Exam 10: Place and Development of Channel Systems

Use this information for questions that refer to the World Tennis Ball (WTB)Company case. World Tennis Ball Co.(WTB)makes tennis balls and sells them only in the United States.Raul Fernandez,the firm's marketing manager,is comparing his firm's distribution with two major competitors. 1)WTB sells its products through four regional distributors,who then sell to 22 sporting goods wholesalers.The wholesalers sell to a total of 7,000 retail outlets.From its website,WTB also sells directly to any customer who will purchase a minimum quantity of 24 tennis balls.WTB cooperates with members of its channel but maintains some control through its economic power and leadership.It helps to direct the activities of the whole channel and tries to avoid or resolve channel conflicts. 2)American Tennis Ball (ATB)is a competitor that sells through two distributors-each with half the country.The distributors then sell through six sporting goods wholesalers,and they,in turn,sell to 1,000 retail outlets (split between two national sporting goods chains and two general merchandise stores).ATB and its channel make little effort to work together.However,because of a relatively low level of competition between the distributors,the wholesalers,or the retail stores,each member of the channel gives the product special attention. 3)National Tennis Ball (NTB)sells its products through only three tennis specialty wholesalers that sell only to tennis clubs.NTB actually owns the wholesale firms that handle its products.NTB's balls are only available at certain tennis clubs and NTB limits coverage to only one club in a particular geographic area. Which of these companies appears to operate as a channel captain?

The Internet gives large firms access to repeat customers,but it does little for small firms trying to develop an initial base of customers.

Use this information for questions that refer to the World Tennis Ball (WTB)Company case. World Tennis Ball Co.(WTB)makes tennis balls and sells them only in the United States.Raul Fernandez,the firm's marketing manager,is comparing his firm's distribution with two major competitors. 1)WTB sells its products through four regional distributors,who then sell to 22 sporting goods wholesalers.The wholesalers sell to a total of 7,000 retail outlets.From its website,WTB also sells directly to any customer who will purchase a minimum quantity of 24 tennis balls.WTB cooperates with members of its channel but maintains some control through its economic power and leadership.It helps to direct the activities of the whole channel and tries to avoid or resolve channel conflicts. 2)American Tennis Ball (ATB)is a competitor that sells through two distributors-each with half the country.The distributors then sell through six sporting goods wholesalers,and they,in turn,sell to 1,000 retail outlets (split between two national sporting goods chains and two general merchandise stores).ATB and its channel make little effort to work together.However,because of a relatively low level of competition between the distributors,the wholesalers,or the retail stores,each member of the channel gives the product special attention. 3)National Tennis Ball (NTB)sells its products through only three tennis specialty wholesalers that sell only to tennis clubs.NTB actually owns the wholesale firms that handle its products.NTB's balls are only available at certain tennis clubs and NTB limits coverage to only one club in a particular geographic area. If American Tennis Ball adds more retail outlets,which of the following would help it to manage channel conflict?

To minimize its own risks,the Boomtown Petroleum Corp.of Houston,Texas,operates a South American oil refinery that is owned by residents of that country.Boomtown is engaged in an activity known as

Intensive distribution is

Sunkist sells foreign companies the right to use the Sunkist brand on soft drinks and citrus juices sold outside the United States.Sunkist gets both an initial fee and a royalty on the sale of goods bearing its brand name.Sunkist is engaged in

Compared to intensive distribution,selective distribution gives a producer a greater opportunity for profit but usually makes it more difficult for intermediaries to make a profit.

If Wilkinson were to sell Norelco the exclusive rights to produce and sell its brand of shavers in Japan for a 5 percent royalty on all sales,it would be using

Firms that use direct distribution can usually adjust their marketing mixes more quickly than firms that use indirect distribution.

A manufacturer prefers to produce and ship in large quantities to take advantage of economies of scale.Final consumers often want to purchase in small quantities.This difference between the producer and consumer is a

When selecting the degree of market exposure for a firm's products,it's important to remember that

Horizontal marketing systems are channel systems in which the whole channel focuses on the same target market at the end of the channel.

Use this information for questions that refer to the World Tennis Ball (WTB)Company case. World Tennis Ball Co.(WTB)makes tennis balls and sells them only in the United States.Raul Fernandez,the firm's marketing manager,is comparing his firm's distribution with two major competitors. 1)WTB sells its products through four regional distributors,who then sell to 22 sporting goods wholesalers.The wholesalers sell to a total of 7,000 retail outlets.From its website,WTB also sells directly to any customer who will purchase a minimum quantity of 24 tennis balls.WTB cooperates with members of its channel but maintains some control through its economic power and leadership.It helps to direct the activities of the whole channel and tries to avoid or resolve channel conflicts. 2)American Tennis Ball (ATB)is a competitor that sells through two distributors-each with half the country.The distributors then sell through six sporting goods wholesalers,and they,in turn,sell to 1,000 retail outlets (split between two national sporting goods chains and two general merchandise stores).ATB and its channel make little effort to work together.However,because of a relatively low level of competition between the distributors,the wholesalers,or the retail stores,each member of the channel gives the product special attention. 3)National Tennis Ball (NTB)sells its products through only three tennis specialty wholesalers that sell only to tennis clubs.NTB actually owns the wholesale firms that handle its products.NTB's balls are only available at certain tennis clubs and NTB limits coverage to only one club in a particular geographic area. Which of the following appears to best describe ATB's channel arrangements?