Deck 35: Channel Strategies

Question 1

Rather than taking a strategic approach to channel design, managers often spend the majority of their time

A) guiding customers to channels.
B) touching customers at each point.
C) mitigating channel conflict.
D) defining a realistic channel range.
E) focusing on low-cost channels.

Answer 1

E

Question 2

The prime purpose of a channel is to effectively

A) provide a source for customer research.
B) keep production costs low.
C) fend off competitive activity.
D) maintain tight delivery and production schedules.
E) deliver the customer value proposition.

Answer 2

E

Question 3

Nokia is taking on Apple's iPhone not by making changes to its core product, but by focusing on the

A) functional product.
B) augmented product.
C) potential product.
D) advertising strategy.
E) media strategy.

Answer 3

C

Question 4

Poorly conceived channel decisions result in

A) increased sales.
B) increased market share.
C) increased profits.
D) decreased red tape.
E) wasted effort.

Question 5

Saturn made channel members its partners to offer excellent after-sales service, resulting in increased

A) sales.
B) media coverage.
C) public relations.
D) brand awareness.
E) customer loyalty.

Question 6

In the 1970s, alternate channels like bank machines (ATMs) allowed banks to reduce their

A) advertising costs.
B) personal selling costs.
C) cost to serve the customer.
D) media costs.
E) product development costs.

Question 7

Once a company has added channels, it becomes very hard to reduce the number of channels because

A) of competitive activity.
B) of bad publicity.
C) customers have become used to them.
D) customers make more transactions.
E) of operational silos.

Question 8

The cost of going to market is often

A) a fraction of product development costs.
B) less than 3% of the advertising budget.
C) equal to retail markup costs.
D) a company's single largest expense.
E) a company's smallest expense.

Question 9

Zara, a popular fashion retailer, has developed a channel strategy that is successful because it

A) relies on traditional advertising.
B) is very responsive to market information flowing through its channels.
C) has a single focus in its product offering.
D) enjoys lower production and distribution costs.
E) maintains a long production cycle and is unresponsive to trends.

Question 10

One of the benefits of Dell's direct channel model is that it allows

A) Dell to receive payment after the product is shipped.
B) for just-in-time inventory management.
C) for face-to-face selling.
D) for a positive cash conversion cycle.
E) Dell to stockpile parts for its computers.

Question 11

Well-designed channels primarily move

A) goods.
B) services.
C) raw materials.
D) product orders.
E) information.

Question 12

The first step in determining the right channels for your business is to

A) focus on low-cost channels.
B) define a realistic channel range.
C) guide customers to channels.
D) touch customers at each point.
E) mitigate channel conflict.

Question 13

By properly understanding customer needs and channel dynamics, a business can

A) build a competitive advantage.
B) introduce new products.
C) increase the acquisition costs of its products.
D) reduce advertising spending.
E) compensate for product weaknesses.

Question 14

A company will likely lose market share if it does not closely align its channel mix to

A) customer needs.
B) supply chain needs.
C) retailer needs.
D) competitive activity.
E) its marketing communications strategy.

Question 15

A strong supply chain strategy can be used to

A) reduce costs.
B) eliminate delivery delays.
C) share marketing communications costs.
D) build customer loyalty.
E) shut out the competition.

Question 16

Multi-channel marketing may decrease a company's profits because it

A) increases customer dissatisfaction.
B) decreases channel conflict.
C) decreases customer value.
D) increases the cost to serve the customer.
E) decreases the number of transactions.

Question 17

To overcome weaknesses in its marketing mix, Papa John's was one of the first pizza companies to introduce

A) instantly redeemable coupons.
B) a two-for-one pizza offering.
C) excessive price drops.
D) front-door delivery.
E) online ordering.

Question 18

In some industries such as retail banking, offering more channels has

A) decreased customer value.
B) increased the cost to serve the customer.
C) decreased channel conflict.
D) increased customer dissatisfaction.
E) decreased the number of transactions.

Question 19

In order to compete with companies that have larger advertising budgets or greater resources, smart companies look to their

A) marketing mix.
B) advertising.
C) public relations.
D) product development.
E) channels.

Question 20

Inserting your company into your customers' network of suppliers and customers is a concept called

A) supply chain.
B) market share.
C) shareholder return.
D) advertising.
E) channel selection.

Question 21

When an organization begins to move customers from one channel to another, the organization's sales force and its channel partners

A) embrace the transition.
B) are not affected in any way.
C) focus on stepping up customer service.
D) are usually downsized.
E) face the same fears as customers.

Question 22

The major problem associated with offering customers a choice of channels is that customers will often

A) use multiple channels.
B) be exposed to competitive messages.
C) choose the lower-cost channel.
D) choose the higher-cost channel.
E) be confused.

Question 23

W. W. Grainger, a leading supplier of facilities maintenance products, successfully switched its customers to a web-based ordering system and ensured a high degree of customer satisfaction by

A) offering incentives.
B) using disincentives.
C) managing the fears of its sales force.
D) increasing channel costs.
E) eliminating commissions.

Question 24

Sony reduces channel conflict among the various retail outlets for its products by

A) ensuring that club stores such as Costco have a higher markup.
B) encouraging customers to browse for items in high-cost channels and buy in low-cost channels.
C) offering incentives to the customer.
D) offering sales representatives a commission regardless of the channel.
E) tweaking product features to ensure the different channels are not competing for the "same" product.

Question 25

In addition to looking at the cost side of channel economics, businesses must also look at channel

A) conflicts.
B) range.
C) fit with the brand.
D) revenues.
E) competition.

Question 26

Charles Schwab's multi-channel strategy keeps costs down by using its branches to acquire customers and its other channels to

A) charge them higher fees.
B) offer advice to them.
C) cross-sell products to them.
D) advertise to them.
E) keep them.

Question 27

Among the four steps of the customer purchase process is

A) post-sale service.
B) online research.
C) personal selling.
D) word of mouth.
E) sampling.

Question 28

With changing customer needs and market conditions, channel strategies have to

A) be driven by costs.
B) add additional channels.
C) have buy-in from the sales force.
D) remain unchanged over time.
E) evolve.

Question 29

Formulating channel strategy often results in

A) new product development.
B) increased customer research.
C) hiring additional sales representatives.
D) increased channel costs.
E) conflict among channel members.

Question 30

Many airlines have been successful at migrating customers to self-serve check-in counters by

A) making the process easy.
B) conducting customer research.
C) offering discounts.
D) using humour in their advertising.
E) ensuring airline personnel are scarce.

Question 31

A lesson learned from the Lego Group of Denmark is that it is better to think of supply chain, innovation, and product quality as

A) separate topics.
B) connected.
C) low priorities.
D) top priorities.
E) competitive advantages.

Question 32

Channel strategies can help a business to focus on

A) innovation.
B) costs.
C) return on investment.
D) the core product.
E) the potential product.

Question 33

Companies that make it easy for customers to switch channels reap the benefits of

A) decreased channel conflict.
B) expanded channel range.
C) customer satisfaction.
D) a lower E/C ratio.
E) a lower E/R ratio.

Question 34

To migrate customers to the preferred channel, ING, the Dutch online bank

A) offers multiple channels.
B) offers customers an incentive.
C) advertises only the lower-cost channel.
D) penalizes customers who use the lower-cost channel.
E) matches all competitive offerings.

Question 35

A failure to understand customer preferences for different channels as they move through the purchase process may result in

A) a lower E/C ratio.
B) a lower E/R ratio.
C) over-serving customers.
D) conserved resources.
E) decreased channel costs.

Question 36

In the channel design process, channel economics examines

A) customer needs.
B) product characteristics.
C) profitability.
D) the brand strategy.
E) the firm's overall strategy.

Question 37

The purchase is the ______ step in the customer purchase process.

A) first
B) second
C) third
D) fourth
E) final

Question 38

The sequence from raw material to sale is known as

A) a product strategy.
B) a sales strategy.
C) a supply chain.
D) channel economics.
E) the core product.

Question 39

Despite focusing on the brand, innovation, and product quality, the Lego Group of Denmark was in trouble because its channel strategy

A) offered too many channels.
B) focused only on low-cost channels.
C) had not kept pace with the changing environment.
D) did not have buy-in from the sales force.
E) didn't touch customers at each point.

Question 40

An important part of any channel strategy is

A) mitigating conflict.
B) segmenting customers.
C) identifying new opportunities.
D) focusing on low-cost channels.
E) conducting customer research.

Question 41

The most important thing channels move is information.

Question 42

Channel strategies impact every aspect of a business.

Question 43

The first step in channel design is to realistically define a set of channels.

Question 44

While channels may be used to improve customer satisfaction levels, they cannot be used to build brand loyalty.

Question 45

A value chain is a supply chain, but its emphasis in on examining how value

A) is perceived by the customer.
B) is created or destroyed by a channel member.
C) is compared to the competition.
D) can be added at the point of purchase.
E) can be added during the product development phase.

Question 46

A typical customer goes through four steps in the purchase process: brand awareness, product knowledge, purchase, and post-sale service.

Question 47

By adding more channels, a business better serves its customers.

Question 48

The prime purpose of a channel is to effectively deliver the customer value proposition.

Question 49

Even if a channel is a good fit with the product and certain customer segments may use it, it should be rejected if it is not a good fit with the firm's overall strategy.

Question 50

Looking at value chains enables a business to

A) build relationships with its channel partners.
B) improve product research and development.
C) keep costs low.
D) expand its distribution.
E) expand its product portfolio.

Question 51

When an organization begins to move customers from one channel to another, the sales force and channel partners experience the same fears as the customers.

Question 52

The cost of going to market (the combined cost of sales and marketing expenses across all channels) is often a company's single largest expense.

Question 53

Left to their own devices, customers will usually choose a lower-cost channel, mainly due to habit.

Question 54

Mitigating channel conflicts consists of examining channel profitability and the channel's capacity for generating sales.

Question 55

Mismatching a customer's channel preferences with the company's channel strategy has little or no impact on market share.

Question 56

ING, the Dutch online bank, uses the proverbial "carrot-and-stick" approach, offering customers a higher savings rate if they use the preferred internet channel and "punishing" them with long lineups if they choose to conduct a transaction face to face with a teller.

Question 57

Companies that make it easy for customers to switch channels reap the dual benefits of channel migration and customer satisfaction.

Question 58

Devices alone are not enough anymore; consumers want a complete experience.

Question 59

Having more channels means getting more sales.

Question 60

The direct channel model allows Dell to practice just-in-time (JIT) inventory management, thus keeping its inventory costs at a minimum.

Question 61

The most important thing channels move is information. Using the popular fashion retailer Zara as an example, explain this statement.

Question 62

It is not necessary for a channel strategy to keep pace with changing customer needs and market conditions.

Question 63

Why is it important to base channel decisions on customers' needs?

Question 64

The sequence from raw material to sale is known as the supply chain.

Question 65

Given its low cost, the internet is always a great channel to reach customers.

Question 66

Provide an example of circumstances that might cause channel conflict. How might a company mitigate or eliminate this conflict?

Question 67

A value chain is a supply chain, but its emphasis is on examining how value is created or destroyed by a channel member.

Question 68

Explain how a company can successfully migrate customers to the right (preferred) channel?

Question 69

Why is it important for channel strategies to evolve?

Question 70

Explain how a channel strategy can be used to build a competitive advantage. Provide an example.

Question 71

Formulating channel strategy often results in conflict among channel members.

Question 72

To reduce channel conflict, Sony makes it hard for the consumer to comparison shop by tweaking features on each item so different channels are not really competing to sell the "same" product.

Question 73

What is the customer purchase process?

Question 74

Channel strategies can help a business focus on the potential product.

Question 75

List the six steps in the channel design process.

Question 76

What is examined when calculating channel economics?

Question 77

If channel decisions are so important, why not simply add more channels to serve the customer?