Uncordinated pricing and selling effort
A manufacturer sells a large quantity to a distributor, but consumers are not buying it at the same pace. What two measures should be compared?
Sell-in vs. sell-through.
A company keeps adding retailers, but sales generated by each outlet are falling. What metric would reveal this?
Outlet productivity / sales per outlet.
One channel member sells, delivers and services the product while another performs only one of those activities. What should managers compare before deciding how each should be paid?
Compare the work/functions performed with compensation.
A distributor is struggling to implement a new digital ordering system. Name one capability that may be missing.
Technology, skills, people, money, data or processes.
MSRP
Manufacturer Suggested Retail Price
A retailer launches a 20% promotion on the same weekend the manufacturer launches its own online discount. What management tool could have prevented this overlap?
A coordinated promotional calendar / promo calendar lock.
Customers frequently arrive at stores and cannot find the product. What simple metric should management monitor?
Stockout percentage/rate.
A distributor believes it is doing more work than its compensation reflects. What metric could help calculate the real cost of those activities?
Activity-based cost per task.
A company wants to know how quickly its channel is responding to new products and market changes. What type of timing metric could it track?
Time-to-update / implementation time.
CRM
Customer Relationship Mamagement
Salespeople are rewarded only when distributors purchase inventory, even when the inventory remains unsold. What change to compensation could improve coordination?
Tie at least part of compensation to sell-through.
The company suspects it has too many outlets competing for the same customers. What immediate action could management take before adding any more?
Freeze new outlets temporarily.
A distributor asks for a larger margin because it now provides installation and customer support. What should the manufacturer determine before saying yes or no?
Determine the additional work, cost and value being contributed.
Instead of changing its entire distribution network at once, a company tests a new process with a small group of partners. What approach is this?
Pilot / pilot cell.
MAP
Minimum Advertised Price
Distributor inventory keeps increasing while manufacturer sales reports look excellent. Why might management still have a problem?
Strong sell-in can hide weak sell-through.
A brand has many retailers but still suffers frequent stockouts. Why might adding more outlets fail to solve the problem?
The real issue may be inventory or service levels rather than coverage.
Retailers are expected to advertise, stock inventory, demonstrate products and manage returns, but their margin stays unchanged. What principle should guide a better compensation system?
Compensation should reflect the work performed/value contributed.
A manufacturer introduces e-commerce and some traditional distributors oppose it. Besides technology, what might distributors fear losing?
Revenue, customer ownership, role or power within the channel.
RACI
Responsible, Accountable, Consulted, Informed.
A manufacturer pushes excessive inventory into distributors. The distributors later discount aggressively to clear it. What should management fix first: retailer pricing or the selling system? Why?
Fix the selling system first.
Management must choose between adding more retailers to increase availability or limiting retailers so each can remain profitable. What trade-off are they managing?
Coverage versus outlet/distributor profitability.
MDF
Market Development Funds