Deck 10: Marketing Channels Delivering Customer Value

Question 1

Orion Steels is the chief provider of metals to the Accline Car Company.The Accline Car Company has two models of car-one for commercial and ordinary consumers,and another for professional car racing teams.The Accline Car Company has designated dealers to sell their commercial cars to consumers,while racing cars are sold directly to the racing teams.In such a distribution channel,which of the following would be considered a horizontal conflict?

A)conflicts between Orion Steels and the Accline Car Company
B)conflicts between Orion Steels and Accline dealers
C)conflicts between two Accline consumer car dealers
D)conflicts between sellers of the Accline consumer cars and racing cars
E)conflicts between the Accline Car Company and its dealers

Answer 1

C

Question 2

Which of the following is an example of a marketing intermediary?

A)business customer
B)producer
C)supplier
D)retailer
E)consumer

Answer 2

D

Question 3

Crowbar Records used to sell its music,in CDs,through a network of retail outlets,record stores,and music dealers.After the advent of MP3 technology,it decided to shift from using any of these agents and sell its music independently from the company's Web site,using personal mail,and other social networking techniques to inform potential customers about upcoming music and promotions.Which of the following types of marketing systems has Crowbar newly adopted?

A)administered vertical marketing system
B)contractual vertical marketing system
C)horizontal marketing system
D)direct marketing channel
E)vertical marketing channel

Answer 3

D

Question 4

Mintel Agros provides raw materials in the form of agricultural products to the Kiltmark Food Company.Kiltmark produces flour-based edible products,which it distributes to a wholesale company called Krackstar Trading.Krackstar Trading then sells Kiltmark products to the discount retailers,Stroos.Stroos then sells it to consumers.Which of the following is considered a marketing intermediary in these transactions?

A)Kiltmark Food Company
B)only Stroos
C)only Krackstar Trading
D)both Krackstar Trading and Stroos
E)Mintel Agros

Question 5

A ________ is made up of the company,suppliers,distributors,and,ultimately,customers who "partner" with each other to improve the performance of the entire system.

A)supply chain
B)distribution center
C)demand chain
D)value delivery network
E)disintermediation system

Question 6

________ are a set of interdependent organizations that help make the product or service of the company available for use or consumption by the consumer or business user.

A)Research and development channels
B)Upstream channels
C)Marketing channels
D)Raw materials suppliers
E)Backward integration chains

Question 7

Orion Steels is the chief provider of metals to the Accline Car Company.The Accline Car Company has two models of vehicles-one for commercial and ordinary consumers,and another providing public transport under a contract with the government.The Accline Car Company has designated dealers to sell their commercial cars to consumers,while public transport vehicles are sold directly to the government.In such a distribution channel,which of the following would be considered a vertical conflict?

A)conflicts between Orion Steels and the Accline Car Company
B)conflicts between Orion Steels and Accline dealers
C)conflicts between two Accline consumer car dealers
D)conflicts between sellers of the consumer cars and sellers of the public transport vehicles
E)conflicts between the Accline Car Company and its dealers

Question 8

Which of the following creates the shortest distribution channel between the producer and the customer?

A)retailer channels
B)indirect marketing channels
C)reseller channels
D)direct marketing channels
E)wholesaler channels

Question 9

Which of the following is true of downstream channels in a company's supply chain?

A)They provide their expertise in product design and production.
B)They produce the products and services of the company.
C)They supply raw materials and components to the company.
D)They contribute financially to the company during production.
E)They form an intermediary link between the company and its customers.

Question 10

Which of the following is an example of horizontal conflict in the distribution channel?

A)a Nike shoe dealer complaining that the shoes provided to the dealer are defective
B)a Ford car dealer complaining that another Ford dealer is overpricing customers for the same car model
C)a FedEx agent complaining that a DHL agent is cutting off its business
D)a Walmart executive complaining to a Pepsi executive for not replenishing stocks
E)a Gucci executive complaining to Gucci's suppliers of delay in shipping consignments

Question 11

Producers use marketing intermediaries because they ________.

A)create greater efficiency in making goods available to target markets
B)supply cheaper raw materials for the production of products and services
C)provide technical expertise and know-how for faster production
D)help monitor day-to-day activities during production
E)form a part of the company's direct channel selling chain

Question 12

Which of the following is true of a conventional distribution channel?

A)It has each channel member acting as a separate business unit trying to maximize its own profits.
B)It consists of the producer selling its product directly to the customer without the use of intermediaries.
C)It has one channel member owning the other channel members.
D)It is a distribution channel where the producer is owner of all other channel members.
E)It has all members of the channel acting as a unified unit.

Question 13

In which of the following does the producer have maximum control over the way its products are sold?

A)horizontal marketing system
B)direct marketing channel
C)administered marketing system
D)contractual marketing system
E)corporate marketing channel

Question 14

Which of the following guarantees full control to the producer over selling their products?

A)adopting an indirect marketing channel
B)adopting a direct marketing channel
C)adopting a traditional distribution channel
D)adopting a horizontal marketing system
E)adopting a vertical marketing system

Question 15

Which of the following exemplifies vertical conflicts that occur in a distribution channel?

A)conflicts that occur between same levels in the same channel
B)conflicts that occur between different levels of the same channel
C)conflicts that occur between same levels of different channels
D)conflicts that occur between a supplier and a producer
E)conflicts that occur between two suppliers over meeting the demands of a producer

Question 16

Which of the following is an example of a firm practicing direct marketing for selling its products?

A)a firm that uses only one marketing intermediary to sell its products
B)a firm that sells its products through retailers
C)a firm that sells its products through wholesalers
D)a firm that sells its products through more than one intermediary
E)a firm that sells its products through the company Web site

Question 17

Which of the following is true of using direct marketing channels?

A)It decreases the number of channel transactions between the producer and customer.
B)It is used by firms that sell their products through intermediaries.
C)It is a distributing channel that does not use intermediaries.
D)It gives the least amount of control to the producer over selling their product.
E)It creates a complex distributional channel with several types of flows.

Question 18

Kevin Pinker is a freelance computer programmer who writes computer algorithms for SoftStars.SoftStars uses these algorithms to make specific softwares based on online market research.SoftStars' programs are then sold to the online retailer,Abundon,which then sells it to consumers and businesses.Which of the following is a marketing intermediary in this chain?

A)only SoftStars
B)both Abundon and SoftStars
C)both Kevin Pinker and SoftStars
D)only Abundon
E)only Kevin Pinker and Abundon

Question 19

Which of the following would be considered an upstream partner in a company's supply chain?

A)a firm that resells the finished product and shares the net sales with the producer
B)a firm that provides technical expertise in the production of the product
C)a firm that helps in marketing the product to consumers through the use of media
D)a firm that buys products in wholesale from the company
E)a firm that helps to exclusively market to other businesses

Question 20

From the economic system's point of view,the role of marketing intermediaries is to ________.

A)facilitate the production of products without direct customer feedback
B)help the company develop a direct channel selling system
C)buy small quantities of products from producers and break them down into narrow assortments for customers
D)create a streamlined distribution channel between the company and its suppliers
E)transform the assortments of products made by producers into the assortments wanted by consumers

Question 21

Which of the following is true of the intensive distribution technique in marketing?

A)It gives unshared rights to select dealers.
B)It makes products available where and when consumers want them.
C)It uses the least amount of intermediaries in selling products.
D)It provides the best dealer selling support.
E)It requires controlled distribution of products in strategic channels.

Question 22

A(n)________ marketing system is a marketing system in which independent firms at different levels of production and distribution join together through binding agreements.

A)corporate vertical
B)horizontal
C)contractual vertical
D)administered vertical
E)direct

Question 23

The Rooster's Car Company has three lines of cars: high-end security cars made for government agencies,commercial cars for consumers and individuals,and professional racing cars.The high-end security cars are sold directly to the government by the company.The consumer cars are sold using dedicated dealers who only sell Rooster's lines at their outlets.Rooster's also makes professional racing cars for a racing team.This is achieved by collaborating with Vivelli Tires,an innovative and renowned tire manufacturer.Rooster's provides the engine and body,while Vivelli provides the tires and its expertise on the racing industry.What kind of marketing system does Rooster's follow with all its line of products combined?

A)direct marketing system
B)horizontal marketing system
C)corporate vertical marketing system
D)multichannel marketing system
E)administered vertical marketing system

Question 24

TruMart,a leading retail chain store,has decided to open an eatery inside its huge stores.MeatMe,a popular burger joint,has decided to partner with TruMart in this endeavor.MeatMe plans to open an express version of MeatMe eatery inside TruMart.The MeatMe chain of restaurants also has a deal with the Westmen Cola Company to serve only Westmen soft drinks at their outlets.This arrangement would mutually help all three companies.What kind of marketing system is being followed in this arrangement?

A)administered vertical marketing system
B)horizontal marketing system
C)direct marketing system
D)contractual vertical marketing system
E)corporate vertical marketing system

Question 25

________ distribution gives a limited number of dealers the sole rights to distribute the company's products in their territories.

A)Inclusive
B)Partial
C)Intensive
D)Exclusive
E)Selective

Question 26

A channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity is referred to as a(n)________.

A)corporate vertical marketing system
B)contractual vertical marketing system
C)direct marketing system
D)horizontal marketing system
E)administered vertical marketing system

Question 27

The Pinewire Company is a renowned electronics company that usually sells its products like laptops,telephones,and MP3 players,through dedicated dealers.Sonic Shack,an audio equipment retailer,signs an agreement with Pinewire which gives Sonic permission to sell the products provided that Pinewire products get superior display,shelf space,and promotion compared to competing products.The agreement also requires that Sonic sell other non-audio Pinewire products at its store.Which of the following types of marketing systems do Pinewire and Sonic have?

A)administered vertical marketing system
B)corporate vertical marketing system
C)direct marketing system
D)contractual vertical marketing system
E)horizontal marketing system

Question 28

________ distribution is a product distribution strategy that involves stocking the products in as many outlets as possible.

A)Selective
B)Exclusive
C)Intensive
D)Exponential
E)Partial

Question 29

When the seller requires that only certain dealers carry its products and also that these dealers not handle competitors' products,its strategy is known as ________.

A)horizontal restraint of trade
B)horizontal market division
C)selective distribution
D)disintermediation
E)exclusive dealing

Question 30

Which of the following is true of a vertical marketing system?

A)It occurs when two or more companies at one level join together to follow a new marketing opportunity.
B)It occurs when a single firm sets up two or more marketing channels to reach one or more customer segments.
C)It does not give overall power to any one member in the channel.
D)It has each channel member acting as a separate business unit trying to maximize its own profits.
E)It has one channel member owning all the other channel members, or has contracts with all other channel members.

Question 31

Pastaliano is a restaurant that exclusively sells Italian food,headquartered in Illinois.The restaurant owners expressed an interest in opening a Pastaliano outlet in the U.K.They were contacted by 2Clover Tradings,situated in the U.K.,who were interested in buying the Pastaliano trademarked recipes and opening an outlet for them.Pastaliano gave the rights to its recipes to 2Clover Tradings,who then opened an outlet in the U.K.under the Pastaliano brand name.Which of the following kinds of marketing systems does Pastaliano have with 2Clover Tradings?

A)horizontal marketing system
B)direct marketing system
C)administered vertical marketing system
D)contractual vertical marketing system
E)corporate vertical marketing system

Question 32

The Rooster's Car Company has three lines of cars: high-end security cars made for government agencies,commercial cars for consumers and individuals,and professional racing cars.The high-end security cars are sold directly to the government by the company.The consumer cars are sold using dedicated dealers who only sell Rooster's lines at their outlets.Rooster's also makes professional racing cars for a racing team.This is achieved by collaborating with Vivelli Tires,an innovative and renowned tire manufacturer.Rooster's provides the engine and body,while Vivelli provides the tires and its expertise on the racing industry.Which of the following types of marketing systems does the collaboration between Rooster's and Vivelli exemplify?

A)direct marketing system
B)administered vertical marketing system
C)corporate vertical marketing system
D)contractual vertical marketing system
E)horizontal marketing system

Question 33

Which of the following types of marketing systems does a franchise organization follow?

A)administered vertical marketing system
B)horizontal marketing system
C)contractual vertical marketing system
D)corporate vertical marketing system
E)direct marketing system

Question 34

A ________ is a channel structure in which producers,wholesalers,and retailers act as a unified system.In such a structure,one channel member owns the others,has contracts with them,or has so much power that they all cooperate.

A)direct marketing system
B)horizontal distribution channel
C)logistical marketing system
D)conventional distribution channel
E)vertical marketing system

Question 35

A(n)________ marketing system is one that coordinates successive stages of production and distribution through the size and power of one of the parties.

A)direct
B)contractual vertical
C)horizontal
D)corporate vertical
E)administered vertical

Question 36

A(n)________ marketing system is a marketing system that combines successive stages of production and distribution under a single ownership,where channel leadership is established through common ownership.

A)contractual vertical
B)corporate vertical
C)administered vertical
D)horizontal
E)direct

Question 37

Crowbar Records used to sell its music,in CDs,through a network of retail outlets,record stores,and music dealers.After the advent of MP3 technology,it decided to shift from using any of these agents and sell its music directly from the company's Web site,using personal mail,and other social networking techniques to inform potential customers about upcoming music and promotions.Which of the following did Crowbar exhibit when it decided not to use external dealers to sell its music?

A)disintermediation
B)networking
C)brokering
D)franchising
E)licensing

Question 38

________ distribution gives producers good market coverage with more control and less cost than does intensive distribution.

A)Exclusive
B)Selective
C)Extensive
D)Comprehensive
E)Inclusive

Question 39

TentaCola is a leading soft drink manufacturer with franchises all around the world.It creates franchises by licensing its trademark cola syrup to a bottling company in a given geographical area.The bottlers then bottle the drink and sell the finished product to retailers.Which of the following types of franchises does TentaCola follow?

A)manufacturer-sponsored wholesaler franchise system
B)manufacturer-sponsored reseller franchise system
C)manufacturer-sponsored retailer franchise system
D)manufacturer-sponsored service firm franchise system
E)service-firm-sponsored retailer franchise system

Question 40

In a selective distribution strategy,________.

A)more than one, but fewer than all of the intermediaries willing to carry the firm's products are used
B)products are stocked in as many outlets as possible
C)dealers are not allowed to sell any of the products of a particular company
D)only premium, dedicated dealers are given sole rights to sell the product
E)the company directly sells the product to its customers

Question 41

Which of the following is an outbound distribution in a supply chain?

A)unwanted products returned to the producer by resellers
B)products returned that have to be refurbished by resellers
C)disposing of broken products returned by resellers
D)moving products from the factory to customers
E)products moved to the factory by suppliers

Question 42

________ is a method of marketing whereby the producer only ties up with a dealer if the dealer takes some or all of its range of products.

A)Horizontal price fixing
B)Horizontal merger
C)Full-line forcing
D)Direct marketing
E)Disintermediating

Question 43

________ is the combining of two or more modes of transportation to move products.

A)Vertical transportation
B)Disintermediation
C)Just-in-time systems
D)Express transportation
E)Intermodal transportation

Question 44

TruMart,a leading retail chain store,has decided to open an eatery inside its huge stores.MeatMe,a popular burger joint,has decided to partner with TruMart in this endeavor.MeatMe plans to open an express version of MeatMe eatery inside TruMart.The MeatMe chain of restaurants also has a deal with the Westmen Cola Company to serve only Westmen soft drinks at their outlets.This arrangement would mutually help all three companies.What kind of marketing strategy has MeatMe adopted with the Westmen Cola Company?

A)horizontal price fixing
B)disintermediation
C)exclusive dealing
D)selective distribution
E)horizontal merger

Question 45

BesMart is a retail chain outlet that is planning a change in its inventory management.Being a retail outlet,BesMart has a huge inventory of products.The products,which were being stored in outdated warehouses,are being moved to computerized distribution centers.Which of the following would help BesMart improve its inventory management without affecting the supply chain?

A)lower the supply input until the shift to distribution centers is complete
B)use intensive distribution techniques to move out products
C)use RFID tags to track products during the shift
D)avoid storage of products from reverse distribution
E)hold any back orders until the shift to distribution centers is complete

Question 46

Which of the following is an advantage of exclusive dealing?

A)The seller gains more shelf power compared to the other products the dealer is selling.
B)The seller can avoid using any intermediary and sell the product directly to customers.
C)The dealer gets more loyal and dependable outlets.
D)The dealer obtains a steady source of supply from producers.
E)The dealer can freely choose what products to sell without any producer interference.

Question 47

In supply chain management,moving products and materials from suppliers to the factory is known as ________.

A)outbound distribution
B)reverse distribution
C)inbound distribution
D)frequency distribution
E)inventory distribution

Question 48

Which of the following defines a just-in-time logistic system?

A)where producers and retailers carry only small inventories of merchandise lasting for a few days
B)where retailers have products in storage for long periods to avoid interruption in supply
C)where producers supply products to the sellers well in advance
D)where producers only supply products when specific instructions are obtained for the products from sellers
E)where producers carry a large supply of parts and store them until sellers take possession of them

Question 49

Which of the following is one of the most cost-effective modes for shipping large amounts of bulk products-coal,sand,minerals,and farm and forest products-over long distances in the United States?

A)airfreight
B)water carriers
C)pipeline
D)trucks
E)railroads

Question 50

The Rooster's Car Company has three lines of cars: high-end security cars made for government agencies,commercial cars for consumers and individuals,and professional racing cars.The high-end security cars are sold directly to the government by the company.The consumer cars are sold using dedicated dealers who only sell Rooster's lines at their outlets.Rooster's also makes professional racing cars for a racing team.This is achieved by collaborating with Vivelli Tires,an innovative and renowned tire manufacturer.Rooster's provides the engine and body,while Vivelli provides the tires and its expertise on the racing industry.What kind of marketing strategy has Rooster's adopted with its consumer car dealers?

A)direct marketing
B)exclusive dealing
C)disintermediation
D)horizontal merger
E)full-line forcing

Question 51

Which of the following is a mode of transportation for high-value merchandise over short hauls with flexible routing and time schedules?

A)water carriers
B)pipeline
C)trucks
D)airfreight
E)railroads

Question 52

Which of the following types of intermodal transportation is the most cost-effective?

A)trainship
B)fishyback
C)piggyback
D)airtruck
E)autorack

Question 53

Which of the following is true of an exclusive dealing between a producer and a dealer?

A)It prohibits producers from selling outside the dealer's territory.
B)It prevents the producer from using any other dealer to sell their products regardless of geographical area.
C)It gives the producer's products more shelf power compared to the competitor's product being sold by the dealer.
D)It is an outlawed practice of marketing.
E)It does not allow other producers to sell to that dealer.

Question 54

The Pinewire Company is a renowned electronics company that usually sells its products like laptops,phones,and MP3 players,through dedicated dealers.However,Sonic Shack,an audio equipment retailer,signs an agreement with Pinewire which gives Sonic permission to sell the products provided that Pinewire products get superior display,shelf space,and promotion compared to their competing products.The agreement also requires that Sonic sell other non-audio Pinewire products at its store.Which of the following types of marketing strategies is Sonic adopting when accepting to sell non-audio products of Pinewire?

A)horizontal price fixing
B)horizontal merger
C)full-line forcing
D)direct marketing
E)disintermediation

Question 55

A ________ is a large,highly automated warehouse designed to receive goods from various plants and suppliers,take orders,fill them efficiently,and deliver goods to customers as quickly as possible.

A)distribution center
B)storage warehouse
C)cold storage
D)controlled-atmosphere warehouse
E)storage silo

Question 56

Under ________,the customer shares real-time data on sales and current inventory levels with the supplier,and the supplier then takes full responsibility for managing inventories and deliveries.

A)materials handling systems
B)continuous inventory replenishment systems
C)scan-based trading inventory systems
D)consignment inventory systems
E)customer-managed inventory systems

Question 57

In the logistics system,minimum distribution costs imply ________.

A)flexible assortments
B)larger shipping lots
C)rapid delivery
D)large inventories
E)liberal returns policies

Question 58

Which of the following is an example of reverse distribution in a supply chain?

A)products moved between intermediaries before reaching the customer
B)products moved directly from producer to customer
C)products moved to the factory by suppliers
D)products moved from the factory to resellers
E)products that are to be disposed upon being returned by resellers

Question 59

Which of the following is the ideal mode of transport for perishable goods for distant markets?

A)railroads
B)water carriers
C)trucks
D)airfreight
E)pipeline

Question 60

Which of the following is a difference between storage warehouses and distribution centers?

A)storage warehouses are only used to store agricultural products, while distribution centers are for nonagricultural products
B)storage warehouses are used for storing for moderate to long periods, while distribution centers are used for a shorter time before the product is moved
C)storage warehouses are always owned by the producer, while distribution centers are rented
D)storage warehouses are used to store products for a short period before it is moved, while distribution centers hold products for long periods
E)storage warehouses are exclusively used by government agencies, while distribution centers are exclusively used by private businesses

Question 61

A vertical marketing system is one in which the producer is always the dominant member of the channel.

Question 62

In a vertical marketing system,the producers do not use intermediaries to sell their products.

Question 63

Marketing channel design calls for analyzing consumer needs,setting channel objectives,identifying major channel alternatives,and evaluating those alternatives.

Question 64

In selective distribution,producers purposely limit the number of intermediaries handling their products.

Question 65

A channel level is a layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer.

Question 66

A corporate VMS is a system in which the distribution channels are under common ownership.

Question 67

A channel conflict between a manufacturer and a retailer would be considered a vertical conflict.

Question 68

Intensive distribution occurs when only one intermediary is used by the producer to sell its products.

Question 69

In an administered VMS,the producer assumes the leadership position in the distribution channel by default.

Question 70

A company that has no intermediary levels sells its products directly to its customers.

Question 71

Full-line forcing is a type of exclusive distribution.

Question 72

A multichannel marketing system is one in which a producer sells to multiple markets using the same distributional channel.

Question 73

In a sense-and-respond view of the market,businesses start planning by first identifying the needs of target customers.

Question 74

Historically,conventional distribution channels have provided channel leadership and have the power to assign roles and manage conflict.

Question 75

A horizontal marketing system can develop between two competitor companies.

Question 76

Disintermediation occurs when product or service producers cut out intermediaries and go directly to final buyers.

Question 77

Full-line forcing has been outlawed under the Clayton Act of 1914.

Question 78

The franchise model of business is an example of a corporate VMS.

Question 79

Exclusive dealing that negatively affects competition is outlawed under the Clayton Act of 1914.

Question 80

Introducing distributors into the distributional chain increases the number of channel transactions between the manufacturer and customer.