Course MKT – 6333 - Channels and Retailing

Professor Brian Ratchford

Term Fall 2009
Meetings W 7:00 PM -9:45 PM

Professor’s Contact Information

Office Phone 972-883-5975
Other Phone 972-473-9384
Office Location SOM 3.707
Email Address Btr051000@utdallas.edu
Office Hours W 5:00-6:00 and after class or by appointment

General Course Information

Pre-requisites,
Core marketing management (e.g., MKT 6301) and statistics courses, or permission of
Co-requisites, &
instructor
other restrictions
This course will study the design and implementation of channels of distribution, with
particular emphasis on retailing, including electronic retailing. Topics covered will
Course include channel coverage strategies, pricing and promotion in channels, retail services,
Description location decisions, franchising and legal issues in channels. Prerequisites: core
marketing management and statistics courses.

Inform students about important decisions involved in managing channels of

distribution, and provide approaches to making these decisions effectively.
Specifically students should learn the consumer behavior and firm resource
Learning
considerations required for designing an effective distribution channel, understand
Outcomes
retail pricing techniques and other retail decisions, and understand institutional and
legal considerations in designing a channel of distribution.

Text: Anne T. Coughlan, Erin Anderson, Louis W. Stern and Adel I. El-Ansary,
Marketing Channels, Upper Saddle River, NJ: Pearson Education Inc., 2006.
Required Texts
& Materials Packet of Harvard Cases.

Outside readings on the syllabus can be downloaded from the library.

Assignments & Academic Calendar

[Topics, Reading Assignments, Due Dates, Exam Dates]
August 25 Introduction
Text: Ch. 1
September 2 Demand for Channels: Consumer Behavior
Text: Ch. 2

September 9 Supply of Channels

Text: Ch. 3
Reading: Stephen Vargo and Robert Lusch, “Evolving to a New Dominant Logic for
Marketing,”Journal of Marketing, , Vol. 68, No. 1 (Jan. 2004), pp. 1-17.**
.

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September 16 Supply Side Analysis
Text: Ch. 5-6
Case – Arrow Electronics (in case pack)
September 23 Power and Conflict
Text: Ch. 6-7
Reading: Mark Bergen; Shantanu Dutta; Orville C. Walker, Jr.,
“Agency Relationships in Marketing: A Review of the Implications and Applications
of Agency and Related Theories,” Journal of Marketing, Vol. 56, No. 3 (Jul. 1992),
pp. 1-24.*
Case: Cisco Systems (in case pack).
September 30 Strategic Alliances and Vertical Integration
Text: Ch. 8-9
Reading: Aric Rindfleisch and Jan B. Heide, “Transaction Cost Analysis: Past,
Present, and Future Applications,” Journal of Marketing, Vol. 61, No. 4 (Oct., 1997),
pp. 30-54.*
Case: Reynolds Metals Company: Consumer Products Division (in case pack).
October 7 Legal Issues
Text: Ch. 10
Reading: Shantanu Dutta; Jan B. Heide; Mark Bergen, “Vertical Territorial
Restrictions and Public Policy: Theories and Industry Evidence,” Journal of
Marketing, Vol. 63, No. 4. (Oct. 1999), pp. 121-134.*
Case: Peripheral Products Company (in case pack).
October 14 Mid-term Exam
October 21 Retailing: Positioning
Text: Ch. 11.
Case: Neiman Marcus (A) (in case pack).
October 28 Retailing: Location
Web presentation: www.claritas.com/MyBestSegments/Default.jsp – discussion of
Prizm NE. The web site may be reached efficiently by the Google search: claritas –
My Best Segments.
Site Selection Assignment (to be handed out).
November 4 Retailing: Promotions and Sales
Reading: Notes on Promotion – to be handed out
CVS Case Example – Video.
Case: HEB Own Brands (in case pack).
November 11 Retailing: Electronic Commerce
Reading: Florian Zettelmeyer, Fiona Scott Morton and Jorge Silva Risso, “How the
Internet Lowers Prices: Evidence from Matched Survey and Automobile Transaction
Data,” Journal of Marketing Research, Vol. 43 (May 2006), 168-181.**
Case: Autobytel.com (in case pack).
November 18 Franchising
Text: Ch. 13
Reading: Paul H. Rubin, “The Theory of the Firm and the Structure of the Franchise
Contract,” Journal of Law and Economics, Vol. 21, No. 1. (Apr. 1978), pp. 223-233.*
Case – Pizza Hut (in case pack).
November 25 Review and Discussion of Projects
December 2 Presentations of Student Projects
Finals week Final Exam
* Article may be downloaded from JSTOR accessible through McDermott Library web site.
** Article may be downloaded by accessing journal at McDermott Library web site.

2
Course Policies
Groups of 3-4 students will be formed in the first class. Each group will prepare
approximately two cases for class presentation, and complete a term project. The
project will involve a channel audit for a company of the group’s choice; more details
Grading (credit) on the project are provided below. Students will also be required to complete one
Criteria individual-level assignment; the assignment is explained below. There will be a mid-
term exam and a final exam. Grades will be based on: group projects (about 30%),
mid-term exam (about 20%), final exam (about 20%), group presentations of cases
(about 20%), class presentation and individual projects (about 10%).
Make-up Exams None
Extra Credit None
Late Work Handled on ad hoc basis – I do not want to give incompletes.
Special
To be explained
Assignments
Class Attendance Mandatory
Classroom
Students are expected to be prepared and to participate.
Citizenship
Field Trip
N/A
Policies

The University of Texas System and The University of Texas at Dallas have rules and
regulations for the orderly and efficient conduct of their business. It is the
responsibility of each student and each student organization to be knowledgeable
about the rules and regulations which govern student conduct and activities. General
information on student conduct and discipline is contained in the UTD publication, A
to Z Guide, which is provided to all registered students each academic year.

The University of Texas at Dallas administers student discipline within the procedures
of recognized and established due process. Procedures are defined and described in
the Rules and Regulations, Board of Regents, The University of Texas System, Part 1,
Student Conduct
Chapter VI, Section 3, and in Title V, Rules on Student Services and Activities of the
and Discipline
university’s Handbook of Operating Procedures. Copies of these rules and
regulations are available to students in the Office of the Dean of Students, where staff
members are available to assist students in interpreting the rules and regulations (SU
1.602, 972/883-6391).

A student at the university neither loses the rights nor escapes the responsibilities of
citizenship. He or she is expected to obey federal, state, and local laws as well as the
Regents’ Rules, university regulations, and administrative rules. Students are subject
to discipline for violating the standards of conduct whether such conduct takes place
on or off campus, or whether civil or criminal penalties are also imposed for such
conduct.

The faculty expects from its students a high level of responsibility and academic
honesty. Because the value of an academic degree depends upon the absolute integrity
of the work done by the student for that degree, it is imperative that a student
demonstrate a high standard of individual honor in his or her scholastic work.
Academic
Scholastic dishonesty includes, but is not limited to, statements, acts or omissions
Integrity
related to applications for enrollment or the award of a degree, and/or the submission
as one’s own work or material that is not one’s own. As a general rule, scholastic
dishonesty involves one of the following acts: cheating, plagiarism, collusion and/or
falsifying academic records. Students suspected of academic dishonesty are subject to
disciplinary proceedings.

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 Plagiarism, especially from the web, from portions of papers for other classes, and
from any other source is unacceptable and will be dealt with under the university’s
policy on plagiarism (see general catalog for details). This course will use the
resources of turnitin.com, which searches the web for possible plagiarism and is over
90% effective.

The University of Texas at Dallas recognizes the value and efficiency of

communication between faculty/staff and students through electronic mail. At the
same time, email raises some issues concerning security and the identity of each
individual in an email exchange. The university encourages all official student email
correspondence be sent only to a student’s U.T. Dallas email address and that faculty
Email Use and staff consider email from students official only if it originates from a UTD
student account. This allows the university to maintain a high degree of confidence in
the identity of all individual corresponding and the security of the transmitted
information. UTD furnishes each student with a free email account that is to be used
in all communication with university personnel. The Department of Information
Resources at U.T. Dallas provides a method for students to have their U.T. Dallas
mail forwarded to other accounts.

The administration of this institution has set deadlines for withdrawal of any college-
level courses. These dates and times are published in that semester's course catalog.
Withdrawal from Administration procedures must be followed. It is the student's responsibility to
Class handle withdrawal requirements from any class. In other words, I cannot drop or
withdraw any student. You must do the proper paperwork to ensure that you will not
receive a final grade of "F" in a course if you choose not to attend the class once you
are enrolled.

Procedures for student grievances are found in Title V, Rules on Student Services and
Activities, of the university’s Handbook of Operating Procedures.

In attempting to resolve any student grievance regarding grades, evaluations, or other

fulfillments of academic responsibility, it is the obligation of the student first to make
a serious effort to resolve the matter with the instructor, supervisor, administrator, or
committee with whom the grievance originates (hereafter called “the respondent”).
Individual faculty members retain primary responsibility for assigning grades and
Student evaluations. If the matter cannot be resolved at that level, the grievance must be
Grievance submitted in writing to the respondent with a copy of the respondent’s School Dean.
Procedures If the matter is not resolved by the written response provided by the respondent, the
student may submit a written appeal to the School Dean. If the grievance is not
resolved by the School Dean’s decision, the student may make a written appeal to the
Dean of Graduate or Undergraduate Education, and the deal will appoint and convene
an Academic Appeals Panel. The decision of the Academic Appeals Panel is final.
The results of the academic appeals process will be distributed to all involved parties.

Copies of these rules and regulations are available to students in the Office of the
Dean of Students, where staff members are available to assist students in interpreting
the rules and regulations.

As per university policy, incomplete grades will be granted only for work
unavoidably missed at the semester’s end and only if 70% of the course work has
Incomplete
been completed. An incomplete grade must be resolved within eight (8) weeks from
Grades
the first day of the subsequent long semester. If the required work to complete the
course and to remove the incomplete grade is not submitted by the specified deadline,
the incomplete grade is changed automatically to a grade of F.

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 The goal of Disability Services is to provide students with disabilities educational
opportunities equal to those of their non-disabled peers. Disability Services is located
in room 1.610 in the Student Union. Office hours are Monday and Thursday, 8:30
a.m. to 6:30 p.m.; Tuesday and Wednesday, 8:30 a.m. to 7:30 p.m.; and Friday, 8:30
a.m. to 5:30 p.m.

The contact information for the Office of Disability Services is:

The University of Texas at Dallas, SU 22
PO Box 830688
Richardson, Texas 75083-0688
(972) 883-2098 (voice or TTY)

Disability Essentially, the law requires that colleges and universities make those reasonable
Services adjustments necessary to eliminate discrimination on the basis of disability. For
example, it may be necessary to remove classroom prohibitions against tape recorders
or animals (in the case of dog guides) for students who are blind. Occasionally an
assignment requirement may be substituted (for example, a research paper versus an
oral presentation for a student who is hearing impaired). Classes enrolled students
with mobility impairments may have to be rescheduled in accessible facilities. The
college or university may need to provide special services such as registration, note-
taking, or mobility assistance.

It is the student’s responsibility to notify his or her professors of the need for such an
accommodation. Disability Services provides students with letters to present to
faculty members to verify that the student has a disability and needs accommodations.
Individuals requiring special accommodation should contact the professor after class
or during office hours.

The University of Texas at Dallas will excuse a student from class or other required
activities for the travel to and observance of a religious holy day for a religion whose
places of worship are exempt from property tax under Section 11.20, Tax Code,
Texas Code Annotated.

The student is encouraged to notify the instructor or activity sponsor as soon as

possible regarding the absence, preferably in advance of the assignment. The student,
so excused, will be allowed to take the exam or complete the assignment within a
reasonable time after the absence: a period equal to the length of the absence, up to a
Religious Holy maximum of one week. A student who notifies the instructor and completes any
Days missed exam or assignment may not be penalized for the absence. A student who fails
to complete the exam or assignment within the prescribed period may receive a
failing grade for that exam or assignment.

If a student or an instructor disagrees about the nature of the absence [i.e., for the
purpose of observing a religious holy day] or if there is similar disagreement about
whether the student has been given a reasonable time to complete any missed
assignments or examinations, either the student or the instructor may request a ruling
from the chief executive officer of the institution, or his or her designee. The chief
executive officer or designee must take into account the legislative intent of TEC
51.911(b), and the student and instructor will abide by the decision of the chief
executive officer or designee.

These descriptions and timelines are subject to change at the discretion of the Professor.

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 Case Analyses
Groups will each be assigned to provide a class presentation of approximately two cases.
These should be power-point presentations that are supplied before class so they can be
loaded onto my computer that I will bring to class in a timely manner. I will print out and
grade these presentations as well as performance in class discussions. Presentations
should roughly follow the format set out in the “Notes on the Analysis of Cases” listed
below. Briefly this format is: problem statement, discussion of alternatives, critical
issues, conclusions. The presentations should be scheduled for about 30 minutes, and
should facilitate a more general discussion after the presentation. Students not assigned to
present a case are expected to be prepared to discuss it, and are encouraged to express
their views. They will be graded on their participation. The Notes on the Analysis of
Cases” provide guidance on how to participate effectively. To help in approaching the
cases, a list of questions that are posed in each of the assigned cases is presented below.
These lists are meant to provide guidance in solving the case, and the presentation need
not follow the list of questions exactly. However the questions should be addressed in
some way in preparing the solution to the case.
Questions to Accompany Cases – Meant to provide guidance in solving the case
1. How do the Arrow/Schweber (Arrow) salespeople build their relationship
with their customers? Specifically how do they leverage Arrow’s product
line B&S versus VA products to add value to their customers?
2. What is Arrow’s business model? What value does it add for suppliers?
Arrow
3. How does Express affect Arrow’s business model and its selling effort?
Electronics
4. What is your action plan? Should Arrow accept or reject the Express
proposal?
5. What is the impact of the Internet on the Arrow salesperson?
6. Do you think the Internet is a friend or foe to Arrow?
1. How have Cisco’s channels evolved in the last 10-15 years? Why have they
evolved that way? What does the future look like?
2. What grade would you give Cisco for managing the evolution? Good or
bad? Why?
Cisco Systems 3. Against the background of your answer to questions 1 and 2, how should
Cisco distribute VoIP products? Through voice VARs? Data VARs? Both?
4. What are your reactions to the “Pyramid” model advanced in Figure C of the
case? What is the core concept of the model? Is there an alternative
evolutionary model that Cisco should adopt?
1. Compare and contrast MDF with off-invoice deals. How are the objectives
of the two different?
2. Does MDF offer a more effective trade promotion alternative to off-invoice?
Reynolds Metals Why or why not?
Company 3. If Reynolds were to fully implement MDF, how should Rosser go about
obtaining retailer support? Is retailer support even necessary?
4. How should Rosser manage the transition of trade deal responsibility from
the marketing department to the sales department?
1. What is the problem in this case? Whose problem is it?
2. What are the important characteristics of the disk-drive industry that affect
the gray market situation? How would you characterize PPCo’s strategy
Peripheral within the industry?
Products 3. What is your evaluation of the alternatives being considered for dealing with
the gray market?
4. What should Ousley do? How should any proposed changes in pricing,
distribution or sales-management practices be implemented?

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 1. What is the Neiman Marcus Difference?
2. Are the Galleries of Neiman Marcus a good idea for Neiman Marcus?
3. What other growth alternatives does Neiman Marcus have?
Neiman Marcus
4. What location should Neiman Marcus consider for the Galleries or for any
other concept?

1. What is your recommendation on Glacia?

2. How should Own Brands respond to competitive price promotions? When
should they follow? What about national promotions?
HEB Own 3. What is the role of H-E-B and Hill Country Fare as own brand labels? How
Brands should they be positioned with respect to other brands in the category?
4. What is the role of Own Brands in H-E-B’s overall corporate strategy?
Should it be scaled up? Or dialed down? If so, in what products or in what
product categories?
1. What is Autobytel’s value proposition for consumers? For dealers? Are there
any downsides to the Autobytel model from the consumer perspective?
From the dealer perspective?
2. What course of action should Autobytel take to accelerate revenue growth?
Autobytel.com
3. How should Autobytel differentiate itself from competition?
4. Come up with a new positioning for Autobytel. What kind of marketing mix
should accompany the new positioning statement? How enduring is this new
positioning?
1. Should Pizza Hut enter the home delivery market?
2. Why would a consumer choose home delivery, eat-in or carryout?
3. Is competition from Domino a threat?
Pizza Hut
4. Would entry into home delivery cannibalize Pizza Hut’s other business?
5. Who knows more about the market, Pizza Hut or its franchisees?
6. What should Pizza Hut do at the upcoming winter meeting?

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 NOTES ON THE ANALYSIS OF MARKETING CASES*
(Plus ten secret tips on class presentation at the end)
INTRODUCTION

The purpose of these notes is to provide the student with a framework for the analysis of a
marketing case. All too often students perceive the purpose of case analysis to be only the
provision of an answer without specific rationale or support. While having a complete answer is
important, in case analysis we are more interested in how clearly and effectively the student argues
his or her point of view. What is required is two-fold. Set forth options and show, through
deductions from case facts, the direction that should be taken. The presentation of a detailed
answer without supporting rationale demonstrates weak case development regardless of the
possible correctness of the answer.
The analytical framework set forth provides a blueprint to be applied to the analysis of a case and
a means for testing whether logic is consistent and complete. By use of this framework, students
may gain more confidence in their analyses and recommendations.
THE FRAMEWORK

The framework is composed of four major components: a statement of the problem faced by the
company, a description of the best alternatives available to solve this problem, the identification
(and discussion) of the critical issues bearing upon the choice of alternative, and a conclusion that
selects the best alternative.
The Problem Statement

The problem may be regarded as a barrier facing an organization, which blocks, or threatens to
block, the achievement of important goals. The key words here are goals and barrier. "Goals"
refers to a set of objectives (perhaps only implicitly present in the case) that the management
wishes to accomplish. Objectives may include market share, consumer attitude shifts, extension
of distribution channel position, sales growth, image, or product position. The barrier refers to
conditions that threaten or hinder management from achieving these objectives.
The problem definition sets guidelines for the case analysis. Data that do not contribute to the
solution of the identified problem become irrelevant. Alternatives that do not address the
problem, issues that are unnecessary for the argument, and conclusions that stray from an
appropriate solution cause the analysis to fail its purpose.
An example of a case regarding men's toiletries follows:
The company has enjoyed a substantial growth in men's toiletry sales over the
last fifteen years (in a market that has grown six-fold over this period). Sales for
the last year have just kept pace with inflation and for the current year have been
flat--indicating a fall in real sales adjusted for inflation. The company would
like to develop a marketing strategy that would restore sales growth and fend off
major challenge from Shulton's Blue Stratos product introduction. If left
unchecked, the company's stagnant sales threaten to weaken their market
position and lead to erosion of their substantial distribution channel penetration.
In this statement, the student indicates that the company's sales growth in men's toiletries was
being threatened by competitor product introductions. This is quite adequate. If the student had
defined the problem to the introduction of a new product or to maximize profits, such statements
shed little insight into the difficulties being faced.
If several distinct problems are identified, the student should focus (especially in written work)
upon the most important where data are sufficient data to permit analysis. Alternatively, the
student may look for some means to synthesize many of the problems into one, large gestalt.
When one raises several problems, the task of analysis often becomes too complex. Problems that

8
call for critical facts and considerations not available in the case should be avoided and attention
given to those that can be resolved with the information and deductions in the case.
The Best Alternatives List

Alternatives comprise a set of strategies that offer competing approaches to resolve the
organization's problem. Competing approaches means that each of the strategies selected by the
student for consideration reflects a significantly different means of problem attack. In responding
to a competitor's incursion into the company's market, one might offer several pricing alternatives
that differ only marginally in the price level chosen. A better response would include options that
differ more broadly, such as a lower price, a new product introduction, and strengthening
distributor motivation. If alternatives are available that differ in major strategic dimensions, the
resulting discussion is often more fruitful.
An alternative should include the following elements:
1) Strategic goals and aims, e.g., to motivate dealers to display product
2) Methodologies to be applied, e.g., provide special monetary incentives for
those who reach targeted sales goals
3) Resources required, e.g., $5,000,000 per year.

For any alternative to be adequately evaluated, it must show what effects are expected and how
various elements of the marketing mix are employed. In most instances, this requires that market
targets be specified and use of marketing mix components be made explicit. Enough information
must be provided to indicate that the student has thought through all aspects of each alternative
and how each might resolve the company's problem.
Strategies may usefully be given titles to provide a quick orientation or gestalt to the character of
an alternative. These could characterize the alternative as a frontal attack to grab market share,
retrenchment, or repositioning.
In selecting alternatives, students should never use more than four for analysis and two or three is
preferable. It is impossible to treat numerous alternatives properly and one task of class
discussion is winnow out the lesser options.
An alternative for the toiletry's company case reads as follows:
TAKE THE HIGH ROAD

The company's goal [under this alternative] would be to introduce their new
Cambridge brand at the high end of the "medium priced" range with a target of 3
million dollars in sales in 1981.
The company would have to apply [substantial resources to this new product
introduction] about 1 million dollars in advertising and an additional $350,000
in other promotional costs. The new product would be positioned at the $10
price, [putting it at the highest extreme of the "medium price" market segment]
and would be distributed through the company's existing retail channels--
primarily drugstores and general/mass merchandise chains. The product would
be targeted at the 19-34 year old age group and would be primarily positioned
for purchase by females as gifts for males. Advertising and packaging would be
designed to differentiate the product from the mainline English Leather brand
and the associated fragrances in the existing line.
This alternative contains a good description of a marketing strategy appropriate for a "high price
line" product distinct from the company's existing products. Putting the market segment objective
at the start and eliminating unnecessary words as indicated by the brackets could have improved
the statement.

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 Since the purpose of case analysis is to develop decision-making skills, it is seldom productive for
the student to recommend an alternative calling for more research. Such a choice is characteristic
of one yet to come to grips with the case. If a student believes more research is the correct
approach, then he or she should specify the data to be acquired, the time, cost and method of
acquisition, and why the information is critical. In other words, the resource and strategic
implications of a more-research option must be treated like any other alternative.
Critical Issues

This section evaluates the causal forces affecting alternative success. Critical issues are a series of
questions, each of which illuminates a crucial factor for analysis. The analysis of each issue
provides the insight for understanding the issue's impact upon the company's situation.

Examples of key issues follow:

1. What elements of buyer satisfaction have been the least well resolved by
current distribution channels?
2. To what extent can advertising affect the purchasing behavior of buyers for
this product? Will resellers provide this advertising?
3. What action might competitors take to the introduction of a new, lower
priced channel?
4. How capable and motivated are the resellers in selling the new product?
Note that issues are all framed as questions. This forces an analytic mode. If one were simply to
identify consumer behavior as an issue, no insight is being signaled as to the key dimensions of
user response. Perceptive questions can often reveal much about the sharpness of the analyst's
arguments and focus the response. More fundamentally, the answer to an issue question must
provide help to the student in establishing the proposed solution. If not, then the issue is either
inappropriate or the answer requires reworking.
In some instances, data on key aspects may be absent. The student may deal with this in a number
of ways. Where the missing information lies with consumer behavior, generalizations derived
from behavioral or economic theory may be applied as a guide. Often bits and pieces of the case
can be sewn together with such logic to develop an insightful response.
Alternatively, the student may set forth different possible states of nature. Probabilities of
occurrence could be subjectively estimated and decision theory employed to evaluate
consequences for each alternative. The estimates may be wrong, but the student has tried to come
to grips with the problem. Problems seldom have all the data one would like in the real world as
well.
An example of an issue statement and analysis in the toiletry case is:
Would dealers be receptive to an extension of the product line?

The company has already encountered difficulty in gaining shelf space for its
Racquet Club brand. Since retailers were not willing to provide additional shelf
space for that product, sales came at the expense of other items in the line.
However, the Racquet Club introduction involved an extension of the company's
already broad line of identically packaged English Leather fragrances. The
Cambridge brand would be a new product altogether, yielding substantially
more profit at the 40% margin. By offering aggressive trade promotions (which
the company appears to be very good at) the company could actually increase
their shelf space by pursuing the "High Road" strategy (and bringing out the
Cambridge brand). The "Circle the Wagons" alternative would also look
promising from this aspect, as the retailer would be pleased to see the company
remove their slower-selling brands and concentrate on English Leather (which
offers more profit anyway).

10
This analyst responds well here to the issue question. Retailer interests are discussed from their
point of view. Different market segment and price point potentials, however, could have been
effectively raised in the response.
Contrast the above issue with the following:
The fourth issue that the company faces is whether food stores are an
appropriate place for the distribution of any of their products. Would consumers
perceive this as a depreciation of the value of their entire line? Would the
additional trade deals and promotional expenditures required by food stores
severely limit or completely eliminate the profitability of this option? How
much interest will food stores have in promoting the company's products once
they have them on their shelves?
Here the student raises a good question in the second sentence (which causes the first sentence to
be redundant). Unfortunately, the student did not assemble any case facts to answer the question.
Instead, new questions are raised and the contribution is limited.
The Conclusion

The conclusion integrates the answers to the issues, building upon each to show how one
alternative is superior to the others. This may be done through a series of deductions moving from
one issue to another. Alternatively, where financial data are available, pro-forma profit and loss
statements should be constructed for each alternative. Here one must insure issue responses have
developed sufficient information to support pro-forma results.
Both of these approaches force the analyst to consider the contribution of each issue to the choice
of an alternative. This avoids the situation where choice is made without supporting
rationale. It also helps identify issues that can be weeded out and where others may be missing.
To exemplify the importance of this, please read the following case conclusion:
Alternative A, the "Go for Broke" strategy, offers the best opportunity for the
company to expand market share and revenues in the long-pull.
Selling English Leather in food stores will exploit the product's relatively low
price, encourage routine purchase, and capture shelf space in what promises to
be a high velocity marketing channel.
Dropping the least competitive brands from the line will save production costs
and allow the Cambridge brand to gain access to retailer shelf space.
Introducing the Cambridge line will allow the company to expand into the
higher-priced segment of the men's fragrance market. By having a product in
this segment, the company will be able to capitalize on both the expensive gift
givers with Cambridge and the more price sensitive purchaser with English
Leather.
A good conclusion reviews each of the alternatives presented, weighs each against the others, and
identifies the key reasons for preference. A form of decision analysis is a useful means for
checking upon the logic. Consider the following table with five issues rated on basis of one to ten,
with ten the best, as to how they affect the prospects of the three alternatives.
This table shows Alternative High Road to be the best, although Circle is close. This table forces
the case analyst to determine that all issues are germane to the solution and the preferred
alternative is consistent with all issue argument. Here, each issue is assigned importance in
making the selection. Issue weights may be assigned if appropriate.

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 Alternatives Issue #1 Issue #1 Issue #1 Issue #1 Issue #1 Issue Total

Go for 5 3 1 2 4 15
Broke

High Road 8 9 5 0 3 25

Circle the 2 5 3 5 7 22
Wagons

Such a table is useful in alternative development and serves as a key test of logic.
TEN SECRETS FOR SUCCEEDING IN CLASS DISCUSSION

1. At the start of class, the first few speakers earn high recognition if they present a brief, but complete
analysis of the entire case.
2. Identifying end-user needs (and frequently those of the intermediaries) with respect to channel services
is invaluable as a means for arguing issues in channel design.
3. Discussion of the forces that motivate the various players in the channel similarly provides useful
insight.
4. When presenting an alternative, provide enough detail to show that you have thoroughly thought
through its viability. Shooting from the “hip” is obvious to all and detracts rather than adds to your
ideas.
5. Do not propose alternatives for which there are little data available in the case. This typically leads to
wild guessing.
6. Where data are missing, use deductive thinking with respect to the needs of the end-user or reasons for
channel member behaviors.
7. Numerical analysis as a means to buttress your arguments invariably impresses. Case numerical data
are typically (though sometimes they may be a red-herring) made available for this purpose.
8. All class contributions are valuable if they help us see a new facet of the case or correct
misinformation already provided. The more ideas on the table, the better off we are.
9. If not prepared to discuss the case, let the instructor know so that you are not unnecessarily
embarrassed if called upon.
10. If a student recommends further research as the appropriate means for resolving a case, the reasons
why the available data are insufficient must be set forth. Otherwise, this often appears as a convenient
excuse for the absence of adequate analysis.

* Obtained from Louis P. Bucklin, Professor Emeritus, University of California,

Berkeley.

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 Group Projects

Groups are to perform a channel audit of a firm of your choice. This could be any type of
company: manufacturing, services, retailing, etc. It might be most interesting if this is a
company one of the group members works for (if necessary appropriate non-disclosure
agreements can be implemented). It could also be a new business that someone is trying
to develop. The basic objective is to evaluate existing channels of distribution for the
chosen company for the purpose of uncovering current or potential problem areas, and of
making recommendations to solve these problems. Questions to be addressed will vary
somewhat with the type of firm, but should include the following:

1. What are the main current and potential end-user customer groups and what
channel services do they require. Are there segments that require different
services? What is their relative size? How much are the segments willing to pay?
Relevant services are convenience of location (including the Internet), product
assortment, sales assistance, advertising or other information, credit,
delivery/waiting time, customer service, and possibly others that you identify.
2. What are the channels that best meet the needs of these customer groups? For
retail or service businesses (doctors, insurance agents) these would involve
location (including Internet) and other services that are to be provided to
customers by the business itself. For manufacturers or other upstream businesses
these would involve finding appropriate retail channels.
3. For the latter, another relevant question is what are the main current and potential
channels that sell to end-user customers, and what channel services do they
require? Relevant services are delivery time and availability, sales assistance,
credit, assistance at selling products to customers, and possibly others that you
identify.
4. How well does your chosen firm perform at matching the needs of its customer
groups? Should some groups be concentrated on? Should some be ignored?
5. Should your chosen firm integrate forward into wholesaling or retailing, or into
having its own sales force? Or if it is a retailing or service firm should it integrate
backward into wholesaling or manufacturing? Or is it better if the firm is
decentralized? Should the firm become more integrated or decentralized?
6. Based on your analysis of the above, what appear to be the major problems faced
by the firm in distributing its products/services to consumers?
7. Develop a plan to solve these problems. Support your recommendations.

Your actual analysis might deviate from the above as the circumstances of your chosen
company dictate. But it should include a thorough analysis of end users and how their
needs are best met. A timeline for the project is as follows:
• September 16 – Identity of company to be studied.
• October 21, 28 – Ten minute informal progress report on project: nothing written
required.
• December 2 – Final presentation – length will depend on number of projects.
Should use Power-point.
• December 2 – Hand in final report – somewhere around 25 pages double spaced.

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 Individual projects

Students may either complete the site location project that will handed out or participate
in one class presentation of a reading, or in the presentation of the Claritas web site.

Two students may be assigned to each reading. One will present a summary of the article
lasting about 10-15 minutes, the other will present a discussion of the article lasting about
10-15 minutes. The summary should outline the main points in the article. The discussion
should outline any areas of disagreement, and present actual examples relating to the
article.

The Claritas web site discussion should emphasize site location services and the Prizm
NE geo-demographic profile of each ZIP in the U.S.

I will assign students to these presentations at the beginning of the second class.

The site location project will involve analyzing the feasibility of a proposed location for a
retail outlet. Regression analysis using EXCEL will likely be involved. The project will
be handed out as soon as I can put it together.

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