Question

carson manages distribution for a gourmet coffee roaster. he discovered that one of the retailers carrying his brand has started offering deep, unauthorized discounts on the premium coffee line, undermining the manufacturer’s pricing strategy and angering his corporate leadership. what type of marketing channel conflict is occurring?
horizontal conflict
vertical conflict
gray market conflict
reverse conflict
question 23 2.67 pts
deena operates a coffee shop located near the university campus. her major competitor is kaprices coffee on the corner across the street from deenas café. recently, deena decided to raise the price of all the products she sells. since they are close competitors with deenas café, kaprices can most likely experience:
a decrease in sales.
an operating loss.
an operating profit.
an increase in sales.

Explanation:

Question 1 (Marketing Channel Conflict)

To determine the marketing channel conflict:

• Horizontal conflict: Occurs between firms at the same level (e.g., two retailers).
• Vertical conflict: Occurs between different levels (e.g., manufacturer and retailer). Here, the retailer (lower level) is acting against the manufacturer’s (higher level) pricing strategy.
• Gray market conflict: Involves unauthorized distribution of genuine goods (not applicable here).
• Reverse conflict: Not a standard marketing channel conflict term.

The retailer (lower level) and manufacturer (higher level) are in different levels of the channel, so it’s vertical conflict.

Deena (coffee shop) and Kaprice’s are close competitors. When Deena raises prices, customers may switch to Kaprice’s (cheaper alternative), increasing Kaprice’s sales.

• "A decrease in sales" is incorrect (customers would likely switch to Kaprice’s).
• "An operating loss" is incorrect (increased sales would likely improve profit, not cause loss).
• "An operating profit" is not directly caused by Deena’s price increase (sales volume drives this, but the immediate effect is sales).
• "An increase in sales" is correct (customers switch from Deena to Kaprice’s due to price difference).

Answer:

B. Vertical conflict

Question 2 (Competitive Pricing Impact)