Case I:

Nespreso, a division of Nestle's SA, pioneered the development of the single serving coffee machine in
1986. By 2009, Nespresso had achieved sales of over $2.6 billion with double-digit growth projected for
the next several years. The machine which have been imitated by more than 20 competitors, use a
capsule or "pod" to make a single serving of coffee by pumping hot water through the pods under
tremendous pressure. From the outset, Nepreso's business model was based on the sale of its exclusive
coffee pods protected by many patents to generate most of sales and profits for the company rather
than on sales of the machines. The pod to coffee machine relationship in analogous to the cartridge and
printer where the printer manufacturer rely on sales of print cartridges for the bulk of their revenues and
profits. Nepreso recognizes the extreme importance of maintaining the exclusivity and premium price of
its coffee pods by stringenly controlling their distribution channels. Consequently, Nepresso's coffee pods
are sold only in its own stores, it's online site, or by phone directly from Nepresso. Recently, competitors
Sara Lee Corporation and Ethical coffee co., announced plans to introduce their own coffee capsule that
will work in Nepresso machines. This capsule will be cheaper and more widely distributed than the
Nepresso pods. Nepresso says it will take legal action if the competitors product infringe on any of its
patent.

Question: Do you think Nepressk's distribution strategy based on tight control of the channel for its
coffee pod can provideab effective means for dealing with competition fron selling their Nepresso-
compatible capsules? Why or why not?

Answer:

Nepresso pod can't deal with nespresso capsule. For me you can compete with Nepressos pod it cannot
compete because it has limited and selective distributor and the sales will affect the income of the
Nepressos pods . The more the distributor the higher the sale .not sure that all the distributor can sell
the product .(disadvantage of exclusive distribution
Case II:

For many years, Procter and Gamble, as well as other giant consumer packaged goods manufacturer,
used special deals and merchandising campaigns as the mainstay of their channel members. Special
discounts, allowances, slotting fees, coupons, payment for displays and similar tactics were used
abundantly to get retailers and wholesalers to push their products. The main problem with that
approach to motivating channel member is that it can be very expensive for the manufacturer. If often
requires higher costs for special packaging and handling, creates "peaks" and "valleys" in production and
increases the manufacturer's promotional costs. Moreover, from the consumer's point of view the ups
and downs in prices, when one week a box of Tide might sell for $3.79 and the next week for $7.79
fosters price sensitivity and erodes brand loyalty. In a fundamental with this status quo approach to
channel management, P&G offered it products to channel members at lower prices on an everyday and
sustained basis. P&G believed this would reduce its own costs and enable channel members to pass an
lower prices to consumers, also on an everyday basis.

Question: What do you think of P&G's channel strategy? What are its possible strength and weaknesses?
Discuss from the standpoints of the manufacturer and the channel members.

Answer:

For me they have a great strategy because they are focusing on the customer and that only their sale .
They have loyal customer they have lower profit . For them creating customer relationship is better than
the number of sale and the channel member can sale with B2B benefit.
Case lll:

Apple, with its almost 300 company-owned stores, uses independent intermediaries, which it refers to as
"third-party resellers". For its Mac computers, Apple is very careful about the intermediaries it selects to
become members member of its distribution channel. One selected, Apple makes a substantial
investment to enhance the capabilities of its chosen channel members to sell and service Apple
products. "Apple Sales Consultant Program", for example, places Apple employees at selected channel
members' stores to provide expertise on how to tell the Apple story and ensure a high-quality buying
experience. The company also offers extensive training and support through what it refers to as its
"Apple Premium Reseller Program" to selected channel members to help them develop high levels of
customer service and product expertise. Apple strongly believes that providing high quality sales nad
after-sales support is critical for attracting new customers and retaining existing ones.

Question:

Do you think Apple's careful selection of channel members and it's efforts to enable them to provide
high-quality sales and service support are as important as Apple's unique products in creating a
differential advantage for Apple?

Answer:

I think that strategy will not apple unique because all of the company have the same aim and that is to
select workers carefully.All company are choosing the best worker to have a greart sale as what apple
want so it can't make the apple differences in providing quality.

Case lV:
John Paul Mitchell Systems, Inc., a manufacturer of specialized high-quality hair care products, has made
it a policy to sell it's products only through "hair care professionals". Only better beauty salons and
specialty stores are selected by the company to represent itls products. Yet somehow, Paul Mitchell
products were being sold by Walmart stores in Texas. Upon hearing this, the company filed suit against
Walmart, alleging that Walmart was selling substandard batches of Paul Mitchell products and had
bought the products from a former Mitchell Systems supplier. The batch of products in question had
been rejected by Paul Mitchell Systems because of poor quality and , therefore, should not have been
made available for resale through any retailers, let alone Walmart. Mitchell Systems requested that the
court issue a temporary restraining order that would forbid Walmart from selling Paul Mitchell products.

Question:

Why did Mitchell Systems go to such lengths to prevent these products from being sold by Walmart?
Discuss in terms of the channel member selection strategy apparently being used by manufacturer.

Answer:

Paul Mitchell come to that point because the contract of disrtibution is not updated . But for me that
case is wrong beacause as the manufacturer they are responsible for the awareness and update of their
distributor so that thier will be good and legal.

Case V:
New Balance has developed a strong reputation as a serious and leading manufacturer of high
performance and high quality athletic footwear. Its use technology to produce state-of-the-art running
shoes and cross-trainers has earned the respect of many world-class athletes who rely on New Balance
footwear to compete at the highest levels in tgeir respective sports. So, it seemed strange to industry
observers when New Balancels channel design strategy, implemented in springof 2009, chose Nine West
shoe stores, a division of Jones Apparel Group Incorporation, to sell New Balance athletic footwear. What
raised the eyebrows ofbthe observers? The fit, not of the shoes, but of the two brands. Would Nine
West, which is identified as a seller of fashionable women's shoes, undermine the brand image of New
Balance as a maker of a hard-core athletic shoes? Although the strategy is being tried on a limited basis
in just 50 Nine West stores, if sales are good for the six months, many additional Nine West stores will be
added. What do you see as the strategic rationale for New Balance selecting Nine West as a channel
member to sell its high performance athletic footwear?

Questions:

Over the long run, do you think New Balance's channel member selection strategy will affects its
product image?

Answer :

It doesn't affect the brand image because the quality of original new balance foot wear are different
from immitation and other shoes although the nine west have many stores still the brand image cannot
change because there's a contract to prove that nine West are distributor of new balance which can tell
to the customer

Case Vl:

Amazon.com became the world's largest e-book seller by offering new best selling books for a fixed
price of $9.99 regardless of the fame and popularity of the author of the prestige of the the publisher.
But some publishers have balked at Amazon's e-book pricing strategy. They believe that over time, $9.99
price will create a ceiling for consumer price perceptio about the value of new books. If consumers
believe new books from famed authors amd top publishers are worth no more that $9.99, the the
publisher' ability to price their products at what they believe them to be worth will be undermined or
destroyed completely. In early 2010, fove publishers, including Macmillan, one of the largest and most
prestigious through book publishers, refused to offer their books through Amazon's Kindle e-books and
instead decided to distribute their e-book list through Apple's iPad, which allows the publisher to set the
price. Some of the e-booka distributed through Apple will be priced at $14.99.

Question:

Who do you think should control the pricing of e-book best sellers in the marketing channel? Why?

Answer:

Apple's iPad is responsible for controlling the price because if the agreement of the publisher and the
author to the book seller is clear including the financial status And identity status of the book ,The book
seller will be the one to control the price to achieve their good sale .

Case Vll:

Anderson talked to knowledgeable sales-people about the pros and cons of a variety of cameras,
discussed the various features and handles the cameras to how they felt while at the Camera Store, a
full-service camera shop at a regional shopping mall. She decided to buy a Konica Minolta DiMage X50.
But she did not buy it from the Camera Store. Instead she said thank you very much to the salesperson
and left the store. She went over to the Starbucks across the street, ordered a tall frappucino and, while
sipping the drink, ordered the Konica Minolta DiMAGE X50 using her Apple iPhone to find the lowest
price online seller. Three days later, the camera was delivered bu UPS to Tina's home. Tina was delighted;
she had saved $60 and the camera was exactly the same one she had tried out in the Camera Store. Tina
could not have care less whether the online dealer was authorized to sell Konica Minolta cameras.

Question:

Discuss this situation from the point of view of Tina Anderson, The Camera Store, the online dealer and
the manufacturer.

Answer:

Tina buy a DiMAGE X50 she just buy it online shop just to saved but the same camera she wants .the
camera store that she canvass the price of the camera is high because it is brand new .the online dealer
she buy a camera with a lowest price than the same camera in the store maybe it is a second hand .
 CASE STUDY
In DISTRIBUTION
MANAGEMENT

Prepared by:. Submitted to:

Colendrez,Corgan O. Doborah, Catilo