Author Question: Net profit margin is calculated by dividing the retailer's net profits by markup in dollars. ... (Read 58 times)

Chloeellawright · **on:** Jun 29, 2018

Net profit margin is calculated by dividing the retailer's net profits by markup in dollars.

Indicate whether the statement is true or false

Question 2

Explain how channel length and channel width can be strategically used by a retailer to position its offering in the marketplace.

EAN94 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

F

Answer to Question 2

Supply-Chain Length: Retailers do not always have a lot of control over their channel length and must learn to operate as efficiently as possible within an inefficient channel. The desired length is determined by many customer-based factors such as the size of the customer base, geographical dispersion, behavior patterns like purchase frequency and average purchase size, and the particular needs of customers. In many cases, indirect channels are actually cheaper in terms of total costs involved. The retailer could thus position itself as an economy store exploiting the cost advantage in an indirect channel.

Supply-Chain Width: Intensive distribution means that all possible retailers are used to reach the target market. Although there are many exceptions, as a rule, intensive distribution is associated with the distribution of convenience goods. Selective distribution means that a smaller number of retailers are used. Selective distribution is associated with shopping goods. Exclusive distribution means only one retailer is used in the trading area. Exclusive distribution is identified with specialty goods.