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Marketing: Auto Industry Use of MSRP; Various Promotion Methods

1. Provide examples of companies who conduct business using the direct and indirect channels of distribution? What is the relationship between these two types?

2. Noise in marketing is everywhere. Regardless of which promotion method is used to influence attitudes and behavior, whether it be personal selling, mass selling, or sales promotion, there will be noise.

Explain the nature of the three promotion methods? Also, what are the strengths and limitations of each method?

3T. Do you believe that planned obsolescence is sometimes part of a company's strategy to help sundown older products and help launch new products? If so, can you provide any examples?

4s. In the automotive industry, the Manufacturer's Suggested Retail Price (MSRP) is the price we recommend our dealers sell our vehicles. By law, the MSRP must be shown on the Monroney Label (window sticker) which gives the customers a point of reference.

Our dealers, who are independent business enterprises or franchises, purchase the vehicles from us at price much lower than the MSRP. The price the dealers sell the vehicles to the retail customer will vary based upon the demand. Although the dealers may sell a vehicle below the MSRP, they always make a profit.

Do you find the MSRP helpful when purchasing a vehicle?

Solution Preview

1. Provide examples of companies who conduct business using the direct and indirect channels of distribution? What is the relationship between these two types?

Distribution channels are the ways in which companies use to gain entry to the consumer markets with their product. Companies that use direct channels of distribution include Wal-Mart Best Buy. These companies sell their products directly to clients. On the other hand, companies that use the indirect channels of distribution include MasterCard and Visa. These companies do not sell their products directly to consumers; rather, they use merchants to advance their services to the same. The main relationship between the two types of channels of distribution is how their products reach the final consumer.

2. Noise in marketing is everywhere. Regardless of which promotion method is used to influence attitudes and behavior, whether it be personal selling, mass selling, or sales promotion, there will be noise. Explain the nature of the three promotion methods? Also, what are the strengths and limitations of each method?

Three promotional methods include ...

Solution Summary

The solution discusses auto industry use of MSRP and various promotion methods.

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