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?

Accepted Answer

The actions of Big Box are an example of bait-and-switch, which is a deceptive sales tactic where a business advertises a product at a low price to lure customers in, but then tries to sell them a higher priced or lower quality product instead. In this case, the advertised Dell laptop is being used as bait to get customers in the store, but then the salespeople are encouraged to push a different, lesser known brand with higher profit margins.

Question 2

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

Accepted Answer

Resale price maintenance policies allow the manufacturer to set a minimum price for the resale of their products. This means that retailers cannot sell the product below a certain price, creating a price floor.

Question 3

What distribution method has been most successful for Royal Canin?

Accepted Answer

Royal Canin has been successful by limiting distribution to specialized pet and garden stores, which aligns with their premium brand positioning and allows them to target pet owners who are more likely to seek specialized nutrition for their pets.

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?

Accepted Answer

Phoebe's Purses are only available at Macy's, indicating that exclusive distribution is being used. This strategy limits the availability of the product to a single retailer, which may help create a sense of exclusivity and increase the perceived value of the product.

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?

Accepted Answer

A local monopoly occurs when a single firm dominates the market for a particular product or service in a specific geographic area. In this case, Sunshine Market is the only vendor in the area selling Sarita's Salsa, giving them a local monopoly for that brand.

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 ________.

Accepted Answer

Intra-brand price competition occurs when retailers sell the same brand of a product at different prices or with different promotions, as seen with Best Buy and Staples offering different incentives for the same Canon printer.

Question 7

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

Accepted Answer

A premium positioning approach relies heavily on the brand's image and perception in the marketplace. For this approach to be successful, channel members must also align with this image and ensure that the brand is presented consistently to consumers. This can be difficult for manufacturers to accomplish as they cannot directly control how their products are presented and sold by channel members.

Question 8

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

Accepted Answer

Selling specialty items would not harm the brand equity of Donna Karan. In fact, selling specialty items could actually enhance the brand's exclusivity and appeal to a niche market. On the other hand, using low-end retailers, stuffing the channel, offering discounts, and expanding distribution can all dilute the brand's perceived value and image.

Question 9

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

Accepted Answer

Milk is a perishable item with a short shelf life, and it is a product that is consumed daily or regularly by many people. Therefore, it needs to be distributed as intensively as possible to ensure that it reaches the maximum number of customers in the shortest possible time, and to avoid spoilage.

Question 10

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

Accepted Answer

By deliberately creating product shortages, the manufacturer is creating a perception of scarcity among consumers, which can encourage them to purchase the product quickly before it runs out. This is known as a scarcity strategy. Additionally, using selective distribution can create a perception of exclusivity, making the product more desirable to consumers.

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 ________.

Accepted Answer

Kellogg's and Post are engaged in inter-brand price competition, as they are both offering similar products (Raisin Bran) at different prices and promoting their products through coupons.

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 ________.

Accepted Answer

The answer of A downstream channel member appears to carry...

Question 13

What is the most likely result of channel stuffing?

Accepted Answer

Channel stuffing involves artificially increasing sales figures and channel inventory levels, which can ultimately lead to a dilution of brand equity as customers may become wary of the product being over-promoted and over-hyped. This can lead to decreased trust in the brand and ultimately lower sales in the long run.

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?

Accepted Answer

Selective distribution is a policy where a company carefully chooses and cultivates specific outlets in each trading area to ensure that its products are sold through the right retailers rather than through all retailers. This is the policy used by Soundz Manufacturing.

Question 15

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

Accepted Answer

Intensive distribution refers to a strategy where a brand is made available in as many outlets as possible within a trading area. This allows for wider availability and accessibility, increasing the chances of the brand being purchased by consumers.

Question 16

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

Accepted Answer

Exclusive distribution is preferred by downstream channel members as it limits the number of intermediaries, allowing for greater control and potentially higher margins.

Question 17

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

Accepted Answer

Product benefits are generally not the least relevant factor when a manufacturer is deciding on channel intensity/selectivity. This decision is more influenced by factors such as product category, brand strategy, transaction costs, and opportunity costs, which directly affect how the product is distributed and sold. Product benefits, while important for marketing and product development, do not directly influence the decision on the intensity or selectivity of the distribution channel.

Question 18

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

Accepted Answer

A niche brand targets a specific group of consumers with unique needs or preferences. Therefore, a selective distribution strategy, which involves carefully chosen retailers or distributors, is most appropriate as it allows the brand to maintain quality and exclusivity while reaching its target market. An intensive or saturated strategy may dilute the brand's image and positioning, while a pull or dual strategy may not be cost-effective for a niche brand with limited resources.

Question 19

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

Accepted Answer

To control channel functions and their performance, manufacturers often avoid saturating distribution outlets, as too many outlets can dilute control and brand image.

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?

Accepted Answer

The answer of Sierra Water,a bottled water brand,is available in...

Quiz 5: Designing Channel Structures and Strategies