Question 1

In administered channel systems, vertical cooperation is achieved by acquiring firms at different levels of activity.

Accepted Answer

A) True 
 B)False

Question 2

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 U.S. 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 6 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?

Accepted Answer

A)  WTB 
B)  ATB 
C)  NTB 
D)  All of the companies appear to be channel captains 
E)  None of the companies is a channel captain 
A)  WTB 
B)  ATB 
C)  NTB 
D)  All of the companies appear to be channel captains 
E)  None of the companies is a channel captain

Question 3

When McDonald's corporate headquarters offers a local McDonald's franchise to a franchisee on Bourbon Street in New Orleans, this is an example of ___________ distribution.

Accepted Answer

A)  Intensive 
B)  Operational 
C)  Selective 
D)  Exclusive 
E)  Administered 
A)  Intensive 
B)  Operational 
C)  Selective 
D)  Exclusive 
E)  Administered

Question 4

Marketing managers should know that:

Accepted Answer

A)  a Supreme Court ruling prohibits exclusive distribution. 
B)  vertical arrangements between manufacturers and intermediaries which limit sales by customer or territory may be legal according to a Supreme Court ruling. 
C)  horizontal arrangements among competing manufacturers or intermediaries which limit sales by customer or territory are generally considered legal. 
D)  vertical arrangements between manufacturers and intermediaries which limit sales by customer or territory are always illegal. 
E)  both C and D are true statements. 
A)  a Supreme Court ruling prohibits exclusive distribution. 
B)  vertical arrangements between manufacturers and intermediaries which limit sales by customer or territory may be legal according to a Supreme Court ruling. 
C)  horizontal arrangements among competing manufacturers or intermediaries which limit sales by customer or territory are generally considered legal. 
D)  vertical arrangements between manufacturers and intermediaries which limit sales by customer or territory are always illegal. 
E)  both C and D are true statements.

Question 5

Because wholesalers and retailers are closer to the final user, they are in an ideal position to assume the channel captain role.

Accepted Answer

A) True 
 B)False

Question 6

In _____ channel systems, the channel members agree by contract to cooperate with each other.

Accepted Answer

A)  contractual 
B)  traditional 
C)  selective 
D)  corporate 
E)  administered 
A)  contractual 
B)  traditional 
C)  selective 
D)  corporate 
E)  administered

Question 7

Nature Fresh Cereal does not feel satisfied with the location and amount of shelf space it is given at Sunshine Health Food Markets. This creates a source of

Accepted Answer

A)  vertical conflict. 
B)  diagonal conflict. 
C)  horizontal conflict. 
D)  parallel conflict. 
E)  placement conflict. 
A)  vertical conflict. 
B)  diagonal conflict. 
C)  horizontal conflict. 
D)  parallel conflict. 
E)  placement conflict.

Question 8

Joint venturing gives a firm less control than if it owns a separate subsidiary.

Accepted Answer

A) True 
 B)False

Question 9

A good reason for developing or joining a vertical marketing system

Accepted Answer

A)  is that the whole channel focuses on the same target market at the end of the channel and seems to be more effective. 
B)  market competition at each level of the channel eliminates inefficient firms and serves consumers' needs better. 
C)  is that no member of the channel has to bear the costs of the regrouping activities. 
D)  is that no member of the channel has to plan for the whole channel since good decisions at each level run the channel. 
E)  All of the above. 
A)  is that the whole channel focuses on the same target market at the end of the channel and seems to be more effective. 
B)  market competition at each level of the channel eliminates inefficient firms and serves consumers' needs better. 
C)  is that no member of the channel has to bear the costs of the regrouping activities. 
D)  is that no member of the channel has to plan for the whole channel since good decisions at each level run the channel. 
E)  All of the above.

Question 10

Exclusive distribution

Accepted Answer

A)  should generally be used only if it is not possible to generate intermediary interest in intensive distribution. 
B)  is legal as long as it does not involve vertical channel arrangements. 
C)  arrangements between a producer and intermediary are illegal for most types of products, and thus they are not very common in the U.S. 
D)  usually involves intermediaries who are willing to take over all responsibility for promoting the producer's product. 
E)  None of the above is true. 
A)  should generally be used only if it is not possible to generate intermediary interest in intensive distribution. 
B)  is legal as long as it does not involve vertical channel arrangements. 
C)  arrangements between a producer and intermediary are illegal for most types of products, and thus they are not very common in the U.S. 
D)  usually involves intermediaries who are willing to take over all responsibility for promoting the producer's product. 
E)  None of the above is true.

Question 11

Discrepancy of quantity is

Accepted Answer

A)  the difference between the lines a typical producer makes and the assortment final consumers or users want. 
B)  adjusting the quantities of products handled at each level in a channel of distribution. 
C)  collecting products from many small producers. 
D)  the difference between the quantities of products that it is economical for a producer to make and the quantity final users or consumers normally want. 
E)  usually seen with producers who specialize by product. 
A)  the difference between the lines a typical producer makes and the assortment final consumers or users want. 
B)  adjusting the quantities of products handled at each level in a channel of distribution. 
C)  collecting products from many small producers. 
D)  the difference between the quantities of products that it is economical for a producer to make and the quantity final users or consumers normally want. 
E)  usually seen with producers who specialize by product.

Question 12

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:

Accepted Answer

A)  Discrepancy of assortment. 
B)  Discrepancy of quantity. 
C)  Regrouping activity. 
D)  Discrepancy adjustment. 
E)  Marketing discrepancy. 
A)  Discrepancy of assortment. 
B)  Discrepancy of quantity. 
C)  Regrouping activity. 
D)  Discrepancy adjustment. 
E)  Marketing discrepancy.

Question 13

Retail stores that sell "seconds" and "irregular" products at discount prices are flourishing all over the country. These stores are needed because of what regrouping activity?

Accepted Answer

A)  Accumulating 
B)  Bulk-breaking 
C)  Sorting 
D)  Assorting 
E)  None of the above 
A)  Accumulating 
B)  Bulk-breaking 
C)  Sorting 
D)  Assorting 
E)  None of the above

Question 14

Channel systems in which the various channel members make little or no effort to cooperate with each other are called ______________ systems.

Accepted Answer

A)  traditional channel 
B)  vertically integrated 
C)  direct-to-customer channel 
D)  franchising 
E)  administered channel 
A)  traditional channel 
B)  vertically integrated 
C)  direct-to-customer channel 
D)  franchising 
E)  administered channel

Question 15

Which of the following best illustrates "discrepancies of quantity"?

Accepted Answer

A)  Michelin makes tires, but most consumers also want a large selection of car-care services. 
B)  Some stores sell large quantities of Michelin tires, but only small quantities of tires made by other companies. 
C)  There are over 309 million consumers in the U.S. but only a small portion buy tires in any given year. 
D)  Four firms make over 90 percent of all the tires sold in the United States. 
E)  Michelin made millions of tires last year--but most customers bought only one set. 
A)  Michelin makes tires, but most consumers also want a large selection of car-care services. 
B)  Some stores sell large quantities of Michelin tires, but only small quantities of tires made by other companies. 
C)  There are over 309 million consumers in the U.S. but only a small portion buy tires in any given year. 
D)  Four firms make over 90 percent of all the tires sold in the United States. 
E)  Michelin made millions of tires last year--but most customers bought only one set.

Question 16

To reduce conflicts in channels, a firm should:

Accepted Answer

A)  Offer different products through each channel. 
B)  Provide some compensation to members of the older channel. 
C)  Treat channel partners fairly even when one partner is more powerful. 
D)  Focus on segments not currently served by existing channels. 
E)  All of the above. 
A)  Offer different products through each channel. 
B)  Provide some compensation to members of the older channel. 
C)  Treat channel partners fairly even when one partner is more powerful. 
D)  Focus on segments not currently served by existing channels. 
E)  All of the above.

Question 17

"Intensive distribution" means selling through:

Accepted Answer

A)  only one channel of distribution. 
B)  all responsible and suitable retailers or wholesalers. 
C)  only one intermediary in a particular geographic area. 
D)  only those intermediaries who give the product special attention. 
E)  all retail outlets. 
A)  only one channel of distribution. 
B)  all responsible and suitable retailers or wholesalers. 
C)  only one intermediary in a particular geographic area. 
D)  only those intermediaries who give the product special attention. 
E)  all retail outlets.

Question 18

"Discrepancies of quantity" means:

Accepted Answer

A)  there are more producers than consumers. 
B)  there are more consumers than producers. 
C)  the difference between the product lines the typical producer makes and the assortment wanted by consumers or final users. 
D)  consumers want more products than producers can make. 
E)  the difference between the quantity of products it is economical for an individual producer to make and the quantity normally wanted by individual consumers or users. 
A)  there are more producers than consumers. 
B)  there are more consumers than producers. 
C)  the difference between the product lines the typical producer makes and the assortment wanted by consumers or final users. 
D)  consumers want more products than producers can make. 
E)  the difference between the quantity of products it is economical for an individual producer to make and the quantity normally wanted by individual consumers or users.

Question 19

Yakima Valley Produce, Inc. buys artichokes from many small farmers, assembles them into larger quantities, and ships in carload quantities to a central market where they are sold to large food processors. This "regrouping activity" is called:

Accepted Answer

A)  bulk-breaking. 
B)  assorting. 
C)  sorting. 
D)  wholesaling. 
E)  accumulating. 
A)  bulk-breaking. 
B)  assorting. 
C)  sorting. 
D)  wholesaling. 
E)  accumulating.

Question 20

Marketing specialists develop to adjust "discrepancies" in the marketplace. Which of the following best explains the concept of "discrepancies"?

Accepted Answer

A)  There are many more consumers than there are producers. 
B)  The assortment and quantity of products wanted by a customer may be different than the assortment and quantity of products normally produced by a manufacturer. 
C)  Supply and demand is no longer determined by market forces because "big business" is more powerful than the individual consumer. 
D)  Price is not always a reliable measure of a product's quality. 
E)  Although most manufacturers claim to be marketing-oriented, most firms would rather produce what they want to sell rather than what customers want to buy. 
A)  There are many more consumers than there are producers. 
B)  The assortment and quantity of products wanted by a customer may be different than the assortment and quantity of products normally produced by a manufacturer. 
C)  Supply and demand is no longer determined by market forces because "big business" is more powerful than the individual consumer. 
D)  Price is not always a reliable measure of a product's quality. 
E)  Although most manufacturers claim to be marketing-oriented, most firms would rather produce what they want to sell rather than what customers want to buy.

Exam 11: Place and Development of Channel Systems

In administered channel systems, vertical cooperation is achieved by acquiring firms at different levels of activity.

When McDonald's corporate headquarters offers a local McDonald's franchise to a franchisee on Bourbon Street in New Orleans, this is an example of ___________ distribution.

Marketing managers should know that:

Because wholesalers and retailers are closer to the final user, they are in an ideal position to assume the channel captain role.

In _____ channel systems, the channel members agree by contract to cooperate with each other.

Nature Fresh Cereal does not feel satisfied with the location and amount of shelf space it is given at Sunshine Health Food Markets. This creates a source of

Joint venturing gives a firm less control than if it owns a separate subsidiary.

A good reason for developing or joining a vertical marketing system

Exclusive distribution

Discrepancy of quantity is

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:

Retail stores that sell "seconds" and "irregular" products at discount prices are flourishing all over the country. These stores are needed because of what regrouping activity?

Channel systems in which the various channel members make little or no effort to cooperate with each other are called ______________ systems.

Which of the following best illustrates "discrepancies of quantity"?

To reduce conflicts in channels, a firm should:

"Intensive distribution" means selling through:

"Discrepancies of quantity" means:

Yakima Valley Produce, Inc. buys artichokes from many small farmers, assembles them into larger quantities, and ships in carload quantities to a central market where they are sold to large food processors. This "regrouping activity" is called:

Marketing specialists develop to adjust "discrepancies" in the marketplace. Which of the following best explains the concept of "discrepancies"?

Marketings Value to Consumers, Firms, and Society

Marketing Strategy Planning

Evaluating Opportunities in the Changing Marketing Environment

Focusing Marketing Strategy With Segmentation and Positioning

Demographic Dimensions of Global Consumer Markets

Final Consumers and Their Buying Behavior

Business and Organizational Customers and Their Buying Behavior

Improving Decisions With Marketing Information

Elements of Product Planning for Goods and Services

Product Management and New-Product Development

Distribution Customer Service and Logistics

Retailers,wholesalers,and Their Strategy Planning

Promotion-Introduction to Integrated Marketing Communications

Personal Selling and Customer Service

Advertising, Publicity, and Sales Promotion

Pricing Objectives and Policies

Price Setting in the Business World

Implementing and Controlling Marketing Plans: Evolution and Revolution

Managing Marketings Link With Other Functional Areas

Ethical Marketing in a Consumer-Oriented World: Appraisal and Challenges

Economics Fundamentals

Marketing Arithmetic

Filters