Deck 11: Distribution

Question 1

Which of the following has been a major contributing factor to the growing bad debt issue among U.S. hospitals over the past 20 years?

A) The large income disparity in the United States
B) The increasing number of consumers with high-deductible health plans
C) The growing attitude that people are not required to pay their bills
D) The rising cost of uninsured individuals

Answer 1

B

Question 2

A hospital-centric health system that operates clinics within school systems might be said to have integrated:

A) horizontally.
B) vertically.
C) forward.
D) backward.

Answer 2

C

Question 3

Which entity in the distribution channel can form a vertical marketing system?

A) Manufacturer
B) Retailer
C) Wholesaler
D) Any member of the channel can form a vertical marketing system.

Answer 3

D

Question 4

In which of the following is production and distribution combined within one vertical marketing system?

A) Corporate vertical marketing system
B) Integrated marketing system
C) Administered vertical marketing system
D) Franchised vertical marketing system

Question 5

In which of the following is there coordination between channel members but not common ownership?

A) Coordinated vertically integrated system
B) Corporate coordinated vertically managed system
C) Franchised managed system
D) Administered vertical marketing system

Question 6

Administered vertical marketing systems occur when one member of the channel:

A) is more powerful than the others.
B) has to coordinate the flow of multiple products or services.
C) has been involved in the coordination of both revenue and information systems for multiple channel members.
D) All of these are correct.

Question 7

An administered vertical marketing system is best represented by which of the following programs?

A) Teladoc, a Web-based provider of physician consults
B) Everett Clinic, which operates more than 25 clinic sites beyond its main location in Everett, Washington
C) The Hospital for Special Surgery in New York, which operates facilities in Florida and on Long Island
D) The Urgent Care Center at O'Hare, which is run by the University of Illinois Health System

Question 8

When a tertiary care organization opens primary care satellites, it can be said to be integrating:

A) vertically.
B) forward.
C) backward.
D) horizontally.

Question 9

Kaiser, a large multispecialty clinic, made the strategic decision in some of their locations to open and operate their own hospitals. In this instance, Kaiser was integrating:

A) forward.
B) backward.
C) vertically.
D) horizontally.

Question 10

When members on the same level of the distribution channel have agreements to perform certain functions for the distribution channel, it is a(n):

A) arranged vertically integrated system.
B) illegal vertically integrated marketing system.
C) horizontal vertically integrated marketing system.
D) cooperative vertical marketing system.

Question 11

The disintermediation paradigm involves the:

A) elimination of the middleman in the channel.
B) reduction of conflict in the channel.
C) separation of the horizontal distribution of competing entities.
D) mediation of goal conflict by multiple levels of channel members.

Question 12

When a middleman links the end user to the provider, it is considered:

A) a direct channel provision.
B) reintermediation.
C) channel integration.
D) None of these is correct.

Question 13

Channel conflict can be:

A) vertical or horizontal.
B) direct or indirect.
C) simple or complex.
D) determinant or indeterminate.

Question 14

If an orthopedic group decided to open its own freestanding surgical center, the hospital CEO would view this as a source of what type of conflict?

A) Revenue conflict
B) Relationship conflict
C) Horizontal conflict
D) Vertical conflict

Question 15

An anesthesiology group is under contract to staff a hospital's anesthesiology service. It believes it can provide coverage by having a provider to the operating room for an emergency surgery within 15 minutes. The hospital wants a 5- to 10-minute standard for the anesthesiologist to be present. This difference in understanding responsibilities represents what type of conflict?

A) Vertical
B) Goal
C) Domain
D) Perception

Question 16

The organization or entity in the channel who can dictate policies to others in the channel is referred to as the channel:

A) dictator.
B) authority.
C) commander.
D) None of these is correct.

Question 17

Manufacturers tend to be channel commanders when:

A) the price of their products is high.
B) the cost of carrying inventory for suppliers is high.
C) delivery costs tend to be high.
D) the brand names are well known.

Question 18

When there are a large number of suppliers and a large number of entities who distribute the product to the end user, the channel commander tends to be:

A) the manufacturer.
B) the wholesaler.
C) the consumer.
D) None of these is correct.

Question 19

Walmart tends to be a channel commander because it has a:

A) good pricing policy.
B) large number of outlets.
C) well-known brand name.
D) None of these is correct.

Question 20

In metropolitan areas where there are a large number of community hospitals all offering a relatively similar array of clinical services, the channel commander may well be the:

A) hospital.
B) doctors.
C) consumers.
D) None of these is correct.

Question 21

Which of the following is not a source of power?

A) Coercive
B) Reward
C) Expertise
D) Relative

Question 22

Using a threat to force a member of the channel to engage in a particular action or behavior is implementing which form of power?

A) Reward
B) Coercive
C) Expertise
D) Referent

Question 23

MD Anderson is well known for its diagnosis and treatment of cancer. In this instance, the organization might be said to have which form of power?

A) Economic
B) Reward
C) Referent
D) Coercive

Question 24

Value-based reimbursement is based on what source of power?

A) Reward
B) Coercive
C) Referent
D) Economic

Question 25

Which of the following is not one of the three criteria that define a true retail market?

A) Intermediaries help align supply and demand.
B) Demand is driven by engaged consumers.
C) Supply is restructured from the present supply.
D) Costs are restructured to a lower cost point.

Question 26

As transparency has increasingly been a factor in health care, which aspects of a true retail market has it impacted?

A) Alignment of supply and demand.
B) Engaged and informed consumers.
C) Supply is restructured from the present supply.
D) Both the alignment of supply and demand and engaged and informed consumers.

Question 27

The retail positioning matrix has which two major dimensions to configure retailers?

A) Breadth of product lines and prices
B) Prices and depth of product lines
C) Breadth of product lines and the value added
D) Value added and depth of product line

Question 28

Cincinnati Children's Hospital would be in which quadrant of the retail positioning matrix?

A) Broad product line and high price
B) Narrow product line and high value added
C) Deep product line and high price
D) High value added and deep product line

Question 29

In the retail mix, the goods and services components refer to:

A) all the clinical programs.
B) the breadth and depth of the product line.
C) the product line and the prices.
D) None of these is correct.

Question 30

The wheel of retailing describes how:

A) retail organizations start up and ultimately go into decline.
B) new retail organizations enter the market and evolve over time.
C) retail stores that sold tires lost market share to large-scale chain stores.
D) low-status retailers evolve to low-margin outlets.

Question 31

Offering consumers the opportunity to pay with a credit card provides the value of possession utility.

Question 32

Use of the eReferral system has been growing because of efficiency and cost per referral.

Question 33

The Internet of Things can result in greater disintermediation within health care.

Question 34

Some rehabilitation facilities will help shape and design orthotic devices for patients as needed. In this instance, these organizations are adding the middleman value of form design utility.

Question 35

To accept risk-sharing contracts, it is important for health systems to assure clinical standardization as a necessary strategy.

Question 36

Form utility is actually changing the product or altering its form to better fit the needs of the customer.

Question 37

Organizations establish hybrid channels to broaden market coverage.

Question 38

In designing the ideal channel, middlemen are not needed and can always be replaced, because they add little value.

Question 39

The middleman can always be eliminated, but the functions they provide cannot be; they just shift.

Question 40

Functional shifting is the concept that different middlemen can always perform different functions as required by the manufacturer.

Question 41

Companies such as Google and Facebook provide medical care to their employees on-site. This is an example of functional shifting.

Question 42

Parents using a CellScope app and otoscope attachment demonstrate the principal of the wheel of retailing.

Question 43

Soda is distributed in selective distribution intensity.

Question 44

In deciding the level of distribution intensity for any product or service, the key determinant is how much effort the consumer will spend in searching for the product or service.

Question 45

When a manufacturer wants greater control over how a product is displayed in a retail environment, the optimum distribution intensity strategy is selective.

Question 46

Gunderson Lutheran Clinic in Wisconsin has primary care clinics in almost 30 locations throughout the state. This distribution intensity strategy might be considered intensive.

Question 47

The Hospital for Special Surgery in New York City is well known for orthopedic care. It has a couple of locations in New York and in Florida. This level of distribution intensity would be considered exclusive.

Question 48

Vertical marketing systems describe the independent levels of the channel of distribution when they operate at optimum efficiency in distribution of goods or services.

Question 49

A vertical marketing system is when functions in the channel performed by the intermediary are integrated at the most optimum point for efficiency.

Question 50

A hospital has decided to develop and operate primary care satellite clinics. This is an example of backward integration in the channel of distribution.

Question 51

A major tertiary center has decided to open several ambulatory clinics in the region as well as primary care satellites throughout the state in which it operates. This is an example of forward integration.

Question 52

When an organization that operates at some level in the channel of distribution moves to a level that is closer to the customer, this move can be described as forward integration.

Question 53

With a corporate vertical marketing system, production and distribution of a product are combined under one entity.

Question 54

An administered vertical marketing system is when channel partners coordinate programs for the distribution of a product or service but there is not common ownership.

Question 55

Many hospitals are now operating walk-in clinics within supermarkets and discount chains. This would be an example of a corporate vertical marketing system.

Question 56

Integrated delivery systems in which care is coordinated and delivered at the appropriate level of intensity might be considered a vertical marketing system.

Question 57

Many hospitals have a physician-hospital organization in which physicians and hospitals collaborate with third parties to contract for patient care. This entity might best be described as an administered vertical marketing system.

Question 58

Urgent care centers operated at airports but staffed and managed by nearby university academic centers are an example of franchised vertical marketing systems.

Question 59

Cooperatives are agreements among channel members who exist on the same horizontal level of the channel of distribution.

Question 60

Franchising is a form of vertical marketing system.

Question 61

Reintermediation in the healthcare channel would be represented by a company such as Zocdoc.

Question 62

Disintermediation in the healthcare channel would be represented by a company such as TelaDoc.

Question 63

Channel conflict can be indirect or direct.

Question 64

Horizontal conflict occurs when there is conflict between two members of the channel at the same level.

Question 65

When a group of orthopedists establishes their own surgery center and the hospital's CEO and board of trustees are upset with the medical group, this is an example of horizontal conflict.

Question 66

Domain conflict is when two parties have a different understanding of the goals and objectives to be accomplished.

Question 67

When the physicians in a community and the hospital administration try to outsmart each other in terms of strategic moves, this might be considered a stage of "felt" conflict.

Question 68

The channel commander is the largest member in the channel.

Question 69

The manufacturer of a large number of generic products is often the channel commander.

Question 70

If a manufacturer pays large margins, this can lead to it becoming a channel commander.

Question 71

The fewer the number of products or brands, the greater the likelihood the wholesaler is the channel commander.

Question 72

The more extensive the market coverage held by a retailer, the more likely this middleman is the channel commander.

Question 73

An insurance company threatens to pull its contract from a large medical group if its rates are not accepted. Most of the medical group's patients have this insurance provider. The insurance company is using referent power.

Question 74

Of all forms of power that can be used, the shortest-term gains often occur when coercive power is used.

Question 75

When the California Public Employees' Retirement System (CalPERS) capped retirees' payment for hip replacement at a set amount, it was displaying the use of coercive power.

Question 76

Fiduciary power occurs when one channel member has significantly greater financial resources compared to another.

Question 77

Gaining incentive to cooperate by another channel member can often be accomplished through the use of reward power.

Question 78

The Mayo Clinic is well known nationally and internationally as a major healthcare provider. This institution might be said to have referent power.

Question 79

The University of Michigan Health System is advertising on National Public Radio as being a leading clinical source for the treatment of skin cancer. This strategy is an approach to gain economic power.

Question 80

Most consumers first go their physician and then turn to the Internet to check the diagnosis that they were given by the doctor.