Deck 9: Distribution: Delivering Customer Value

Question 1

Why do business-to-business channels tend to be shorter in length than consumer markets?

A)The greater geographic concentration of business customers
B)The greater complexity of the products that require close producer-customer liaison
C)The small number of ultimate customers
D)All of the above

Answer 1

D

Question 2

Which of the following channels is sometimes used by companies entering foreign markets?

A)Producer to wholesaler to retailer to consumer
B)Producer direct to consumer
C)Producer to retailer to consumer
D)Producer to agent to wholesaler to retailer to consumer

Answer 2

D

Question 3

Which of the following factors does not influence channel selection?

A)Transport factors
B)Competitive factors
C)Product factors
D)Market factors

Answer 3

A

Question 4

Channel management decisions involve which of the following?

A)The selection of distributors, which shorten the supply chain as much as possible, making it more efficient and effective
B)The selection and evaluation of channel members, so that distribution margins are minimized, thus derives our ability to keep our prices low
C)The selection, motivation, training and evaluation of channel members and managing conflict between producers and channel members
D)The selection, motivation, training and evaluation of retail outlets which stock our product

Question 5

Channel management requires which of the following in order to be successful?

A)Effective implementation
B)Exhaustive market research
C)Speedy channels of delivery
D)Loyal distributors

Question 6

Which of the following companies deploy the direct selling approach?

A)Coca Cola
B)Gillette
C)Avon
D)L'Oreal

Question 7

Which of the following factors does influence channel selection?

A)Producer factors
B)Production factors
C)Marketing factors
D)All of the above influence channel selection

Question 8

Organizations who facilitate the distribution of products to customers are called which of the following?

A)Retailers
B)Channel intermediaries
C)Channel agents
D)Wholesalers

Question 9

Which of the following services does an agent provide?

A)The agent holds title to the goods before they are distributed in foreign markets
B)The agents are retailers based in foreign markets
C)The agent contacts local wholesalers (or retailers) and receives a commission on sales
D)The agent sells direct to consumers in foreign markets

Question 10

The development of supermarkets led to which of the following?

A)Online shopping
B)The death of the convenience store
C)The elimination of wholesalers
D)Less retailer concentration

Question 11

Which of the following is a disadvantage associated with using an agent in a channel of distribution?

A)Length of channel
B)Costly
C)Lack of control
D)Speed of distribution

Question 12

Service channels tend to be shorter in length than consumer markets because of _______.

A)intangibility
B)perishability
C)inseparability
D)all of the above

Question 13

Which of the following is a characteristic of "Producer to Business Customer" channels of distribution?

A)Common for expensive products
B)Close liaison
C)Direct selling
D)All of the above

Question 14

Which of the following is a market factor which may influence channel selection?

A)Buyer expectations that may dictate that the product be sold in a certain way
B)Location and geographical concentration of customers
C)All of the above are market factors
D)None of the above, market factors do not influence channel selection

Question 15

The channel of distribution, which is the means by which products are moved from producer to the ultimate customer, is also called which of the following?

A)The supply chain
B)The value chain
C)The distribution chain
D)The retailing chain

Question 16

Selling smaller quantities to numerous retailers is referred to as which of the following?

A)Discounting
B)Breaking bulk
C)Mass distribution
D)Logistics

Question 17

Why, in some cases, are distributors used in preference of a dedicated sales force?

A)Greater product knowledge
B)Usually time based reasons
C)Usually control based reasons
D)Usually cost based reasons

Question 18

The "place" element of the marketing mix refers to which of the following?

A)Retailing
B)Distribution
C)Advertising
D)Customer Service

Question 19

Channel strategy involves which of the following?

A)The degree of channel integration.
B)The most appropriate level of distribution intensity
C)The selection of the most effective distribution channel
D)All of the above

Question 20

Supermarket chains exercise considerable power over manufacturers because of _______.

A)the lack of retail concentration
B)the lack of other viable distribution channels
C)their enormous buying capabilities
D)their global reach

Question 21

A manufacturer may dominate a market through _______.

A)its positioning and advertising strategy
B)its size and strong brands
C)its location and geographical reach
D)none of the above as a manufacturer cannot dominate a market

Question 22

Which of the following influences the selection of channel members?

A)Their advertising resources
B)The product lifecycle of the brand
C)Contract management
D)The desired degree of control of channel members

Question 23

Distribution that aims to provide saturation coverage of the market by using all available outlets is called which of the following?

A)Exhaustive distribution
B)Exclusive distribution
C)Intensive distribution
D)Selective distribution

Question 24

Which of the following statements is true?

A)Direct distribution is also less prevalent when buyers are few in number and buy large quantities
B)Direct distribution is also more prevalent when buyers are few in number and buy large quantities
C)Direct distribution is also more prevalent when there are a large number of buyers and they buy large quantities
D)Direct distribution is also more prevalent when buyers are few in number and buy small quantities

Question 25

A constraint on the channel decision is when _______.

A)the company has too many intermediaries, leading to intra- channel conflict
B)the company has too few intermediaries, leading to low exposure in the marketplace
C)the producer lacks adequate resources to perform the functions of the channel
D)the producer lacks experience of managing the channel

Question 26

Which of the following is suited to intensive distribution strategy?

A)Toiletries
B)Perfumes
C)Refrigerators
D)Televisions

Question 27

Which of the following statements is true?

A)Manufacturers are not permitted to refuse distribution rights on the grounds that the retailer will sell for less than the list price
B)Manufacturers are permitted to refuse distribution rights on the grounds that the retailer will sell for less than the list price
C)Manufacturers are not permitted to refuse distribution rights on the grounds that retailers may not measure up in terms of décor and staff training
D)Manufacturers are never permitted to refuse distribution rights due to national and European legislation

Question 28

Why are large, complex products often supplied direct to customers?

A)The use of agents and/ or distributors adds additional costs
B)The need for close personal contact between producer and customer
C)A direct sales force is more cost efficient
D)All of the above

Question 29

Which of the following is a typical product that uses an exclusive distribution strategy?

A)Confectionery
B)Cosmetics
C)Cigarettes
D)Cars

Question 30

How may a company control a channel of distribution?

A)A franchise
B)Exclusive dealing arrangements
C)Vertical integration
D)All of the above are methods of control

Question 31

Which of the following is a reason why selective distribution strategies are chosen?

A)Where the product is not an impulse purchase
B)Builds working relationships with distributors and retailers
C)It reduces competition between distributors and retailers
D)All of the above are reasons for choosing a selective distribution strategy

Question 32

Exclusive distribution is an extreme form of which of the following?

A)Exhaustive distribution
B)Luxury distribution
C)Intensive distribution
D)Selective distribution

Question 33

Which of the following is a typical product that uses a selective distribution strategy?

A)Confectionery
B)Cosmetics
C)Cigarettes
D)Cars

Question 34

Which of the following products requires a short distribution channel?

A)Cars
B)Perishable products
C)Fast moving consumer goods
D)Consumer durables

Question 35

Conventional marketing channels are characterized by which of the following?

A)Harmonious working relations and mutually rewarding relationships
B)Hard bargaining and occasional conflict
C)Hard bargaining yet harmonious working relations
D)Exclusive dealing arrangements

Question 36

If competitors control traditional channels of distribution, how may a company circumvent this obstacle?

A)Direct marketing
B)Use agents
C)Use distributors
D)Use high street retailers

Question 37

Distributors and/ or retailers may demand which of the following for stocking a manufacturer's product?

A)Exhaustive distribution
B)Exclusive distribution
C)Reduced margins
D)Reduced control

Question 38

Which of the following is not a strategic option for the choice of distribution intensity?

A)Exhaustive distribution
B)Exclusive distribution
C)Intensive distribution
D)Selective distribution

Question 39

For products that are distributed using an intensive distribution strategy, which of the following is a common characteristic of these products?

A)Geographic coverage needs to be maximized in order to achieve profits
B)The convenience aspect of purchase is paramount
C)Service is a large element of the augmented product offering
D)They are products that need highly experienced and skilled sales personnel to assist customers

Question 40

Distribution in which a producer uses a limited number of outlets in a geographical area to sell its products is called which of the following?

A)Exhaustive distribution
B)Exclusive distribution
C)Intensive distribution
D)Selective distribution

Question 41

Which of the following is a possible motivator for channel members?

A)Provision of resource support
B)Development of strong work relationships
C)Provision of territorial exclusivity
D)All of the above are possible motivators

Question 42

The "Retailer and Retailer" level of franchising is useful when companies want to do which of the following?

A)When companies do not want to invest more capital outlay required with ownership
B)When companies want to distribute the products within a defined geographic area
C)When companies want to secure distribution of their product to consumers
D)When the company is seeking to expand geographically by means of a franchise operation

Question 43

When firms purchase retail outlets,and producers control their purchasing, production and marketing activities, this is called which of the following?

A)Administered vertical marketing system
B)Central vertical marketing system
C)Corporate vertical marketing system
D)Contractual vertical marketing system

Question 44

Which of the following is not a criterion used in the selection of potential channel members?

A)Reputation among customers
B)Amount of leverage needed for control
C)Market, product and customer knowledge
D)Managerial competence

Question 45

In recent times, the power in marketing channels has transferred to which of the following?

A)The manufacturer
B)The retailer
C)The wholesaler
D)The consumer

Question 46

A franchise agreement provides which of the following?

A)Contractual vertical marketing system
B)Administered vertical marketing system
C)Contractual horizontal marketing system
D)Administered horizontal marketing system

Question 47

The need to train channel members depends on _______.

A)training personnel available
B)their internal competencies
C)the costs involved
D)none of the above

Question 48

A franchise is which of the following?

A)A form of expansion used exclusively in restaurants
B)An intensive distribution strategy, used to maximize geographical coverage in a market area
C)A legal contract in which a producer and channel intermediaries agree each member's rights and obligations
D)All of the above

Question 49

Which of the following is a method for the identification of potential channel members?

A)Trade sources such as trade associations
B)Talking to existing customers
C)Participation at exhibitions
D)All of the above are methods used for the identification of potential channel members

Question 50

Which of the following industries are categorized by "Manufacturer and Retailer" level of franchising?

A)Airline industry
B)Car industry
C)Steel industry
D)Food industry

Question 51

Which of the following is a criterion used in the selection of potential channel members?

A)Market coverage
B)Brand equity
C)Political standing
D)Level of promotional expenditure

Question 52

Why may channel members lack motivation in the selling of a manufacturer's product?

A)Due to them carrying many competing brands
B)Due to inferior margins
C)Due to much control exerted by manufacturer
D)All of the above

Question 53

Which of the following is not a reason why a producer might choose franchising as a means of distribution?

A)A way for a producer to access the local knowledge of the franchisee
B)Owner-manager who has a vested interest in the success of the business
C)Goal conflict does not arise
D)The cost of distribution is shared with the franchisee

Question 54

Total control over distributor activities comes with _______.

A)administered vertical marketing systems
B)franchising
C)channel ownership
D)exclusive distribution

Question 55

Which of the following is a disadvantage of producer owned channels?

A)Hard to achieve, due to inertia of intermediaries
B)Lack of control over channels
C)High price of acquisition and spreads managerial activities too widely
D)All of the above are disadvantages associated with producer owned channels

Question 56

Which of the following is key to improving the motivation of a company's channel members?

A)To improve the quality of internal service delivery
B)The provision of extra promotional allowances
C)To understand the needs and problems of distributors
D)None of the above

Question 57

Which of the following companies operate a "Manufacturer and Wholesaler" level of franchising?

A)McDonalds
B)Coca Cola
C)Benetton
D)Ford

Question 58

Which of the following is a typical industry where producers own the channel?

A)Car
B)Petrol
C)Food
D)Cosmetics

Question 59

Which of the following is a strength associated with franchising?

A)Reduces marketing, promotional and administration costs
B)Goal conflict does not arise
C)Reduces levels of conflict within the channel, compared to other channel systems
D)Combines the strengths of a large sophisticated marketing-orientated organization with the energy and motivation of a locally owned outlet

Question 60

Which of the following companies operate a franchising system?

A)River Island
B)Gap
C)Marks & Spencer
D)Benetton

Question 61

Which of the following is used as an evaluative criterion for channel members?

A)Quality and position of display
B)Sales volume and value
C)New accounts opened
D)All of the above are used as evaluative criteria

Question 62

Which of the following is a method for reducing conflict within a channel?

A)Coercion
B)Purchase of other party
C)Partition of market
D)All of the above are methods

Question 63

Most retailing is conducted in stores, but non-store retailing is also on the increase. Which of the following is an example of non-store retailing?

A)Discount houses
B)Category killers
C)Department stores
D)Automatic vending

Question 64

The evaluation of channel members has an important bearing on which of the following?

A)Training decisions
B)Motivation decisions
C)Distributor retention decisions
D)All of the above are influenced by channel evaluation

Question 65

Which of the following is used as an evaluative criterion for channel members?

A)Competitor control feedback
B)Quality of service provided to customers
C)Company capability
D)All of the above are used as evaluative criteria

Question 66

Increasingly, retailers are opting for a dual online and offline channel, as they realize that as well as having an online presence, _______ stores play an important role in brand awareness and brand building.

A)intangible
B)physical
C)online
D)non

Question 67

Mail order is a form of _______ retailing, whereby catalogues are employed as a promotional vehicle and the purchase transaction is normally conducted via the mail.

A)store
B)non-store
C)limited
D)secondary

Question 68

Mail order retailing offers many advantages e.g. the prospect of pan-European catalogues, _______ warehousing and processing of cross-border orders.

A)central
B)dispersed
C)secondary
D)minor

Question 69

Which of the following is distributed by means of automatic vending?

A)Soft drinks
B)Confectionery
C)Newspapers
D)All may be distributed by automatic vending

Question 70

Mail order and automatic vending are examples of which of the following?

A)Non-store retailing
B)Online retailing
C)Development retailing
D)Discount retailing

Question 71

Which of the following is an advantage of online retailing?

A)Relatively lower costs
B)Location is less important
C)Flexibility
D)All of these are advantages of online retailing

Question 72

Which of the following is a "category killer"?

A)Speciality stores which stock a deep product line to be sold in restricted shop space
B)Retail outlets with a narrow product focus but that sell products at low prices by bulk buying, accepting low margins and selling high volumes
C)Retail outlets with a wide product focus but with an unusually wide width and depth to that product range
D)Retail outlets with a narrow product focus but with an unusually wide width and depth to that product range

Question 73

Speciality shops have a _______.

A)narrow product line
B)wide product line
C)discount prices
D)none of the above

Question 74

Automatic vending offers many advantages and disadvantages to companies. No sales staff are required, although re-stocking, _______ and repair costs can be high.

A)servicing
B)financing
C)evaluating
D)budgeting

Question 75

Why may conflict arise within a channel?

A)Over dependence on a particular channel member
B)Single distribution channels
C)Differences in goals
D)Performing to expectations

Question 76

Which of the following retail chains is an example of a "category killer" retailer?

A)B & Q
B)PC World
C)Debenhams
D)Top Shop

Question 77

Department stores are under increasing pressure due to which of the following?

A)The emergence of out of town shopping
B)The emergence of discount chains
C)The emergence of speciality stores
D)All of the above are reasons why department stores are facing greater pressure

Question 78

Online retailing can take three forms: _______ online retailing, products can be ordered online and then distributed , or the company can develop an online presence.

A)uncontrolled
B)non-store
C)limited
D)pure

Question 79

Discount houses are usually located in which of the following areas?

A)High street locations
B)Out of town retail centres
C)In city retail centres
D)Beside department stores

Question 80

The power of supermarket chains is illustrated in their ability to extract "Guarantee of Margins" from manufacturers. This refers to a situation where _______.

A)a guaranteed percentage of sales is used as a promotional allowance
B)a fixed percentage of a product's price is returned to manufacturers in the form of an advertising rebate
C)a clause is inserted in the manufacturer's contract that states that a fixed amount of the manufacturer's product will be stocked for a specified time period
D)a clause is inserted in the contract that ensures a certain profit margin for the retailer irrespective of the retail price being charged to the customer