Deck 9: Emerging Channel Structures and Strategies

Question 1

Emerson Electric most likely shifted to a service-based business model for the purpose of ________.

A) communicating more efficiently with key customers
B) adding new channel intermediaries to lower costs
C) competing better with overseas manufacturers
D) revising the vertical integration structure
E) supporting lifetime product warranties

Answer 1

C

Question 2

Which statement is most likely true about shifting from a product-based to a service-based business?

A) Adding services tends to decrease overall sales because a firm needs to increase its promotional spending.
B) Services require less integration and communication between supplier and customer, which increases profitability.
C) Services tend to cause an erratic flow of revenue because they are less resistant to economic cycles than products.
D) Services are typically onetime purchases, unlike products, which are purchased often.
E) Services increase the level of differentiation with competitive offerings.

Answer 2

E

Question 3

How has the Internet been an "enabling technology" in the music industry?

A) increased demand for the services of local music retailers
B) removed the product aspect from music offerings
C) reduced the cost and ease of downloading music
D) increased the need for more intermediaries
E) consolidated the efforts of music retailers

Answer 3

B

Question 4

What is the best way a channel manager can adjust to higher levels of coproduction and inventory perishability in service settings?

A) shifting to a product-based business strategy
B) using CRM to monitor upstream channels
C) building hybrid channel structures
D) increasing e-commerce sales
E) outsourcing manufacturing

Question 5

Which U.S.trend is significantly influencing marketing channel structures and strategies?

A) shift towards bricks-and-mortar retailing
B) demand for locally-made products
C) decreased need for service outputs
D) growth of the manufacturing sector
E) drive for globalization

Question 6

Which of the following best describes coproduction?

A) Production levels are maintained by upstream partners.
B) Customers need to be present at the point of production.
C) Intermediaries and customers influence service outputs.
D) Channel members monitor production quality and quantity.
E) Customer experiences influence service and production standards.

Question 7

Which concept refers to the inability to inventory services until they are needed?

A) sustainability
B) tangibility
C) homogeneity
D) perishability
E) heterogeneity

Question 8

The fact that a service cannot be touched,seen,or patented refers to its ________.

A) perishability
B) tangibility
C) homogeneity
D) intangibility
E) heterogeneity

Question 9

What is most likely a disadvantage of developing in-house service capabilities?

A) Service output demands are difficult to measure and implement very quickly.
B) An overlap of service and product divisions causes shareholder concerns.
C) Channel conflicts increase because of the loss of proprietary information.
D) Suppliers compete against channel partners for service delivery rights.
E) Formal joint partnerships lead to organizational culture problems.

Question 10

What is the most likely reason that a firm's channel strategy is affected when the firm no longer offers a physical product?

A) Intermediaries perform fewer traditional channel functions.
B) Upstream channel members alter production capabilities.
C) Additional service offerings require new intermediaries.
D) Effective supply chains rely on geographic proximity.
E) Service transition strategies rely on upstream channels.

Question 11

Which of the following is LEAST likely a characteristic of services?

A) primarily intangible
B) homogenous nature
C) value through timeliness
D) value through convenience
E) consumable when produced

Question 12

What is a likely advantage of acquiring service capabilities,infrastructure,and knowledge by collaborating with an existing service provider?

A) reducing channel conflicts
B) streamlining the value chain
C) minimizing management complexities
D) communicating more with end-users
E) monitoring service outputs more closely

Question 13

Most firms have added services to their current product offerings for the purpose of ________.

A) altering channel structures
B) improving competitiveness
C) meeting customer demands
D) expanding into foreign markets
E) improving value and supply chains

Question 14

Which term refers to the degree to which a firm's sales come from services?

A) capacity
B) service ratio
C) service output
D) channel power
E) return on investment

Question 15

VCW Enterprises manufactures small electronics and plans to start selling warranty services in the near future.VCW's financial performance will most likely increase dramatically once VCW earns at least ________ of its sales from services.

A) 5%
B) 20%
C) 40%
D) 55%
E) 70%

Question 16

According to the text,consumer electronics manufacturers are increasingly offering service warranties for their products to ________.

A) increase profit margins
B) comply with regulations
C) alter e-commerce strategies
D) eliminate channel conflicts
E) meet social responsibility demands

Question 17

Which service characteristic is substantial,difficult to control,and highly dependent on an employee's delivery?

A) perishability
B) tangibility
C) homogeneity
D) intangibility
E) heterogeneity

Question 18

What is the primary reason that many automobile manufacturers increased both dealership costs and service standards?

A) reduce heterogeneity among local car dealerships
B) encourage car buyers to purchase extended warranties
C) improve quality control at domestic automotive factories
D) discourage car dealers from selling multiple car brands
E) minimize the perishability of automotive inventories

Question 19

According to the text,Johnson Controls' service division is large and fast growing because the firm________.

A) outsources service calls
B) customizes service solutions
C) uses multiple channel intermediaries
D) automates most production capabilities
E) sells most services through distribution networks

Question 20

Madison Manufacturing makes small appliances and faces tough competition from overseas firms that make similar products less expensively.Madison managers have decided to offer more services to customers,such as maintenance agreements and warranty contracts.Madison now deals directly with end-users instead of relying on intermediate channel partners.What is the most likely result of Madison's shift to services?

A) horizontal integration
B) channel free-riding
C) upstream integration
D) service acquisition
E) disintermediation

Question 21

A firm that uses e-commerce channels to enter new markets most likely wants to do all of the following EXCEPT________.

A) increase sales growth
B) minimize expansion risks
C) gain proximity to local suppliers
D) identify local customer priorities
E) limit staff and infrastructure expenditures

Question 22

How has the Internet accelerated international expansion efforts by retailers such as Neiman Marcus and J.Crew?

A) facilitating the construction of brick-and-mortar stores
B) monitoring sales revenues more efficiently with extranets
C) providing low cost access to new markets through e-commerce
D) enabling firms to provide online customer service in multiple languages
E) building a strong customer base through social media and viral advertising

Question 23

What is the world's largest market for e-commerce sales?

A) Japan
B) China
C) Germany
D) United States
E) United Kingdom

Question 24

Which of the following would LEAST likely help a manufacturer become a successful service provider?

A) creating a customer-centric organizational culture
B) forming deeper relationships with customers
C) gathering customer feedback and assessment
D) teaching channel members to sell services
E) investing in boundary spanning personnel

Question 25

Company X plans to enter a foreign market by purchasing land and building a new facility.What should Company X most likely do to improve its chances of success?

A) develop a knowledgeable local network of business associates
B) send home-country representatives to manage construction
C) acquire a small, local firm in the logistics industry
D) engage in e-commerce to identify local demands
E) leverage economies of scale in the local market

Question 26

What is the primary drawback of online shopping for most customers?

A) restricted reach
B) lack of immediacy
C) limited assortment
D) complex infrastructures
E) minimal customer support

Question 27

Which term refers to vertical channel partners using multiple routes to reach horizontal end-users?

A) hierarchical multichannel relationship
B) integrated channel strategy
C) channel free-riding
D) vertical integration
E) disintermediation

Question 28

Why has Wal-Mart built numerous stores in India in recent years?

A) access to e-commerce sites
B) relaxed foreign investment rules
C) ability to develop brand position
D) creation of free trade agreements
E) limited franchising opportunities

Question 29

Which of the following is LEAST likely a benefit of e-commerce?

A) eliminating costly channel layers
B) reducing high labor and inventory costs
C) enabling customers to shop when convenient
D) reducing geographic barriers and constraints
E) building ties with more channel intermediaries

Question 30

AVW Enterprises,a supplier in the B2B sector,recently introduced an e-commerce site to improve its supply chain management.What should AVW most likely do to minimize conflicts with its downstream channel members?

A) offer mature and declining products on the website
B) avoid diverting website orders to channel partners
C) take online orders for products and services
D) offer lower prices than channel partners
E) promote channel partners on the website

Question 31

Which of the following is most likely a true statement about Zappos?

A) Zappos reduces shoppers' risks by offering free shipping and returns.
B) Zappos gained immediate success when it came under the Amazon umbrella.
C) Zappos shifted from traditional brick-and-mortar stores to online-only retailing.
D) Zappos' e-commerce strategy reduces the firm's need for customer service employees.
E) Zappos' gross sales for clothing have now surpassed the firm's gross sales for footwear.

Question 32

Which developing market ranks highest in market attractiveness for retailers?

A) China
B) Chile
C) India
D) Uruguay
E) Brazil

Question 33

TDX Manufacturing has adopted a service transition strategy and needs to gain specialized service capabilities,infrastructure,and knowledge.What would be the fastest method for TDX to accomplish this goal?

A) forming a service department
B) acquiring a services company
C) developing in-house service capabilities
D) establishing a contract with a services firm
E) forming a joint partnership with a services firm

Question 34

What channel system inequity is increasing significantly with the growth of e-commerce?

A) bundling
B) free-riding
C) hybrid retailing
D) reverse auctions
E) creative pricing

Question 35

What was the main reason that Fujitsu formed a partnership with FedEx?

A) FedEx provided the best logistics services at the lowest price.
B) Fujitsu wanted to sell computers in the less competitive U.S. market.
C) Fujitsu needed a faster method of delivering computers to channel partners.
D) FedEx had formed a similar partnership with Dell that had been highly lucrative.
E) Fujitsu customers and channel partners were primarily located on the West Coast.

Question 36

All of the following are most likely disadvantages of acquiring service capabilities through a joint venture EXCEPT ________.

A) losing proprietary information
B) engaging in management difficulties
C) losing control of end-user relationships
D) creating organizational culture clashes
E) increasing service transition investment risks

Question 37

Sadie's Shoes sells fashionable,affordable shoes directly to customers through the company Web site.The firm does not have any brick-and-mortar stores.Sadie's Shoes is most likely engaged in ________.

A) niche marketing
B) globalization
C) networking
D) e-commerce
E) blogging

Question 38

Which characteristic of developing markets most likely appeals to firms from developed markets?

A) strong infrastructures
B) minimal economic risks
C) high numbers of retirees
D) significant competition levels
E) large and growing populations

Question 39

According to the text,Wal-Mart's unsuccessful expansion into Germany occurred because the firm ________.

A) was unable to leverage its economies of scale in a foreign market
B) failed to adapt its channel structure and strategy to local conditions
C) utilized local channel intermediaries that were costly and unreliable
D) failed to implement the same low-cost processes that it uses domestically
E) formed a partnership with a local grocery store chain that went out of business

Question 40

What is the main reason that channel participants expand internationally?

A) increase revenue
B) integrate vertically
C) acquire new firms
D) form joint partnerships
E) avoid regulatory environments

Question 41

The disintermediation process occurs when manufacturers exclude their channel partners so that they can sell directly to end consumers.

Question 42

What factors motivate firms to shift from selling products to selling services?

Question 43

Approximately 50% of the U.S.gross domestic product comes from the service sector and the other half from the manufacturing sector.

Question 44

Discuss three major trends in the U.S.business environment that are affecting today's marketing channel structures and strategies.

Question 45

Coproduction between the provider and end-user and inventory perishability are both higher for products than for services.

Question 46

Although the Chilean market is highly attractive for retailers,it has a very high degree of country risk.

Question 47

What factors are causing the significant growth of e-commerce as a sales channel? How has e-commerce affected channel strategies?

Question 48

Why are firms from developed markets increasingly expanding into developing markets? What role has the Internet played in these globalization efforts?

Question 49

Geographic convenience becomes more important as coproduction between the provider and end-user increases.

Question 50

What are the key characteristics of services? How does each characteristic affect channel strategies?