M-CHANNELS TEXT DISCUSSION QUESTIONS FOR CHAPTERS 1 & 2

CHAPTER 1
1. The marketing channel for Mary Kay Cosmetics is called a direct selling channel. The company
uses a sales force of over 1,000,000 Independent Beauty Consultants around the world. These
consultant are not employees of Mary Kay Corporation; the buy cosmetics form the company at a
wholesale price and sell to end-users at a retail price. They maintain personal relationships with their
end-user consumers and deliver products to them after it is ordered; it is high-service purchasing
relationship form the consumer’s point of view. Consultants thus act as both distributors and retailers.

1.a. To what extent does as Independent Beauty Consultant participate in the eight universal
marketing flows?
1.b. How might have these flows be shifted, either among the members now in the channel or to
different agencies or institutions not presently included? What do you think would be the
implications of such shifts? (think about how cosmetics are sold through department stores or
though drugstore chains).
1.c. Within each of these distribution systems, specify the consumer’s role from a flow-absorption
perspective. Contrast this with the consumer’s role when buying cosmetics from a department
store or a drugstore chain.

2. Should advertising agencies and financial institutions be considered channel members? Why?
Why not? Is it more useful form a managerial perspective to think of consumers as members of the
channel or as end-users consuming the services of the channel?

3. Why is it that “small, medium, and large” is not a strong a segmentation scheme for service
outputs as it might be fore product attributes? Use a business-to-business product to market in your
answer; for example, steel, semiconductors, fax machines sold to sheet metal fabrication, computer
companies, or insurance agencies.

4. Explain how the shopping characteristics for the following consumer and industrial goods affect
the channels for them:
CONSUMER GOODS INDUSTRIAL GOODS

Bread Computer printer ink cartridges

Breakfast cereal Uranium (for nuclear power plants)

Women’s hats Cement

Refrigerators Data-processing equipment

5. Describe how the necessary channel flow performance differs when selling and services an
ultrasound machine (a piece of medical equipment) when targeting two different segments of buyers:
(a) a hospital emergency room and (b) an academic medical researcher on a tight government-funded
budget using the machine for laboratory research.

6. Should a channel manager always seek to target the maximum possible number of segments to
sell to? Why or why not?

7. The service on high-end automobiles is of very good quality; timely and done by polite and
competent professional at service facilities that give the auto owner access to many amenities (free
refreshments, free loaner cars, etc.). In what sense can there be a demand-side gap in this service
channel?

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8. Explain how not keeping up with advances in distribution channel technology (e.g. information
technology advances, warehouse management techniques, database management tools, etc.) can
cause an otherwise well-working channel to develop a supplier gap.

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M-CHANNELS TEXT DISCUSSION QUESTIONS FOR CHAPTERS 1 & 2

CHAPTER 2
1. For each of the three scenarios below, categories the demand for bulk-breaking, spatial
convenience, waiting/delivery time, and assortment/variety as high, medium, or low. In each
case, explain your answers

a. A women in an emerging market country of Southeast Asia wishes to buy some

cosmetics for herself. She has never done so before and is not entirely sure of the
occasions on which she will wear the cosmetics. She does not live near a big city. She is
too poor to own a car but ha a bit of extra money for a small luxury

b. A manufacture uses a particle industrial chemical in one of its large-scale production

processes and needs to buy more of this chemical. The rest of the raw materials for its
plant operations are delivered in just-in-time fashion.

c. Before you visit certain parts of the world, you are required to get a yellow fever vaccine.
Many travelers let this slip until the last minute, forgetting that it is advisable (or avoiding
an unpleasant shot as long as possible). But they definitely realize they need the shot,
and they do not want to have to cancel the trip at the last minute because they did not get
it. The often find themselves making a long trip to a regional medical center because
they did to plan ahead.

2. For the three scenarios in Question 1, describe a marketing channel that would meet
the target end-user’s demand for service outputs.

3. Describe three different buying situation with which you are familiar and the SODs of the
buyers in each one. Do you think the SODs begin supplied are close to those being
demanded? Why or why not?

4. Give an example of a service output demand that goes beyond the standard ones of the
bulk-breaking, spatial convenience, waiting/delivery time, assortment/variety, customer
service, and information provision.

5. Give an example of market segmentation that is appropriate for the purpose of product
design but inappropriate for the purpose of marketing channel design. Conversely, give an
example where the product-design segmentation is also useful of marketing channel design
purposes. Explain your answers.