Problem 1. It has been said that "Channels of Distribution may be the best opportunity for a sustained competitive advantage." Do you agree or disagree? Why?
Please compare the Channels of Distribution (Place) to Product, Price, and Promotion in terms of its importance within the Marketing Mix (Four P's).
Problem 2. Suppose your company is the Outofsight Speaker Company, a manufacturer of a high quality line of audio speaker systems in Philadelphia, PA. Your company has been in existence for four years, and sales have gradually been increasing at approximately 8% annually. Your speakers range in price from $400 to $3,200 per pair. Although this is expense comparatively, Consumer Reports magazine rates them highly. Your VP of channel relations has asked you to qualify a potential new distributor for your electronic products. That distributor is Washburn Electronics in Paducah, Kentucky. Your company had received a letter of inquiry from Washburn, in which they expressed interest in becoming your qualified Outofsight wholesale distributor in Kentucky. In effect, you are considering Washburn Electronics as a new Outofsight wholesale distributor to represent your products to appropriate retailers in the state of Kentucky. At this time, you do not have an authorized wholesaler that is physically located in Kentucky and your three primary competitors do. Washburn also represents two of those three lines of competing speakers. Because you have no wholesale distributors located directly in Kentucky, the visibility of your product line is lower than you would like. Washburn Electronics is a wholesale electronics distributor and sells a variety of electronic goods to retail stores, most of which are independent stores. Those stores compete with Tweeter and other stores that sell high quality speakers and audio systems. Thus, we have a business-to-business channel that includes merchant intermediaries. Since its creation four years ago, Outofsight speakers have been represented in Kentucky by two authorized wholesalers from the neighboring states of Indiana and Tennessee, both of which have done a more than adequate job of representing the quality Outofsight line.
Answer the following question:
- Assume you have a meeting arranged with Washburn Electronics senior management. At that meeting, you may ask their senior managers any question that you wish.
- What questions would you want to ask? What are the things you would want to know about Washburn Electronics that would help you make the "correct" decision about whether or not to recommend bringing them aboard as a potential distributor of Outofsight?