Question 1

In "traditional channel systems," the channel members:

Accepted Answer

A)  consider traditional values--like cooperation and respect--as central to their relationship. 
B)  have franchise contracts. 
C)  usually have a common product-market commitment. 
D)  make little or no effort to cooperate with each other. 
E)  are integrated. 
A)  consider traditional values--like cooperation and respect--as central to their relationship. 
B)  have franchise contracts. 
C)  usually have a common product-market commitment. 
D)  make little or no effort to cooperate with each other. 
E)  are integrated.

Question 2

Barnes & Noble, a multichannel book shop, discovers that Amazon.com is selling a new blockbuster book by Dan Brown at a 25 percent discount over Barnes & Noble's in-store price--because Amazon.com has a lower overhead cost. This is an example of _________ conflict.

Accepted Answer

A)  Vertical 
B)  Traditional 
C)  Horizontal 
D)  Administered 
E)  Contractual 
A)  Vertical 
B)  Traditional 
C)  Horizontal 
D)  Administered 
E)  Contractual

Question 3

Producers often have to use "multichannel distribution":

Accepted Answer

A)  because they want to sell both direct with a Web site and indirectly through intermediaries. 
B)  because big retail chains want to deal directly with producers. 
C)  because competitors use a variety of channels. 
D)  All of the above. 
E)  None of the above. 
A)  because they want to sell both direct with a Web site and indirectly through intermediaries. 
B)  because big retail chains want to deal directly with producers. 
C)  because competitors use a variety of channels. 
D)  All of the above. 
E)  None of the above.

Question 4

The owners of all the Chrysler auto dealerships in a large metropolitan area have an informal meeting during a golf outing. During the meeting, they agree to limit their orders of a new model of automobile that has received excellent reviews from the trade press for its styling and handling characteristics. Restricting orders will permit the dealers to sell these models at a price that will be at or above the manufacturer's suggested retail price for the vehicle. As a result, the dealers will make more profit on each vehicle sold due to the high demand for the new model. This type of agreement would be viewed by the courts as:

Accepted Answer

A)  Horizontal collusion that is illegal. 
B)  Horizontal collusion that is legal. 
C)  Vertical collusion that is legal. 
D)  Vertical collusion that is illegal. 
E)  An exclusive distribution arrangement that is legal. 
A)  Horizontal collusion that is illegal. 
B)  Horizontal collusion that is legal. 
C)  Vertical collusion that is legal. 
D)  Vertical collusion that is illegal. 
E)  An exclusive distribution arrangement that is legal.

Question 5

Which of the following is true of selective distribution?

Accepted Answer

A)  It is commonly needed for convenience products and business supplies used by all offices. 
B)  It is selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product. 
C)  It is selling through only one intermediary in a particular geographic area. 
D)  It is making a product available widely enough to satisfy target customers' needs but not exceed them. 
E)  It is selling through only those intermediaries who will give the product special attention. 
A)  It is commonly needed for convenience products and business supplies used by all offices. 
B)  It is selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product. 
C)  It is selling through only one intermediary in a particular geographic area. 
D)  It is making a product available widely enough to satisfy target customers' needs but not exceed them. 
E)  It is selling through only those intermediaries who will give the product special attention.

Question 6

Assorting activities involve putting together a variety of products to give a target market what it wants.

Accepted Answer

A) True 
 B)False

Question 7

Using the ______ approach to entering international markets gives a firm complete control of marketing strategy planning in the foreign market.

Accepted Answer

A)  joint venture 
B)  management contracting 
C)  direct investment 
D)  licensing 
E)  exporting 
A)  joint venture 
B)  management contracting 
C)  direct investment 
D)  licensing 
E)  exporting

Question 8

Exporters usually work with specialists who can handle international problems such as customs, taxes, exchange rates, and shipping.

Accepted Answer

A) True 
 B)False

Question 9

A direct-to-customer channel

Accepted Answer

A)  includes a retailer but not a wholesaler. 
B)  usually helps the producer to be more aware of changes in final customer attitudes. 
C)  eliminates some of the marketing functions. 
D)  is typical to reach final consumer markets. 
E)  is most suitable when a large number of transactions are required in the channel or when orders are smaller. 
A)  includes a retailer but not a wholesaler. 
B)  usually helps the producer to be more aware of changes in final customer attitudes. 
C)  eliminates some of the marketing functions. 
D)  is typical to reach final consumer markets. 
E)  is most suitable when a large number of transactions are required in the channel or when orders are smaller.

Question 10

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.
-If American Tennis Ball adds more wholesalers and more retail outlets, this is likely to

Accepted Answer

A)  create horizontal channel conflict. 
B)  lead to vertical channel conflict. 
C)  require that the largest wholesaler take over the channel captain role. 
D)  increase trust and cooperation in the channel. 
E)  prompt both vertical and horizontal channel conflict. 
A)  create horizontal channel conflict. 
B)  lead to vertical channel conflict. 
C)  require that the largest wholesaler take over the channel captain role. 
D)  increase trust and cooperation in the channel. 
E)  prompt both vertical and horizontal channel conflict.

Question 11

The lowest cost and lowest risk way to enter a foreign market is through

Accepted Answer

A)  a joint venture. 
B)  licensing. 
C)  management contracting. 
D)  a direct investment. 
E)  exporting. 
A)  a joint venture. 
B)  licensing. 
C)  management contracting. 
D)  a direct investment. 
E)  exporting.

Question 12

In _____ channel systems the amount of cooperation among members of the channel is very high.

Accepted Answer

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

Question 13

The most important reason to use indirect channels is if intermediaries can help serve customers better and at lower cost.

Accepted Answer

A) True 
 B)False

Question 14

Intensive distribution covers the broad area of market exposure between selective and exclusive distribution.

Accepted Answer

A) True 
 B)False

Question 15

Intensive distribution is selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product.

Accepted Answer

A) True 
 B)False

Question 16

A convenience product would probably be sold using:

Accepted Answer

A)  Intensive distribution. 
B)  Exclusive distribution. 
C)  Selective distribution. 
D)  Extensive distribution. 
E)  Sole-source distribution. 
A)  Intensive distribution. 
B)  Exclusive distribution. 
C)  Selective distribution. 
D)  Extensive distribution. 
E)  Sole-source distribution.

Question 17

Place decisions are easier to change in the short-run than Product, Price, and Promotion decisions.

Accepted Answer

A) True 
 B)False

Question 18

Channels of distribution:

Accepted Answer

A)  that include intermediaries result in higher distribution costs than channels without intermediaries. 
B)  should be designed to increase discrepancies of quantity between producers and consumers. 
C)  usually do not involve conflicts as long as each channel member has profit as a goal. 
D)  usually require longer-term planning than other market mix elements because channel decisions are more difficult to change quickly. 
E)  are always characterized by conflict among channel members. 
A)  that include intermediaries result in higher distribution costs than channels without intermediaries. 
B)  should be designed to increase discrepancies of quantity between producers and consumers. 
C)  usually do not involve conflicts as long as each channel member has profit as a goal. 
D)  usually require longer-term planning than other market mix elements because channel decisions are more difficult to change quickly. 
E)  are always characterized by conflict among channel members.

Question 19

The vertical marketing system that typically has the greatest amount of cooperation among channel members is a(n):

Accepted Answer

A)  Traditional channel system. 
B)  Administered channel system. 
C)  Contractual channel system. 
D)  Franchise channel system. 
E)  Corporate channel system. 
A)  Traditional channel system. 
B)  Administered channel system. 
C)  Contractual channel system. 
D)  Franchise channel system. 
E)  Corporate channel system.

Question 20

In a licensing agreement, the licensee takes most of the risk because it must invest some capital to use the right granted by the licensor.

Accepted Answer

A) True 
 B)False

Exam 11: Place and Development of Channel Systems

In "traditional channel systems," the channel members:

Barnes & Noble, a multichannel book shop, discovers that Amazon.com is selling a new blockbuster book by Dan Brown at a 25 percent discount over Barnes & Noble's in-store price--because Amazon.com has a lower overhead cost. This is an example of _________ conflict.

Producers often have to use "multichannel distribution":

Which of the following is true of selective distribution?

Assorting activities involve putting together a variety of products to give a target market what it wants.

Using the ______ approach to entering international markets gives a firm complete control of marketing strategy planning in the foreign market.

Exporters usually work with specialists who can handle international problems such as customs, taxes, exchange rates, and shipping.

A direct-to-customer channel

The lowest cost and lowest risk way to enter a foreign market is through

In _____ channel systems the amount of cooperation among members of the channel is very high.

The most important reason to use indirect channels is if intermediaries can help serve customers better and at lower cost.

Intensive distribution covers the broad area of market exposure between selective and exclusive distribution.

Intensive distribution is selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product.

A convenience product would probably be sold using:

Place decisions are easier to change in the short-run than Product, Price, and Promotion decisions.

Channels of distribution:

The vertical marketing system that typically has the greatest amount of cooperation among channel members is a(n):

In a licensing agreement, the licensee takes most of the risk because it must invest some capital to use the right granted by the licensor.

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

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