Deck 13: Designing and Managing Integrated Marketing Channels

Question 1

A(n)________ is a facilitator who assists in the distribution process.

A) advertising agency
B) sales agent
C) manufacturer's representative
D) broker
E) wholesaler

Answer 1

A

Question 2

A computer manufacturing company allows customers to place orders online which they can later pick up from a convenient retail location.Which of the following terms best represents this practice?

A) channel integration
B) mass customization
C) online personalization
D) push strategy
E) internal marketing

Answer 2

A

Question 3

A manufacturer uses the company's sales force and trade promotions to carry,promote,and sell products to end users.Which of the following strategies is this manufacturer using?

A) personalization strategy
B) tailoring strategy
C) push strategy
D) pull strategy
E) consumer promotion strategy

Answer 3

C

Question 4

A firm uses its sales force to sell to large accounts and outbound telemarketing to sell to medium-sized accounts.The firm is using ________ marketing.

A) hybrid
B) pull
C) personalized
D) vertical
E) internal

Question 5

Producers often shift some functions to intermediaries.Which of the following is the most significant benefit of doing this?

A) It increases customer loyalty.
B) It provides the producer with greater control over operations.
C) It reduces the amount of direct customer interaction.
D) It lowers the producer's costs and prices.
E) It ensures greater information security.

Question 6

Spike Inc.is a sportswear manufacturer that recently launched its new line of customizable running shoes.The shoes come with a digital component that allows them to adapt to the runner's biomechanics.To promote this new product,Spike launches an advertising campaign and also ropes in a famous athlete to endorse the product.This is an example of a ________.

A) trade promotion
B) reverse flow
C) push strategy
D) pull strategy
E) backward flow

Question 7

________ are sets of interdependent organizations participating in the process of making a product or service available for use or consumption.

A) Marketing channels
B) Interstitials
C) Communication channels
D) Sales territories
E) Marketing terrains

Question 8

Atburex is a furniture manufacturing company in the United States.The company provides a sixty day credit period and EMI options to customers and also offers on-site delivery and installation.These special benefits refer to which of the following service outputs?

A) good service backup
B) large product variety
C) spatial convenience
D) large lot size
E) short waiting time

Question 9

When is a pull strategy appropriate?

A) when there is low brand loyalty
B) when consumers are able to perceive differences between brands
C) when brand choice is made in the store
D) when it is a low involvement purchase
E) when the product is an impulse item

Question 10

Which of the following is an example of a zero-level channel?

A) A company takes online orders from customers and ships the products to them.
B) An organization uses a combination of direct salespeople and sales agencies to increase sales.
C) A company sells its products through wholesalers and retailers.
D) A company sells its products through chains of supermarkets and other large sellers.
E) A large company forms alliances with smaller companies to increase sales coverage.

Question 11

Companies should first think of the target market and then design the supply chain backward from that point.This strategy is called ________.

A) demand chain planning
B) resource planning
C) external channel planning
D) materials planning
E) strategic business planning

Question 12

Using the push strategy is most appropriate when ________.

A) consumers are able to perceive differences between brands
B) the product being sold is an impulse item
C) there is high brand loyalty for the product
D) the product is a high involvement purchase
E) consumers choose the brand before they go to the store

Question 13

Which of the following terms refers to the add-on services,such as credit,delivery,installation,and repairs,provided by a marketing channel?

A) service backup
B) product accessories
C) external products
D) product variety
E) service extensions

Question 14

Toyota has an advantage over Lexus due to the fact that there are more Toyota dealers,which helps customers save on transportation and search costs in buying and repairing an automobile.Which of the following service outputs relates to this competitive advantage?

A) spatial convenience
B) service backup
C) lot size
D) waiting time
E) delivery time

Question 15

As a service output produced by marketing channels,product variety refers to the ________.

A) units the channel permits a customer to purchase at once
B) assortment provided by the marketing channel
C) add-on services provided by the channel
D) ability of a product to provide incremental value
E) degree to which the channel makes it easy for customers to purchase a product

Question 16

A direct marketing channel is a ________.

A) one-level channel
B) two-level channel
C) zero-level channel
D) three-level channel
E) reverse-flow channel

Question 17

Which of the following activities is a reverse-flow channel of marketing?

A) raw materials movement
B) product recycling
C) materials ordering
D) finished goods storage
E) customer order placement

Question 18

Which of the following is the most accurate description of a value network?

A) A system of partnerships and alliances that a firm creates to source, augment, and deliver its offerings.
B) A system of organizations and resources involved in moving a product from supplier to customer.
C) An arrangement whereby an organization transforms inputs into finished goods.
D) A network that allows an organization take the finished products to the end-users.
E) A communication network that allows an organization to transfer information to end-customers.

Question 19

Which of the following entities in the marketing channel is a merchant?

A) wholesalers
B) brokers
C) sales agents
D) warehouses
E) advertising agencies

Question 20

Which of the following entities is present in a zero-level marketing channel?

A) consumers
B) retailers
C) brokers
D) jobbers
E) wholesalers

Question 21

A manufacturer is using legitimate power when it ________.

A) requests a behavior that is warranted under the selling contract
B) threatens to withdraw a resource or terminate a relationship
C) offers intermediaries an extra benefit for performing specific acts or functions
D) makes the intermediaries sell more of a particular product by offering rewards
E) sells more products by making use of its reputation in the market

Question 22

Which of the following allows a firm to maintain control over the service level and obtain more dedicated and knowledgeable selling?

A) selective distribution
B) intensive distribution
C) push strategy
D) exclusive distribution
E) pull strategy

Question 23

Exclusive dealing arrangements are mainly used by companies looking for an edge in markets increasingly driven by ________.

A) price
B) efficiency
C) product variety
D) add-on services
E) spatial convenience

Question 24

A producer must modify its channel design and arrangements if ________.

A) consumer buying patterns change
B) the competition in the market stabilizes
C) the product is in the growth stage of its life cycle
D) the market size remains unchanged for a particular period
E) the firm's profits stabilize

Question 25

A new firm typically starts as a local operation selling in a fairly circumscribed market by ________.

A) finding and developing new intermediaries
B) using a few existing intermediaries
C) forming partnerships with the market leader
D) creating a special channel
E) forming partnerships with other firms

Question 26

A(n)________ VMS consists of independent firms at different levels of production and distribution,integrating their programs on a contractual basis to obtain more economies or sales impact than they could achieve alone.

A) administered
B) contractual
C) corporate
D) regulated
E) referent

Question 27

A group of small sellers take the initiative and organize a new business entity to carry on wholesaling and possibly some production.This initiative is called a(n)________.

A) retailer cooperative
B) franchise organization
C) area-based cartel
D) sponsored voluntary chain
E) alternate selling channel

Question 28

Which of the following covers payment terms and producer guarantees?

A) conditions of sale
B) pricing policies
C) exclusive dealings
D) mutual services
E) territorial rights

Question 29

An administered VMS coordinates successive stages of production and distribution through ________.

A) an automated central control unit
B) single ownership
C) the combined efforts of all its members
D) the establishment of contractual obligations
E) the size and power of one of the members

Question 30

Rotter Garder Inc.is a large-scale paint manufacturer and is known for its wide range of decorative paint products and industrial coatings.In addition to making paints,the company also owns and operates the retail stores which sell its products.This is an example of a(n)________ vertical marketing system.

A) administered
B) contractual
C) referent
D) corporate
E) regulated

Question 31

A(n)________ vertical marketing system combines successive stages of production and distribution under single ownership.

A) corporate
B) administered
C) contractual
D) regulatory
E) controlled

Question 32

What is the major difference between a conventional marketing channel and a vertical marketing system (VMS)?

A) Elements in a conventional marketing channel act as separate businesses whereas the elements in a VMS act as a unified system.
B) A VMS has many intermediaries whereas a conventional marketing channel has a limited number of intermediaries.
C) A VMS is characterized by an independent producer whereas a conventional marketing channel is characterized by multiple producers.
D) A conventional marketing channel has elements such as retailers and wholesalers whereas these elements are not present in a VMS.
E) Producers have complete control over the other members in a conventional marketing channel whereas this control is minimal in a VMS.

Question 33

A(n)________ includes the producer,wholesaler(s),and retailer(s)acting as a unified system.

A) parallel marketing channel
B) vertical marketing system
C) extensive marketing channel
D) internal marketing system
E) conventional marketing channel

Question 34

In a retailer cooperative,________.

A) profits are equally divided among members
B) members plan their advertising jointly
C) nonmembers cannot buy through the co-op
D) members rely on distribution programming
E) members standardize their selling practices

Question 35

Armon Apparels designs,manufactures,and distributes athletic apparel and accessories for men and women.The company has only nine distributors across the United States.These distributors control a nationwide network of 600 retailers.The company does not sell its products through other channels.This is an example of ________ distribution.

A) selective
B) intensive
C) exclusive
D) internal
E) passive

Question 36

Electrobar,a European manufacturer of industrial kitchenware,sells to industrial canteens,restaurants,hotels,and so forth.The company provides a one-year warranty on all products and also allows customers to pay in installments-they pay fifty percent on delivery and the rest as equal installments.This refers to which element in the "trade-relations mix"?

A) price policy
B) conditions of sale
C) distributors' territorial rights
D) exclusive dealings
E) mutual services and responsibilities

Question 37

An intensive distribution strategy serves well for ________.

A) premium cars
B) commercial trucks
C) private label products
D) industrial equipment
E) newspapers

Question 38

A group of small grocery shops forms a new business entity to buy products directly from manufacturers.The group buys products in bulk which are then distributed among members.This helps the shops obtain better profit margins.Which of the following types of vertical marketing systems can be observed here?

A) contractual
B) corporate
C) administered
D) controlled
E) regulatory

Question 39

Which marketing channel is associated with the highest value added per sale?

A) retail stores
B) sales force
C) distributors
D) Internet
E) telemarketing

Question 40

Which of the following channels is associated with the lowest cost per transaction?

A) Internet
B) telemarketing
C) retail stores
D) distributor
E) sales force

Question 41

A franchisee owner is unsatisfied because the manufacturer provides more benefits to a wholesaler.This conflict is an example of a(n)________ conflict.

A) horizontal
B) vertical
C) intermediate
D) multichannel
E) parallel

Question 42

Consumer surveys suggest that one of the most significant inhibitors of online shopping is the absence of ________.

A) pleasurable experiences
B) competitive prices
C) adequate technical information
D) after-sales service
E) facilities to compare offerings

Question 43

In a ________ marketing system,two or more unrelated companies put together resources or programs to exploit an emerging marketing opportunity.

A) reverse flow
B) vertical
C) horizontal
D) lateral
E) forward flow

Question 44

A manufacturer wants to achieve rapid market penetration through a low-price policy.However,its dealers prefer to work with high margins and pursue short-run profitability.The major reason for this conflict is ________.

A) goal incompatibility
B) unclear roles
C) ambiguous rights
D) differences in perception
E) dependence on the manufacturer

Question 45

Companies should first think of the target market and then design the supply chain backward from that point.This strategy is called demand chain planning.

Question 46

Sales agents and brokers are called facilitators in a marketing channel.

Question 47

A pull strategy is particularly appropriate when there is low brand loyalty in a category,brand choice is made in the store,the product is an impulse item,and product benefits are well understood.

Question 48

RX Corp.is a large manufacturer of electronic goods and sells its products through distributors and retailers.In order to keep pace with the growing use of the Internet,the company decides to start selling online.The company faces stiff opposition from its retailers as they believe that this will significantly reduce their profits.The company attempts to eliminate this resistance by offering its retailers commissions for processing and delivering orders received via the Web.This is an example of which of the following conflict resolution strategies?

A) dual compensation
B) joint membership
C) arbitration
D) co-option
E) strategic pricing

Question 49

JSE Securities Exchange is the largest stock exchange in Africa.The JSE provides a market where securities can be traded freely under a regulated procedure.The company acts as an intermediary between the traders.JSE is an example of a(n)________.

A) internal broker
B) infomediary
C) customer community
D) market maker
E) third party arbitrator

Question 50

A marketing channel overcomes the time,place,and possession gaps that separate goods and services from those who need or want them.

Question 51

Marketing channels are the set of pathways a product or service follows after production,culminating in purchase and consumption by the final end user.

Question 52

Which of the following channel conflict resolution techniques is used only if everything else proves ineffective?

A) legal recourse
B) mediation
C) arbitration
D) co-option
E) superordinate goals

Question 53

Co-optation is an effort by one organization to win the support of the leaders of another by ________.

A) including them in advisory councils
B) engaging in mediation and arbitration
C) encouraging joint memberships in trade associations
D) encouraging employee exchanges
E) offering strategic justifications

Question 54

A franchise organization is an example of a(n)________ vertical marketing system.

A) corporate
B) administered
C) contractual
D) regulatory
E) controlled

Question 55

Which of the following is a major advantage of adding more channels for selling?

A) It helps the company increase its market coverage.
B) It helps the company reduce its fixed costs.
C) It reduces the likelihood of channel conflict.
D) It is the best strategy for selling low-involvement consumer products.
E) It results in economies of scale.

Question 56

A large retail chain in the United States decides to expand its operations by adding an online site for e-commerce.This is called a(n)________ company.

A) B2B
B) brick-and-mortar
C) m-commerce
D) pure-click
E) brick-and-click

Question 57

Exxon Consulting,works as an agent on behalf of business consumers to collect information on various industrial products.When faced with buying decisions,businesses can approach Exxon to obtain detailed information on the various options available to them.The company earns revenue by selling such information to various customers.Marten Consulting can be called a(n)________.

A) infomediary
B) market maker
C) customer community
D) third party arbitrator
E) informant

Question 58

General Motors' executives work for a short time in some dealerships,and some dealership owners work in GM's dealer policy department.This strategy helps the company avoid conflicts with its dealers.This is an example of the ________ strategy.

A) employee exchange
B) dual compensation
C) joint membership
D) co-optation
E) diplomacy

Question 59

________ channel conflict occurs between channel members at the same level.

A) Horizontal
B) Vertical
C) Multichannel
D) Administrative
E) Contractual

Question 60

Which of the following is a major threat facing the brick-and-mortar manufacturers when they add an e-commerce channel?

A) It creates the possibility of a backlash from the existing intermediaries.
B) It increases the likelihood of product cannibalization.
C) Successful implementation leads to a significant increase in operational costs.
D) It significantly increases the resource requirements of the organization.
E) E-commerce channels often have low potential for attracting customers.

Question 61

Lot size refers to the total number of units a channel can transmit from the manufacturer's place to the service outlet.

Question 62

Add-on services such as credit,delivery,installation,and repairs provided by the marketing channel are referred to as service backup.

Question 63

Channel power is the ability to alter channel members' behavior so they take actions they would not have taken otherwise.

Question 64

Retailer cooperatives allow nonmember retailers to buy through them and share the profits.

Question 65

Distributors' territorial rights define the terms under which the producer will enfranchise other distributors.

Question 66

The flow of materials to refurbish products for resale constitutes a reverse flow.

Question 67

Vertical marketing systems achieve economies through size,bargaining power,and elimination of duplicated services.

Question 68

Orion Airlines is an American airline that provides domestic and international air transport services.Explain the five service outputs provided by marketing channels with reference to Orion.

Question 69

Intensive distribution relies on only some of the intermediaries willing to carry a particular product.

Question 70

Marketing channel functions such as storage and movement and communications constitute a backward flow of activities.

Question 71

Explain the three distribution strategies based on the number of intermediaries.

Question 72

After a company has chosen a channel system,it must select,train,motivate,and evaluate individual
intermediaries for each channel.

Question 73

Brick-and-click companies are those that have launched a Web site without any previous existence as a firm.

Question 74

A zero-level marketing channel typically uses a wholesaler and a retailer.

Question 75

Unrelated companies put together resources or programs in horizontal marketing systems.

Question 76

The first step in global channel planning is to get close to customers.

Question 77

UltraMotion Pictures produces and distributes music and television entertainment in the United States.The company distributes music in partnership with a large music retailer,Fromen Tunes.Fromen executives often work for a short time with UltraMotion and some of the UltraMotion executives work at the retail outlets to study Fromen's operations.This strategy minimizes the conflicts between partners.What strategy is being used here? Briefly explain.

Question 78

What is a vertical marketing system (VMS)? What are the various types of VMSs?

Question 79

A conventional marketing channel includes the producer,wholesalers,and retailers acting as a unified system.

Question 80

Differentiate between pure-click companies and brick-and-click companies.