Question 1

In an administered VMS,the sheer size and power of one of the channel members places it in a position of channel control.The lead player in such situations may be referred to as the ______________,signifying its ability to control many aspects of that channel's operations.
A)Lieutenant
B)Retailer cooperative
C)Wholesaler cooperative
D)Channel captain
E)Partner relationship management (PRM) strategies

Accepted Answer

In an administered VMS, the sheer size and power of one of the channel members places it in a position of channel control. The lead player in such situations may be referred to as the channel captain or channel leader, signifying its ability to control many aspects of that channel's operations.

Question 2

____________ consists of vertically aligned networks behaving and performing as a unified system.
A)Insourcing
B)Vertical marketing system (VMS)
C)Corporate VMS
D)Contractual VMS
E)Administered VMS

Accepted Answer

Whereas standard marketing channels are comprised of independent entities, a vertical marketing system (VMS) consists of vertically aligned networks behaving and performing as a unified system. A VMS can be set up in three different ways: corporate systems, contractual systems, and administered systems. At its essence, in a VMS a channel member (a) owns the others, (b) has contracts with them, or (c) simply forces cooperation through sheer clout within the channel.

Question 3

It is possible that a(n)________________ can be more formally structured through strategic alliances and partnership agreements among channel members that agree to work in mutual cooperation.An example of this is the relationship between Walmart and Procter & Gamble.
A)Insourcing arrangement
B)Vertical marketing system (VMS)
C)Corporate VMS
D)Contractual VMS
E)Administered VMS

Accepted Answer

It is possible that an administered VMS can be more formally structured through strategic alliances and partnership agreements among channel members that agree to work in mutual cooperation. P&G and Walmart have a longstanding strategic alliance that includes connectivity of inventory, billing systems, and market research. The result is improved inventory management, more efficient invoice processing, and product development that better serves the consumer marketplace.

Question 4

Nadia works for a major soda distributor.Recently the company has begun to discuss buying a transportation company to move its product from its own manufacturing facility to the consumer.This is an example of _______________.
A)Insourcing
B)Vertical marketing system (VMS)
C)Corporate VMS
D)Contractual VMS
E)Administered VMS

Accepted Answer

In corporate VMS, a channel member has invested in backward or forward vertical integration by buying a controlling interest in other intermediaries.

Question 5

Famous Al's purchases different fruits from local farmers and then sells them to local restaurants and retailers.If the fruits rot before Al sells them he takes the loss.As an intermediary,Famous Al's is performing the function of ________________.
A)Financing
B)Market research
C)Buying
D)Risk-taking
E)None of these

Accepted Answer

A big part of how an intermediary can add value is by reducing the risk of others in the channel. Any of the major physical distribution functions that are assumed by a channel member comes with potential risks and liabilities. For example, accumulating bulk in perishable goods comes with a risk of spoilage if customer demand estimates are inaccurately high. Also, when product liability lawsuits are filed, the defendants named are nearly always anyone within the distribution channel that played a part in getting the product to market.

Question 6

Entrepreneur magazine reports that ________________ remain the highest-potential start-up and growth mechanism for small-business owners,and are an effective way to expand a distribution channel quickly and efficiently.
A)Franchise organizations
B)Retailer cooperatives
C)Wholesaler cooperatives
D)Channel captains
E)Partner relationship management (PRM) strategies

Accepted Answer

A contractual VMS consists of otherwise independent entities that are bound together legally through contractual agreement. The most famous example of this arrangement is a franchise organization, which is designed to create a contractual relationship between a franchisor that grants the franchise and the franchisee, or the independent entity entering into an agreement to perform at the standards required by the franchisor. Entrepreneur magazine reports that franchising remains the highest-potential start-up and growth mechanism for small-business owners, and it's an effective way to expand a distribution channel quickly and efficiently.

Question 7

XYZ intermediary works with large consumer product manufacturers as well as small local retailers.The company buys large quantities of products from the manufacturers and sells them in smaller quantities to retailers.XYZ is performing the distribution function of _________________.
A)Physical distribution
B)Supply chain
C)Supply chain management
D)Breaking bulk
E)Accumulating bulk

Accepted Answer

The function of breaking bulk occurs within a channel to better match quantities needed to space constraints and inventory turnover requirements. Importantly, like most channel functions, breaking bulk could be performed by different types of intermediaries, in the case of Walgreens by the retailer's own warehouse and in the case of the local pharmacy by a drug wholesaler such as McKesson.

Question 8

A(n)__________________ consists of otherwise independent entities that are bound together legally through contractual agreement.
A)Insourcing arrangement
B)Vertical marketing system (VMS)
C)Corporate VMS
D)Contractual VMS
E)Administered VMS

Accepted Answer

A contractual VMS consists of otherwise independent entities that are bound together legally through contractual agreement.

Question 9

Ultimately,________________ can occur in which channel members experience disagreements and their relationship can become strained or fall apart.
A)Channel power
B)Channel conflict
C)Expert power
D)Reward power
E)Coercive power

Accepted Answer

Power can directly influence the relationships within the channel. Ultimately, channel conflict can occur in which channel members experience disagreements and their relationship can become strained or fall apart. Unresolved channel conflict can result not only in an uncooperative and inefficient channel, but it can also ultimately impact end-user consumers through inferior products, spotty inventory, and higher prices.

Question 10

Financing,market research,risk-taking,and other services are considered to be _________________________.
A)Creating assortments
B)Reducing transactions
C)Transportation and storage functions
D)Facilitating functions
E)Disintermediation

Accepted Answer

In a channel, facilitating functions performed by intermediaries include a variety of activities that help fulfill completed transactions and also maintain the viability of the channel relationships. The activities may include financing, market research, risk-taking, and other services.

Question 11

By combining efforts,____________ gain advantages through enhanced buying and distribution power,which allow them to better compete with supermarket chains than if the stores were buying separately.
A)Franchise organizations
B)Retailer cooperatives
C)Wholesaler cooperatives
D)Channel captains
E)Partner relationship management (PRM) strategies

Accepted Answer

Another common contractual VMS is the retailer cooperative, or co-op. In this era of chain stores, independent retailers across a variety of product categories have banded together to gain cost and operating economies of scale in the channel. Associated Grocers is a retailer-owned co-op of more than 2,900 stores in 24 states that, through enhanced buying and distribution power, can better compete with supermarket chains than if the stores were buying separately.

Question 12

The goal of the ________________ is to share resources,especially remembering-based resources,to effect optimally profitable relationships between two channel members.
A)Lieutenant
B)Retailer cooperative
C)Wholesaler cooperative
D)Channel captain
E)Partner relationship management (PRM) strategies

Accepted Answer

Partner relationship management (PRM) strategies consist of a strategic alliance that includes connectivity of inventory, billing systems, and market research among marketing channel members. The goal of PRM is to share resources, especially knowledge-based resources, to effect optimally profitable relationships between two channel members.

Question 13

XYZ is a Cleveland-based wholesaler that retailers contract for varying degrees of exclusive dealings with a particular wholesaler.XYZ is an example of a ________________.
A)Franchise organization
B)Retailer cooperative
C)Wholesaler cooperative
D)Channel captain
E)Partner relationship management (PRM) strategy

Accepted Answer

The concept of wholesale cooperative is when retailers contract for varying degrees of exclusive dealings with a particular wholesaler. An example is Ace Hardware.

Question 14

A(n)________________ creates a powerful competitive advantage in the marketplace due to cost and process efficiencies realized when a channel is strictly controlled by one entity.
A)Insourcing arrangement
B)Vertical marketing system (VMS)
C)Corporate VMS
D)Contractual VMS
E)Administered VMS

Accepted Answer

An owned, or corporate, VMS creates a powerful competitive advantage in the marketplace due to cost and process efficiencies realized when a channel is strictly controlled by one entity.

Question 15

______________ is the degree to which any member of a marketing channel can exercise influence over the other members of the channel.
A)Channel power
B)Channel conflict
C)Expert power
D)Reward power
E)Coercive power

Accepted Answer

The very nature of channels, especially traditional channels composed of independent entities, fosters differences in channel power among members. Channel power is the degree to which any member of a marketing channel can exercise influence over the other members of the channel.

Question 16

Keisha is in charge of overseeing the flow of activities among several entities for Walmart.Her main objective is to coordinate these value-adding activities in a way that adds value.She is in charge of _______________.
A)Physical distribution
B)Supply chain
C)Supply chain management
D)Breaking bulk
E)Accumulating bulk

Accepted Answer

Supply chain management is the process of managing the aspects of the supply chain. The goal is coordination of these value-adding flows among the entities in a way that maximizes overall value delivered and profit realized.

Question 17

Producers make money by pushing finished goods out the door and into the channel of distribution.As such,the most commonly provided channel intermediary activities are _______________.
A)Creating assortments
B)Reducing transactions
C)Transportation and storage functions
D)Facilitating functions
E)Disintermediation

Accepted Answer

Relatively few producers operate their own transportation networks or provide warehousing facilities. Producers make money by pushing finished goods out the door and into the channel of distribution. As such, transportation and storage functions are among the most commonly provided channel intermediary activities.

Question 18

In ________________ a channel member has invested in backward or forward vertical integration by buying a controlling interest in other intermediaries.
A)Insourcing arrangement
B)Vertical marketing system (VMS)
C)Corporate VMS
D)Contractual VMS
E)Administered VMS

Accepted Answer

In corporate VMS, a channel member has invested in backward or forward vertical integration by buying a controlling interest in other intermediaries.

Question 19

Local Farmers of Tampa Bay is a group of more than 100 farmers who have banded together to gain cost and operating economies of scale.The Local Farmers group is an example of a ______ .
A)Retailer cooperative
B)Vertical marketing system (VMS)
C)Corporate VMS
D)Contractual VMS
E)Administered VMS

Accepted Answer

A common contractual VMS is the retailer cooperative, or co-op. In this era of chain stores, independent retailers across a variety of product categories have banded together to gain cost and operating economies of scale in the channel.

Question 20

_____________ is the shortening or collapsing of marketing channels due to the elimination of one or more intermediaries,and is common in the electronic channel.
A)Creating assortments
B)Reducing transactions
C)Transportation and storage functions
D)Facilitating functions
E)Disintermediation

Accepted Answer

Driven largely by the advent of electronic commerce and online marketing, disintermediation, or the shortening or collapsing of marketing channels due to the elimination of one or more intermediaries, is common in the electronic channel.

Quiz 11: Manage Marketing Channels and Points of Customer Interface

In an administered VMS,the sheer size and power of one of the channel members places it in a position of channel control.The lead player in such situations may be referred to as the ______________,signifying its ability to control many aspects of that channel's operations.

____________ consists of vertically aligned networks behaving and performing as a unified system.

It is possible that a(n) ________________ can be more formally structured through strategic alliances and partnership agreements among channel members that agree to work in mutual cooperation.An example of this is the relationship between Walmart and Procter & Gamble.

Nadia works for a major soda distributor.Recently the company has begun to discuss buying a transportation company to move its product from its own manufacturing facility to the consumer.This is an example of _______________.

Famous Al's purchases different fruits from local farmers and then sells them to local restaurants and retailers.If the fruits rot before Al sells them he takes the loss.As an intermediary,Famous Al's is performing the function of ________________.

Entrepreneur magazine reports that ________________ remain the highest-potential start-up and growth mechanism for small-business owners,and are an effective way to expand a distribution channel quickly and efficiently.

XYZ intermediary works with large consumer product manufacturers as well as small local retailers.The company buys large quantities of products from the manufacturers and sells them in smaller quantities to retailers.XYZ is performing the distribution function of _________________.

A(n) __________________ consists of otherwise independent entities that are bound together legally through contractual agreement.

Ultimately,________________ can occur in which channel members experience disagreements and their relationship can become strained or fall apart.

Financing,market research,risk-taking,and other services are considered to be _________________________.

By combining efforts,____________ gain advantages through enhanced buying and distribution power,which allow them to better compete with supermarket chains than if the stores were buying separately.

The goal of the ________________ is to share resources,especially remembering-based resources,to effect optimally profitable relationships between two channel members.

XYZ is a Cleveland-based wholesaler that retailers contract for varying degrees of exclusive dealings with a particular wholesaler.XYZ is an example of a ________________.

A(n) ________________ creates a powerful competitive advantage in the marketplace due to cost and process efficiencies realized when a channel is strictly controlled by one entity.

______________ is the degree to which any member of a marketing channel can exercise influence over the other members of the channel.

Keisha is in charge of overseeing the flow of activities among several entities for Walmart.Her main objective is to coordinate these value-adding activities in a way that adds value.She is in charge of _______________.

Producers make money by pushing finished goods out the door and into the channel of distribution.As such,the most commonly provided channel intermediary activities are _______________.

In ________________ a channel member has invested in backward or forward vertical integration by buying a controlling interest in other intermediaries.

Local Farmers of Tampa Bay is a group of more than 100 farmers who have banded together to gain cost and operating economies of scale.The Local Farmers group is an example of a ______ .

_____________ is the shortening or collapsing of marketing channels due to the elimination of one or more intermediaries,and is common in the electronic channel.