Deck 10: Channels of Distribution

Question 1

Some cost is associated with each link in a distribution channel so all links should contribute value.

Answer 1

True

Question 2

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 are 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.

Answer 2

True

Question 3

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

Answer 3

True

Question 4

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

Question 5

Foluke and Rachael need to buy appliances for a restaurant that they will open in a few months.To save money, they can purchase the appliances through intensive distribution channels.

Question 6

Archie and Betty are examining how their firm manages the sales process, and they are considering selling directly to consumers without maintaining a sales force.In making their decision, they should consider the complexity of their product.

Question 7

Companies cannot succeed without distribution partners.

Question 8

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

Question 9

Inexpensive consumer packaged goods should be distributed intensively.

Question 10

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 11

ABC Inc.needs to attract more customers to its restaurants.The marketing department sends coupons to its current customers.Coupons are an example of push marketing.

Question 12

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

Question 13

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

Question 14

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

Question 15

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.

Question 16

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

Question 17

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 18

Exclusive channels can be easily accessed by all consumers.

Question 19

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

Question 20

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

Question 21

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

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

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

Question 25

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

Question 26

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

Question 27

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

Question 28

Wanting to please the customer but being unable to do so is an example of role conflict.

Question 29

ABC Clothing has a catalog that enables consumers to browse and order new clothing.Based on current research, the company should replace its catalog with an Internet site that customers can browse.

Question 30

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

Question 31

Maya's family owns the only pharmacy in Smalltown.Adeline's family owns the only grocery store in town.A few items are sold by both retailers.This is an example of vertical competition.

Question 32

Channel members frequently bicker over prices and margins.

Question 33

Channel experts speak of trust as both the willingness and ability to deliver on promises.

Question 34

ABC Groceries has established private labels in several categories, including locally grown canned fruits and vegetables.This is an example of backward integration.

Question 35

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 36

Transaction cost analysis is a model that does not consider channel members' marketing costs and governance costs because they are ideally minimized.

Question 37

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 38

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

Question 39

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 40

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

Question 41

Storage and display are __________ activities.

A) customer-oriented
B) product-oriented
C) marketing-oriented
D) coworker-oriented

Question 42

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 43

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

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

Question 44

Selling Company produces its product in batches of 100, yet its average customer only purchases 10 at a time.In order to encourage sales, Selling Company must make its 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

In push marketing, the manufacturer targets __________ rather than __________.

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

Question 46

The downstream partners that help a company reach consumers comprise the

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

Question 47

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) a distribution channel.
C) logistics.
D) flow marketing.

Question 48

What term refers to the extreme case of selectivity?

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

Question 49

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 50

Promotion and financing are __________ activities.

A) customer-oriented
B) product-oriented
C) marketing-oriented
D) coworker-oriented

Question 51

Ordering, handling, and shipping are __________ activities.

A) customer-oriented
B) product-oriented
C) marketing-oriented
D) coworker-oriented

Question 52

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

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

Question 53

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 54

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

A) transaction value analysis.
B) transaction cost analysis.
C) production cost.
D) governance cost.

Question 55

ABC Company is having trouble keeping merchandise in stock because its suppliers are unreliable.ABC needs to deal with its

A) channel members.
B) supply chain management.
C) customer distribution route.
D) downstream partners.

Question 56

Automobiles are complicated and expensive and require the help of a salesperson for a customer to make a purchase decision.Therefore, they need to be distributed

A) intensively.
B) selectively.
C) extensively.
D) upstream.

Question 57

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

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

Question 58

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

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

Question 59

__________ 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 60

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 61

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 62

Which channel function is most visible to the customer?

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

Question 63

ABC Uniforms currently buys uniforms and customizes them for specific teams.The uniform manufacturer is hard to deal with and has refused to negotiate a reasonable price.ABC Uniforms already has the equipment to customize the uniforms.Perhaps the company should begin to make the basic uniforms in-house.What term refers to this type of decision?

A) buy vs.sell
B) make vs.buy
C) sell vs.make
D) integrate vs.manufacturer

Question 64

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

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

Question 65

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

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

Question 66

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

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

Question 67

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

A) segment.
B) service.
C) site.
D) good.

Question 68

Channel members Grigor and Caster frequently bicker over prices.Grigor wants high prices and Caster wants lower prices.The best way for channel members to handle conflict is to

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

Question 69

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

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

Question 70

Which of the following identifies a major class of franchising?

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

Question 71

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 72

Specialty stores carry __________ but not __________.

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

Question 73

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

A) price point.
B) expense.
C) workload.
D) quality of the sales representatives.

Question 74

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 it should ask?

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 75

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 United States.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 76

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 77

Amazon used to simply sell books.Now, it also publishes books.This is an example of which of the following?

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

Question 78

ABC Groceries sells private label pastries and pastries made by a local bakery that is a channel partner.This is an example of __________ competition.

A) vertical
B) horizontal
C) breadth
D) unfair

Question 79

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 80

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 but would still like to maintain some control over it.Which of these is she considering?

A) franchising
B) multisite expansion
C) push marketing
D) finding additional segments