2012 ESSAY EXAM 2 DUE : Thursday, March 22, 2012

(Each question = 5 points)

1. Procter and Gamble, as part of a new channel strategy, decided a few years ago to

drastically reduce its emphasis on special deals and trade promotions and

merchandising campaigns. Instead it has decided to offer everyday low prices. What are some of the problems with the old channel strategy?

What are some of the benefits of the new channel strategy for P&G?

How would some channel members react?

Why did P&G instead of a small manufacturer decide to change the traditional

strategy.

What were the results? (Need references). Channel members often engage in forward buying (buying large quantities when there

is a trade promotion) or diverting (buying when there is a regional trade promotion and diverting the product to other areas).

Channel members do not always pass along trade discounts.

See Facebook page

2. The rise of HMOs and PPOs has changed the marketing landscape for

pharmaceutical firms.

Who are the intermediaries between pharmaceutical companies and consumers

(patients). Who are the different firms/persons who influence what drug patients take?

How do HMOs and their formularies affect the promotional decisions of drug firms? Should physicians and NPs be sold the same way as HMOs? Why or why not?

3. Hard Candy was founded by a college student Dineh Mohajer.

Write a brief description of the founder and her entrepreneurial journey?

Describe her choice of channel member (Fred Segal). Why was this choice an

inspired decision? How did it generate a lot of buzz?

Hard Candy was acquired in 1999 by LVMH for a reported $30,000,000. Why did

LVMH, the world's largest luxury goods group acquire Hard Candy?