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Ast1 Task 1

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AST1 Task 305.6.2-05
Distribution Strategies
Washington Governors University

Strategies for Motivating Dealerships as Intermediaries

Company S is a new manufacturer entering the scooter market. The company’s objective is to motivate dealerships as intermediaries. Company S wants the existing scooter dealerships to sell its product instead of the competitions. The company will motivate the dealerships as intermediaries through Incentive Programs, Profit Opportunities, Sales Quotas, Decision Making, and Frequent/Timely Delivery. Incentive Program. Company S can motivate scooter dealerships as intermediaries by offering compelling incentives. The company could offer a quantity discount on large purchases. A discount will be given to a dealership when purchasing a large quantity of product. This incentive will encourage dealerships to sell the product from Company S versus the product from a competitor who doesn’t offer a quantity discount when making large purchases. The advantage to an incentive program is it creates a strong relationship between Company S and the dealership. Having a strong relationship means loyalty from both Company S and the dealership, which means repeat business for Company S. Repeat business means that the dealership has had an increase in demand for the product, resulting in an increase in Sales Volume for Company S. The disadvantage to an incentive program is the decrease in profit for Company S. Instead of selling 10 scooters profiting $200 per scooter ($2,000 profit), the company would sell 20 scooters profiting $120 per scooter ($2,400 profit). By offering a quantity discount, the dealership will buy more, but Company S will lose a certain percentage of profit from each scooter sold.

Profit Opportunities. Company S can motivate scooter dealerships as intermediaries by offering profit opportunities such as providing the

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