Question 1

A manufacturer offers its intermediaries an extra benefit for performing a promotional activity. This is an example of the use of ________ power.

Accepted Answer

The scenario mentions that the manufacturer is offering an extra benefit to its intermediaries for performing a promotional activity. This incentive falls under the category of reward power, where the manufacturer is using rewards or incentives to motivate the intermediaries to take a specific action. Coercive power, on the other hand, involves using threats or punishment to influence behavior, while functional power refers to the power an individual holds due to their official position or role. Expert power is based on an individual's knowledge or expertise in a specific area, while referent power is derived from one's likability or admiration by others. None of these types of power are applicable in the given scenario.

Question 2

Intensive distribution relies on only some of the intermediaries willing to carry a particular product.

Accepted Answer

Intensive distribution means the product is widely available through as many intermediaries as possible, rather than just a few.

Question 3

Briefly explain the various service outputs that marketing channels produce.

Accepted Answer

The answer of Briefly explain the various service outputs that...

Question 4

Products such as heating and cooling systems are usually sold and maintained by the company or by franchised dealers.

Accepted Answer

Heating and cooling systems are typically sold and maintained by the company or by franchised dealers, as they require specialized knowledge and installation.

Question 5

An intensive distribution strategy serves well for products such as snack foods and soft drinks.

Accepted Answer

Intensive distribution strategy aims to make a product available in as many outlets as possible. This works well for products that need to be easily accessible to consumers, such as snack foods and soft drinks, which are commonly found in convenience stores, supermarkets, vending machines, and other outlets.

Question 6

Orion Airlines is an American airline that provides domestic and international air transport services. Explain the five service outputs provided by marketing channels with reference to Orion.

Accepted Answer

The answer of Orion Airlines is an American airline that...

Question 7

Selective distribution severely limits the number of intermediaries and is appropriate when the producer wants to maintain control over the service level and outputs offered by the resellers.

Accepted Answer

The answer of Selective distribution severely limits the number of...

Question 8

Distributors' territorial rights define the terms under which the producer will enfranchise other distributors.

Accepted Answer

Territorial rights refer to the specific geographic areas where a distributor has the exclusive right to sell a producer's products. These rights can determine how and when a producer can enter into agreements with other distributors in the same area.

Question 9

Broomer threatens to withdraw all its other products from the retailers' stores if they are unwilling to push products from the "Inducer" line. This is an example of ________ power.

Accepted Answer

This is an example of coercive power because Broomer is threatening to withdraw all its other products from the retailers' stores if they don't comply with pushing products from the "Inducer" line.

Question 10

Intensive distribution is becoming a mainstay for specialists looking for an edge in markets increasingly driven by price.

Accepted Answer

Intensive distribution is a strategy used by manufacturers to get their products into as many outlets as possible. It is more commonly associated with mass-market products rather than specialists looking for an edge, as specialists often focus on selective or exclusive distribution to maintain a brand image or target specific market segments.

Question 11

Manufacturers can obtain greater control over the selling process by using a sales agency.

Accepted Answer

Manufacturers typically have less control over the selling process when using a sales agency because the agency operates independently and serves multiple principals, not just one manufacturer.

Question 12

In an effort to boost sales, Broomer offers its retailers a higher margin for promoting and selling products from the "Inducer" line to customers. This is an example of ________ power.

Accepted Answer

This is an example of reward power, where Broomer is using incentives (higher margins) to encourage its retailers to promote and sell its products.

Question 13

When economic conditions are depressed, producers want to move goods to market using longer channels.

Accepted Answer

When economic conditions are depressed, producers may actually want to use shorter channels to save on costs and reach the market more efficiently. Longer channels may result in higher costs and longer lead times, which is not desirable in a depressed economic environment.

Question 14

Because of the acceptance that the other Broomer products have in the market, retailers are willing to stock items from the new "Inducer" line of clothing. This is an example of ________ power.

Accepted Answer

The acceptance of other Broomer products in the market gives the company referent power, the ability to influence based on admiration and respect for the brand.

Question 15

Ravake is a manufacturer of high-end designer apparel. Competition in the apparel industry is severe and the market is driven by price. What distribution strategy would be best suited to help Ravake obtain an edge over its competitors?

Accepted Answer

The answer of Ravake is a manufacturer of high-end designer...

Question 16

Explain the three distribution strategies based on the number of intermediaries.

Accepted Answer

The answer of Explain the three distribution strategies based on...

Question 17

STIHL, which manufactures handheld outdoor power equipment sold to six independent US distributors and six STIHL-owned marketing and distribution centers who sell to a nationwide network of more than 8,000 servicing retail detailers, is a good example of intensive distribution.

Accepted Answer

STIHL's distribution strategy, which involves selling through a network of independent distributors and STIHL-owned centers to servicing retailers, is more indicative of a selective distribution strategy rather than an intensive distribution strategy, which aims for widespread market coverage through as many outlets as possible.

Question 18

A manufacturer is using legitimate power when it ________.

Accepted Answer

Legitimate power is based on a legitimate position or authority. In this case, the manufacturer is using its legitimate power to request a behavior that is warranted under the selling contract.

Question 19

________ power can be effective, but its exercise produces resentment and can lead the intermediaries to organize countervailing power.

Accepted Answer

Coercive power is based on the use or threat of force, punishment, or negative consequences such as penalty, suspension, and termination. Although it can produce compliance in the short term, its exercise can create resentment and resistance among intermediaries, who may organize countervailing power to oppose the source of coercion. As a result, coercive power is often less effective and more risky than other forms of power, such as reward, legitimate, expert, and referent power, which are based on positive or desirable outcomes, positions, expertise, or relationship.

Question 20

National Beverage Corp. produces and distributes a wide range of beverages. It offers a selection of flavored soft drinks, juices, sparkling waters, energy drinks, nutritionally enhanced waters, and other specialty beverages. What distribution strategy will be most suitable for the company's products?

Accepted Answer

The answer of National Beverage Corp. produces and distributes a...

Quiz 17: Designing and Managing Integrated Marketing Channels