Question 1

Reverse channels may provide a way to retrieve unwanted products from intermediaries, business customers, or final consumers.

Accepted Answer

A) True 
 B)False

Question 2

A channel system in which the various members informally agree to cooperate with each other is called a(an) ______________ system.

Accepted Answer

A)  contractual channel 
B)  dual distribution 
C)  traditional channel 
D)  administered channel 
E)  franchising

Question 3

Which of the following statements about Place is FALSE?

Accepted Answer

A)  Place variations are required when target markets have different needs. 
B)  Product classes suggest Place objectives. 
C)  Place decisions have relatively little impact on competition in a product-market. 
D)  Place decisions have longer-run implications than Price decisions. 
E)  Place decisions need to consider when customers want products.

Question 4

Because of long-run effects, decisions about one of the four Ps is often harder to change than the others. This P is:

Accepted Answer

A)  Product. 
B)  Place. 
C)  Promotion. 
D)  Price.

Question 5

Consumer product companies such as Tupperware that appear to be selling direct may not be because their salespeople are independent distributors, not company employees.

Accepted Answer

A) True 
 B)False

Question 6

Accumulating involves collecting products from many small producers--often as a way to get lower transportation rates.

Accepted Answer

A) True 
 B)False

Question 7

Choosing an INDIRECT channel probably will be better than a direct channel if a producer wants to:

Accepted Answer

A)  provide special technical service. 
B)  make it easier to do marketing research. 
C)  be more sensitive to coming changes in customer needs and attitudes. 
D)  obtain a very aggressive selling effort. 
E)  adjust large discrepancies of quantity and assortment.

Question 8

Digital products cost more to distribute than physical products.

Accepted Answer

A) True 
 B)False

Question 9

Coca-Cola's carbonated soft drinks are available in millions of locations worldwide. This is an example of ____________ distribution.

Accepted Answer

A)  Administered 
B)  Intensive 
C)  Horizontal 
D)  Selective 
E)  Exclusive

Question 10

Quiet Drive Mufflers are sold only through Car Parts Now retailers. This retailer has only one store in any given geographic area to minimize competition between stores. Quiet Drive Mufflers uses _____ distribution.

Accepted Answer

A)  intensive 
B)  ideal 
C)  selective 
D)  specialized 
E)  exclusive

Question 11

In a _____ the whole channel focuses on the same target market at the end of the channel.

Accepted Answer

A)  vertical marketing system 
B)  horizontal marketing system 
C)  parallel marketing system 
D)  diagonal marketing system 
E)  linear marketing system

Question 12

Channel conflict often results when a manufacturer opens a new distribution channel, especially if it directly competes with its existing intermediaries.

Accepted Answer

A) True 
 B)False

Question 13

Vertical marketing systems are growing in the U.S., but declining in the rest of the world.

Accepted Answer

A) True 
 B)False

Question 14

Small farmers in the mountains of Peru pick coffee beans by hand, obtaining only a bucket a day. Then they sell them to buyers who put the beans in large bags to be shipped to processors. This regrouping activity is called:

Accepted Answer

A)  Assorting 
B)  Wholesaling 
C)  Bulk-breaking 
D)  Sorting 
E)  Accumulating

Question 15

Intensive distribution is often very appropriate for:

Accepted Answer

A)  shopping products and convenience products. 
B)  convenience products and business supplies. 
C)  business products of all classes. 
D)  unsought products and specialty products. 
E)  shopping, specialty, and unsought products.

Question 16

"Sorting" means separating products into grades and qualities desired by different target markets.

Accepted Answer

A) True 
 B)False

Question 17

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.
-If American Tennis Ball adds more retail outlets, which of the following would help it to manage channel conflict:

Accepted Answer

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

Question 18

If a large furniture retailer were to purchase Drexel (a manufacturer of sofas and chairs), this would be an example of:

Accepted Answer

A)  a tying contract. 
B)  an administered channel system. 
C)  internal expansion. 
D)  vertical integration. 
E)  horizontal integration.

Question 19

A good "channel captain" knows that:

Accepted Answer

A)  direct-to-customer channels usually cost less and perform more efficiently than indirect channels. 
B)  marketing functions can be shifted and shared within a channel--but they cannot be completely eliminated. 
C)  a channel system works best when all its members have a shared product-market commitment. 
D)  some marketing functions can usually be completely eliminated by using short channels instead of long channels. 
E)  Both B and C are true.

Question 20

Which of the following statements about channel systems is true?

Accepted Answer

A)  Some administered channel systems have achieved the advantages of vertically integrated systems while retaining more flexibility. 
B)  All vertical marketing systems are also contractual channel systems. 
C)  The independence of firms in traditional channel systems has led to channel efficiencies because of greater freedom of decision making. 
D)  Indirect channel systems seem to be generally more effective than direct channels. 
E)  Corporate channel systems are competitively superior to administered channel systems.

Exam 11: Place and Development of Channel Systems

Reverse channels may provide a way to retrieve unwanted products from intermediaries, business customers, or final consumers.

A channel system in which the various members informally agree to cooperate with each other is called a(an) ______________ system.

Which of the following statements about Place is FALSE?

Because of long-run effects, decisions about one of the four Ps is often harder to change than the others. This P is:

Consumer product companies such as Tupperware that appear to be selling direct may not be because their salespeople are independent distributors, not company employees.

Accumulating involves collecting products from many small producers--often as a way to get lower transportation rates.

Choosing an INDIRECT channel probably will be better than a direct channel if a producer wants to:

Digital products cost more to distribute than physical products.

Coca-Cola's carbonated soft drinks are available in millions of locations worldwide. This is an example of ____________ distribution.

Quiet Drive Mufflers are sold only through Car Parts Now retailers. This retailer has only one store in any given geographic area to minimize competition between stores. Quiet Drive Mufflers uses _____ distribution.

In a _____ the whole channel focuses on the same target market at the end of the channel.

Channel conflict often results when a manufacturer opens a new distribution channel, especially if it directly competes with its existing intermediaries.

Vertical marketing systems are growing in the U.S., but declining in the rest of the world.

Small farmers in the mountains of Peru pick coffee beans by hand, obtaining only a bucket a day. Then they sell them to buyers who put the beans in large bags to be shipped to processors. This regrouping activity is called:

Intensive distribution is often very appropriate for:

"Sorting" means separating products into grades and qualities desired by different target markets.

If a large furniture retailer were to purchase Drexel (a manufacturer of sofas and chairs) , this would be an example of:

A good "channel captain" knows that:

Which of the following statements about channel systems is true?