Past Year Paper 2007 MKT541

a) Distribution channel management for new products requires manufacturers to get the
active involvement of channel members in order to ensure product acceptance.
Describe five (5) possible ways manufacturers can increase new product acceptance
amongst channel members.
(15 marks)

b) Trading up and trading down are two examples of strategic product management in
distribution channels management. Explain trading up and trading down methods
and describe the risks involved in both these methods.
(10 marks)

a) Using relevant examples, explain the six (6) components of logistics.
(15 marks)

b) "The efficiency of materials handling has improved through the use of cross docking".
(10 marks)

a) In designing a distribution channel, under what situation would you recommend that a
firm consider a short channel?
(10 marks)

b) Contrast the characteristics of the following distribution intensity:
i) exclusive
ii) intensive
iii) selective
(15 marks)

"With the explosion of Information Technology (IT) and e-commerce, disintermediation was
predicted in the beginning of the new millennium. Yet, what had actually happened was the
emergence of re-intermediation." Discuss.
(25 marks)

QUESTION 5a) Channel pricing is affected by gray markets and free riders. Using relevant examples,
explain clearly gray markets and free riders.
(10 marks)

b) It is common for manufacturers to consider relevant factors when determining
channel pricing. Explain five (5) guidelines for developing effective channel pricing.
(15 marks)

Agra Rice Sdn. Bhd. is a licensed distributor of rice in Malaysia. The company owns a
warehouse capable of processing an estimated 3,000 to 4,000 metric tons of rice at any one
time and it has the capacity to package 104 metric tons of rice per day. The company
imports and repackages the rice under different brand names according to their grade, and
at present, there are fifteen different brands of rice that the company distributes. The
company is now planning to introduce a new type of rice called Peony Herbal Rice. Unlike
the other types of rice, Peony Herbal Rice is a premium brand with special characteristics. It
is organically grown and is high in calcium and protein and it is said to be good for those with
diabetes or high blood pressure. Thus, it is targeted to a niche market consisting of those
practicing healthy lifestyles and those who are looking for healthy food products. The
company is considering whether to use its present distribution channel which consists of
wholesalers and retailers or develop a new distribution channel for this premium product.
Advise Agra Rice Sdn. Bhd. on the most appropriate channel structure for distributing Peony
Herbal Rice.
(25 marks)

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