Question 1

With respect to consumer products, which of the following is the most common system for distributing consumer products in the U.S.?

Accepted Answer

A)  Direct channel systems. 
B)  Vertical marketing systems. 
C)  Traditional channel systems. 
D)  Horizontal marketing systems. 
E)  None of the above.

Question 2

The text suggests that a "channel captain" should be:

Accepted Answer

A)  a strong wholesaler. 
B)  a market-oriented producer. 
C)  a large retailer. 
D)  any of the above--i.e. whoever can provide leadership.

Question 3

"Discrepancies of assortment" means:

Accepted Answer

A)  there are more producers than consumers. 
B)  consumers want more output than producers make. 
C)  the difference between the product lines the typical producer makes and the assortment wanted by final consumers or users. 
D)  there are more consumers than producers. 
E)  the difference between the quantity of products the typical producer makes and the quantity wanted by individual consumers.

Question 4

Exclusive distribution is selling through only one intermediary in each geographic area.

Accepted Answer

A) True 
 B)False

Question 5

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 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.
-These three tennis ball producers all rely on retailers to reach consumers who want to buy only a few balls at a time. Apparently they all think that this is an efficient way to

Accepted Answer

A)  deal with sorting activities. 
B)  address discrepancies of quantity. 
C)  handle discrepancies of assortment. 
D)  minimize the potential for conflict in the channel. 
E)  achieve intensive distribution.

Question 6

Licensing, in international marketing,

Accepted Answer

A)  refers to foreign intermediaries agreeing to sell products produced in this country. 
B)  requires a producer to pay a licensing fee to the country where it wants to sell its products. 
C)  increases the risk that a company's production facilities will be taken over by the foreign country. 
D)  means a company selling the right to use a process, trademark, patent, or other right for a fee or royalty. 
E)  None of the above is true.

Question 7

According to the text, it's best for the "channel captain" to be a producer rather than a wholesaler or retailer.

Accepted Answer

A) True 
 B)False

Question 8

When Renault Motor Co. builds a new production facility in Venezuela and it is the sole owner of the facility, this is an example of a(n) _________ investment approach.

Accepted Answer

A)  Indirect 
B)  Management contracting 
C)  Joint venture 
D)  Licensing 
E)  Direct

Question 9

If Walmart purchases a manufacturing plant to produce nothing but Walmart's dealer brand of laundry detergent, Walmart is engaging in:

Accepted Answer

A)  Monopoly. 
B)  Vertical integration. 
C)  Intertype competition. 
D)  A contractual channel system. 
E)  An administered channel system.

Question 10

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?

Accepted Answer

A)  Concentrated distribution 
B)  Selective distribution 
C)  Administered distribution 
D)  Intensive distribution 
E)  Exclusive distribution

Question 11

Traditional channels of distribution

Accepted Answer

A)  do not perform bulk-breaking activities. 
B)  are usually preferred to other distribution arrangements. 
C)  are easier to control than corporate channel systems. 
D)  may involve little or no cooperation among channel members. 
E)  are usually controlled through strong legal contracts.

Question 12

A new channel is more likely to prompt conflict if it focuses on segments not already served by current channels.

Accepted Answer

A) True 
 B)False

Question 13

The vertical marketing system in which control is maintained via economic power and leadership is a(n):

Accepted Answer

A)  Administered channel system. 
B)  Corporate channel system. 
C)  Contractual channel system. 
D)  Franchise channel system. 
E)  Channel captain system.

Question 14

Horizontal agreements to limit sales by territory or customer are always illegal according to the Supreme Court.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements about Place is NOT true?

Accepted Answer

A)  Most consumer products move from producer to intermediaries to final customer. 
B)  A series of participants in the flow of goods and services from producer to final customer is called a channel of distribution. 
C)  There is always one Place arrangement that is "best" for a product. 
D)  Intermediaries develop to adjust discrepancies in quantity and assortment. 
E)  All of the above are true.

Exam 11: Place and Development of Channel Systems

With respect to consumer products, which of the following is the most common system for distributing consumer products in the U.S.?

The text suggests that a "channel captain" should be:

"Discrepancies of assortment" means:

Exclusive distribution is selling through only one intermediary in each geographic area.

Licensing, in international marketing,

According to the text, it's best for the "channel captain" to be a producer rather than a wholesaler or retailer.

When Renault Motor Co. builds a new production facility in Venezuela and it is the sole owner of the facility, this is an example of a(n) _________ investment approach.

If Walmart purchases a manufacturing plant to produce nothing but Walmart's dealer brand of laundry detergent, Walmart is engaging in:

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?

Traditional channels of distribution

A new channel is more likely to prompt conflict if it focuses on segments not already served by current channels.

The vertical marketing system in which control is maintained via economic power and leadership is a(n) :

Horizontal agreements to limit sales by territory or customer are always illegal according to the Supreme Court.

Which of the following statements about Place is NOT true?