Unit 4: Distribution and Promotion

Answer: C — C is correct because expanding its online presence through social media and online marketplaces like Amazon would allow the company to reach a wider audience and increase its market share. This channel is particularly effective for athletic wear, as many consumers shop online for apparel. A is incorrect because adding more local retail stores in the same area may not significantly increase the company's market share, as it may be targeting the same customer base. B is incorrect because partnering with a few large wholesalers may not be the most effective way to increase the company's online presence. D is incorrect because focusing solely on in-store promotions at its existing retail partners may not be enough to achieve the company's goal of increasing its market share and reaching more customers.

Answer: D — Option D is correct because partnering with an online retailer like REI would allow the company to reach a wider audience of urban dwellers who may not have access to outdoor gear stores. Online retailers can provide a broader reach and convenience for customers. Option A is incorrect because while direct sales can be effective, it may not provide the same level of exposure as partnering with an established online retailer. Option B is incorrect because partnering with a wholesaler to supply small, independent stores may not be the most effective way to reach urban dwellers. Option C is incorrect because selling products through a catalog may not be as effective in reaching urban dwellers as online channels.

Answer: A — The correct answer is A) intermediary because the retail store is acting as a middleman between the manufacturer (the company that produces athletic wear) and the consumer. It is helping to facilitate the sale of the product by providing a location where consumers can purchase the product. The other options are incorrect because the retail store is not the manufacturer (B), it is not a competitor (C) in this context, and it is not a supplier (D) of the raw materials used to make the athletic wear.

Answer: A — Option A is correct because it addresses the core issue through strategic differentiation rather than capitulation or abandonment. Channel conflict in dual distribution systems is best resolved by creating distinct value propositions for each channel—exclusive or newer products for e-commerce, premium services and curated selections for department stores, and tiered pricing that doesn't directly undercut retail partners. Cooperative advertising allowances are a legitimate tool that compensates retailers while the manufacturer maintains market presence. This preserves the 35% of customers who prefer retail while capturing the 40% who shop online, totaling 75% market coverage. Option B is incorrect because capitulating entirely to retailer demands would abandon a significant growth opportunity (40% of the target market) and create a precedent where channel partners can dictate business strategy. It also ignores the company's own margin and growth potential through e-commerce. This reactive approach weakens negotiating power. Option C is incorrect because it ignores the legitimate value of the 35% of consumers who prefer department store shopping and the brand-building benefits of premium retail placement. The complete abandonment of a channel representing one-third of the addressable market is strategically shortsighted, and losing department store distribution could damage the brand's prestige positioning. This is a false choice that ignores integrated channel strategy. Option D is incorrect because it perpetuates the very conflict causing the problem. Increasing spend equally in both channels while maintaining the same pricing structure won't resolve partner grievances and may actually accelerate channel conflict by appearing dismissive of retailer concerns. This non-solution approach demonstrates poor conflict management.

Answer: A — Option A is correct because a multi-channel distribution strategy allows the company to reach a wider audience by being present in multiple sales channels. This increases the company's visibility and makes its products more accessible to a larger number of customers. Option B is incorrect because while online sales can be effective, they may not reach customers who prefer to shop in-person. Option C is incorrect because partnering with a single large retailer may limit the company's reach and make its products less accessible to customers who do not shop at that retailer. Option D is incorrect because selling products directly to consumers through independent sales representatives can be costly and may not be as effective as using established retail channels.