Question 1

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 United States.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 six 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?

Accepted Answer

A) WTB 
B) ATB 
C) NTB 
D) All these companies appear to be channel captains. 
E) None of these companies is a channel captain.

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

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 United States.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 six 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.
If American Tennis Ball adds more retail outlets,which of the following would help it to manage channel conflict?

Accepted Answer

A) assigning the channel captain role to the largest retail chain 
B) selling a different brand of tennis ball through the new retailers than what it sells through current retailers 
C) selecting new retail outlets that target the same customers as those who buy from its current retailers 
D) choosing new retailers in the same geographic market as its current retailers but who sell at lower prices 
E) dropping its national advertising and leave it to retailers to promote its tennis balls

Question 4

To minimize its own risks,the Boomtown Petroleum Corp.of Houston,Texas,operates a South American oil refinery that is owned by residents of that country.Boomtown is engaged in an activity known as

Accepted Answer

A) management contracting. 
B) a joint venture. 
C) exporting. 
D) licensing. 
E) direct investment.

Question 5

Intensive distribution is

Accepted Answer

A) selling through only those wholesalers or retailers who will give the product special attention. 
B) selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product. 
C) selling through only one wholesaler or retailer in a particular geographic area. 
D) making a product available widely enough to satisfy target customers' needs but not exceed them. 
E) used to gain some of the advantages of exclusive distribution while still achieving fairly widespread market coverage.

Question 6

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

Accepted Answer

A) exporting. 
B) management contracting. 
C) licensing. 
D) a joint venture. 
E) None of these answers is correct.

Question 7

Compared to intensive distribution,selective distribution gives a producer a greater opportunity for profit but usually makes it more difficult for intermediaries to make a profit.

Accepted Answer

A) True 
 B)False

Question 8

If Wilkinson were to sell Norelco the exclusive rights to produce and sell its brand of shavers in Japan for a 5 percent royalty on all sales,it would be using

Accepted Answer

A) licensing. 
B) joint venturing. 
C) management contracting. 
D) exporting. 
E) direct investment.

Question 9

Firms that use direct distribution can usually adjust their marketing mixes more quickly than firms that use indirect distribution.

Accepted Answer

A) True 
 B)False

Question 10

A manufacturer prefers to produce and ship in large quantities to take advantage of economies of scale.Final consumers often want to purchase in small quantities.This difference between the producer and consumer is a

Accepted Answer

A) discrepancy of assortment. 
B) discrepancy of quantity. 
C) regrouping activity. 
D) discrepancy adjustment. 
E) marketing discrepancy.

Question 11

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

Accepted Answer

A) vertical arrangements between producers and intermediaries that limit sales by customer or territory are always illegal. 
B) the Federal Trade Commission prohibits exclusive distribution. 
C) vertical arrangements between producers and intermediaries that limit sales by customer or territory may be legal,according to a recent Supreme Court ruling. 
D) horizontal arrangements among competing producers or intermediaries which limit sales by customer or territory are generally considered legal. 
E) None of these answers is correct.

Question 12

Horizontal marketing systems are channel systems in which the whole channel focuses on the same target market at the end of the channel.

Accepted Answer

A) True 
 B)False

Question 13

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 United States.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 six 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 appears to best describe ATB's channel arrangements?

Accepted Answer

A) intensive distribution 
B) exclusive distribution 
C) selective distribution 
D) global distribution 
E) direct distribution

Exam 10: Place and Development of Channel Systems

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

To minimize its own risks,the Boomtown Petroleum Corp.of Houston,Texas,operates a South American oil refinery that is owned by residents of that country.Boomtown is engaged in an activity known as

Intensive distribution is

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

Compared to intensive distribution,selective distribution gives a producer a greater opportunity for profit but usually makes it more difficult for intermediaries to make a profit.

If Wilkinson were to sell Norelco the exclusive rights to produce and sell its brand of shavers in Japan for a 5 percent royalty on all sales,it would be using

Firms that use direct distribution can usually adjust their marketing mixes more quickly than firms that use indirect distribution.

A manufacturer prefers to produce and ship in large quantities to take advantage of economies of scale.Final consumers often want to purchase in small quantities.This difference between the producer and consumer is a

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

Horizontal marketing systems are channel systems in which the whole channel focuses on the same target market at the end of the channel.