Exam 10: Place and Development of Channel Systems

Channels used to retrieve products that customers no longer want are called collection channels.

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 tennis ball manufacturer is involved in direct distribution?

A selective distribution policy might be used to avoid selling to wholesalers or retailers that:

Which degree of market exposure would probably be most suitable for a heterogeneous shopping product which has achieved brand preference and sells for about $300?

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

Distribution costs can be very low for digital products because there is often no physical good to distribute.

Accumulating involves dividing larger quantities into smaller quantities as products get closer to the final market.

A common "product-market commitment" in a channel system helps to eliminate:

Which of the following is typically the lowest risk approach for moving into international markets?

In a licensing agreement, the licensee

Product classes help marketing managers understand how much market exposure will be needed in each geographic area.

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.

When Amazon.com collects products from many small producers, the company is involved in _____.

When an online intermediary like Hulu scans all of the episodes of NCIS and then offers them to its customers one episode at a time, this is an example of:

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:

ESPN cable television offers numerous sports programs. What type of discrepancy does this create for sports fans who want to watch only a few of the programs?

Which of the following is not a benefit that an intermediary is likely to provide for producer-suppliers?

Which of the following is a function that an intermediary is likely to provide for customers?

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?

Which of the following statements about Place decisions is True?