Deck 12: Designing and Managing Integrated Marketing Channels

Question 1

Producers often shift some functions to intermediaries. Which of the following is the most significant benefit of doing this?

A) It increases customer loyalty.
B) It provides the producer with greater control over operations.
C) It reduces the amount of direct customer interaction.
D) It lowers the producer's costs and prices.
E) It ensures greater information security.

Answer 1

D

Question 2

Identify the channel function that constitutes both backward and forward flow.

A) obtaining financing
B) storage of physical goods
C) persuasive communication
D) movement of physical goods
E) overseeing actual transfer of ownership

Answer 2

A

Question 3

Cortron Consultants provides business consulting services for startups. It helps customers design their supply chains by first evaluating the target market and then proceeds backward from that point. What is this strategy of reverse design called? Why is it beneficial?

Answer 3

This strategy is called demand chain planning. This helps the companies have a clear focus on the target market.

Question 4

A pull strategy is particularly appropriate when there is low brand loyalty in a category, brand choice is made in the store, the product is an impulse item, and product benefits are well understood.

Question 5

A computer manufacturing company allows customers to shop in their preferred way. For example, they can gather information online or in the store; they can place orders online or by phone or purchase in a store. They can have orders delivered to their home or arrange to pick them up from a convenient retail location. Which of the following terms best represents this practice?

A) omnichannel marketing
B) mass customization
C) online personalization
D) push strategy
E) internal marketing

Question 6

Which of the following is the most accurate description of a value network?

A) a system of partnerships and alliances that a firm creates to source, augment, and deliver its offerings
B) a system of organizations and resources involved in moving a product from supplier to customer
C) an arrangement whereby an organization transforms inputs into finished goods
D) a network that allows an organization to take the finished products to the end-users
E) a communication network that allows an organization to transfer information to end-customers

Question 7

Which of the following is an example of a zero-level channel?

A) A manufacturer takes online orders from customers and ships the products to them.
B) An organization uses a combination of direct salespeople and sales agencies to increase sales.
C) A manufacturer sells its products through wholesalers and retailers.
D) A manufacturer sells its products through chains of supermarkets and other large sellers.
E) A large company forms alliances with smaller companies to increase sales coverage.

Question 8

Which of the following channel functions constitute only a backward flow?

A) movement of physical goods
B) placing orders with suppliers
C) persuasive communication
D) storage of physical goods
E) overseeing actual transfer of ownership

Question 9

Using the push strategy is most appropriate when ________.

A) consumers are able to perceive differences between brands
B) the product being sold is an impulse item
C) there is high brand loyalty for the product
D) the product is a high involvement purchase
E) consumers choose the brand before they go to the store

Question 10

Explain the concept of a value network.

Question 11

Companies should first think about the target market and then design the supply chain backward from that point. This strategy is called ________ planning.

A) demand chain
B) resource
C) external channel
D) materials
E) strategic business

Question 12

Door-to-door sales, home parties, mail order, telemarketing, TV selling, Internet selling, and manufacturer-owned stores are examples of ________.

A) zero-level channels
B) jobbers
C) wholesalers
D) manufacturer's representatives
E) consumers

Question 13

Sweet Treats is a startup confectionery manufacturer that sells chocolates, toffees, marshmallows, jelly candies, and so on. Should the firm adopt a push or a pull strategy? Explain your answer.

Question 14

________ are sets of interdependent organizations participating in the process of making a product or service available for use or consumption.

A) Marketing channels
B) Interstitials
C) Communication channels
D) Sales territories
E) Marketing terrains

Question 15

Spike Inc. is a sportswear manufacturer that recently launched its new line of customizable running shoes. The shoes come with a digital component that allows them to adapt to the runner's biomechanics. To promote this new product, Spike launches an advertising campaign and entices a famous athlete to endorse the product. This is an example of a ________.

A) trade promotion
B) reverse flow
C) push strategy
D) pull strategy
E) backward flow

Question 16

The Norticon Group provides and manages computers and network systems for businesses and communities. Norticon sells its products through various means. It uses its sales force to sell to large customers and telemarketing to sell to smaller customers. The company also sells its products via the Internet. Briefly explain the marketing approach being used by the company.

Question 17

Companies should first think of the target market and then design the supply chain backward from that point. This strategy is called demand chain planning.

Question 18

A manufacturer uses the company's sales force and trade promotions to carry, promote, and sell products to end users. Which of the following strategies is this manufacturer using?

A) personalization strategy
B) tailoring strategy
C) push strategy
D) pull strategy
E) consumer promotion strategy

Question 19

When is a pull strategy appropriate?

A) when there is low brand loyalty
B) when consumers are able to perceive differences between brands
C) when brand choice is made in the store
D) when it is a low involvement purchase
E) when the product is an impulse item

Question 20

Marketing channels are the set of pathways a product or service follows after production, culminating in purchase and consumption by the final end user.

Question 21

A marketing channel overcomes the time, place, and possession gaps that separate goods and services from those who need or want them.

Question 22

Marketing channel functions such as storage and movement and communications constitute a backward flow of activities.

Question 23

A new firm typically starts as a local operation selling in a fairly circumscribed market by ________.

A) finding and developing new intermediaries
B) using a few existing intermediaries
C) forming partnerships with the market leader
D) creating a special channel
E) forming partnerships with other firms

Question 24

Briefly explain the various levels of marketing channels.

Question 25

Which of the following activities is a reverse-flow channel of marketing?

A) raw materials movement
B) product recycling
C) materials ordering
D) finished goods storage
E) customer order placement

Question 26

The flow of materials to refurbish products for resale constitutes a reverse flow.

Question 27

Which of the following is NOT a standard that producers would use to evaluate intermediaries' performance?

A) sales-quota attainment
B) average inventory levels
C) modification of channel design
D) customer delivery time
E) cooperation in promotional programs

Question 28

List the various functions performed by members of a marketing channel.

Question 29

Which of the following types of distribution involves severely limiting the number of channel intermediaries?

A) exclusive
B) selective
C) intensive
D) aggressive
E) retail

Question 30

Exclusive dealing arrangements are mainly used by companies looking for an edge in markets increasingly driven by ________.

A) price
B) efficiency
C) product variety
D) add-on services
E) spatial convenience

Question 31

All functions in a marketing channel use up scarce resources and can be shifted among channel members.

Question 32

Toyota has an advantage over Lexus due to the fact that there are more Toyota dealers, which helps customers save on transportation and search costs in buying and repairing an automobile. Which of the following service outputs relates to this competitive advantage?

A) spatial convenience
B) service backup
C) lot size
D) waiting time
E) delivery time

Question 33

Which marketing channel is associated with the highest value added per sale?

A) retail stores
B) sales force
C) distributors
D) Internet
E) telemarketing

Question 34

Atburex is a furniture manufacturing company in the United States. The company provides a 60-day credit period and also offers on-site delivery and installation. These special benefits refer to which of the following service outputs?

A) service backup
B) large product variety
C) spatial convenience
D) large lot size
E) short waiting time

Question 35

A(n) ________ vertical marketing system combines successive stages of production and distribution under single ownership.

A) corporate
B) administered
C) contractual
D) regulatory
E) controlled

Question 36

A producer must modify its channel design and arrangements if ________.

A) consumer buying patterns change
B) the competition in the market stabilizes
C) the product is in the growth stage of its life cycle
D) the market size remains unchanged for a particular period
E) the firm's profits stabilize

Question 37

In many cases, retailers hold greater ________ than manufacturers, so manufacturers need to know retail buyers' acceptance criteria.

A) channel power
B) conditions of sale
C) territorial rights
D) motivation
E) channel design

Question 38

Electrobar, a European manufacturer of industrial kitchenware, sells to industrial canteens, restaurants, hotels, and so forth. The company provides a one-year warranty on all products and also allows customers to pay in installments-they pay 50 percent on delivery and the rest as equal installments. This refers to which element in the "trade-relations mix"?

A) price policy
B) conditions of sale
C) distributors' territorial rights
D) exclusive dealings
E) mutual services and responsibilities

Question 39

What is the major difference between a conventional marketing channel and a vertical marketing system (VMS)?

A) Elements in a conventional marketing channel act as separate businesses whereas the elements in a VMS act as a unified system.
B) A VMS has many intermediaries whereas a conventional marketing channel has a limited number of intermediaries.
C) A VMS is characterized by an independent producer whereas a conventional marketing channel is characterized by multiple producers.
D) A conventional marketing channel has elements such as retailers and wholesalers whereas these elements are not present in a VMS.
E) Producers have complete control over the other members in a conventional marketing channel whereas this control is minimal in a VMS.

Question 40

Eureka Forbes, an Asian consumer appliances company, sells its vacuum cleaners through door-to door sales. Comment on the length of the channel in the case of Eureka Forbes' vacuum cleaners.

Question 41

Lot size refers to the total number of units a channel can transmit from the manufacturer's place to the service outlet.

Question 42

Rotter Garder Inc. is a large-scale paint manufacturer known for its wide range of decorative paint products and industrial coatings. In addition to making paints, the company also owns and operates the retail stores that sell its products. This is an example of a(n) ________ vertical marketing system.

A) administered
B) contractual
C) referent
D) corporate
E) regulated

Question 43

Multichannel conflicts are common when the members of one channel obtain a lower price based on larger-volume purchases.

Question 44

After a company has chosen a channel system, it must select, train, motivate, and evaluate individual intermediaries for each channel.

Question 45

Exclusive dealings and tying agreements are illegal and prohibited by law.

Question 46

In a ________ marketing system, two or more unrelated companies put together resources or programs to exploit an emerging marketing opportunity.

A) reverse flow
B) vertical
C) horizontal
D) lateral
E) forward flow

Question 47

Retailer cooperatives allow nonmember retailers to buy through them and share the profits.

Question 48

A group of small sellers takes the initiative and organizes a new business entity to carry on wholesaling and possibly some production. This entity is called a(n) ________.

A) retailer cooperative
B) franchise organization
C) area-based cartel
D) sponsored voluntary chain
E) alternate selling channel

Question 49

When Goodyear began selling its popular tire brands through Sears, Walmart, and Discount Tire, independent dealers that sold the same tires at higher prices were angry. This is an example of a(n) ________ conflict.

A) horizontal
B) vertical
C) intermediate
D) multichannel
E) parallel

Question 50

Alcart Solutions is a large distributor of Aldor phones in Canada. The company distributes products to various retailers in the New Brunswick province. Recently Aldor received several complaints from its retailers that their orders are not delivered on time. This is an example of ________ conflict.

A) multichannel
B) horizontal
C) vertical
D) intermediate
E) parallel

Question 51

Describe the distribution challenges and opportunities that international markets pose.

Question 52

Which of the following channel conflict resolution techniques is used only if everything else proves ineffective?

A) legal recourse
B) mediation
C) arbitration
D) co-option
E) superordinate goals

Question 53

An intensive distribution strategy serves well for products such as snack foods and soft drinks.

Question 54

Briefly describe the basic types of intermediaries.

Question 55

Manufacturers can obtain greater control over the selling process by using a sales agency.

Question 56

A manufacturer wants to achieve rapid market penetration through a low-price policy. However, the manufacturer's dealers prefer to work with high margins and pursue short-run profitability. The major reason for this conflict is ________.

A) goal incompatibility
B) unclear roles
C) ambiguous rights
D) differences in perception
E) dependence on the manufacturer

Question 57

A corporate vertical marketing system combines successive stages of production and distribution under single ownership.

Question 58

Define the five kinds of service outputs that marketing channels produce.

Question 59

Channel power is the ability to alter channel members' behavior so that they take actions they would not have taken otherwise.

Question 60

Winstar is a large-scale manufacturer with more than a hundred partners across the globe. When making decisions concerning distribution and channel optimization, the company invites members from its channel partners to be part of its advisory committee. This helps the company maintain harmony with its partners. Which of the following conflict resolution techniques is Winstar using?

A) diplomatic counselling
B) mediation
C) arbitration
D) co-optation
E) joint membership

Question 61

What are exclusive distribution and dealing arrangements, and when are they legal?

Question 62

Companies are trying to give their customers more control over their shopping experiences by bringing Web technologies into the store via mobile apps.

Question 63

When Japanese teenagers carry mobile phones from NTT and use them to order goods, they are engaged in ________.

A) B2B ecommerce
B) brick-and-click commerce
C) infomediation
D) dilution
E) m-commerce

Question 64

A large retail chain in the United States decides to expand its operations by adding an online site for e-commerce. This is called a(n) ________ company.

A) B2B
B) brick-and-mortar
C) m-commerce
D) pure-click
E) brick-and-click

Question 65

Which of the following is an example of a brick-and-click company?

A) IFB Industries, a company that sells products using various channels such as Internet, retailers, direct outlets, and franchisees
B) Opera, a Web browser and Internet suite developed by Opera Software, performs common tasks such as displaying Web sites and sending and receiving e-mail messages.
C) Atrutron, a company that offers its customers access to the Internet using data transmission technology
D) eBay Inc., an American company, facilitates online auctions and shopping to people and businesses across the globe to buy and sell a broad variety of goods and services.
E) Yahoo! Inc., an American corporation, provides services via the Internet such as directories, e-mail, news, advertising, online mapping, and so on.

Question 66

Which of the following is the most complete and accurate description of a pure-click company?

A) These are companies that launch a Web site without any previous existence as a firm.
B) These firms' business models are based on advertising revenue.
C) These are established companies that have an online site for selling products.
D) These companies get paid every time a user visits their Web site.
E) These companies sell online space to other Web sites and are paid for the service.

Question 67

Manufacturers that add online channels may avoid alienating retailers or other intermediaries by offering different brands or products through online channels than in stores.

Question 68

Brick-and-click companies are those that have launched a Web site without any previous existence as a firm.

Question 69

The redemption rate for paper coupons (10 percent) far exceeds that of mobile coupons (1 percent).

Question 70

Crafted Jewels is a jewelry manufacturer that sells its designs to various jewelry retailers. The retailers often complain that the company's online store acts as a competitor and reduces their profitability. What type of conflict is this? Briefly explain.

Question 71

True Value is a retailer-owned cooperative with over 4,000 independent retail locations worldwide. Members of True Value own their individual stores and operate independently. True Value helps its members procure materials at a low cost. What kind of marketing system is True Value? Explain briefly.

Question 72

XM Consulting collects information on various industrial products. When faced with buying decisions, businesses can visit XM's website to purchase detailed information on the various options available to them. XM Consulting can be called a(n) ________.

A) infomediary
B) market maker
C) customer community
D) third party arbitrator
E) informant

Question 73

M-commerce refers to ________.

A) conducting business using mobile channels
B) the use of mass media communications to attract customers
C) providing mobile and on-site services to customers
D) the use of a specific medium to communicate with prospects
E) using the Internet as a medium for doing business

Question 74

National Beverage Corp. produces and distributes a wide range of beverages. It offers a selection of flavored soft drinks, juices, sparkling waters, energy drinks, nutritionally-enhanced waters, and other specialty beverages. What distribution strategy will be most suitable for the company's products, and why?

Question 75

What is geofencing? Provide an example.

Question 76

Flash Designs is an apparel manufacturing company and has adopted a franchising model to distribute and sell its garments. The company recently received complaints from a particular franchisee that another competing franchisee was infringing on its territory. What type of conflict is this?

Question 77

What is a vertical marketing system (VMS)? What are the various types of VMSs?

Question 78

A group of entrepreneurs is planning to start a food processing company. Comment on the likely evolution of the company's marketing channels.

Question 79

Differentiate between pure-click companies and brick-and-click companies.

Question 80

Altrudex, Inc., is involved in the manufacture, distribution, and sale of consumer electronics. The company sources over half the products it sells from companies it partly or wholly owns. It also owns a large retail chain and sells its products through them. What marketing system is Altrudex using?