Deck 5: Designing Channel Structures and Strategies

Question 1

Big Box,an electronics retailer,runs advertisements promoting a Dell laptop but encourages its salespeople to sell consumers a lesser known computer brand so that Big Box will earn higher margins.Which term best describes the actions of Big Box?

A) intra-brand pricing
B) overt discontinuation
C) bait-and-switch
D) covert conversion
E) free riding

Answer 1

C

Question 2

A resale price maintenance policy most likely allows a manufacturer to ________.

A) regulate financing options
B) monitor price negotiations
C) utilize price promotions
D) seek category exclusivity
E) set a price floor

Answer 2

E

Question 3

What distribution method has been most successful for Royal Canin?

A) distributing products through hypermarkets
B) limiting distribution to pet and garden stores
C) limiting distribution to professional breeders
D) distributing products as convenience goods
E) limiting distribution to pet product e-retailers

Answer 3

B

Question 4

Phoebe's Purses,a line of designer handbags,can only be purchased at Macy's.What channel intensity strategy is most likely being used to sell Phoebe's Purses?

A) saturation
B) monopolistic
C) niche marketing
D) intensive distribution
E) exclusive distribution

Question 5

Sunshine Market is the only vendor in the trading area that sells Sarita's Salsa brand of hot sauces and dips.Which term most likely describes the arrangement that Sunshine Market has with Sarita's Salsa?

A) saturation
B) local monopoly
C) channel oligopoly
D) selective partnership
E) intensive distributorship

Question 6

In Dallas,Canon printers are sold at both Best Buy and Staples.Newspaper flyers from each store advertise a current sale price of $149 for the same Canon printer.Customers who purchase the printer at Best Buy will receive a free printer cartridge,while those who buy the printer from Staples will receive a free case of paper.Best Buy and Staples are most likely engaged in ________.

A) vertical integration
B) exclusive distribution
C) dual distribution competition
D) intra-brand price competition
E) inter-brand price competition

Question 7

What is the most likely reason that a premium positioning approach is difficult for a manufacturer to accomplish?

A) Consumer demand for luxury products fluctuates.
B) Channel members must match the brand's ideal image.
C) Buyers of expensive goods require easy product access.
D) Intra-brand competition levels are typically very high.
E) Channel function performance levels are difficult to assess.

Question 8

All of the following are factors that harmed the brand equity of Donna Karan EXCEPT ________.

A) using low-end retailers
B) stuffing the channel
C) offering discounts
D) expanding distribution
E) selling specialty items

Question 9

Which of the following products should most likely be distributed as intensively as possible?

A) milk
B) blender
C) printer
D) television
E) refrigerator

Question 10

A manufacturer that deliberately creates product shortages and uses selective distribution is most likely relying on a strategy of ________.

A) scarcity
B) complacency
C) free riding
D) bait-and-switch
E) channel stuffing

Question 11

In the San Francisco market,Kellogg's Raisin Bran sells for $3.49 per box,and Post Raisin Bran sells for $3.39 per box.Both Kellogg's and Post promote their cereals with weekly coupons in the local newspaper.Kellogg's and Post are most likely engaged in ________.

A) vertical integration
B) exclusive distribution
C) dual distribution competition
D) intra-brand price competition
E) inter-brand price competition

Question 12

A downstream channel member appears to carry a weak brand by offering a nominal amount of stock but encourages prospective customers to purchase another brand.The downstream channel member is most likely attempting to drop the weak brand through ________.

A) overt substitution
B) discontinuation
C) bait-and-switch
D) covert conversion
E) free riding

Question 13

What is the most likely result of channel stuffing?

A) diluted brand equity
B) improved brand image
C) increased channel power
D) closed service gaps
E) unlimited free riding

Question 14

Soundz Manufacturing makes and sells home cinema systems.Soundz managers carefully choose,cultivate,and support specific outlets in each trading area to ensure that Soundz products are sold through the right retailers rather than through all retailers.Which term best describes the policy used by Soundz?

A) saturation
B) monopolistic
C) dual distribution
D) selective distribution
E) premium positioning

Question 15

Which term means that a brand can be purchased from many possible outlets in a trading area?

A) intra-brand competition
B) exclusive distribution
C) intensive distribution
D) dual distribution
E) local monopoly

Question 16

Which channel intensity strategy is most likely preferred by downstream channel members?

A) exclusive distribution
B) intensive distribution
C) dual distribution
D) zero-based
E) saturation

Question 17

Which factor is LEAST relevant to a manufacturer when making a channel intensity/selectivity decision?

A) product category
B) brand strategy
C) product benefits
D) transaction costs
E) opportunity cost

Question 18

What distribution strategy is most likely best for a niche brand?

A) intensive
B) saturated
C) selective
D) pull
E) dual

Question 19

Which of the following statements about channel intensity is most likely true?

A) The more intensively a manufacturer distributes its brand in a market, the more the manufacture can influence how channel members perform marketing channel functions.
B) To control channel functions and their performance, the manufacturer needs to refrain from blanketing or saturating distribution outlets.
C) A channel intensity strategy primarily addresses whether to outsource channel functions or to engage in vertical integration.
D) Saturation is an extreme version of dual distribution that is rarely employed by manufacturers due to monopoly concerns.
E) Total saturation of a trading area is a common channel intensity strategy used by manufacturers.

Question 20

Sierra Water,a bottled water brand,is available in every possible outlet in the trading area.What channel intensity strategy is most likely being used for Sierra Water?

A) saturation
B) monopolistic
C) mass marketing
D) intensive distribution
E) exclusive distribution

Question 21

The instability of carrier-rider relationships can most likely be corrected by ________.

A) piggybacking
B) better coverage
C) more reward power
D) premium positioning
E) reciprocal piggybacking

Question 22

Carmen's Department Store is a downstream channel member that has a selective distribution arrangement with Winston Leather,a manufacturer of shoes and accessories.Which of the following would Carmen's LEAST likely receive from Winston Leather?

A) better credit terms
B) more reward power
C) lower wholesale prices
D) more marketing support
E) more promotional materials

Question 23

Which of the following is most likely exemplified by Sony setting up "boutiques" in upscale malls for the purpose of attracting female shoppers?

A) demonstration argument
B) piggybacking channels
C) upstream forecasting
D) cherry-picking
E) selectivity

Question 24

In a piggybacking channel,the firm making the product that requires distribution is known as the ________.

A) partner
B) rider
C) vendor
D) carrier
E) supplier

Question 25

Which statement is most likely true about the arrangement between Tupperware and Target?

A) Tupperware parties hosted in Target stores were as successful as private parties.
B) The social atmosphere of Tupperware parties held in private homes helped boost sales.
C) Tupperware increased its dealer network and customer base by hosting parties in Target.
D) The joint partnership between Target and Tupperware failed due to high distribution costs.
E) Tupperware's party format is rarely successful in societies where women work outside of the home.

Question 26

Which of the following is NOT a method for closing a service gap?

A) expanding the level of service outputs provided
B) offering multiple, tiered service output levels
C) retracting the level of service outputs provided
D) outsourcing all service and sales activities
E) altering the list of segments targeted

Question 27

Which of the following most likely occurs when a channel member is the exclusive distributor for a manufacturer?

A) The channel member gains reward power over the manufacturer.
B) The manufacturer attempts to influence the channel member's behavior.
C) The manufacturer gains idiosyncratic knowledge about the channel member.
D) The manufacturer allows the channel member to make all marketing decisions.
E) The channel member and the manufacturer form a joint partnership to share profits.

Question 28

Which action by a distributor would most likely increase the distributor's leverage over a manufacturer?

A) increasing direct selling efforts
B) selling more than one brand
C) limiting brand assortment
D) increasing display space
E) using pull strategies

Question 29

By limiting the number of trading partners,a manufacturer is most likely able to reduce transaction costs for all of the following reasons EXCEPT having________.

A) lower travel expenses
B) fewer but larger transactions
C) lower reseller turnover rates
D) fewer but larger sales promotions
E) lower inventory holding costs

Question 30

A manufacturer would most likely be reluctant to limit the number of downstream trading partners in a highly competitive market because of ________.

A) industrial requirements
B) service output needs
C) economies of scale
D) channel strategies
E) opportunity costs

Question 31

Company X and Company Y have partnered together so that each firm sells its own products and those of the partner.Which term best describes the arrangement between Company X and Company Y?

A) piggybacking
B) mutual franchising
C) intensive distribution
D) exclusive distribution
E) reciprocal piggybacking

Question 32

Which of the following is most likely a true statement about closing cost and service gaps?

A) Service gaps are a significant concern when the competition has the same service gaps.
B) Cost gaps usually occur when multiple channel functions are performed too inexpensively.
C) Closing gaps caused by managerial and environmental bounds is typically quick and inexpensive.
D) Cost gaps can be closed by changing the roles of current channel members to improve efficiency.
E) An oversupply of customer service does not lead to service gaps because no costs are involved.

Question 33

Which of the following is NOT a method used by manufacturers to distribute more intensively while retaining some benefits of selective distribution?

A) expanding channels
B) building brand equity
C) introducing branded variants
D) setting up separate service-only facilities
E) providing information in conjunction with new products

Question 34

Gomez Ford maintains a Web site that provides car shoppers with the prices and specifications of all the cars the dealership has in stock.Car shoppers can also negotiate with Gomez salespeople via e-mail to get the best deals on cars.By offering customers the ability to gather information and negotiate online,Gomez Ford has most likely ________.

A) reassured channel partners
B) offered branded variants
C) modified the channel format
D) increased transaction costs
E) engaged in niche marketing

Question 35

________establishes relationship stability between a manufacturer and a downstream channel member by making it unprofitable for either side to exploit the other.

A) Opportunism
B) Niche branding
C) Reward power
D) Product assortment
E) Mutual dependence

Question 36

How does a manufacturer encourage a downstream channel member to acquire brand-specific assets?

A) using intensive distribution
B) increasing service outputs
C) forming a new franchise
D) offering selective distribution
E) obtaining idiosyncratic knowledge

Question 37

Dual channels most likely enable a manufacturer to ________.

A) offer more coverage to downstream channel members
B) shift business from one channel to the other
C) sell more fast moving consumer goods
D) forecast upstream supply needs
E) monitor promotional activities

Question 38

Which of the following is a method for closing cost gaps?

A) increasing the intensity of channel coverage
B) forming a piggybacking channel system
C) investing in new distribution technologies
D) engaging in horizontal integration
E) setting managerial boundaries

Question 39

A manufacturer that uses a branded variants strategy is most likely trying to ________.

A) minimize the transaction costs associated with branded service outputs
B) offer downstream channel members near exclusivity of the brand
C) encourage downstream channel members to carry new brands
D) reduce turnover among downstream channel members
E) alter brand equity among key end users

Question 40

Which term refers to going to market through both third parties and one's own distribution divisions?

A) free riding
B) channel stuffing
C) multi-distribution
D) broadbanding
E) dual distribution

Question 41

In most cases,downstream channel members prefer exclusive distribution arrangements,while manufacturers benefit more from intensive distribution.

Question 42

Total saturation is a commonly used strategy because intensive distribution enables a manufacturer to have significant influence on how channel members perform marketing channel functions.

Question 43

Company X,which uses a strategy of intensive distribution,is experiencing lackluster sales support from downstream channel partners as well as bait-and-switch tactics.Discuss three options for Company X and describe the advantages and disadvantages of each.

Question 44

What is a pull strategy and what is its effect on brand equity? What are the advantages and disadvantages of using a pull strategy?

Question 45

What is selective distribution? Discuss the conflicts that exist between manufacturers and downstream channel members regarding channel intensity decisions.

Question 46

What methods are used to close service gaps and cost gaps?

Question 47

What distribution strategies are best for convenience goods,shopping goods,and luxury goods? Briefly explain the reasons for each strategy.

Question 48

A pull strategy is both common and effective in fast moving consumer goods channels.

Question 49

In a carrier-rider relationship,which is typically very stable,each firm sells its own products and those of the partner.

Question 50

A service gap can be closed by altering the list of segments targeted or by expanding the level of service outputs provided.