Author Question: Why does it make sense to sell high-priced and exclusive merchandise such as diamonds, rare Cognac, ... (Read 87 times)

cool · **on:** Jun 29, 2018

Why does it make sense to sell high-priced and exclusive merchandise such as diamonds, rare Cognac, or Waterford Crystal, through warehouse club channels?
a. The warehouse clubs attract thousands of customers each year.
b. Companies can sell last year's style/model easily at the warehouse club.
c. Two-thirds of the shoppers at a warehouse club are business owners, many of whom are successful and affluent.
d. These types of manufacturers are changing their distribution channels to include mass merchandisers, discount stores, and warehouse clubs in order to reach more potential buyers.
e. It makes no sense for these manufacturers to sell products at a warehouse club and diminish the image of their brand or product name.

Question 2

What is the main reason that Mercedes-Benz pursues a different strategy in the U.S. compared to the other markets in which it operates?
a. The U.S. culture appeared to need a non-mandatory adaptation.
b. Mercedes had to fight gray marketing channels.
c. Coordination of research and development proved to be too expensive in the U.S. market.
d. The product-country stereotype worked against Mercedes in the U.S. market.

Gabe · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

C

Answer to Question 2

B
Mercedes had to fight gray marketing channels until it instituted a strategy that made using alternate marketing channels a complicated proposition and took control of distribution under the Mercedes-USA umbrella organization. Thus, gray marketing issues drove the decision to use a different strategy in the U.S. market.