The channel with the greatest potential for profit and should be pursued is the online and corporate programs. Currently this channel has accounted for 10% of US sales and I believe it has a very strong potential to increase in future years. Montague has been contemplating about increasing their activity in this area and this is a very good idea. As Montague hasn’t really done much advertising and marketing of their products online and so if they were to pursue and be aggressive, more people will be aware of their products and be able to purchase it right off from the website and have the product shipped instead of having to go to a lot of trouble to go to a shop and purchase it physically. Beside the added benefit of the folding mechanism, when the product is shipped, it’s already assembled and ready to go so the consumers won’t have to worry about assembling it. At the same time by using online and phone order sales, Montague will be able to earn all the profits it makes above the cost whereas by using other channels, they have to share commission of the profits. Therefore by using this channel, Montague may be able to lower the selling price of the bicycles as they will be earning more profits compared to before and can afford to reduce the cost.
The corporation will also not have any problems of trying to demonstrate the folding mechanism or that their product won’t stand out compared to the other bicycle products. By having their own website their product will definitely stand out. For the demonstration, they can incorporate a video into the website that shows exactly how the folding mechanism works quickly and without any mistakes whereas in bicycle dealers there’s a high chance that the sale reps might fumble and not really show the efficiency and convenience of the product like it’s supposed to. Also through the online distribution channel, Montague doesn’t have to face direct competition like in bicycle dealer shops or worry that their product will...
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