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Marketing Final Exam

Form of distribution intensity retailers may be

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Unformatted text preview: tributor of Spanx brand hosiery in the region. How does this form of market coverage benefit the retailer? How does it benefit the manufacturer? ANS: Exclusive distribution entails only one or a few dealers within a given market area. It is the most restrictive form of distribution intensity. Retailers may be unwilling to commit the time and money necessary to promote a product unless the manufacturer guarantees them an exclusive territory. The arrangement shields the retailer from direct competition and enables it to be the main beneficiary of the manufacturer’s promotion within the geographic area. For the manufacturer, exclusive distribution can serve to project an exclusive image for the product. PTS: 1 REF: 211 Communication KEY: CB&E Model Distribution OBJ: 13-4 TOP: AACSB MSC: BLOOMS Synthesis 12. List and briefly define the three basic types of channel relationships. Explain why they are described as a continuum. ANS: ARM’S-LENGTH RELATIONSHIPS. In these relationships, both parties retain their independence and pursue only their own interests while attempting to benefit from the goods and services provided by the other. INTEGRATED RELATIONSHIPS. These relationships are at the opposite end of the relationship continuum from arm’s-length relationships. In this situation, one company, or several companies acting as one, performs all channel functions. COOPERATIVE RELATIONSHIPS. These relationships exist between arm’s-length and integrated relationships. In general, cooperative relationships are administered using some sort of formal contract. They tend to be more flexible than integrated relationships. Also, they tend to be used when a company wants less ambiguity in the channel relationship than the arm’s-length relationship can provide but without the long-term and/or capital investment required to achieve full integration. The three basic types of channel relationships are organized by how close the buyer and the supplier interact with each other. Students need to understand that certain channel relationships can fall between arm’s length and cooperative, or that a relationship can be integrated at some point and then cooperative at others. All of the factors that affect choice of channel type also can influence the relationship. A combination of relationships can exist––one that is kind of cooperative and still has a degree of arm’s length can exist. A continuum indicates that relationships can and do fall at many points within the graphic representation. PTS: 1 REF: 211 Communication KEY: CB&E Model Distribution OBJ: 13-5 TOP: AACSB MSC: BLOOMS Synthesis 13. Define channel power, channel control, channel leadership, and channel partnering and explain how these four terms are related. ANS: Power, control, leadership, conflict and partnering are the main social dimensions of marketing channel relationships. CHANNEL POWER refers to the capacity of one channel member to control or influence the behavior of other channel...
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