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Evaluating major channel alternatives is the next step after identifying major channel alternatives. In this step, marketing management department evaluates all the available major channel alternatives to choose the best one that suits the company. The marketing management does the evaluation based on three criteria- Economic criteria, control criteria, and adaptive criteria. In this chapter, students will learn about all the three criteria in detail. With our Evaluating major channel alternatives assignment help service they can understand these criteria more easily as our teaching members are from a marketing background and they can explain each criterion with real-time examples of various companies.
Understanding of economic criteria
Each channel alternative results in a various level of costs and sales. Initially, the management has to access the sales levels which would be generated by the sales force of the company and the sales agency and to compare both the sales levels.
In the second step, the management has to work out how much it would cost to sell different volumes via each channel. By referring to our Evaluating major channel alternatives homework help answer you will realize that the fixed costs of using a sales agency are always less in comparison to costs of establishing a company sales office.
However, selling through a sales agency increases abruptly due to the huge sales agent commission which is quite higher compared to company salespeople. There is also a sales level (SB) where both the selling channels have the same costs. Generally, smaller firms and big firms in smaller territories, whose sales volume is extremely less to set up a company sales force, prefer to use sales agents.
Understanding of Control criteria
Control criteria take into account the control issues related to the two channels. Selling products through sales agency results in more control problem. Since a sales agency works as an independent organization, its main interest is profits maximization. The agent may focus on those consumers who purchase the largest volume of products from their overall mix of client firms, instead of those who prefer to buy a company’s products.
Another limitation of sales agency is that its sales force may not have technical expertise regarding the company’s products. They are also not trained to handle promotion materials efficiently.
Understanding of Adaptive criteria
Long-term commitment and loss of flexibility are associated with every channel. Those who sell their goods through sales agency has to enter into a five-year contract. A company cannot break the contract with the sales agency before the completion of the tenure, even though its own sales force is performing better than the agency.
In terms of the evaluation criterion, a channel with long-term commitment must consider economic criteria or control criteria.
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