Question 1

A ________ VMS integrates successive stages of production and distribution under single ownership.

Accepted Answer

A corporate VMS refers to a vertical marketing system where one entity owns and operates the entire supply chain from production to distribution. This allows for greater control and coordination among the different stages of the supply chain, leading to increased efficiency and potentially higher profits. The other options are not relevant to this definition.

Question 2

When KFC came into conflict with its franchisees over the brand's Unthink KFC repositioning, which emphasized grilled chicken over its traditional Kentucky fried chicken, KFC experienced ________ conflict.

Accepted Answer

The conflict between KFC and its franchisees over the Unthink KFC repositioning represents a vertical conflict, which occurs between different levels of the same supply chain. In this case, KFC, as the franchisor, sought to change the direction of its brand, while its franchisees, who own and operate individual KFC locations, were opposed to the change because it could potentially harm their businesses.

Question 3

In a(n) ________, two or more companies at one level join together to follow a new marketing opportunity.

Accepted Answer

In a horizontal marketing system, two or more companies at the same level join together to pursue a new marketing opportunity. This allows them to leverage their combined resources and expertise to better serve the target market. Administered vertical marketing systems involve leadership by one of the parties, corporate vertical marketing systems involve one company owning another at a different level, hybrid distribution systems combine different types of channels, and conventional marketing systems involve independent companies working separately. None of these are as closely related to the described scenario as a horizontal marketing system.

Question 4

Which of the following is true of channel members?

Accepted Answer

Channel members play specialized roles in the channel, with each member contributing unique skills, resources, and expertise to the distribution process. This ensures that the channel functions efficiently and effectively in delivering products to customers.

Question 5

Conflict in the channel can be healthy because ________.

Accepted Answer

Conflict in the channel can be healthy because it can prevent the channel from becoming passive and non-innovative. When channel partners challenge each other's ideas and opinions, they are forced to think creatively and come up with new solutions that benefit the channel as a whole. However, it is important to manage the conflict effectively to prevent it from causing harm to channel relationships or disrupting channel effectiveness.

Question 6

Managers at the Imperial Hotel-Chicago complained that the chain's overall image was hurt because Imperial Hotel-Dallas was overcharging guests and providing poor service. The Imperial Hotel was experiencing ________ conflict.

Accepted Answer

The situation described involves conflict between hotels within the same organization, specifically between the Imperial Hotel-Chicago and Imperial Hotel-Dallas. This type of conflict is identified as horizontal conflict.

Question 7

In a(n) ________, leadership is assumed not through common ownership or contractual ties but through the size and power of one or a few dominant channel members.

Accepted Answer

In an administered vertical marketing system (VMS), leadership is assumed by a dominant member who holds the power to coordinate activities and impose their authority. The other channel members may not have ownership or contractual ties, but they comply with the dominant member's decisions due to their size and power. In contrast, a contractual VMS has a formal agreement among members, a corporate VMS is owned by one firm, and a conventional VMS has no formal coordination. A horizontal marketing system has multiple companies at the same level cooperating for mutual benefit.

Question 8

A ________ VMS consists of independent firms at different levels of production and distribution who join together through formal agreements to obtain more economies or sales impact than each could achieve alone.

Accepted Answer

A contractual VMS is a marketing system in which independent firms at different levels of production and distribution join together through formal contracts to achieve economies of scale and sales impact that they couldn't achieve alone. The contracts clearly define each member's rights and responsibilities in the system.

Question 9

Which of the following is a major type of vertical marketing system?

Accepted Answer

Corporate vertical marketing system involves a single entity controlling the entire distribution channel. This type of system is often seen in large corporations where there is complete ownership and control from production to distribution.

Question 10

Which of the following is true of conventional distribution channels?

Accepted Answer

Conventional distribution channels typically involve independent channel members (such as wholesalers, retailers, and distributors) who seek to maximize their own profits through the sale of goods or services. While some degree of collaboration may exist between channel members, they ultimately act in their own self-interest rather than working exclusively for the good of the organization. Channel members may also engage in conflicts with one another over issues such as pricing, distribution, and promotion. As such, there may be little control over one another or formal mechanisms for resolving disputes. While channel members may have assigned roles, these may be somewhat flexible or subject to negotiation, rather than being governed by a clearly defined framework.

Question 11

Which of the following is true of vertical marketing systems?

Accepted Answer

Vertical marketing systems refer to a supply chain structure in which manufacturers, wholesalers, and retailers work together as a unified system to serve the customer. This means that channel members have a high degree of interdependence and work towards common goals. Through formal agreements and contracts, they coordinate their activities and share resources to improve efficiency and reduce costs. Channel conflict is minimized, and the system is designed to be customer-centric.

Question 12

________ VMS is a vertical marketing system that coordinates successive stages of production and distribution through the size and power of one of the parties.

Accepted Answer

An administered VMS is a system in which one of the parties (usually the manufacturer or wholesaler) has sufficient size and power to coordinate the successive stages of production and distribution. This central party is able to exert control over the activities of the other parties in the system, which may include retailers and distributors. Therefore, the best choice for the vertical marketing system described in the question is E - Administered.

Question 13

The management of two Panizza restaurants has an ongoing disagreement over the discount rate given to students from the local high school. This is an example of ________ conflict.

Accepted Answer

Horizontal conflict occurs between entities at the same level in a distribution channel, such as two restaurants under the same management.

Question 14

A(n) ________ consists of one or more independent producers, wholesalers, and retailers, each seeking to maximize its own profits, sometimes even at the expense of the system as a whole.

Accepted Answer

The description given in the question best fits a conventional distribution channel, where each member of the channel focuses on their own profit rather than the efficiency of the entire system. A multitiered supply chain may also involve multiple levels of producers and distributors, but it typically implies a more coordinated and interdependent system. The other answer choices do not apply to the given scenario.

Question 15

Conflict that occurs among firms at the same level of the marketing channel is known as ________ conflict.

Accepted Answer

Horizontal conflict involves competition and conflict among firms at the same level of the marketing channel, such as retailers competing with each other for customers. Multitiered conflict and vertical conflict involve conflict and competition between firms at different levels of the marketing channel. Prolonged conflict and financial conflict are not commonly used terms in the context of marketing channels.

Question 16

Ford and its network of independent franchised dealers is an example of a ________.

Accepted Answer

Ford is the manufacturer and it sponsors its franchised dealerships as retailers through a manufacturer-sponsored retailer franchise system.

Question 17

A(n) ________ marketing system consists of producers, wholesalers, and retailers acting as a unified system.

Accepted Answer

A vertical marketing system describes a channel of distribution in which several levels of intermediaries work together to promote and sell a product. In this system, producers, wholesalers, and retailers collaborate as a unified system, which often allows for greater efficiency and cost savings.

Question 18

The ________ organization is the most common type of contractual relationship.

Accepted Answer

Franchise organizations are the most common type of contractual relationship. This is because they are a popular way for businesses to expand their brand and reach. Franchise agreements allow for a business to grant another party the right to use their trademark, products, and services in exchange for fees or royalties. This type of relationship provides a framework for both the franchisor and franchisee, ensuring consistency and standardization across all locations.

Question 19

Fire Up makes fireproof clothing material and it licenses select stores around the world to use its material to make finished products with the Fire Up logo. Which of the following types of franchising is evident here?

Accepted Answer

The answer of Fire Up makes fireproof clothing material and...

Question 20

Conflict that occurs between different levels of the same marketing channel is known as ________ conflict.

Accepted Answer

Vertical conflict is the competition and disputes between different levels of the same marketing channel, such as disagreements between manufacturers and wholesalers or between wholesalers and retailers. A is incorrect as horizontal conflict occurs between firms at the same level of the channel. C and D are not relevant terms in this context. E is not a recognized term in marketing channel conflict.

Quiz 12: Marketing Channels: Delivering Customer Value