Question

A direct marketing channel produces higher margins than an indirect channel, but the business must bear the cost of channel management and all marketing and sales expenses.

A) True
B) False

Answer 1

Direct marketing channels generally have higher margins, but the business bears the cost of channel management and all marketing and sales expenses.

Step-by-step explanation:

In direct marketing, the business sells its products or services directly to the consumers without involving intermediaries, such as retailers or wholesalers. This means that the business can charge higher prices, resulting in higher margins. However, the business is also responsible for managing the channel and bearing all marketing and sales expenses, which can be costly.

For example, a company that sells its products through a website or catalogs is using a direct marketing channel. Although the company can enjoy higher profits per sale, it needs to invest in website development, advertising, and customer service to attract and retain customers.

Therefore, the statement is true. Direct marketing channels generally lead to higher margins, but the business is responsible for the cost of channel management and all marketing and sales expenses.