MKT2207_310 MARKETING CHANNELS

Wednesdays: 6PM-9PM

WEEK 4 HYBRID ASSIGNMENT

Questions 1 and 8 on page 230 (Chapter 7)

1. Are selection decisions always the result of changes in channel structure? Explain.
Selection decisions may not always be the result of changes in channel structure.
Although the selection of good employees is critical to the success of the firm, selection
decisions may occur when there are new members, or if one may be replaced, but it may not
affect the channel structure. One example as discussed in the book is that, suppose a firm needs
more coverage in existing territories. Even though its channel structure remains the same in
terms of length, intensity and types of intermediaries, the firm may need additional outlets to
allow for growth. The other common reason for selection, independent of channel design
decisions, is to replace channel members that have left the channel either voluntarily or
otherwise (Rosenbloom, n. d.).

8. Briefly describe each of the 10 general criteria for selecting channel members that can be used
as a starting point for developing more specialized lists of channel member selection criteria.

(1) Credit and financial condition

-The investigation of the credit and financial position of prospective intermediaries.
(2) Sales strength
-The sales capacity of prospective intermediaries (i. e. quality of salespeople, the actual
number of salespeople employed and may also be the technical competence of salespeople for a
technical intermediary).
(3) Product lines
-Four considerations of the product line include: competitive, compatible,
complimentary, and quality.
(4) Reputation
-A critical component that an intermediary should project to the manufacturer. It is the
image that matters to be considered in the selection as part of the channel member.
(5) Market coverage
-The adequacy of the intermediary in covering the geographical territory that the
manufacturer would like to reach.
(6) Sales performance
-The main factor is whether the prospective intermediary can capture as much market
share as the manufacturer expects.
(7) Management succession
-The assurance that if the firm’s principal dies, the continuity of management will not be
left in doubt.
(8) Management ability
-The idea that manufacturers may feel that a prospective channel member is
not even worth considering if the quality of its management is poor.
(9) Attitude
-Applies specifically to a prospective intermediary’s aggressiveness, enthusiasm and
initiative that may associate with long-term success of an intermediary.
(10) Size
MKT2207_310 MARKETING CHANNELS
Wednesdays: 6PM-9PM

- The belief is that the larger the organization and sales volume, the larger the sales of
the manufacturer’s products. Often associated with the assumption that large intermediaries
are more successful, more profitable, better established and handle better product lines.

Questions 8 on page 251 (Chapter 8)

8. Discuss the major issues facing the channel manager with respect to where buyers make their
purchases.
-The following may be considered by the channel manager with respect to where the
buyers make their purchases:

 Market geography - deals with the physical location of markets and their distance from the
producer or manufacturer.
 Market size – it is the number of buyers in each market.
 Market density – the number of buyers per unit of a geographical area.