Deck 10: Managing Business Marketing Channels

Question 1

Manufacturers' representatives sell noncompeting but complementary products.

Answer 1

True

Question 2

The two critical elements of the distributor's function are to secure financing and have products readily available.

Answer 2

False

Question 3

There are many situations in business marketing where a direct channel of distribution is not feasible.

Answer 3

True

Question 4

The compensation provided to middlemen should be based on loyalty, length of service, and past years' sales performance.

Question 5

A direct sales force is best used for complex sales opportunities.

Question 6

A business marketer that uses industrial distributors will usually, as a matter of policy, not utilize any manufacturers' representatives.

Question 7

Indirect distribution is appropriate when control of the selling job is necessary to ensure proper implementation of the total product package and to guarantee a quick response to market conditions.

Question 8

The goal of a multichannel model is to coordinate the activities of many channels to enhance the total customer experience and profitability.

Question 9

For products that are bought frequently, repetitively, and in small quantities, industrial distributors provide an efficient channel path.

Question 10

The availability of good intermediaries and product characteristics are two factors that often limit the choice of industrial channels.

Question 11

When a manufacturer sells through hundreds of distributors across the U.S., reps may sell and service the distributors.

Question 12

The industrial distributor takes title to the products sold but rarely maintains an inventory.

Question 13

Industrial distributors are generally large business firms that cover broad geographical markets.

Question 14

By retaining title to the goods, the business marketer has a higher level of channel control in a rep channel as opposed to a distributor channel.

Question 15

Frequently, the manager has little flexibility in the selection of channel structures because of trade, competitive, company, and environmental factors.

Question 16

Once a particular industrial channel structure is selected, channel participants must be selected, and arrangements made to ensure that all obligations are assigned.

Question 17

A business marketer that serves many different market segments would likely use a direct channel.

Question 18

Business marketing channels typically include fewer types of intermediaries than consumer-goods channels.

Question 19

Channel member motivation begins with the understanding that the channel relationship is a partnership.

Question 20

A source of conflict between business marketers and their manufacturers' representatives centers on the size of inventory levels reps maintain.

Question 21

Which of the following statements concerning the selection of industrial channel structures is(are) true?

A)Frequently, the manager has little flexibility in the selection because of trade, competitive, company, and environmental factors.
B)The channel should be viewed as a set of channel institutions rather than as a sequence of activities to be performed.
C)Competitors often have the better intermediaries "locked up."
D)all of the answer choices.
E)Both frequently, the manager has little flexibility in the selection because of trade, competitive, company, and environmental factors and competitors often have the better intermediaries "locked up."

Question 22

Concerning the compensation of manufacturers' representatives, the business marketer compensates them on the following basis:

A)percentage commission.
B)a salary.
C)salary plus commission.
D)varies by product category.
E)varies by SIC industry.

Question 23

The industrial distributor:

A)takes title to the product sold.
B)occasionally does some assembly and manufacturing work.
C)provides delivery.
D)all of the answer choices.
E)both takes title to the product sold and occasionally does some assembly and manufacturing work.

Question 24

The need to employ more than one type of industrial channel of distribution arises as a result of:

A)different target markets sought by the firm.
B)a geographically concentrated market.
C)different marketing tasks associated with different products produced by the firm.
D)both a different target markets sought by the firm and different marketing tasks associated with different products produced by the firm.
E)all of the answer choices.

Question 25

Manufacturer's representatives are paid on a salary basis.​

Question 26

The channel strategy that does not utilize any manufacturers' representatives, industrial distributors, or other kinds of middlemen is referred to as:

A)indirect distribution.
B)selective distribution.
C)direct distribution.
D)exclusive distribution.
E)restrictive distribution.

Question 27

The geographic dispersion of customers and competitive strategies have very little influence on the choice of industrial channels.

Question 28

The channel strategy that involves the utilization of one or more middlemen is referred to as:

A)indirect distribution.
B)direct distribution.
C)selective distribution.
D)exclusive distribution.
E)restrictive distribution.

Question 29

The backbone of channel design is the analysis of objectives, constraints, and channel activities.

Question 30

Smart, connected products tend to reduce the need for distribution channel partners.​

Question 31

​Manufacturer's representatives are the manufacturer's buying arm.

Question 32

Generally, manufacturers' reps:

A)take title to the products handled.
B)are restricted to a limited geographical area.
C)hold inventory.
D)provide customers with prompt delivery.
E)all of the answer choices

Question 33

The most appropriate channel of distribution for an industrial product is:

A)direct.
B)indirect.
C)one that relies on the firm's sales force.
D)a combination of direct and indirect.
E)dependent upon a host of product, company, market, and competitive conditions.

Question 34

Manufacturers' reps:

A)possess expert product knowledge.
B)sell non-competing but complementary products.
C)take title to the goods handled.
D)all of the answer choices
E)both possess expert product knowledge and sell non-competing but complementary products.

Question 35

The largest proportion of sales handled by industrial channel members is accounted for by:

A)brokers and jobbers.
B)brokers and commission merchants.
C)manufacturers' representatives and industrial distributors.
D)jobbers and industrial distributors.
E)brokers and distributors.

Question 36

A business marketer who places the highest priority on achieving control in the channel of distribution should use:

A)a direct channel.
B)a channel which includes numerous industrial distributors.
C)a channel which includes numerous manufacturers' representatives.
D)a channel which includes numerous commission merchants.
E)an indirect channel.

Question 37

A distributor classification, the combination house:

A)operates in two sectors of the industrial market.
B)operates a chain of distributorships.
C)operates in both the industrial and consumer markets.
D)does not take title to the goods handled.
E)is paid on a commission basis.

Question 38

The first step in the channel design process is to:

A)determine channel design constraints.
B)consider the availability of good intermediaries.
C)outline key channel alternatives.
D)determine the tasks to be performed by the channel.
E)define customer segments

Question 39

CRM has improved channel coordination.​

Question 40

Service provided by industrial distributors includes:

A)repair.
B)credit.
C)maintenance.
D)all of the answer choices
E)both credit and maintenance.

Question 41

The manufacturer-rep channel is generally used when the:

A)gross margin is large.
B)product is not technically complex.
C)product is not standard, but is closer to made-to-order.
D)all of the answer choices.

Question 42

Manufacturer reps are most likely used:

A)by large firms.
B)when there is unlimited market potential.
C)to eliminate significant overhead costs.
D)all of the answer choices.
E)both by large firms and to eliminate significant overhead costs.

Question 43

Which of the following channels would give the business marketer the greatest amount of channel control?

A)a channel consisting of merchant wholesalers
B)a channel composed of industrial distributors
C)a channel consisting of both manufacturers' reps and distributors
D)a channel composed of jobbers
E)a channel consisting of manufacturers' reps

Question 44

In specifying channel alternatives, which of the following issues is(are) involved?

A)determining the levels to be included in the channel
B)determining the number of channel intermediaries at each level of the channel
C)determining the types of intermediaries to employ
D)all of the answer choices
E)both determining the levels to be included in the channel and determining the number of channel intermediaries at each level of the channel.

Question 45

Which of the following are tasks that are performed by channels of distribution?

A)Arranging financing.
B)Storage.
C)Transportation.
D)All of the answer choices.
E)Both storage and transportation.

Question 46

The compensation provided to industrial channel members should reflect:

A)the length of service of the channel member.
B)the nature of the marketing tasks performed by the channel member.
C)the loyalty of the channel member.
D)the amount of market potential available in the territory.
E)all of the answer choices.

Question 47

Industrial products that are complex, unique and made to order are more frequently sold through:

A)direct channels.
B)indirect channels.
C)manufacturers' representatives.
D)industrial distributors.
E)merchant wholesalers.

Question 48

Techniques for motivating individual channel members include all of the following except:

A)dealer advisory councils.
B)competitive compensation.
C)building trust.
D)better planning by the business marketer.
E)product training for channel members.

Question 49

Manufacturers who wish to strengthen the dependence that channel members have on them could:

A)increase commissions.
B)encourage channel members to carry the firm's full product line.
C)increase promotion to enhance the profitability of channel members.
D)all of the answer choices.
E)both encourage channel members to carry the firm's full product line and increase promotion to enhance the profitability of channel members.

Question 50

There is a trend toward _____ as a result of increasing technical complexity of products.

A)general-line distributors
B)specialists
C)combination houses
D)none of the answer choices.

Question 51

When evaluating alternative channels, the critical element is to compare both systems on the basis of:

A)customer service.
B)performance.
C)structure.
D)costs.
E)all of the answer choices.

Question 52

The primary reason for using more than one type of intermediary for the same product is:

A)the gross margin is not large.
B)the product tends toward technical complexity.
C)different market segments require different channel structures.
D)the product is not standard, but is closer to made-to-order.

Question 53

A direct sales force is best used for:

A)highly standardized solutions.
B)small customers.
C)simple transactions.
D)complex products.

Question 54

When evaluating channel alternatives, if the existing channel is about as good as it can be and if customer satisfaction is low,:

A)an alternative channel should be utilized.
B)the fault is not with the channel design, it is with poor management.
C)the existing system can be changed without sacrificing management goals.
D)none of the answer choices.

Question 55

Robert Morgan and Shelby Hunt suggest that relationship commitment and trust develop when:

A)firms align themselves with partners that have distinctly different corporate values.
B)firms share valuable information on expectations, markets, and performance.
C)firms offer benefits and resources that are superior to what other partners could offer.
D)all of the answer choices.
E)both firms share valuable information on expectations, markets, and performance and firms offer benefits and resources that are superior to what other partners could offer.

Question 56

_____ cater to a broad array of industrial goods.

A)Specialists
B)General-line distributors
C)A combination house.
D)none of the answer choices.

Question 57

When evaluating channel alternatives, if the feasible system lies between the ideal and existing system,

A)the existing system can be changed without sacrificing management goals.
B)relaxing management constraints might produce even greater benefits.
C)the fault is not with the channel design, it is with poor management.
D)both the existing system can be changed without sacrificing management goals and relaxing management constraints might produce even greater benefits.
E)both the existing system can be changed without sacrificing management goals.and the fault is not with the channel design, it is with poor management.

Question 58

The industrial distributor's primary responsibilities include:

A)contact.
B)repair.
C)product availability.
D)all of the answer choices.
E)both contact and product availability.

Question 59

A recent poll asked distributors which business strategies would have the largest impact on them in the future. The top two factors were:

A)collaboration with supply chain partners.
B)new information technologies.
C)the increase in general-line distributors
D)both collaboration with supply chain partners and new information technologies.
E)both new information technologies and the increase in general-line distributors.

Question 60

Factors that contribute to the use of more than one distribution channel for the same product include:

A)various market segments are served.
B)the needs and buying processes employed by prospective customers varies.
C)conflict between competing channels is relatively rare.
D)all of the answer choices.
E)both various market segments are served and the needs and buying processes employed by prospective customers varies.

Question 61

____________________systems provide a valuable tool for coordinating sales channel activities and managing crucial connections and handoffs between them.

Question 62

The last step of the channel design process is to evaluate and select ____________________.

Question 63

Channel length decreases:

A)when the purchase becomes more significant.
B)when market or industry concentration increases.
C)when customer potential increases.
D)All of the answer choices.
E)both when the purchase becomes more significant and when market or industry concentration increases.

Question 64

Channel____________________refers to the number of channel levels, the number and types of intermediaries and the linkages among channel members.

Question 65

E-channels can be used by business marketing firms for:

A)information platforms.
B)transaction platforms.
C)customer relationship management platforms.
D)all of the answer choices.
E)both transaction platforms and customer relationship management platforms.

Question 66

Responsibilities for distributors include:

A)making products available.
B)repair.
C)providing service and technical advice.
D)All of the answer choices.
E)both making products available and repair.

Question 67

The surest way to lose intermediary support is____________________ policies that do not meet industry and competitive standards.

Question 68

Manufacturers' representatives are used:

A)by smaller firms that cannot afford their own sales force.
B)when a manufacturer's market potential is limited.
C)to help reduce overhead costs.
D)All of the answer choices.
E)both by smaller firms that cannot afford their own sales force and to help reduce overhead costs.

Question 69

Channel design involves

A)developing new channels.
B)modifying existing channels.
C)simply allowing channels to evolve into effective channels
D)both developing new channels and modifying existing channels.
E)All of the answer choices

Question 70

_____ is the dynamic process of developing new channels where none existed and modifying existing channels.

A)Channel structure
B)Channel design
C)Channel choice
D)Channel partnering
E)Supply chain management

Question 71

What percentage of U.S. Gross Domestic Product is sold through indirect distribution channels?

A)10%
B)25%
C)40%
D)60%
E)80%

Question 72

Full-service intermediaries that take title to the products they sell and perform the full range of marketing functions are known as____________________.

Question 73

Use of a direct sales force is best for:

A)highly customized solutions.
B)smaller customers.
C)complex products.
D)all of the answer choices.
E)both highly customized solutions and complex products.

Question 74

In the classification of distributors, _____ focus on one line or on a few related lines.

A)general-line distributors
B)specialists
C)combination houses
D)brokers

Question 75

When motivating channel members, the primary motivating device tends to be:

A)dealer advisory councils.
B)trust.
C)compensation.
D)strong relationships.
E)training.

Question 76

Manufacturers' representatives and industrial distributors are both examples of____________________channels.

Question 77

_____ are generally small, independent businesses serving narrow geographic markets.

A)Distributors
B)Channel partners
C)Manufacturers' representatives
D)Broker houses
E)Field offices

Question 78

An Arizona-based high-technology firm, Three Five Systems, produces component parts that are sold to cellular phone manufacturers as well as a diverse set of customers across several different industry sectors. The firm uses a corporate sales force for large customers, like Motorola, and relies on a mix of manufacturers' reps and/or industrial distributors to serve small and medium-sized customers.
​
The top management team at Three Five Systems would like you to conduct an audit of the firm's channel strategy. These executives are concerned that rapidly-changing customer needs have created important gaps in the firm's market coverage and market offerings. Describe the specific steps that you would follow in conducting this audit and highlight the particular questions that you would emphasize in the assessment.

Question 79

The primary responsibility of____________________salespersons is to take telephone orders, processing orders, and schedule delivery.

Question 80

Selecting the best channel of distribution to accomplish objectives can be difficult because:

A)the alternatives are so numerous.
B)marketing goals differ.
C)separate channels must often be used concurrently.
D)all of the answer choices
E)both the alternatives are so numerous and marketing goals differ.