Assignment:
Channel Issues for Discussion
1. ROCKAUTO.COM is a leading online auto parts store that prides itself for offering a huge selection of auto parts, everyday low prices, fast shipping, and an easy-to-use Web site. 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 custo¬mers 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. Do you agree with ROCKAUTO.COM's claim? Might customers seeking auto parts need other channel options? Explain.
2. The TV reporter for a network news show is walking through a cornfield with a downtrodden-looking farmer in Iowa. As they continue through the field, the farmer comments: "My family and I have worked real hard over the years to produce a good crop, but we hardly get much of a price for it. But when I see how much they want for corn and just about any corn products in the super¬markets, I can't believe it. The consumer is paying a high price while I'm getting a very low price, so somebody must be making a lot of money in between." The reporter then turns to the camera and in a melodramatic style intones: "As you've just seen, we've talked with a farmer who, in spite of all his hard work, can hardly make a living. But you and I both know how high prices are in the supermarkets. Are we being ripped off by a bunch of middlemen?" Comment on the farmer's lament to the re-porter and the reporter's remarks to the TV au-dience in light of the relevant channel concepts discussed in this chapter.
3. Growth in online retail sales has been outstripping conventional sales in retail stores. This online sales growth might be enhanced significantly by the latest online sales phenomenon of mobile commerce-shopping via mobile smart phones such as Apple's iPhone, Research in Motion's Blackberry, or Google's NexusOne. But so far, of the almost 50 million smart phone users that have access to the Internet, only about 7 million (under 15%) have actually bought something through their phones during the course of a year. Do you think mobile commerce via smart phone will grow rapidly in the future? Why or why not?
4. The dramatic growth in online sales in recent years has led many pundits to predict that mail order channels driven by paper catalogs would virtually disappear. But this has not happened. By the close of the first decade of the Twenty-First Century, over 17 billion catalogs were mailed to U.S. homes, which helped to produce over $700 billion in sales via this "old fashioned" channel of distribution. Why do you think such vast numbers of paper catalogs are still printed and mailed and such high levels of sales are still generated in mail order channels?
5. One of the major themes presented in this chapter is the need for choice as to how products and services are made available to customers. Thus, multi-channel strategies that provide a wide range of channels including an Internet-based online channel option have become imperative. Yet there are very successful firms that take a virtually opposite view by purposely lim¬iting choice. A case in point is Edward Jones, a financial services company with the largest network of brokerage offices in the U.S.-more than 10,000 and still growing. Edward Jones has a Web site that its customers can visit but it does not offer its customers the option of trading on¬line. Instead, all transactions must take place through an Edward Jones broker. Even with this single channel strategy, the company is still growing and is very profitable. Why do you think Edward Jones has been able to "buck the trend" toward multi-channel strategy that would include an online channel as a key option?
6. Susan Jensen, a marketing manager for a major consumer package goods manufacturer, is very upset with the sales results of the new oat bran cookies her company introduced three months ago. She believes that an important factor in the lackluster sales results is that too many supermarkets across the country were not featuring the product in giant end-of-aisle displays recommended by the manufacturer to evoke consumer impact and awareness. "I feel like hitting those store managers over the head for not featuring this product-if only I had more control over these guys," remarked a frustrated and angry Susan Jensen. Discuss the situation in the context of the definition of the marketing channel presented in the text.