Q1: Explain the following utilities sought by consumers while buying a product along

with relevant examples.

a) Place utility: Place utility is one of the components of the utility marketing model.
Here, it can be defined as the value that the consumers put on where they purchase the
product. Simplifying the above statement, the consumers go to the store to purchase a
particular item, rather than going to the factory or warehouse, where the product is
manufactured or stored. Place utility considers how consumers find what they need in
a place conveniently located near to their home or workplace.
b) Time utility: Time utility is one of the components of the utility marketing model. It
can be defined as the value for the consumers, ensuring that, when a consumer wants a
particular product, it should be available for him or her. Substantiating it, let’s say the
demand for warm clothes increases during the winters, while the demand for FMCG
Products like Atta, Soap or soft drinks remains the same throughout the year, because
the customer uses these products throughout the year.
c) Form utility: Place utility is one of the components of the utility marketing model. It
can be defined as the value that a consumer sees in a finished product. Many items
starting from furniture, to electronic gadgets, can be a good example under this aspect,
where the consumer prefers to buy the finished product, rather than assembling the parts
by their own. Form utility considers how the customer sees the value in the finished
product, or the form created by each product part.
d) Possession utility: Place utility is one of the components of the utility marketing model.
It can be defined as the value that a consumer puts, after purchasing a particular product
and having the freedom in ultimate utilization of the same. Explaining the same with
an example, let’s say a person buys a flower pot. It's used for plantation, but these pots
have various other purposes, like keeping some small objects, which might be necessary
at some other point of time, or even as a decorative item for the dining table room some
times.
Q2: Explain the Explain the following terms of Channel Design along with relevant
examples.
a) Channel Width: Channel Width refers to the set of independent members at any
stage of distribution. This is basically of two types: Wide Channel and Narrow
Channel. Wide Channel refers to the distribution of products to the end consumers by
more number of distribution partners like wholesalers, retailers, Speciality stores,
grocery stores etc. In the case of a narrow channel, there are less number of
distribution partners.
Let’s understand the channel width with an example: Suppose a particular distributor
“XY” supplies a particular FMCG product to all the shops in a particular city.
Suppose there are 2000 Shops in that city and the distributor delivers the product to
1500 shops. Then the width of the channel is:

Number ofshops inwhich the product is available 1500

*100 = *100 = 75%
Totalnumber of shops 2000
So the width of distribution channel is 75%.
b) Channel Length: Channel Length refers to the set of distribution oriented institution
and agencies in a particular distribution channel between the production and
 consumption of a particular product. In case of an FMCG product if a company uses
more number of intermediaries to deliver the product to the end consumer then the
channel length is long. If there are less number of intermediaries, then the channel
length is short.
c) Channel Depth or intensity of channel: Intensity of a channel refers to the level of
availability of a particular product in terms of different SKU’s in different distribution
intermediaries. For example, if a company has 12 SKUs and it delivers 9 SKUs to a
particular shop, then the Depth of the channel is more. To increase the depth of the
channel one should focus on how to deliver all of their SKUs to as many distribution
partners as possible.
Q3: Explain the following theories and concepts for choosing feasible channel structures.
a) Goods and Parallel Systems Approach by Aspinwall: Aspinwall mainly emphasised
on the channel structure for its product variable and it further categorised each product
into a particular colour. The variables are as follows:
i. Replacement rate
ii. Gross margin
iii. Adjustment
iv. Time of consumption
v. Searching time
But the main problem in this type was it had too much emphasis on the product
characteristics.
b) Financial Approach by Lambert: In this approach, Lambert told that the most
important factor for deciding the channel structure was the finance. Because in this
approach we can estimate the cost-benefit analysis of the channel and can prefer the
most suitable channel for us. But the main problem in this system was too much
difficulty in making it operationalize.
c) Transaction Cost Theory by Williamson: It is the most general method because it
addresses the choice of marketing structure between the manufacturer performing all
the distribution task by itself by vertical integration or by using the independent
intermediaries. The main function of the TCA is to evaluate the cost of conducting the
transaction to complete the distribution task.
d) Vertical Integration: Vertical integration is a strategy whereby an organisation owns
or controls its suppliers, distributors or retail locations to control its supply chain &
value system & it benefits companies by allowing them to control process, reduce costs
and improve efficiencies as well as effectiveness. Significant amounts of capital
investment required in this process.
Types of Vertical Integration
i. Backward Integration: Here a company expands backwards on the production path,
meaning a retailer buys the manufacturer of their product.
ii. Forward Integration: Here a company expands by purchasing and controlling the
supply of its products.
e) Resource-Based View: Resources as a key to superior firm performance is considered
in this model. If a resource exhibits VRIO attributes, the resource enables the firm to
 gain a competitive advantage over your competitors which is much more feasible to
exploit external opportunities using existing resources in a new way instead of trying
to acquire new skills & here resources are given the major role in helping companies to
achieve best organizational performance.
f) Judgment Heuristics Approach: Heuristics are basic procedures or mental cycles that
people, creatures, associations and machines use to rapidly frame decisions, decide, and
discover answers for complex issues. This happens when an individual spotlight on the
most applicable parts of an issue or circumstance to plan an answer.
A few heuristics are more relevant and helpful than others relying upon the
circumstance. Heuristic cycles are utilized to discover the appropriate responses and
arrangements that are destined to work or be right. Notwithstanding, heuristics are not
in every case right or the most exact. While they can contrast from answers given by
rationale and likelihood, decisions and choices dependent on a heuristic can be
sufficient to fulfil a need. They are intended to fill in as brisk mental references for
regular encounters and choices. In circumstances of vulnerability, where data is
inadequate, heuristics take into consideration the toning it down would be the best
impact, in which less data prompts more precision.
Q4: Explain Hub-and-Spoke Model and its relevance.
Hub and spoke model can be defined as a type of business model in which the
distribution method depends on a centralised hub. The distribution either originates in
the hub or is sent to the hub which in turn goes to the customers. Things are then sent
to smaller locations owned by the company called spokes for further distribution. The
connections in a Hub & spoke model are arranged like a wheel. Through this model,
the products more efficiently.
The relevance of this model in the industry is quite good. Originating in the transport
industry, it also has quite a significance in other industries too. Through this model,
the products are delivered most cost-effectively and just in time. This makes the
product move out of the distribution centres easily which lessens the travel time. This
model ensures that there is a continuous movement of the loads/products which
reduces costs & enhances productivity.