Deck 12: Channels of Distribution

Question 1

A merchant establishment operated by a concern that is engaged primarily in buying,taking title to,usually storing and physically handling goods in large quantities,and reselling the goods (usually in smaller quantities)to retail or to industrial or business users is known as a(n):

A)agent.
B)wholesaler.
C)facilitating agent.
D)broker.

Answer 1

B

Question 2

Which of the following best describes an agent who generally operates on an extended contractual basis,often sells within an exclusive territory and handles non-competing but related lines of goods?

A)broker
B)manufacturer's agent
C)distributor
D)facilitating agent

Answer 2

B

Question 3

Because channel members often have direct contact with customers,it is an ideal situation for collecting information about customer and competitor behavior.Which of the following channel functions best describes this event?

A)marketing research
B)communications
C)negotiation
D)relationship management

Answer 3

A

Question 4

Which of the following statements is true regarding the value-added chain of distribution channels?

A)The value-added chain of distribution channels begins with the customer.
B)Distribution channels establish a connection between the firm and the customers.
C)One of the components of the value-added chain of distribution channels is the government.
D)Distribution channels connect suppliers to the firm.

Question 5

As customer knowledge about a product increases:

A)the number of intermediaries in the distribution channels also increases.
B)the information needs of the customers increase because of their curiosity to learn more.
C)the need for personalized services increase because customers feel that they need specific features.
D)sales through outlets increase and they offer wide product lines and low prices increase.

Question 6

Which of the following statements is true regarding changes in the distribution channel?

A)Once the distribution channel system is designed,the basic structure remains constant.
B)Innovation in distribution can create new marketing opportunities.
C)Distribution channels are not affected by structural changes to the industry.
D)Channel structures are independent of the changes in the environment.

Question 7

Identify the individual who serves as a go-between for the buyer and seller,but is not seen as a permanent representative of the buyer or seller.

A)broker
B)manufacturer's agent
C)distributor
D)retailer

Question 8

With reference to a value-added chain,the beginning of the chain consists of:

A)intermediaries.
B)buyers.
C)suppliers.
D)customers.

Question 9

Which of the following is one of the components of the value-added chain of distribution channels?

A)government
B)customers
C)competitors
D)marketers

Question 10

Some channel members seek out and interact with customers.Independent agents and wholesalers develop retail accounts for products.This channel function is known as:

A)contact.
B)communications.
C)negotiation.
D)risk taking.

Question 11

Activities of channel management that requires getting channels to carry and sell the product are known as ________ activities.

A)vertical
B)push
C)horizontal
D)pull

Question 12

Which of the following marketing intermediaries is a business that assists in the performance of distribution tasks other than buying,selling,and transferring title?

A)merchant middleman
B)jobber
C)retailer
D)facilitating agent

Question 13

Which of the following describes a business unit that negotiates purchases or sales but does not take title to the goods?

A)retailer
B)merchant middleman
C)agent
D)wholesaler

Question 14

A merchant middleman who is engaged primarily in selling to ultimate consumers is known as a:

A)broker.
B)facilitating agent.
C)distributor.
D)retailer.

Question 15

According to the text,channels of distribution must be treated like:

A)partners of the organization.
B)customers.
C)competitors of the firm.
D)marketers of the firms products.

Question 16

Which of the following indicates physical distribution of goods from one location to another?

A)procurement
B)logistics
C)segmentation
D)inventory management

Question 17

Activities of channel management that require motivating customers to ask for your brand by name are referred to as ________ activities.

A)vertical
B)push
C)horizontal
D)pull

Question 18

The system through which customers have access to your product or service to be able to purchase it represents:

A)the channels of distribution.
B)sales promotion.
C)advertising.
D)public relations.

Question 19

A middleman who buys from manufacturers and sells to retailers is called a:

A)broker.
B)manufacturer's agent.
C)facilitating agent.
D)jobber.

Question 20

Which of the following statements is true regarding channels?

A)It stops at the loading platform and what happens afterward is the buyer's responsibility.
B)It's members are considered as a substitute of the firm.
C)Customers do not associate problems in the channel with the firm.
D)Pull activities of channel management require getting channels to carry and sell the product.

Question 21

When the distribution system is characterized by the channel member purchasing and therefore taking title to the products,it performs the:

A)financing function.
B)risk taking function.
C)service function.
D)relationship management function.

Question 22

Sales literature and product brochures are distributed through wholesalers and retailers.Identify this channel function.

A)communication
B)marketing research
C)risk taking
D)negotiation

Question 23

Identify the situation where indirect channels are more useful than direct channels.

A)When product customization is important.
B)When after-sale service is important.
C)When purchase orders are large.
D)When transportation and storage are complex.

Question 24

Identify the key reason for picking a particular channel system.

A)To differentiating your product or service from the competition.
B)To follow competition's strategy.
C)By considering the inexpensive nature of the distribution channel.
D)By analyzing the organization's familiarity with the distribution channel.

Question 25

Retailers have category managers who are empowered to:

A)operate their categories as separate businesses.
B)merge with other companies as they see fit.
C)make significant investments in international countries.
D)relocate their retail locations to meet their satisfaction.

Question 26

In order to compete with "category killer" stores,local stores must offer ________ to warrant customer loyalty.

A)lower price
B)sufficient service
C)higher price
D)less service

Question 27

While formulating marketing strategy,companies such as Amway,Tupperware,and Mary Kay Cosmetics differentiate on the basis of:

A)retail sales as opposed to door-to-door.
B)door-to-door as opposed to retail sales.
C)retail sales as opposed to mass marketing.
D)mass marketing as opposed to customized marketing.

Question 28

A modification of the multiple-channel system is the ________ system.

A)direct channel
B)indirect channel
C)hybrid
D)vertical

Question 29

When providing basic logistical services,the channel member is providing the function of:

A)marketing research.
B)physical distribution.
C)risk taking.
D)negotiation.

Question 30

Identify the multiple channel system in which channel members perform complementary functions,often for the same customer thereby allowing for specialization and better levels of performance.

A)direct marketing system
B)hybrid system
C)vertical system
D)horizontal system

Question 31

Walmart used its investments in information technology to create direct links between its own warehouses and manufacturers,thereby eliminating the need for independent wholesalers in its system.This is an example of:

A)reintermediation.
B)disintermediation.
C)hybrid system.
D)channel conflict.

Question 32

Which of the following statements is true regarding a "category killer"?

A)They sell products belonging to multiple categories.
B)They deal with companies through intermediaries.
C)Smaller retailers posses a significant threat to category killers.
D)They are also known as big box retailers.

Question 33

Which of the following statements is true about a multiple-channel system?

A)It reduces the cost of distribution.
B)It is a type of a direct channel where intermediaries are eliminated through the use of information technology.
C)It simplifies coordination and management of the channel of distribution.
D)Loss of control is a typical problem associated with a multiple-channel system.

Question 34

Which of the following statements is true about a direct channel?

A)A company may have independent parties participate in a direct channel.
B)The channel members have direct contact with the end customers.
C)Usually,direct channels can reach more customers than indirect channels.
D)Microsoft selling its products through Best Buy is an example of a direct channel.

Question 35

Identify the situation where channel members have significant bargaining power over the marketing manager.

A)When the channel's sales volume is low relative to the product's total sales volume.
B)When the product is well differentiated from competitors.
C)When the channel poses a credible threat of backward integration.
D)When the channel has high switching costs.

Question 36

Which of the following statements is true about an indirect channel?

A)The company has a direct contact with the end customers.
B)The product or service remains under the control of the company from production to customer.
C)Indirect channels can reach more customers and perform functions that the sales force cannot.
D)The message given to the customers by the channel is entirely controlled by the organization.

Question 37

For some products,channels may actually be part of the manufacturing process by performing certain production functions.Identify this channel function.

A)financing
B)risk taking
C)relationship management
D)product assembly

Question 38

Wholesalers try to deliver products to customers in lot sizes that match their needs.Identify this channel function.

A)communications
B)matching/customizing
C)risk taking
D)relationship management

Question 39

When the channel member can enhance (or harm)the quality of the relationship between the selling firm and the customer,the channel member is engaging in:

A)marketing research.
B)risk taking.
C)service.
D)relationship management.

Question 40

When does a direct channel appear to be better than an indirect channel?

A)When product customization is important.
B)When one-stop shopping for many products is important.
C)When availability is important.
D)When after-sale service is important.

Question 41

Supermarkets that have gained power now charge fees for stocking products,called slotting allowances.This is a large problem for small companies trying to break into the channel.Identify the source of conflict.

A)goal divergence
B)domain dissensus
C)differing perceptions of reality
D)misuse of power

Question 42

Product categories are considered to be the business units that should be customized on a store-by-store basis to satisfy customer needs.Which of the following best describes this process?

A)category management
B)market segmentation
C)efficient consumer response
D)continuous replenishment program

Question 43

Which of the following statements is true regarding Russia and other former soviet bloc countries?

A)The retailing scene in these countries looks much like that of the United States.
B)These countries have high quality distribution structure.
C)The retail markets in these countries are extremely fragmented.
D)In these countries,a significant amount of purchasing is done on the black market.

Question 44

Identify the source of conflict when the perception of who owns a particular sector differs from channel participants.

A)goal divergence
B)domain dissensus
C)differing perceptions of reality
D)misuse of power

Question 45

Which of the following statements is true regarding an original equipment manufacturer (OEM)?

A)OEMs sell a product on a stand alone basis to end customers.
B)Brand name is highly visible in OEM marketing.
C)A customer is usually not aware of the cost structure of an OEM.
D)Knowledge of technical aspects of the product is important for OEM marketing.

Question 46

Which of the following is particularly a problem with multiple channels?

A)goal divergence
B)domain dissensus
C)differing perceptions of reality
D)misuse of power

Question 47

Which of the following is most likely to be associated with selling of trademarked goods through channels of distribution that are not authorized by the holder of the trademark?

A)a gray market
B)a multiple-channel system
C)a black market
D)a hybrid system

Question 48

Which of the following best describes organizations that buy products from a variety of vendors,assemble them in packages,and resell the packages to specialized segments?

A)an original equipment manufacturer
B)a manufacturing agent
C)a value-added reseller
D)a broker

Question 49

A company typically uses ________ when an ingredient is used in or as part of another company's products.

A)VARs
B)OEMs
C)APIs
D)SCMs

Question 50

A retailer may not think that the manufacturer's support in terms of cooperative advertising and training is sufficient while the manufacturer believes that it is offering the same level to that retailer as to others that have been successful.Identify this source of conflict.

A)goal divergence
B)domain dissensus
C)differing perceptions of reality
D)misuse of power

Question 51

In China,foreign firms are often ________ to set up their own distribution networks.

A)encouraged
B)required
C)forbidden
D)licensed

Question 52

Which of the following best describes retailers' scarce resources?

A)employees
B)selling space
C)available product
D)technology

Question 53

An organization focusing on the law firm segment purchases personal computers from a company,bundles together special software designed for client management and law firm accounting,and then sells the package as a turnkey system to customers.This organization is an example of:

A)an original equipment manufacturer.
B)a manufacturing agent.
C)a value-added reseller.
D)a broker.

Question 54

Which of the following can be used to resolve conflict?

A)Offering all products to all channels.
B)Reducing the money spent on push and pull activities.
C)Charging higher prices in the direct channel.
D)Working with the channel members to develop joint solutions.

Question 55

The sales force is rewarded on a commission basis.It wants to sell quantity and is willing to be flexible on price,whereas the organizations strategy is high quality,high price.Identify this source of conflict.

A)goal divergence
B)domain dissensus
C)differing perceptions of reality
D)misuse of power

Question 56

It is difficult to enter Japan's retail market because of:

A)its maze of importion and operational laws.
B)high brand loyalty.
C)its high dependence on black markets.
D)low level of disposable income.

Question 57

Which of the following is more concerned with how a particular product category is selling rather than a particular brand?

A)manufacturer
B)salesperson
C)retailer
D)jobber

Question 58

________ is most often found when there are significant currency-exchange-rate or price differences between countries that make it profitable to purchase goods in one country and then import them into another for resale.

A)Reintermediation
B)Parallel importing
C)Disintermediation
D)Customized marketing

Question 59

Which of the following statements is true regarding a value-added reseller?

A)A value-added reseller normally has a much larger number of suppliers.
B)Selling through a VAR is more like a supplier relationship.
C)Companies selling through VARs rarely have well-established markets into which they can also sell by themselves.
D)Marketing managers using VARs also have to have significant branded marketing skills.

Question 60

Identify the systems in which the manufacturer must be concerned about meeting not only its own objectives but also the objectives of the retailer.

A)value chain system
B)category management system
C)direct marketing system
D)hybrid system

Question 61

There are two broad categories of channels: direct and indirect channels.

Question 62

Which of the following is a process seeking to reducing costs throughout the entire distribution system,resulting in lower prices and increased consumer demand?

A)category management
B)efficient consumer response
C)value chain management
D)market segmentation

Question 63

Which of the following statements is true about continuous replenishment program (CRP)?

A)It is used as a tool for market segmentation.
B)It reduces the cost of producing goods.
C)It is a part of efficient consumer response.
D)It increases inventories at the retail side.

Question 64

A merchant middleman who is engaged primarily in selling to ultimate consumers is referred to as broker.

Question 65

Competitive distribution structures cannot differ in the same market.

Question 66

Companies that are marketing services must solve the same distribution problems as those that market tangible products.

Question 67

A jobber is a middleman who buys from manufacturers and sells to retailers.

Question 68

A broker assumes title risk and usually takes physical custody of products.

Question 69

Logistic refers to physical distribution of goods from one location to another.

Question 70

A careful analysis of customer behavior leads to a better understanding of what kind of channel structure is necessary to satisfy the different segments.

Question 71

Identify the process where retailers,wholesalers,and marketing managers work together to attempt to accurately forecast demand?

A)direct marketing
B)hybrid system
C)continuous replenishment program
D)value chain management

Question 72

A direct channel is one where the product or service remains under the control of the company from production to customer.

Question 73

In supermarket retailing there is an increased need to control costs and operate efficiently to compete with category killers.This need to be efficient has created:

A)mass marketing.
B)market segmentation.
C)efficient consumer response.
D)a hybrid system.

Question 74

Under ________,the idea is that retailers plan marketing and strategy for an entire group of products rather than on a brand by brand basis.

A)category management system
B)value chain system
C)mass marketing system
D)hybrid system

Question 75

A middleman who buys from manufacturers and sells to retailers is known as facilitating agent.

Question 76

Because agents are compensated only when they sell,based on a negotiated commission rate,the channel costs become fixed costs rather than variable.

Question 77

The channel stops at the loading platform and what happens afterward is the buyer's responsibility.

Question 78

A business that assists in the performance of distribution tasks other than buying,selling,and transferring title is referred to as merchant middleman.

Question 79

A merchant establishment operated by a concern that is engaged primarily in buying,taking title to,usually storing and physically handling goods in large quantities,and reselling the goods to retail or to industrial or business users is known as wholesaler.

Question 80

Channel systems cannot be as easily changed as a marketing strategy.