Question 1

The dominant and controlling member of a marketing channel is known as a:

Accepted Answer

The dominant and controlling member of a marketing channel is known as a channel captain. The channel captain is responsible for coordinating the activities of other members of the channel and ensuring that the channel functions effectively. The channel captain is typically the member of the channel with the greatest power and influence, often because of their market share, financial resources, or other factors that allow them to exert control over the other members.

Question 2

The number of intermediaries through which a manufacturer distributes its goods in a particular market is referred to as _____.

Accepted Answer

Distribution intensity refers to the level or number of intermediaries that a manufacturer uses to distribute its goods in a particular market.

Question 3

Clarke's,a popular and high-end brand of men's formalwear,has just five main distributors to cater to the five zones in the country: north,south,east,west,and central.According to the information given in this case,Clarke's uses:

Accepted Answer

Clarke's is using closed sales territories, meaning they have limited the number of distributors to specific geographic areas.

Question 4

The management at Vision,a company that specializes in high-end eyewear,was dissatisfied with the performance of the marketing intermediaries' in promoting their products.They decided to sell their products only through standalone,exclusive boutiques which are owned and maintained by Vision.This is an example of:

Accepted Answer

Forward integration occurs when a company decides to take control of the distribution channels and sell its products directly to the end-users. In the given scenario, Vision is dissatisfied with the marketing intermediaries' performance, so they decided to bypass them entirely and sell their products only through standalone boutiques owned and maintained by Vision. This decision indicates that Vision has undertaken forward integration to have greater control over the promotion and distribution of their products.

Question 5

A planned channel system designed to improve distribution efficiency and cost-effectiveness by integrating various functions throughout the distribution chain is called a(n)_____ marketing system.

Accepted Answer

This question describes a vertical marketing system, which is designed to streamline the distribution chain by integrating various functions, such as production, distribution, and retail, under a single umbrella. This allows companies to improve efficiency, control costs, and maintain quality throughout the entire process.

Question 6

When the same branded product is carried in competing retail pharmacies,discount houses,department stores,and convenience stores,the marketing channel conflict that can result is referred to as:

Accepted Answer

Horizontal conflict occurs when the same product is carried by different retailers in the same channel, leading to competition and conflicts over pricing, promotion, and distribution.

Question 7

The process through which a firm attempts to control downstream distribution is called _____ integration.

Accepted Answer

Forward integration refers to a situation where a company seeks to control the downstream distribution channels in the supply chain. This means that the company seeks to acquire or establish its own retail stores, distributors, or wholesalers to sell its products directly to end consumers. This can help the company to have greater control over its supply chain, improve its distribution efficiency, and reduce its reliance on third-party distributors.

Question 8

Which of the following distribution strategies seeks to distribute a product through all available channels in a trade area?

Accepted Answer

Intensive distribution seeks to make the product available through all possible channels in a trade area, including convenience stores, supermarkets, discount stores, and online retailers. This strategy is commonly used for fast-moving consumer goods, such as snacks and soft drinks, where wide availability and accessibility are critical to meeting consumer demands.

Question 9

An arrangement that requires a marketing intermediary to carry items other than those they want to sell is known as a(n)_____.

Accepted Answer

A tying agreement is when a supplier requires a buyer to purchase a specific product or service as a condition for purchasing another product or service. This type of arrangement is often seen as anticompetitive and is illegal in many countries.

Question 10

The basic antidote to channel conflict is effective cooperation among channel members.Who among the following is primarily responsible for providing the leadership necessary to achieve this kind of cooperation?

Accepted Answer

Channel captain is primarily responsible for providing the leadership necessary to achieve effective cooperation among channel members. They are responsible for coordinating and aligning the activities of different channel members towards common goals, resolving conflicts that arise, and fostering trust and collaboration among channel members. Vertical leaders are responsible for setting overall strategic direction, while channel navigators focus on enhancing channel performance through data collection and analysis. Horizontal leaders focus on coordinating activities among peers within a single organization.

Question 11

Which of the following distribution strategy seeks to distribute a product through a single wholesaler or retailer in a specific geographic region?

Accepted Answer

Exclusive distribution is a strategy where a manufacturer or supplier distributes a product through only one wholesaler or retailer in a specific geographic area. This helps in maintaining control over the product and ensuring that it is only available through a trusted partner. It is often used for luxury or high-end products.

Question 12

Products manufactured under license from a U.S.firm and then sold in the U.S.market in competition with that firm's own domestic output are called _____ goods.

Accepted Answer

Gray goods refer to products manufactured by a foreign company under license from a U.S. company, but sold in the U.S. market without the U.S. company's authorization. The U.S. company may not receive any profits from the sales of gray goods, and it can cause harm to the U.S. company's reputation and potentially lower sales of their domestic output. Deficient goods are low-quality products that do not meet market standards, subsidized goods are products that receive financial assistance from the government, and exempt goods are products that are not subject to certain laws or regulations.

Question 13

Alve,a fashion house specializing in designer bags,sells its products only through a limited number of boutiques worldwide.This is an example of:

Accepted Answer

Selective distribution refers to selling through a limited number of outlets. In this case, Alve is selling its designer bags through only a limited number of boutiques worldwide.

Question 14

Advertising in which the manufacturer pays a percentage of the retailer's advertising expenditures and the retailer prominently displays the firm's products is known as _____ advertising.

Accepted Answer

Cooperative advertising involves the manufacturer partnering with the retailer to share advertising costs and promote the manufacturer's products. The retailer prominently displays the products, and the manufacturer pays a percentage of the retailer's advertising expenditures. A is incorrect as affinity advertising involves a company promoting the products of another company that shares similar values or characteristics. C and D are incorrect as sustainable and community advertising do not specifically involve sharing advertising costs between a manufacturer and a retailer.

Question 15

Bubble,a company that manufactures gums and candies,distributes its products through all possible channels.One can pick up a Bubble's product from just about anywhere-department stores,general stores,convenience stores,and even local medical shops.Which of the following distribution strategy is being employed by Bubble?

Accepted Answer

Bubble is using an intensive distribution strategy as it is making its products available through as many channels as possible, including department stores, general stores, convenience stores, and local medical shops. This strategy is characterized by wide distribution, and it aims to maximize availability and convenience for customers.

Question 16

The U.S.Supreme Court has ruled that closed sales territories may meet the legal criteria if:

Accepted Answer

The U.S. Supreme Court has ruled that vertical territorial restrictions, which occur when a manufacturer imposes geographic limits on its distributors or retailers, may meet the legal criteria if they promote interbrand competition (competition between different brands). Therefore, choice D is the best answer.

Question 17

Which of the following distribution strategies seeks to distribute a product through a limited number of channels?

Accepted Answer

Selective distribution seeks to distribute a product through a limited number of channels, typically those that are best suited to reach the target market. This strategy allows for more control over the product and brand image, and may help to increase the perceived value of the product.

Question 18

Lakeview Industries contracts with Marine Motor Distributors to sell their newly patented outboard engine.In exchange for exclusive dealership rights,Marine Motor has agreed to carry the full line of boating accessories offered by Lakeview.This arrangement can be described as an example of:

Accepted Answer

This arrangement is an example of a tying agreement, where the seller requires the buyer to purchase additional products or services in order to obtain the desired product (in this case, exclusive dealership rights for the outboard engine). The additional products or services in this case are the full line of boating accessories offered by Lakeview.

Question 19

Conflicts resulting from disagreements among channel members at the same level,such as two or more wholesalers or two or more retailers,or among marketing intermediaries of the same type are called _____ conflicts.

Accepted Answer

Horizontal conflicts result from disagreements among channel members at the same level, such as between two or more wholesalers or two or more retailers. Exclusive conflicts occur when a manufacturer grants exclusive distribution rights to one channel member, causing conflict with other potential distributors. Vertical conflicts occur between channel members on different levels of the distribution chain, such as between a manufacturer and a retailer. Cross-channel conflicts occur between different types of channels, such as between traditional retail channels and e-commerce channels.

Question 20

KitchenAid has established an electronic storefront so that its customers can purchase mixers and accessories from its website.This establishment of electronic storefront is likely to result in _____ conflict between KitchenAid and its retailers.

Accepted Answer

Vertical conflict arises when a manufacturer and its retailers compete for the same customers through different channels. In this case, KitchenAid's electronic storefront competes with its retailers as customers can now purchase products directly from the manufacturer's website. Thus, the establishment of the electronic storefront is likely to result in vertical conflict between KitchenAid and its retailers.

Quiz 14: Marketing Channels and Supply Chain Management