Deck 10: Managing Business Marketing Channels

Question 1

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

Answer 1

E

Question 2

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.

Answer 2

A

Question 3

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 above
E)(a)and (c)only

Answer 3

E

Question 4

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 above
E)(b)and (c)only

Question 5

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 6

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 7

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 8

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 9

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 10

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 11

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)and (c)
E)all of the above

Question 12

Service provided by industrial distributors includes:

A)repair.
B)credit.
C)maintenance.
D)all of the above
E)(b)and (c)only

Question 13

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 above
E)(a)and (b)only

Question 14

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 above
E)(a)and (b)only

Question 15

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 above
E)(a)and (b)only

Question 16

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 17

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 18

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 above

Question 19

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 above

Question 20

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 above
E)both (a)and (b)

Question 21

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

A)Arranging financing.
B)Storage.
C)Transportation.
D)All of the above.
E)Only b and c.

Question 22

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

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

Question 23

_____ cater to a broad array of industrial goods.

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

Question 24

A direct sales force is best used for:

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

Question 25

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 above.

Question 26

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 above.

Question 27

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 28

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 above.

Question 29

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 above.
E)(b)and (c)only.

Question 30

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 31

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 32

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)(a)and (b)only.
E)(b)and (c)only.

Question 33

Use of a direct sales force is best for:

A)highly customized solutions.
B)smaller customers.
C)complex products.
D)All of the above.
E)Only a and c.

Question 34

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 35

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 above

Question 36

The industrial distributor's primary responsibilities include:

A)contact.
B)repair.
C)product availability.
D)all of the above.
E)(a)and (c)only.

Question 37

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 above.
E)(a)and (c)only.

Question 38

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)(a)and (b)only.
E)(a)and (c)only.

Question 39

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 above.
E)Only b and c.

Question 40

Responsibilities for distributors include:

A)making products available.
B)repair.
C)providing service and technical advice.
D)All of the above.
E)Only a and b.

Question 41

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

Question 42

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

Question 43

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 above.
E)Only a and c.

Question 44

Manufacturers' representatives sell noncompeting but complementary products.

Question 45

_____ 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 46

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

Question 47

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 above.
E)Only a and b.

Question 48

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

Question 49

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

Question 50

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

Question 51

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

Question 52

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

Question 53

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 54

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 55

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

Question 56

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 above.
E)Only a and b.

Question 57

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

Question 58

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 59

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

Question 60

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

Question 61

Manufacturers' representatives and industrial distributors are both examples of____________________channels.

Question 62

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

Question 63

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

Question 64

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

Question 65

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

Question 66

Since all of the organizations or member firms that comprise the business marketing channel are interested in achieving important profit goals,why does conflict often emerge in the channel and what steps can the business marketing manager take to control it?

Question 67

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

Question 68

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

Question 69

A large consumer goods company recently entered the business market with a new product with broad industrial application. They must develop a channel of distribution through which the product will be sold. Discuss,generally,the key factors the company must evaluate in designing the channel.

Question 70

Describe specific product,market,and competitive conditions that lend themselves to: (a)a direct channel of distribution and (b)an indirect channel of distribution.

Question 71

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

Question 72

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

Question 73

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 74

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

Question 75

Explain the important product/market factors that lend themselves to the use of manufacturers' representatives by business marketers.

Question 76

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

Question 77

A medium-sized industrial firm plans to significantly expand their operations next year,and they are considering a change in channel structure. Discuss five (5)questions you would ask them to help you determine whether they should use their own sales force,reps,or industrial distributors.

Question 78

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

Question 79

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

Question 80

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