- For the first example, what were the main reasons that the firm reversed their decision and returned to their initial channel mix?
The firm didn’t see any change in profitability. The point of the move made by the company was to boost sales, and this didn’t happen. So they switched back to their traditional channels only. Also, the jeans were marketed as high-quality jeans. Having the jeans in discount stores may have an impact on their brand integrity.
2. Do you agree with their decision?
Yes!, if the new idea wasn’t working, or at least was not more profitable than the previous one, going back is not a bad idea. And besides, marketing your as high-quality jeans and having them in discount stores is not a good idea. In my opinion, it can really hurt the brand to a point where it can be hard to recover from.
3. In the second example, do you agree with their choice of channel for their new watches? Why?
Even though that the idea is wonderful, I would disagree with the selection of the channel. Most people that attend Jewelry stores are looking for something a little fancier, very high-quality products.
4. Do you think that most of their existing jewelry stores will be willing to stick and sell these new watches?
I don’t think they would. They won’t make a lot of profit since the customer who attends this kind of store it’s not looking for a $10 watch, and it can also damage their reputation as a jewelry store.
5. What other channels (retailers) should they also consider?
Macy’s, Amazon, Costco, Walmart are some good examples, I’d say.
The reasons that the firm reversed their decision and returned to their initial channel mix because their products were highly priced and branded and the markets, they were selling them might not have that customer that are willing to pay such a high price if they can find an alternative at lower price. I do not agree with their decision because if they don’t market there brand, they will not attract customers and will only a limited number of customers. However, if they are distributing their products to other markets, they should keep the demographics in mind and not have overly priced jeans that customers would not be interested, instead they can launch new jeans with a cheaper material that can bring the cost and the price down according to the buyers.
For the second example I do not agree with their choice of channel for their new watches because even though they decided to produce and sell low priced watches they are still using their jewelry store distribution channel which is not an idea, because customers who want cheap watches are more likely to go cheaper stores to buy them, no one would think that Swiss which is famous for their branded and expensive watches would have cheap watches that are under $10.So the company should have their watches distributed to local and convivences stores because they will have more sales there.
I do not think that the existing jewelry stores will stick to selling these watches because they will hardly see any sales and the cheap watches would be using up space to be put on display. They should target stores and markets where people are not willing to buy a highly prices watch, mostly stores that are cheap and where low income families shop from, like Walmart, amazon, target, convenience stores,99 cent stores and etc.
Hi Carlos,
You took the words right out of my mouth, Firstly, marketing high-quality jeans while they are simultaneously being sold in discount stores is a terrible idea because your custumers will lose faith in the brand as a high end good. Exclusivity is what people are paying for in high end brands so you don’t want to see something you payed over $500 for, dangling off of the discount rack in Marshalls. Secondly its pointless to welcome increased sales when your profit margin is shrinking.