Deck 10: Channels of Distribution

Question 1

Archie and Betty are examining the way their firm manages the sales process, and they are considering making some changes. They feel their sales force is not as effective as it should be. In making their decision as to whether or not to maintain a sales force, they should keep in mind that although sales forces are useful, they are also expensive to maintain.

Answer 1

True

Question 2

"Push" and "pull" refer simply to whether the manufacturer targets consumers or channel partners with its
marketing communications.

Answer 2

True

Question 3

When a manufacturer gives an incentive to a retailer as a part of push marketing, the retailer has to pass that incentive on to the customer.

Answer 3

False

Question 4

The downstream partners that help a company reach consumers comprise the channel members.

Question 5

Everyone in the distribution network is involved with customer-oriented activities.

Question 6

The types of goods that require a sales force are less expensive than those that don't.

Question 7

The channel design does not need to be consistent with all the other marketing elements (i.e., it is a stand-alone process).

Question 8

Executives at Inspiron Company disagree as to which channel partners are the best fit for their business. One executive says that a particular channel partner's interactions with customers is not in sync with Inspiron Company's vision and mission statement. When channel partners differ in their opinions on how to please customers and maximize profit, such as the case between Inspiron Company and its channel partner, conflict can arise.

Question 9

Most buyers wish to purchase a larger quantity of a wider variety of goods.

Question 10

The second question in designing a distribution system is one of distribution intensity.

Question 11

Company ABC is trying to determine which products it should introduce. It is more efficient for Company ABC to produce a large quantity of a limited number of goods.

Question 12

The marketplace with the most links, or costs, is most efficient.

Question 13

The extensiveness of distribution channels is related to the brand's life cycle or the company's maturity in the
marketplace.

Question 14

Channels are supposed to make access harder for customers.

Question 15

A distribution channel is a network of firms that are interconnected in their quest to provide sellers a means of infusing the marketplace with their goods, and buyers a means of purchasing those goods, doing all as efficiently and profitably as possible.

Question 16

Refrigerators are available via intensive distribution channels.

Question 17

The system with an intermediary channel member is more efficient than all firms going direct to consumers.

Question 18

Coupons are an example of pull marketing.

Question 19

Selectivity in channels offers additional benefits to the manufacturer, such as few relationships to manage and the cost of interactions is less.

Question 20

Companies cannot succeed without distribution partners.

Question 21

When power is used to resolve conflict, the less powerful player can feel resentful and look to leave the channel arrangement as soon as another opportunity becomes available.

Question 22

A very popular means of forward integrating has been manufacturers providing their wares online for direct purchasing.

Question 23

Top managers at S & A, Inc. believe that their staff needs some help understanding the perspectives and needs of the distributors they work with. It could be a good idea for them to exchange some personnel with these distributors for a short time in order to achieve this.

Question 24

If private labels sell well, they give the manufacturer negotiating power with the retailer.

Question 25

An important form of international channel support these days is "global outsourcing."

Question 26

PizzaPie Company plans for explosive growth over the next five years. The company might consider creating a franchise system to enable multi-site expansion.

Question 27

If Tara wants to open her own Subway franchise, she will have to pay an upfront fee as well as royalties to the franchisor.

Question 28

Buyers and sellers usually come to the table as equals when bargaining.

Question 29

If a pharamacy and a department store are competing, it would be vertical competition.

Question 30

General merchandise retailers may carry depth, but they do not carry breadth, and the product assortment is broader at specialty stores.

Question 31

Network Supplies, Inc. manufactures and sells an undifferentiated product line. Its products are very similar to others available in the marketplace. Thus, the quality of the company's sales force is likely to be the most significant means of differentiation for the firm.

Question 32

Channel members frequently bicker over prices and margins.

Question 33

Marketers have shown that the Internet is very well-suited for a specific search, but catalogs still dominate when a customer is in browsing mode.

Question 34

If Sony opened its own retail stores, that would be "backward integration."

Question 35

Transaction cost analysis (TCA) is a model that considers channel members' marketing costs and governance
costs, both of which are ideally minimized.

Question 36

Arbitration is when the third party makes a binding decision for the two conflicting parties.

Question 37

Retailers are categorized by their level of service, which tends to be positively related to their price points.

Question 38

There's a markup (profit to be made) when the manufacturer yields product to the retailer, and there's a second
markup (more to be made) when the retailer makes the product available to the consumer.

Question 39

Wanting to please the customer but being unable to do so is known as role conflict.

Question 40

Channels experts speak of trust as both the willingness and ability to deliver on products.

Question 41

The upstream partners that a company has to deal with are its suppliers, also known as the .

A) chain
B) supply chain
C) customer distribution route
D) supplying customers

Question 42

Tech Gadgets Co. is revamping its distribution strategy. If the goods manufactured by Tech Gadgets Co. are simple, inexpensive, easily transported, it is typical that they would be distributed widely and .

A) selectively
B) comparatively
C) intensively
D) pushed

Question 43

A perspective by which the benefits a company brings to its partners (beyond cost reductions) are emphasized is referred to as .

A) TVA
B) TCA
C) governance cost
D) government cost

Question 44

Selling Company produces its product in batches of 100, yet its average customer only purchases ten at a time. In order to encourage sales, Selling Company must make their product available to be sold in smaller batches. This process is known as .

A) quantities
B) breaking bulk
C) limited goods
D) none of these

Question 45

Coordinating the flow of all goods, services and information among channel members, and throughout the channel, is referred to as:

A) supply chain management
B) distribution channel
C) logistics
D) flow marketing.

Question 46

Promotion and financing are activities.

A) customer-oriented
B) product-oriented
C) marketing-oriented
D) co-worker-oriented

Question 47

Some products are complicated and expensive, and require the help of a salesperson for a customer to make a purchase decision. These product, therefore, need to be distributed .

A) intensively
B) selectively
C) paradoxically
D) partially

Question 48

Consumers are said to pull goods through the channel, whereas trading partners the goods from the manufacturer on down the food chain.

A) hold
B) throw
C) push
D) select

Question 49

Tech Gadgets Co. distributes complex and relatively expensive goods, with customers typically requiring assistance before purchasing. The channels for these types of products are often structured to be .

A) comparative
B) intensive
C) pulled
D) selective

Question 50

What term refers to the extreme case of selectivity?

A) distribution channel
B) exclusive channel
C) monopolistic channel
D) intensively channel

Question 51

Most consumers wouldn't drive very far to buy a pack of gum since it's a lost­cost item that is often bought on impulse. Therefore, this product needs to be distributed .

A) intensively
B) selectively
C) paradoxically
D) partially

Question 52

Channel design is an integral part of all of the following EXCEPT:

A) marketing
B) strategy
C) positioning
D) pricing

Question 53

The downstream partners that help a company reach consumers comprise the .

A) supply chain
B) logistics
C) distribution channel
D) channel members

Question 54

Pixar makes fun movies. What role does the movie theater play in the distribution channel?

A) manufacturer
B) distributor
C) retailer
D) customer

Question 55

In push marketing, the manufacturer targets rather than .

A) consumers, channel members
B) channel members, consumers
C) men, women
D) women, men

Question 56

Storage and display are activities.

A) customer-oriented
B) product-oriented
C) marketing-oriented
D) co-worker-oriented

Question 57

strategies are incentives a manufacturer offers to its distribution partners such as dealers, wholesalers, retailers, and the like to sell products to the end users.

A) Pull marketing
B) Marketing
C) Promotion marketing
D) Push marketing

Question 58

The of channels is a network of suppliers and providers, and the of channels is efficiency, scales, and consistency in positioning.

A) who, what
B) what, who
C) why, what
D) what, why

Question 59

BrainTrust company produces and sells educational toys for children. In pricing its product, the company needs to make sure it properly estimates its costs. The company can safely estimate that transportation is what percentage of total distribution cost?

A) 50%
B) 75%
C) 30%
D) 100%

Question 60

Ordering, handling, and shipping are activities.

A) customer-oriented
B) product-oriented
C) marketing-oriented
D) co-worker-oriented

Question 61

When different types of retailers are competing, it's called competition.

A) vertical
B) horizontal
C) sideways
D) upward

Question 62

When a retailer is planning for its sales force, it starts with the question, "How many salespeople should we have?" What is the next question they should be asking?

A) Where should we find the salespeople?
B) What kind of salespeople are we looking for?
C) How should salespeople be compensated for their efforts?
D) Should we even have salespeople?

Question 63

The determination of the size of a sales force is usually done via some estimation of expected .

A) price point
B) salary
C) workload
D) age of customers

Question 64

Apple computers used to be in the business of manufacturing only, but then they opened Apple stores. This is an example of which of the following?

A) revenue sharing
B) forward integration
C) franchising
D) backward integration

Question 65

There are two major classes of franchising. One is business format franchising. What is the other one?

A) market franchising
B) product franchising
C) in-house franchising
D) multisite franchising

Question 66

A lot of research has demonstrated that there is a relationship between the of employees and that of customers.

A) income
B) age
C) extraversion
D) satisfaction

Question 67

What phrase refers to the fact that conflict can be squashed if one player is inherently more powerful than another?

A) right makes fight
B) fight makes right
C) right makes might
D) might makes right

Question 68

Sheila owns a small boutique. She wants to move on to other things. She thinks she might be comfortable giving up complete ownership of the business as but would still like to maintain some control over it. Which of these is she considering?

A) franchising
B) multi-site expansion
C) push marketing
D) finding additional segments

Question 69

Bling, Inc. produces jewelry that it sells to retail jewelry stores. One of Bling's customers is Ice Jewels, a chain of jewelry stores with locations in dozens of malls across the U.S. Both Bling, Inc. and Ice Jewels want to make a profit off the merchandise manufactured by Bling, Inc. This scenario is best described as .

A) greed
B) double marginalization
C) compromising
D) dual marketing

Question 70

Barnes & Noble started as a retailer but then opened warehouses to stock books and later began publishing "classics" with its own imprint. This is an example of which of the following?

A) revenue sharing
B) forward integration
C) push marketing
D) backward integration

Question 71

Channel members continually evaluate whether their relationships with other channel members are worth it: is the service good enough for how much it costs? What term refers to this decision?

A) buy vs. sell
B) make vs. buy
C) sell vs.make
D) them vs. us

Question 72

When channels are in conflict, what's the best way to handle it?

A) ignore the conflict
B) use power
C) hire someone to do arbitration
D) talk to each other

Question 73

A grocery store that decides to add a florist is expanding by offering an additional .

A) segment
B) service
C) site
D) space

Question 74

When the decisions seem overwhelming, we should simplify and remember that the key to marketing is to think about the .

A) sales force
B) bottom line
C) customer
D) mission statement

Question 75

Specialty stores carry but not .

A) services, goods
B) clothing, jewelry
C) depth, breadth
D) variety, customization

Question 76

Costs of are these relational issues incurred by trying to coordinate the enterprise and control one's partners.

A) governance
B) government
C) goods
D) services

Question 77

Which channel function is most visible to the customer?

A) retailing
B) manufacturing
C) distributing
D) transporting

Question 78

BizCo is a B2B firm specializing in selling highly complex computer networking systems and software that allow clients to work more efficiently. Mark is the VP of Sales at BizCo, and is concerned about some of the complaints he's received from customers and prospective customers. Which of the following is one of the complaints Mark is MOST likely to hear?

A) "The salesperson never sought my business."
B) "The product I purchased was not delivered on time."
C) "The salesperson is not compensated enough."
D) "The salesperson isn't following my company's buying process."

Question 79

Which of the following is NOT one of the biggest B2C catalogers?

A) Sears
B) JCPenney
C) Williams Sonoma
D) The Limited

Question 80

competition is when the manufacturer competes with its partners.

A) Vertical
B) Horizontal
C) Direct
D) Straight