Question 2:The satisfaction of consumers abounds, and market rationality states that consumers are willing to replace outlets. This happens arbitrary or where there exists a gap in the channel of distribution. For instance in the banking and money payment systems many consumers are at dissonance and in markets segments which are not satisfied with the service delivery. Demand side gaps occurs in a market situation when consumers get dissatisfied buying what is available because the level of product or services provided may be of low value or inadequate or when the services offered are too expensive that they cannot afford.
The direct channel design will affect the coverage of currency for the manufacturer. It will also lead to least selectivity, meaning less money and non exclusive distribution of goods by the manufacturer. Demand-side gap analysis occurs when customers are dissatisfied with suppliers which provide them with goods and services. It shows business shortcomings since the manufacturers use money to pay channel members hence limiting their coverage of brand product category hence, gaining exclusive dealings which are more expensive. The suppliers will lack the opportunity to support the premium positioning of their brands hence getting a narrow target market.
The channel members will coordinate less closely with the manufacturers. Situations will arise that will hinder supplier specific investments with minimized new products emerging in the market; in addition, few markets will emerge in the market. In payment of my e-bills there was an assortment of payment methods. But a one stop bill payments site wasn’t available. I chose to use the most expensive payment site and it took 2 days to process.
Some Payment channels took up to 5 days to process the payment. In this, there was high SOD as compared to the SOS. It was during rush hour and everyone was working to beat deadline. There existed inefficiently high flow costs and thus there were high costs. I couldn’t use the 5 day e-bills payment outlet as this could cause my untimely payment. Other consumers preferred the long waiting time of up to a week for the processing of their bills. I didn’t prefer this due to the poor information provision thus more risky: high uncertainty.
Those who used these outlets said that they were less costly as compared to they shorter timed one, that they relied on them and had used them for long besides all driving to the same thing: satisfaction-bill payment. Question 5DuPont Agricultural Chemicals is an extremely large and diversified supplier of herbicides and pesticides to farmers. It has several competitors, also large and diversified (such as Monsanto and Dow). Imagine a dealer selling a full line of whatever a corporate or individual farmer would use, including agricultural chemicals. Is it possible to imagine a scenario in which the dealer is more powerful than DuPont?
What factors might make this possible? An important measure of the profitability of an activity is its return on capital- the profit expressed as a percentage of land, equipment and cash used in the activity. This measure shows the productivity of an investment. Neo-classical Economic Theory states that return on capital from an activity is determined by the competitiveness of the industry of which the activity is part. In a perfectly efficient market there is no return on capital in excess of what the capital providers need in order to provide to it, and as markets become less efficient, the return on capital steadily increases.
When returns on capital increases new firms may enter the market and this lowers prices, but when returns on capital reduces then firms leave the market and thus price increase. Market efficiencies also stabilize the return on capital at equilibrium.