Exam 11: Place and Development of Channel Systems

Midwest Tools, Inc. of Indianapolis, Indiana owns a plant in Poland for manufacturing and selling machine tools in Europe. This type of international involvement is called:

Bulk-breaking means separating products into grades and qualities desired by different target markets.

Direct marketing is

Roscoe Hardware carries stock on the complete line of Ever-Green Push Lawn Mowers. Its competitor down the street sells the same mowers at a special price by special order but does not carry any inventory. This situation creates

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 the following describes WTB's channel arrangements?

Many firms prefer to distribute directly to the final customer or consumer because they

Regrouping activities adjust the quantities or assortments of products handled at each level in a channel of distribution.

A manufacturer may be forced to use multichannel distribution because a big retail chain wants to deal directly with it instead of wholesalers.

Direct-to-customer channels are rarely used in business markets because they are much more expensive and less efficient than using intermediaries.

"Discrepancies of quantity" means:

Which of the following is NOT a Place decision?

Multichannel distribution occurs when a producer uses several competing channels to reach the same target market perhaps using several intermediaries in addition to selling directly.

Firms that use direct marketing promotion may or may not use direct distribution.

Exporting is sometimes just a way for a firm to get rid of surplus products.

A manager who helps direct the activities of a whole channel and tries to avoid or solve channel conflicts is a:

Which of the following is NOT an advantage of vertical integration?

Discrepancies of quantity and assortment occur because individual producers find it economical to produce and sell small quantities of a large assortment of products while individual consumers prefer to buy large quantities of a small assortment of products.

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

Some channel conflict may

Some firms are forced to use direct distribution when they can't find intermediaries willing to carry innovative, new products.