Which of the following statements about cost gaps is most likely true?
A) A cost gap typically is indicated through negative feedback from end-users in a segment.
B) Cost gaps exist when a single channel function is performed at a price that fluctuates.
C) A cost gap occurs when the performance of channel functions is jointly inefficient.
D) Cost gaps usually trigger high compensation expenses for channel members.
E) Low costs typically indicate both cost gaps and service gaps.

Question

Quizplus · Accepted Answer

A cost gap occurs when the performance of channel functions is jointly inefficient. This means that there is a gap between the cost of the functions and the value they provide to customers. Negative feedback from end-users may indicate a service gap, but not necessarily a cost gap. Fluctuating prices may indicate a price gap, but not necessarily a cost gap. Compensation expenses may be affected by cost gaps, but not necessarily caused by them. Low costs may indicate a cost advantage, but not necessarily a cost gap.

Which of the Following Statements About Cost Gaps Is Most