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13Marketing Chapter Channels MULTIPLE CHOICE 1. A _____ is a business structure of interdependent organizations that reaches from the point of product origin to the consumer. a. facilitating agency or place member b. marketing mix intermediary c. selective distribution channel d. marketing channel or channel of distribution e. transportation channel or channel of movement Register to View AnswerThis is the definition of a marketing channel, also called the channel of distribution. PTS: 1 REF: 197 OBJ: 13-1 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 2. Jones Soda is positioned as the anti-Coke. In the early years, few mainstream retailers sold Jones soda. Fans had to get their Jones fix in surf shops, tattoo parlors, and bookstores, adding to the brand's mystique. Jones Soda used its _____ to create a competitive advantage. a. channel ascendancy b. distribution channel c. channel conflict d. channel focus e. vertical integration Register to View AnswerIts unusual retail venues added to the brand's mystique. PTS: 1 REF: 197 OBJ: 13-1 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 3. Kayak.com is a company that allows customers to efficiently search databases to find the best airline and hotel deals all over the Web. Kayak does not make bookings, but rather provides recommendations for the best travel plans. Travel providers pay Kayak a commission when customers click through to their sites. Kayak.com, travelers, the airlines, and the hotels are all part of a: a. facilitating agency b. marketing mix intermediary c. selective promotion channel d. marketing channel or channel of distribution e. transportation channel or channel of movement Register to View AnswerA marketing channel is a business structure of interdependent organizations that reaches from the point of product origin to the consumer. PTS: 1 REF: 197 OBJ: 13-1 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 4. Marketing channels can achieve economies of scale through: a. overcoming spatial discrepancies b. contact expertise c. specialization and division of labor d. overcoming temporal discrepancies e. overcoming discrepancies of quantity Register to View AnswerThe concept of specialization and division of labor involves breaking down a complex task into smaller, simpler ones and allocating them to specialists, creating greater efficiency and lower average production costs. PTS: 1 REF: 198 OBJ: 13-1 TYPE:Comp TOP: AACSB Reflective Thinking | TB&E Model Distribution 5. Distribution channels aid in overcoming barriers to exchange that are created in the production process by overcoming all of the following types of discrepancies EXCEPT: a. possession b. assortment c. quantity d. spatial e. temporal Register to View AnswerChannels facilitate the end goal of possession of the goods, but they do not help to overcome a discrepancy of possession. PTS: 1 REF: 198-199 OBJ: 13-1 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Distribution 6. A discrepancy of _____ is the difference between the amount of product produced and the amount an end user wants to buy. a. space b. quantity c. assortment d. accumulation e. possession Register to View AnswerThis is the definition of the discrepancy of quantity. PTS: 1 REF: 198 OBJ: 13-1 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 7. Kraft Foods produces millions of packages of Chips Ahoy cookies each year, but consumers only want to purchase one package at a time. This difference between the amount Kraft produces and the amount a consumer wants to buy is referred to as a: a. discrepancy of quantity b. discrepancy of assortment c. spatial discrepancy d. temporal discrepancy e. discrepancy of possession Register to View AnswerA discrepancy of quantity is the difference between the amount of product produced and the amount an end user wants to buy. PTS: 1 REF: 198 OBJ: 13-1 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 8. Which of the following is the lack of all the items a customer needs to receive full satisfaction from a product or products? a. discrepancy of assortment b. discrepancy of quantity c. spatial discrepancy d. temporal discrepancy e. discrepancy of possession Register to View AnswerThis is the definition of the assortment discrepancy. PTS: 1 REF: 198-199 OBJ: 13-1 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 9. McKesson Wholesalers provides health care products to pharmacies. It purchases bandages, gauze, antibacterial cream, and ointments from a variety of different manufacturers and resells them to pharmacies so that many of the items a customer might need for a cut will be available in the store. McKesson is aiding consumers by overcoming a: a. spatial discrepancy b. discrepancy of quantity c. discrepancy of assortment d. demand discrepancies e. discrepancy of possession Register to View AnswerA manufacturer may only produce one product, yet additional products may be required to actually use the first product. This creates a discrepancy of assortment. PTS: 1 REF: 198-199 OBJ: 13-1 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 10. Certified Grocers Midwest, Inc., the Chicago-based grocery wholesale cooperative, provides all kinds of meats, cereals, canned and fresh fruits and vegetables, beauty aids, health care items, and pet products to the supermarkets in its channel. Certified Grocers is aiding consumers by overcoming: a. spatial discrepancy b. discrepancy of quantity c. discrepancy of assortment d. demand discrepancies e. discrepancy of possession Register to View AnswerBy providing the central buying function on behalf of its customers, Certified overcomes the discrepancy of assortment and is able to offer many different brands of similar items. PTS: 1 REF: 198-199 OBJ: 13-1 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 11. A(n) _____ discrepancy is created when a product is produced but a consumer is not ready to purchase it. a. quantity b. supply c. possession d. temporal e. assortment Register to View AnswerThis is the definition of a temporal discrepancy. PTS: 1 REF: 199 OBJ: 13-1 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 12. Cutter & Buck is a high-end fashion sportswear company. Even though swimwear is a product category that does not sell year round, its sales remain steady all year because Cutter & Buck sells to wholesale distributors that stock the product. Its wholesale distributors are helping to overcome a(n) _____ discrepancy. a. assortment b. spatial c. possession d. quantity e. temporal Register to View AnswerA temporal discrepancy is created when a product is produced but a consumer is not ready to purchase it. PTS: 1 REF: 199 OBJ: 13-1 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 13. Vicobello is a major manufacturer of outdoor fountains that are currently popular in gardens. Even though fountains represent a product category that does not sell year round due to inclement weather, Vicobello's sales remain steady all year because it sells to wholesale distributors that stock the product. Its wholesale distributors are primarily helping to overcome a(n) _____ discrepancy. a. assortment b. spatial c. possession d. quantity e. temporal Register to View AnswerA temporal discrepancy is created when a product is produced but a consumer is not ready to purchase it. Several of those discrepancies are being partially overcome, but the MAIN one is temporal. PTS: 1 REF: 199 OBJ: 13-1 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 14. The difference between the location of a producer and the location of widely scattered markets represents a(n) _____ discrepancy. a. spatial b. temporal c. assortment d. quantity e. ownership Register to View Answer This is the definition of a spatial discrepancy. PTS: 1 REF: 199 OBJ: 13-1 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 15. YKK slide fasteners (zippers) are made in Macon, Georgia, yet manufactures all over the world use zippers to manufacture, clothes, luggage, shoes, and other items. Wholesalers around the world primarily help to overcome a(n) _____ discrepancy. a. creation b. temporal c. assortment d. spatial e. ownership Register to View AnswerMarkets are often scattered over large geographic regions, yet a manufacturer may only have one location in the country. This creates a spatial discrepancy. PTS: 1 REF: 199 OBJ: 13-1 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 16. Marketing channels make distribution simpler by reducing the number of transactions required to get products from manufacturers to consumers. This is called: a. forward integration b. contact efficiency c. elimination of temporal discrepancies d. sorting e. reciprocity Register to View AnswerMarketing channels provide contact efficiencies by reducing the number of stores customers must shop in to complete their purchases. PTS: 1 REF: 199 OBJ: 13-1 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 17. When an intermediary in the channel of distribution owns the merchandise and controls the terms of the sale, this is referred to as: a. complete control b. exclusive distribution c. taking title d. contact efficiency e. economies of scale Register to View AnswerThis is the definition of taking title. PTS: 1 REF: 200 OBJ: 13-2 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 18. The major characteristic that is used to differentiate among types of intermediaries is whether they: a. install exchange barriers such as location, time, and quantity b. create specialization of labor c. create economies of scale d. take title to the products they sell e. raise profit margins for independent middlemen Register to View AnswerTaking title means they own the merchandise and control the terms of the sale. PTS: 1 REF: 200 OBJ: 13-2 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Distribution 19. Retailers and merchant wholesalers are examples of intermediaries that: a. take title to a product b. create temporal and spatial discrepancies c. use consumer promotions d. do not benefit from any economies of scale e. are accurately described by all of these statements Register to View AnswerRetailers and merchant wholesalers own the merchandise and control the terms of its ultimate sale. PTS: 1 REF: 200 OBJ: 13-2 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Distribution 20. Which of the following intermediaries sell mainly to consumers? a. retailers b. merchant wholesalers c. agents d. brokers e. specialists Register to View Answer PTS: 1 REF: 200 OBJ: 13-2 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 21. A(n) _____ is an institution that buys goods from manufacturers, takes title to these goods, and resells them to businesses, government agencies, and/or other wholesalers or retailers. a. merchant wholesaler b. agent c. drop shipper d. channel cooperative e. marketing cooperative Register to View AnswerThis is the definition of a merchant wholesaler. PTS: 1 REF: 200 OBJ: 13-2 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 22. W.W. Grainger, Inc., is one of the world's largest business-to-business distributors of equipment, component parts, and supplies in the United States and Canada. It has ownership title to over 220,000 products, which are stocked in one national and nine regional warehouses to guarantee product availability and quick service to the many manufacturers who are its customers. W.W. Grainger is an example of a(n): a. agent or broker b. merchant wholesaler c. retailer d. consumer market e. hypermarket intermediary Register to View AnswerA merchant wholesaler is an institution that buys goods from manufacturers and resells them to other wholesalers and retailers. Merchant Wholesalers receive and take title to the goods, own warehouses, and ship the products they sell. PTS: 1 REF: 200 OBJ: 13-2 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 23. Long Island Lefty provides retailers and other businesses with the latest and the best products for lefthanded consumers. It buys all types of products from a variety of manufacturers and stores the merchandise in its New York warehouse until purchased by buyers. Long Island Lefty does not sell to end users and is an example of a(n): a. agent or broker b. merchant wholesaler c. retailer d. consumer market e. hypermarket intermediary Register to View AnswerA merchant wholesaler is an institution that buys goods from manufacturers and resells them to other wholesalers and retailers. Merchant wholesalers receive and take title to the goods, own warehouses, and ship the products they sell. PTS: 1 REF: 200 OBJ: 13-2 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 24. Agents and brokers: a. have a great deal of control and risk invested in the goods b. only represent manufacturers in sales situations c. have a great deal of input on the terms of the sale d. generally are on salary with the manufacturer e. do not take title to merchandise Register to View AnswerAgents and brokers represent retailers, wholesalers, or manufacturers in sales situations, but the agent or broker generally has little input into the terms of the sale. Agents and brokers generally receive a fee or commission and do not take title, control, or risk concerning the merchandise. PTS: 1 REF: 200 OBJ: 13-2 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 25. _____ are wholesaling intermediaries who facilitate the sales of a product from producer to end user by representing retailers, wholesalers, or manufacturers and providing little input as to the terms of the sale. a. Marketing facilitators b. Channel cooperatives c. Agents and brokers d. Merchant wholesalers e. Channel functionaries Register to View AnswerAgents and brokers simply facilitate the sale of a product from producer to end user. PTS: 1 REF: 200 OBJ: 13-2 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 26. Generally, _____ determine what type of intermediary a manufacturer should use: a. product characteristics, buyer consideration, and market characteristics b. internal environmental characteristics only c. competitive conditions and government regulations d. all controllable marketing factors e. only noncontrollable environmental factors Register to View AnswerThe correct answer combines both internal and external elements. The internal elements can be controlled by the manufacturer, while external environmental factors cannot. PTS: 1 REF: 200 OBJ: 13-2 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Distribution 27. The three basic functions channel intermediaries perform are: a. transactional, logistical, and facilitating b. contacting, negotiating, and ownership c. promoting, distributing, and bulk-breaking d. assorting, accumulating, and allocating e. financing, mediating, and storing Register to View AnswerSee Exhibit 13.2. PTS: 1 REF: 200-201 OBJ: 13-2 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 28. Which of the following is a transactional function performed by intermediaries? a. sorting b. researching c. risk taking d. physically distributing e. storing Register to View AnswerTransactional functions include contacting and promoting, negotiating, and risk taking. PTS: 1 REF: 201 OBJ: 13-2 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Distribution 29. Transactional channel functions include all of the following activities EXCEPT: a. contacting buyers b. promoting the products to be sold c. taking the risks associated with product inventories d. negotiating the sale e. physical distribution and sorting Register to View AnswerSee Exhibit 13.2. PTS: 1 REF: 201 OBJ: 13-2 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 30. Which of the following is a logistical function performed by intermediaries? a. sorting b. negotiating c. financing d. risk taking e. all of these choices Register to View AnswerLogistical functions include physically distributing, storing, and sorting products. PTS: 1 REF: 201 OBJ: 13-2 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Distribution 31. Marketing channels perform all of the following logistical activities EXCEPT: a. sorting b. storing c. physically distributing d. risk taking e. breaking bulk Register to View AnswerRisk taking is a transactional activity. See Exhibit 13.2 PTS: 1 REF: 201 OBJ: 13-2 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 32. All of the following are sorting activities EXCEPT: a. assorting b. accumulation c. sorting out d. allocation e. possession Register to View AnswerSee Exhibit 13.2. PTS: 1 REF: 201 OBJ: 13-2 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Distribution 33. Breaking bulk at the wholesale level is called: a. allocating b. accumulation c. storing d. downsizing e. grading Register to View AnswerAllocating is breaking a homogeneous supply into smaller and smaller lots (breaking bulk). See Exhibit 13.2. PTS: 1 REF: 201 OBJ: 13-2 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 34. With respect to the sorting logistical function, _____ is the combining of similar stocks into a larger homogeneous supply. a. sorting out b. accumulating c. allocating d. breaking bulk e. assorting Register to View AnswerAccumulating is combining similar stocks into a larger homogeneous supply. PTS: 1 REF: 201 OBJ: 13-2 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 35. Which of the following are examples of facilitating functions performed by wholesaling intermediaries? a. sorting and storing b. risk taking and promotion c. assorting, accumulating, grading, and allocating d. researching and financing e. financial management and storing Register to View Answer See Exhibit 13.2. PTS: 1 REF: 201 OBJ: 13-2 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 36. _____ is the efficient and cost-effective forward and reverse flow and storage of goods, services, and related information, into, through, and out of channel member companies. a. Disintermediation b. Logistics c. Materials handling d. Intermodal transportation e. Contract logistics Register to View AnswerThis is the definition of logistics. PTS: 1 REF: 200 OBJ: 13-2 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 37. _____ describes the process of strategically managing the efficient flow and storage of raw materials, in-process inventory, and finished goods from point of origin to point of consumption. a. Contract logistics b. Logistics c. Cross-docking d. Disintermediation e. Channel facilitation Register to View AnswerThis describes the logistics function. PTS: 1 REF: 200 OBJ: 13-2 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 38. Serenity is a manufacturer of outdoor fountains that are currently popular in gardens. Even though fountains represent a product category that does not sell year round due to inclement weather, Serenity's sales remain steady all year because it sells to wholesale distributors that stock the product. Serenity sells to wholesale distributors that perform _____ functions for the manufacturer. a. financial b. transactional c. facilitating d. logistical e. promotional Register to View AnswerStoring for later sale to retailers is a logistical function. See Exhibit 13.2. PTS: 1 REF: 201 OBJ: 13-2 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 39. One configuration of a marketing channel entails producers selling to consumers with no intermediaries involved. This is called a: a. limited distribution system b. conventional channel c. vertical marketing system d. reciprocal channel e. direct channel Register to View AnswerProducers use the direct channel to sell directly to consumers. PTS: 1 REF: 201 OBJ: 13-3 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 40. The only way Jim Keeler in New Mexico can get a box of Carolyn Popwells Festive Holiday Truffles from Washington is to order it through the mail. Popwell, who makes the candy by hand, uses a(n) _____ exclusively. a. exclusive distribution system b. conventional channel c. vertical marketing system d. reciprocal channel e. direct channel Register to View AnswerThe manufacturer sells directly to the consumer. PTS: 1 REF: 201-202 OBJ: 13-3 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 41. Vutek manufactures printing machines used to print high resolution graphics for billboards, bus cards, banners, and posters. For distribution, you would expect Vutek to use a: a. network of facilitating agents b. horizontally integrated channel c. reciprocal channel d. direct channel e. vertical marketing system Register to View AnswerDirect channels are typical in business and industrial markets. PTS: 1 REF: 201-202 OBJ: 13-3 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 42. Centigon is a manufacturer of customized armored vehicles for military, private, presidential, and commercial uses. Each armored vehicle is designed to deliver security on the road while also achieving optimum levels of performance and comfort. For distribution, you would expect Centigon to use a: a. network of facilitating agents b. horizontally integrated channel c. reciprocal channel d. direct channel e. vertical marketing system Register to View AnswerFor customized business products requiring detailed specifications, the most common channel structure is the direct channel because of the amount of interaction and direct communication required. PTS: 1 REF: 201-202 OBJ: 13-3 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 43. All of the following are typical channel members in marketing channels for consumer products EXCEPT: a. retailer b. agent/broker c. industrial distributor d. producer e. wholesaler Register to View AnswerIndustrial distributors are used for distributing industrial, not consumer products. See also Exhibit 13.3 and Exhibit 13.4. PTS: 1 REF: 202-203 OBJ: 13-3 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Distribution 44. Companies selling standardized items of moderate or low value to other businesses (not to consumers) often use: a. retailers b. industrial distributors c. wholesalers d. bulk breakers e. industrial resellers Register to View AnswerIn many ways, an industrial distributor is like a supermarket for organizations. PTS: 1 REF: 202 OBJ: 13-3 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 45. _____ distribution occurs when a producer selects two or more different channels to distribute the same products to target markets. a. Selective b. Intensive c. Dual d. Contractual e. Cumulative Register to View AnswerDual distribution (multiple distribution), is the use of two (or more) channels to distribute the same product to target markets. PTS: 1 REF: 203 OBJ: 13-3 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 46. Customers can purchase HP computers from retail stores like Best Buy and Office Depot, online directly from HP, and through various catalogs. HP is using a(n) _____ distribution arrangement. a. intensive b. multiple c. exclusive d. cumulative e. aggregated Register to View AnswerMultiple distribution occurs when a producer selects two or more different channels to distribute the same products to target markets. PTS: 1 REF: 203 OBJ: 13-3 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 47. Which of the following enables a company to use another manufacturers already established channel? a. strategic channel alliances b. relationship channels c. reverse channels d. multiple distribution systems e. nontraditional channelization Register to View AnswerAlliances used are most often when the creation of marketing channel relationships may be too expensive and time-consuming. PTS: 1 REF: 203 OBJ: 13-3 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 48. Selfridges is the second-largest department store in Great Britain. It works with House of Frasier, one of its competitors, to reduce operating costs by sharing channels of distribution to ship goods from 1,500 plus suppliers. Selfridges and House of Frasier are engaged in: a. vertical conflict b. an integrated supply chain c. a strategic channel alliance d. an information-based distribution channel e. a distribution cooperative Register to View AnswerA strategic channel alliance is a cooperative agreement between businesses to use each other's already established distribution channels. PTS: 1 REF: 203 OBJ: 13-3 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 49. When Delphi-Grundig, a manufacturer of state-of-the-art car radios, decided to expand its marketing efforts into countries in which its products are not currently available, it did not have the time or resources to spend on developing new channels of distribution. Delphi-Grundig should consider a(n): a. industrial distributor b. franchising system c. reverse channel d. strategic channel alliance e. channel cooperative Register to View AnswerStrategic channel alliances use another manufacturer's already established channel and are used when the creation of marketing channel relationships may be expensive and time-consuming. PTS: 1 REF: 203 OBJ: 13-3 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 50. Which of the following statements concerning how market factors affect channel decisions is true? a. Industrial customers tend to buy in larger quantities and require more customer service b. Geographically concentrated target markets should be served with an indirect sales force c. Widely dispersed markets require fewer intermediaries d. New firms in extremely competitive markets will be more successful if they use indirect channels e. A very large market requires fewer intermediaries Register to View AnswerIndustrial customers buying habits are very different from those of consumers, and they tend to buy in larger quantities and require more customer service. PTS: 1 REF: 204 OBJ: 13-4 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Distribution 51. Canesta Company has developed a virtual keyboard out of light to be used with cell phones and personal digital assistants (PDAs). The product beams an image of a keyboard on a desk, allowing the user to type on the image. The words are picked up by the user's digital device. When introduced to the market, the device will sell for less than $50. If, in choosing its channel, Canesta is most concerned about the life cycle of the device, then its choice of channels will largely be influenced by: a. factors of production b. customer characteristics c. ownership factors d. product factors e. market factors Register to View AnswerStage of the product life cycle is a product factor. PTS: 1 REF: 204 OBJ: 13-4 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 52. Canesta Company has developed a virtual keyboard out of light to be used with cell phones and personal digital assistants (PDAs). The product beams an image of a keyboard on a desk, allowing the user to type on the image. The words are picked up by the user's digital device. When introduced to the market, the device will sell for less than $50. If, in choosing its channel, Canesta is most concerned about its lack of financial, managerial, and marketing resources to support the product's introduction, then its choice of channels will largely be influenced by: a. factors of ownership b. market factors c. producer factors d. product factors e. internal environmental characteristics Register to View AnswerFinancial, managerial, and marketing issues are producer factors. PTS: 1 REF: 205 OBJ: 13-4 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 53. _____ is distribution aimed at maximum market coverage. It is used for many convenience goods and supplies that need to be available in every outlet where the potential customer might want to buy them. a. Selective distribution b. Channel franchising c. Intensive distribution d. Horizontal channeling e. Exclusive distribution Register to View AnswerThe objective of intensive distribution is to achieve mass-market selling. PTS: 1 REF: 205 OBJ: 13-4 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 54. Chewing gum and soft drinks are sold in grocery stores, service stations, convenience stores, drugstores, discount stores, and motel vending machines. This is a example of a(n) _____ distribution strategy. a. exclusive b. reciprocal c. selective d. horizontal e. intensive Register to View AnswerIntensive distribution is distribution aimed at maximum market coverage. It is used for many convenience goods that need to be available in every outlet where the potential customer might want to buy them. PTS: 1 REF: 205 OBJ: 13-4 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 55. Which of the following manufacturers most likely uses intensive distribution? a. M&Ms candies b. Jen-Weld windows c. Calloway golf clubs d. Rollerblade inline skates e. Smith & Wesson firearms Register to View Answer Only M&Ms candies are a low-value product that is frequently purchased. Low-value products are commonly sold in a variety of locations. PTS: 1 REF: 205 OBJ: 13-4 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 56. _____ distribution is achieved by screening dealers to eliminate all but a few in any single geographic area. Shopping goods and some specialty products that consumers are willing to search for are sold this way. a. Intensive b. Selective c. Exclusive d. Dual e. Controlled Register to View AnswerThis is a description of selective distribution. PTS: 1 REF: 205 OBJ: 13-4 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 57. Husqvarna Viking manufactures sewing machines. The company carefully screens its dealers to ensure a quality dealer image and service ability. Only a few dealers are chosen in any single geographic area. This is an example of _____ distribution. a. dual b. intensive c. exclusive d. selective e. controlled Register to View AnswerSelective distribution is achieved by screening dealers to eliminate all but a few in any single geographic area. Shopping goods and some specialty goods that consumers are willing to search for are sold by selective distribution. PTS: 1 REF: 205 OBJ: 13-4 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 58. Canesta Company has developed a virtual keyboard out of light to be used with cell phones and personal digital assistants (PDAs). The product beams an image of a keyboard on a desk, allowing the user to type on the image. The words are picked up by the user's digital device. When introduced to the market, the device will sell for less than $50. What level of distribution intensity should the company use? a. exclusive b. controlled c. extensive d. reciprocal e. selective Register to View AnswerScreening dealers will promote a quality image for the product. Price is also a factor in its level of distribution intensity. It is not a convenience good. PTS: 1 REF: 205 OBJ: 13-4 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 59. Polo brand apparel is only available in fine department stores or from Polo retail stores. Which distribution strategy has Polo adopted? a. extensive b. intensive c. premium d. selective e. pioneering Register to View AnswerSelective distribution is achieved by screening dealers to eliminate all but a few in any single geographic area. Shopping goods and some specialty goods that consumers are willing to search for are sold by selective distribution. PTS: 1 REF: 205 OBJ: 13-4 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 60. Which level of distribution intensity is the most restrictive and entails establishing only one or a few dealers within a given geographic area? a. selective b. intensive c. exclusive d. dual e. premium Register to View AnswerThis is the definition of exclusive distribution. PTS: 1 REF: 206 OBJ: 13-4 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 61. Rolex is an expensive brand of watches. The company has a policy of only having one or two dealers within a given large geographic area. Buyers of Rolex watches will travel to acquire just the right watch. This is an illustration of which level of distribution intensity? a. exclusive b. intensive c. selective d. reciprocal e. premium Register to View AnswerThe most restrictive form of distribution, exclusive, entails establishing one or a few dealers within a given geographic area. Because buyers need to be willing to search or travel to acquire the product, this form of distribution is limited to consumer specialty goods, a few shopping goods, and major industrial equipment. PTS: 1 REF: 206 OBJ: 13-4 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 62. Caterpillar, the manufacturer of tractors and other earthmoving equipment, has an extremely high market share, which means customers seek the dealers out regardless of where they are. There are approximately 50 Caterpillar dealers in the United States--one in each state. From this information, you can surmise that Caterpillar uses _____ distribution. a. selective b. premium c. intensive d. exclusive e. inclusive Register to View AnswerThe most restrictive form of distribution, exclusive, entails establishing one or a few dealers within a given geographic area. Because buyers need to be willing to search or travel to acquire the product, this form of distribution is limited to consumer specialty goods, a few shopping goods, and major industrial equipment. PTS: 1 REF: 206 OBJ: 13-4 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 63. Which of the following types of distribution channel relationships is considered to be temporary? a. Arm's Length b. functional c. cooperative d. hierarchical e. integrated Register to View Answer These types of relationships are often referred to as Arms length relationships due to the companies unwillingness or lack of ability to develop a closer type of relationship. PTS: 1 REF: 206 OBJ: 13-5 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 64. This summer, college student Pat is planning on selling kites at Panama City Beach. He has found some suppliers and preordered all of the kites he thinks he can sell this summer. What type of a distribution channel relationship does Pat have with his suppliers? a. Arm's Length b. functional c. cooperative d. hierarchical e. integrated Register to View AnswerThe Arm's Length relationship is considered to be temporary. PTS: 1 REF: 206 OBJ: 13-5 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 65. With the _____ channel relationship, both parties retain their independence and pursue their own interests while attempting to benefit from the goods or services provided by the other. a. Arm's Length b. functional c. cooperative d. hierarchical e. integrated Register to View AnswerThese types of relationships are often referred to as Arms length relationships due to the companies unwillingness or lack of ability to develop a closer type of relationship. PTS: 1 REF: 206 OBJ: 13-5 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Distribution 66. _____ distribution channel relationships are situations where one company or several companies acting as one perform all channel functions. a. Arm's Length b. Functional c. Cooperative d. Hierarchical e. Integrated Register to View AnswerIntegrated relationships are tightly connected with linked processes across and between firm boundaries, and high levels of trust and interfirm commitment. PTS: 1 REF: 207 OBJ: 13-5 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 67. One of the earliest, largest and most famous examples of vertical integration was the Carnegie Steel Company. The company controlled not only the mills where the steel was manufactured but also the mines where the iron ore was extracted, the coal mines that supplied the coal, the ships that transported the iron ore and the railroads that transported the coal to the factory. Carnegie Steel has a(n) _____ channel relationship. a. Arm's Length b. functional c. cooperative d. hierarchical e. integrated Register to View AnswerIntegrated distribution channel relationships are situations where one company or several companies acting as one perform all channel functions. PTS: 1 REF: 207 OBJ: 13-5 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 68. _____ channel relationships include non-equity agreements such as franchising and licensing, as well as equity-based joint ventures and strategic alliances. a. Arm's Length b. Functional c. Cooperative d. Hierarchical e. Integrated Register to View AnswerCooperative relationships are between companies that take the form of informal partnership with moderate levels of trust and information sharing as needed to further each companys goals. PTS: 1 REF: 206 OBJ: 13-5 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 69. Which channel relationship is less ambiguous than an Arm's Length relationship but without the longer-term and/or capital investment required to achieve full integration? a. negotiated b. functional c. cooperative d. hierarchical e. intermediate Register to View AnswerCooperative relationships are between companies that takes the form of informal partnership with moderate levels of trust and information sharing as needed to further each companys goals. PTS: 1 REF: 206 OBJ: 13-5 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 70. In 1935, Howard Johnson teamed up with Reginald Sprague to establish the first modern restaurant franchise. Their idea was to let independent operators use the same name, food, supplies, logo and even building design in exchange for a fee. In terms of the type of channel relationships established, this non-equity agreement would require a(n) _____ relationship. a. negotiated b. functional c. cooperative d. hierarchical e. segregated Register to View AnswerCooperative channel relationships include non-equity agreements such as franchising and licensing, as well as equity-based joint ventures and strategic alliances. PTS: 1 REF: 206 OBJ: 13-5 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 71. Some countries, such as the Peoples Republic of China and to some extent India, require foreign companies to form joint ventures with domestic firms in order to enter a market. This requirement often forces technology transfers and managerial control to the domestic partner. These types of equity agreements also require the establishment of a(n) _____ channel relationship. a. Arm's Length b. functional c. cooperative d. hierarchical e. integrated Register to View AnswerCooperative channel relationships include non-equity agreements such as franchising and licensing, as well as equity-based joint ventures and strategic alliances. PTS: 1 REF: 206 OBJ: 13-5 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 72. The capacity of a particular marketing channel member to control or influence the behavior of other channel members is known as: a. channel power b. channel conflict c. channel control d. channel dominance e. channel inversion Register to View AnswerChannel power is a channel members ability to control or influence the behavior of other channel members. PTS: 1 REF: 207 OBJ: 13-6 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 73. Wal-Mart is the largest retailer in the world and many consumer package-goods manufacturers like Kraft have offices in Bentonville, Arkansas where Wal-Mart is headquartered. Wal-Mart has the ability to influence manufacturers to lower their prices so that it can deliver on its low-price guarantee to consumers. Wal-Mart possesses: a. channel influence b. channel supremacy c. channel power d. channel exclusivity e. channel clout Register to View AnswerChannel power is the capacity of a particular marketing channel member to control or influence the behavior of other channel members. PTS: 1 REF: 207 OBJ: 13-6 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 74. A situation that occurs when one marketing channel member intentionally affects another members behavior is called: a. channel power b. channel control c. channel conflict d. channel dominance e. channel inversion Register to View Answer Channel control is when one channel member actually affects another. PTS: 1 REF: 207 OBJ: 13-6 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 75. A channel leader is also called a(n): a. intermediary leader b. channel captain c. channel facilitator d. distribution supervisor e. channel gatekeeper Register to View AnswerThe channel captain is a member of a marketing channel that exercises authority and power over the activities of other channel members. PTS: 1 REF: 207 OBJ: 13-6 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 76. DeBeers sells most of the diamonds it produces to industry. The company controls over 90 percent of the market and has great power over its distributors. In its marketing channel, DeBeers would be considered a: a. channel authority b. channel member c. channel leader d. channel gatekeeper e. power broker Register to View AnswerThe channel captain is a member of a marketing channel that exercises authority and power over the activities of other channel members. DeBeers has control over delivery, inventory, etc. PTS: 1 REF: 207 OBJ: 13-6 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 77. Johns Manville is the only manufacturer to offer a complete line of Formaldehyde-free fiber glass building insulation, which offers superior energy efficiency in hard-to-reach cathedral ceilings and flat roof cavities; plus it is an excellent sound control for interior floors. As the only manufacturer and patent-holder of this revolutionary insulation, Johns Manville has great power over its dealers. It is an example of a: a. channel authority b. channel regulator c. channel captain d. channel gatekeeper e. power broker Register to View AnswerA channel captain or channel leader is a member of the marketing channel that exercises authority and power over the activities of other members in the channel. PTS: 1 REF: 207 OBJ: 13-6 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 78. Channel conflict: a. always has an adverse effect on the members of the channel b. is not caused by ideological differences because such differences would prevent the members from ever operating as a channel c. is often caused by an inability of some channel members to keep up with the changing times d. can appear as either internal or external e. does not occur when multiple distribution channels are used Register to View AnswerIn a broad context, channel conflict can be good for a channel. It is sometimes caused by ideological differences. It appears as vertical or horizontal. PTS: 1 REF: 207-208 OBJ: 13-6 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Distribution 79. Almost a million fans are willing to buy subscriptions to watch Major League Baseball (MLB) games online at MLB.com. That business is worth more than $100 million to MLB. But this online broadcast takes those fans away from the broadcasters that pay MLB hundreds of millions of dollars for the right to carry the games. Which of the following is likely to occur between MLB and broadcast television? a. horizontal market share b. lateral channel takeover c. niche market conflict d. channel conflict e. market share conflict Register to View AnswerChannel members may have conflicting goals resulting in channel conflict. PTS: 1 REF: 207-208 OBJ: 13-6 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 80. Honda uses just-in-time manufacturing to build its Odyssey minivans. Five companies that make component parts for the Honda Odyssey relocated to Alabama and states bordering Alabama when Honda announced plans to build a new Odyssey manufacturing plant in Alabama. This relocation in order to provide efficient delivery of goods indicates Honda is a: a. channel captain b. horizontal integrator c. distribution champion d. distribution ombudsman e. demand maverick Register to View AnswerA channel captain exercises authority and power over the other channel members. PTS: 1 REF: 207 OBJ: 13-6 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 81. Channel conflict that occurs among channel members on the same level is known as: a. primary conflict b. organic conflict c. internal conflict d. horizontal conflict e. vertical conflict Register to View AnswerThis is the definition of horizontal conflict, which occurs at the same level of distribution such as two or more different wholesalers or two or more different retailers. PTS: 1 REF: 208 OBJ: 13-6 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 82. Horizontal channel conflict occurs most often when manufacturers practice: a. dual or multiple distribution b. trade loading c. promotional pricing d. direct distribution e. channel distribution Register to View AnswerHorizontal conflict occurs when more than one channel is used to handle the same brand. PTS: 1 REF: 208 OBJ: 13-6 TYPE: Comp TOP: AACSB Reflective Thinking | TB&E Model Distribution 83. Goodyear tire dealers were hurt financially when Goodyear made the decision to distribute its tires through retailers such as Sears and Wal-Mart in addition to the exclusive dealerships it had established. The conflict that occurred at the retail level is an example of: a. horizontal conflict b. trade loading c. value-added pricing d. exclusive distribution e. channel partnering Register to View AnswerHorizontal conflict occurs among channel members at the same level--retail in this example. PTS: 1 REF: 208 OBJ: 13-6 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 84. Channel conflict that occurs between different levels in a marketing channel is referred to as: a. horizontal conflict b. primary conflict c. vertical conflict d. secondary conflict e. parallel conflict Register to View AnswerThis describes vertical conflict, which typically occurs between the manufacturer and wholesaler or between the manufacturer and retailer. PTS: 1 REF: 208 OBJ: 13-6 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution 85. Polo brand apparel can be purchased through fine department stores nationwide. However, Polo apparel can also be purchased through Polo stores, which creates the potential for _____ conflict in the channel of distribution. a. primary b. secondary c. horizontal d. vertical e. parallel Register to View AnswerVertical conflict is a channel conflict that occurs between different levels of a marketing channel. PTS: 1 REF: 208 OBJ: 13-6 TYPE: App TOP: AACSB Reflective Thinking | TB&E Model Distribution 86. _____ is the joint effort of all channel members to create a supply chain that serves customers and creates a competitive advantage. a. Selective partnering b. Direct distribution c. Channel partnering d. Intensive integration e. Closed channel distribution Register to View AnswerThis is the definition of channel partnering, which is also called channel cooperation. PTS: 1 REF: 208 OBJ: 13-6 TYPE: Def TOP: AACSB Reflective Thinking | TB&E Model Distribution ... View Full Document

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