especially given the expected growth potential for showing movies on mobile devices such as smart phones, physical DVDs are still an important distribution channel for movie studios.
Develop a channel strategy that you recommend to the movie studios to deal with this challenge.
Motivate your answer.
4.2 Discuss the main strategic questions channel manager faces when managing the marketing channel