Selecting Channels and Intermediaries Paradise Kitchens was started by cofounder
ID: 343271 • Letter: S
Question
Selecting Channels and Intermediaries
Paradise Kitchens was started by cofounders Randall F. Peters and Leah E. Peters to develop and market Howlin' Coyote Chili, a unique line of single-serve and microwaveable Southwestern/Mexican style frozen chili products. The Howlin' Coyote line of chili was first introduced into the Minneapolis-St. Paul market and expanded to Denver two years later and Phoenix two years after that.
To the Company's knowledge, Howlin' Coyote is the only premium-quality authentic Mexican style frozen chili sold in U.S. grocery stores. Its high quality has gained fast, widespread acceptance in its markets. Currently, Paradise Kitchens has introduced Howlin' Coyote frozen chilies to 15 of its planned 20 markets. In the near future, the company believes the Howlin' Coyote brand can be extended into other categories of Mexican food products, such as tacos, enchiladas, and burritos.
Paradise Kitchens believes that its high-quality, high-price strategy has proven to be successful and now is contemplating adding a new product line to its offerings, Earth Coyote Organics (ECO). Earth Coyote Organics will be positioned as a healthier Mexican-style frozen food line made with certified organic ingredients. Similar to the Howlin' Coyote product line, the ECO line will feature single-serve Southwestern/Mexican frozen dinner products seasoned with lime, garlic, and red chili spices, targeted at Hispanics and non-Hispanics living primarily in the southwestern regions of the United States. The price point for the four initial ECO products will be above the Howlin' Coyote line as well as above the competitor's lines.
Paradise Kitchens must now decide on a distribution density for the new Earth Coyote Organics product line.
A product can take many routes on its journey from a producer to buyers. Marketers continually search for the most efficient route from the many alternatives available. There are some important differences between the marketing channels used for consumer products like premium frozen dinners.
While completing this activity, please refer to Appendix A in your textbook for additional information on Paradise Kitchens and Building an Effective Marketing Plan.
Read the case below and answer the questions that follow.
Marketing channels not only link a producer to its buyer but also provide the means through which a firm implements various elements of its marketing strategy. Therefore, choosing a marketing channel is a critical decision.
Marketing executives consider three questions when choosing a marketing channel and intermediaries:
1. Which channel and intermediaries will provide the best coverage of the target market?
2. Which channel and intermediaries will best satisfy the buying requirements of the target market?
3. Which channel and intermediaries will be the most profitable?
The first question that Paradise Kitchens should consider when selecting its marketing channel and intermediaries is which channel and intermediaries will provide the best target market coverage. Paradise Kitchens should consider the density of its distribution—the number of stores in a geographical area—and type of intermediaries to be used at the retail level of distribution. Three degrees of density exist: intensive, exclusive, and selective.
The owners of Paradise Kitchens were able to easily rule out exclusive distribution as a nonsuitable strategy for the Earth Coyote Organics line. With an exclusive distribution strategy, only one retailer in a specified geographical area will carry the firm's products. Exclusive distribution is typically used for the distribution of specialty goods like high-end clothing and prestige brands. Consumers typically must exert a significant amount of effort to purchase these luxury products.
The owners are split on their decision between the two remaining distribution strategies since both strategies seem to have merit. Randall would like to pursue an intensive distribution strategy to try and get Earth Coyote Organics in front of as many potential consumers as possible to maximize sales, while Leah would rather pursue a more conservative selective distribution strategy.
Answer the questions to help Paradise Kitchens choose between an intensive and a selective distribution density.
1. If Paradise Kitchens wanted to have its products available virtually everywhere consumers go during the day, such as supermarkets, convenience stores, and even vending machines, it would choose a(n) _______ strategy.
intensive
selective
exclusive
2. A(n) _______ distribution strategy would be the most expensive strategy for Paradise Kitchens to pursue.
exclusive
selective
intensive
3. The owners of Paradise Kitchens have ruled out exclusive distribution for its Earth Coyote Organics product line because exclusive distribution is most often used for
convenience products such as milk and soft drinks.
nonorganic food products.
luxury products and prestige brands.
4. If Paradise Kitchens chose a(n) _______ distribution strategy, it would likely have its Earth Coyote Organics product line in a few supermarkets and specialty grocery stores in the area.
exclusive
intensive
selective
5. Compared to the Howlin' Coyote product line, it is likely that the Earth Coyote Organics product line would be sold in _______ retail outlets.
fewer
the same number of
more
Explanation / Answer
INTENSIVE Strategy under which an organization sells through as many channels as possible to increase sales INTENSIVE Paradise Kitchens are offering only luxurious and high end products LUXURY PRODUCTS AND PRESTIGE BRANDS Exclusive distribution is typically used for the distribution of specialty goods like high-end clothing and prestige brands. SELECTIVE more conservative distribution strategy ad focused on only selected markets FEWER
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.