A clear understanding of ones target market is essential

Question

Part 1: Review Questions

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.

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 and airline and decide if they have strong or weak distribution channel. Defend your answer.

A clear understanding of one's target market is essential for planning and implementing an effective promotional program. Explain why this statement is true.

New media, including the Internet, email, and Smart cellphones, are predicted to revolutionize ad spending, because their results-like those for direct marketing programs-can often be directly measured. Using the airlines 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 airlines 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 the rates their performance. Here is your chart:

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 screen shots) in the document. You may need to save your document in landscape orientation to fit all the content onto the page. If you encounter significant difficulty in doing this, email your instructor the spreadsheet file separately.

Channel Selection Matrix - Your Airlines
S#	Criteria	Weight	Channel A	Channel B	Channel C
1.0	Channel Alignment with Business Objectives	0.40
1.1	Time to readiness (for channel to start selling)	0.10	5	3	3
1.2	Cost of getting channel up to speed	0.05	5	4	5
1.3	Direct cost per transaction	0.10	1	5	3
1.4	Overhead cost (include management, infrastructure, etc.)	0.10	5	2	5
1.5	Capacity (number of transactions channel can handle)	0.15	3	5	5
1.6	Ease of channel management	0.10	1	5	3
1.7	Channel's ability to produce expected results	0.10	5	1	3
1.8	Contractual obligation fulfillment	0.10	3	3	3
1.9	Profitability	0.20	1	1	5
	Alignment with Business Objectives:	1.00	2.9	3.05	4
S#	Criteria	Weight	Channel A	Channel B	Channel C
2.0	Channel Attractiveness for Consumer	0.60
2.1	Consumer acceptability	0.10	3	5	5
2.2	Online Ticketing	0.05	3	3	4
2.3	Payment systems	0.20	4	5	3
2.4	Convenience	0.10	5	1	3
2.5	Order cycle time	0.20	3	3	3
2.6	Communications	0.10	3	5	5
2.7	Post-sales service	0.10	5	1	5
2.8	Friendliness of channel partner	0.10	5	3	3
2.9	Dependability	0.05	5	1	3
	Attractiveness for Consumer:	1.00	3.9	3.3	3.65
Overall Score:		1.00	3.5	3.2	3.79