Deck 17: Designing and Managing Integrated Marketing Channels

Question 1

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.

Answer 1

True

Question 2

________ 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

Answer 2

A

Question 3

Explain the concept of a value network.

Answer 3

A company can be seen as being at the center of a value network, a system of partnerships and alliances that a firm creates to source, augment, and deliver its offerings. A value network includes a firm's suppliers and its suppliers' suppliers, and its immediate customers and their end customers. The value network includes valued relationships with others such as university researchers and government approval agencies. A company needs to orchestrate these parties in order to deliver superior value to the target market.
Managing a value network means making increasing investments in information technology (IT) and software. Firms have introduced supply chain management (SCM) software and invited such software firms as SAP and Oracle to design comprehensive enterprise resource planning (ERP) systems to manage cash flow, manufacturing, human resources, purchasing, and other major functions within a unified framework.

Question 4

Total Beverages, a maker of fruit juices and health drinks, recently launched a new brand of packaged drinking water called AquaPure. In order to induce distributors to carry the product, Total offers all its intermediaries a free refrigerator to store bottles of AquaPure. This is an example of a ________.

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

Question 5

A merchant is a(n) ________ in the marketing channel.

A) wholesaler
B) broker
C) sales agent
D) warehouse
E) advertising agency

Question 6

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 7

What are marketing channels? Briefly explain some of the different types of intermediaries.

Question 8

Sweet Treats is a startup confectionery manufacturer that sells chocolates, toffees, marshmallows, jelly candies, and so on. Should the firm adopt a push or a pull strategy? Explain your answer.

Question 9

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

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

Question 10

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 11

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

Question 12

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 13

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 14

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 15

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

Question 16

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

Question 17

The Norticon Group provides and manages computers and network systems for businesses and communities. Norticon sells its products through various means. It uses its sales force to sell to large customers and telemarketing to sell to smaller customers. The company also sells its products via the Internet. Briefly explain the marketing approach being used by the company.

Question 18

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 entices 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 19

Garolds Stores operates as a low price retailer. It offers home fashion products, such as wall decor, frames, candles, bath and bedding products, furniture, home accents, and kitchen products. The firm has showrooms and retail stores across United States. Customers can buy products in three different ways: (1) they can place orders online and have the products shipped to their homes; (2) they can buy directly from the showrooms and retail outlets; or (3) they can place orders online and pick them up from the nearest showroom. What are the benefits that Garolds Stores could achieve by using various channels to sell to customers?

Question 20

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 21

A jobber in a three-level marketing channel is a(n) ________.

A) small-scale wholesaler
B) external broker
C) advertising agent
D) independent evaluator
E) communication channel

Question 22

A direct marketing channel is a ________ channel.

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

Question 23

Dell computers is a manufacturer of computers. Dell accepts orders for computers online and ships the products to the customer. Explain the likely physical flow of materials in this case.

Question 24

Door-to-door sales, home parties, mail order, telemarketing, TV selling, Internet selling, and manufacturer-owned stores are examples of ________.

A) zero-level channels
B) jobbers
C) wholesalers
D) manufacturer's representatives
E) consumers

Question 25

Members of a marketing channel perform three types of functions. Provide examples of these three functions in the context of a publishing company that publishes books and magazines.

Question 26

Cortron Consultants provides business consulting services for startups. It helps customers design their supply chains by first evaluating the target market and then proceeds backward from that point. What is this strategy of reverse design called? Briefly explain.

Question 27

What are the various functions performed by members of a marketing channel? Provide examples.

Question 28

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 29

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

Question 30

Identify the channel function that constitutes both backward and forward flow.

A) obtaining funds for financing
B) storage of physical goods
C) persuasive communication
D) movement of physical goods
E) overseeing actual transfer of ownership

Question 31

All functions in a marketing channel use up scarce resources and can be shifted among channel members.

Question 32

Which of the following channel functions constitute only a backward flow?

A) movement of physical goods
B) placing orders with manufacturers
C) persuasive communication
D) storage of physical goods
E) overseeing actual transfer of ownership

Question 33

Eureka Forbes, an Asian consumer appliances company, sells its vacuum cleaners through door-to door sales. This allows the company to obtain a high conversion ratio. Comment on the length of the channel in the case of Eureka Forbes' vacuum cleaners.

Question 34

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

Question 35

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

Question 36

Briefly explain the various levels of marketing channels.

Question 37

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 38

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

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

Question 39

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

Question 40

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 41

Which of the following is a major disadvantage of using the Internet as a marketing channel?

A) It is less effective for complex products.
B) It lacks convenience and practicality.
C) It cannot be used to reach a wide audience.
D) It is considered expensive.
E) It causes the company to lose direct contact with customers.

Question 42

An intensive distribution strategy serves well for ________.

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

Question 43

Atburex is a furniture manufacturing company in the United States. The company provides a 60-day credit period and also offers on-site delivery and installation. These special benefits refer to which of the following service outputs?

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

Question 44

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 45

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 50 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 46

________ call(s) for the producer to establish a schedule of discounts and allowances that intermediaries see as equitable and sufficient.

A) Exclusive dealings
B) Mutual services
C) Territorial rights
D) Price policy
E) Tying agreements

Question 47

Which of the following problems is most likely when a company chooses to use a sales agency instead of company salespeople?

A) The company will find it difficult to control the sales process.
B) They do not take title to goods or negotiate purchases or sales.
C) The value-added per sale is the lowest for sales agencies.
D) Agencies will pay less attention to customers who buy the most or in large volumes.
E) Sales agencies are often difficult to access due to strict contractual obligations.

Question 48

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 49

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 50

Which of the following products is most likely to be sold using an exclusive distribution strategy?

A) designer luggage
B) cigarettes
C) alcoholic beverages
D) car fuel
E) medicine

Question 51

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

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

Question 52

Which of the following types of distribution involves severely limiting the number of channel intermediaries?

A) exclusive
B) selective
C) intensive
D) aggressive
E) retail

Question 53

Which of the following allows a firm to maintain control over 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 54

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

Question 55

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 56

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 57

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 58

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

Question 59

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 60

Which of the following channel alternatives is most suited to handle complex products and transactions?

A) sales forces
B) the Internet
C) dealers
D) telemarketers
E) direct mails

Question 61

Ravake is a manufacturer of high-end designer apparel. Competition in the apparel industry is severe and the market is driven by price. What distribution strategy would be best suited to help Ravake obtain an edge over its competitors?

Question 62

In an effort to boost sales, Broomer offers its retailers a higher margin for promoting and selling products from the "Inducer" line to customers. This is an example of ________ power.

A) coercive
B) reward
C) passive
D) expert
E) referent

Question 63

Intensive distribution is becoming a mainstay for specialists looking for an edge in markets increasingly driven by price.

Question 64

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 65

Briefly explain the various service outputs that marketing channels produce.

Question 66

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

Question 67

________ power can be effective, but its exercise produces resentment and can lead the intermediaries to organize countervailing power.

A) Coercive
B) Reward
C) Legitimate
D) Expert
E) Referent

Question 68

Broomer threatens to withdraw all its other products from the retailers' stores if they are unwilling to push products from the "Inducer" line. This is an example of ________ power.

A) reward
B) coercive
C) legitimate
D) expert
E) referent

Question 69

National Beverage Corp. produces and distributes a wide range of beverages. It offers a selection of flavored soft drinks, juices, sparkling waters, energy drinks, nutritionally enhanced waters, and other specialty beverages. What distribution strategy will be most suitable for the company's products?

Question 70

STIHL, which manufactures handheld outdoor power equipment sold to six independent US distributors and six STIHL-owned marketing and distribution centers who sell to a nationwide network of more than 8,000 servicing retail detailers, is a good example of intensive distribution.

Question 71

An intensive distribution strategy serves well for products such as snack foods and soft drinks.

Question 72

Because of the acceptance that the other Broomer products have in the market, retailers are willing to stock items from the new "Inducer" line of clothing. This is an example of ________ power.

A) referent
B) passive
C) legitimate
D) coercive
E) reward

Question 73

A manufacturer offers its intermediaries an extra benefit for performing a promotional activity. This is an example of the use of ________ power.

A) reward
B) coercive
C) functional
D) expert
E) referent

Question 74

When economic conditions are depressed, producers want to move goods to market using longer channels.

Question 75

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

Question 76

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

Question 77

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 78

Selective distribution severely limits the number of intermediaries and is appropriate when the producer wants to maintain control over the service level and outputs offered by the resellers.

Question 79

Products such as heating and cooling systems are usually sold and maintained by the company or by franchised dealers.

Question 80

Manufacturers can obtain greater control over the selling process by using a sales agency.