Question 1

A producer must modify its channel design and arrangements if ________.

Accepted Answer

A producer must modify its channel design and arrangements if consumer buying patterns change. This is because changes in consumer behavior can significantly affect the effectiveness and efficiency of the current channel system in reaching and satisfying consumer needs. The producer may need to adjust the number and type of intermediaries, the amount of promotional activities and incentives, and the level of cooperation and coordination among channel members to respond to the changing consumer needs and preferences. The other options (B, C, D, and E) may also require some modifications in the channel design and arrangements, but they are not as critical as changes in consumer buying patterns.

Question 2

A manufacturer obtains referent power when it has special knowledge that intermediaries value.

Accepted Answer

The answer of A manufacturer obtains referent power when it...

Question 3

A new firm typically starts as a local operation selling in a fairly circumscribed market by ________.

Accepted Answer

A new firm typically starts by using a few existing intermediaries to sell in a fairly circumscribed market. These intermediaries may be distributors, wholesalers, or retailers that already have established relationships with customers in the target market. This allows the new firm to leverage the existing distribution channels rather than trying to create new ones from scratch.

Question 4

A manufacturer is using reward power when it offers intermediaries an extra benefit for performing specific acts or functions.

Accepted Answer

Reward power involves offering rewards or incentives to influence behavior, which is what the manufacturer is doing by offering intermediaries an extra benefit for performing specific acts or functions.

Question 5

Coercive and referent power are subjective and depend on the ability and willingness of parties to recognize them.

Accepted Answer

The answer of Coercive and referent power are subjective and...

Question 6

What is channel power? Explain the various types of channel power.

Accepted Answer

The answer of What is channel power? Explain the various...

Question 7

Who will most likely be willing to pay for high-value-added channels?

Accepted Answer

Early buyers of a product are often willing to pay for high-value-added channels because they are typically more invested in the product and its success. They may also be more willing to pay a premium for added value and convenience.

Question 8

What is the major difference between a conventional marketing channel and a vertical marketing system (VMS)?

Accepted Answer

The major difference between a conventional marketing channel and a vertical marketing system (VMS) is that the elements in a conventional marketing channel act as separate businesses whereas the elements in a VMS act as a unified system. In a VMS, cooperation and coordination exist between the producer, wholesaler, and retailer to attain efficiency, whereas in a conventional marketing channel, each member of the channel acts independently to optimize profits.

Question 9

After a company has chosen a channel system, it must select, train, motivate, and evaluate individual intermediaries for each channel.

Accepted Answer

Once a company has chosen a channel system, it needs to further select, train, motivate, and evaluate individual intermediaries for each channel to ensure that they are performing effectively and contributing to overall channel success.

Question 10

Channel power is the ability to alter channel members' behavior so that they take actions they would not have taken otherwise.

Accepted Answer

Channel power refers to a company's ability to influence and control the actions of its distribution partners in order to achieve organizational objectives. This can be done through a range of mechanisms such as providing incentives, enforcing contracts, or withholding vital resources. The goal is to motivate channel members to act in ways that benefit the company's bottom line, even if they might not be in the partners' best interests.  So, Channel power is the ability to alter channel members' behavior so that they take actions they would not have taken otherwise.

Question 11

Atronix Solutions is a major manufacturer of electronic measuring devices in the United States. The company often threatens to terminate its relationship with its intermediaries if they do not agree with its terms and conditions. What channel power does Atronix use? What are its effects?

Accepted Answer

The answer of Atronix Solutions is a major manufacturer of...

Question 12

Hewlett-Packard is a highly respected brand. Many retailers want to be associated with the brand because of this reputation. What kind of power does Hewlett-Packard obtain due to this reputation?

Accepted Answer

Hewlett-Packard's reputation as a highly respected brand gives it referent power. Referent power is based on the idea of being admired, respected, and trusted. It allows the brand to influence others because of their desire to be associated with the brand’s positive image.

Question 13

Describe the challenges and opportunities that international markets pose.

Accepted Answer

The answer of Describe the challenges and opportunities that international...

Question 14

Early buyers might be willing to pay for high-value-added channels, but later buyers will switch to lower-cost channels.

Accepted Answer

This statement reflects the phenomenon known as market segmentation where early adopters are often willing to pay more for high-quality products or services, whereas later adopters are cost-sensitive and prefer lower-priced alternatives.

Question 15

A group of entrepreneurs is planning to start a food processing company. Comment on the likely evolution of the company's marketing channels.

Accepted Answer

The answer of A group of entrepreneurs is planning to...

Question 16

A(n) ________ includes the producer, wholesaler(s), and retailer(s) acting as a unified system.

Accepted Answer

A vertical marketing system includes the coordinated efforts of the producer, wholesaler(s), and retailer(s) to create a unified system. The other options are not applicable to this definition.

Question 17

When a manufacturer requests a behavior that is warranted under the contract, the manufacturer is using coercive power.

Accepted Answer

Coercive power involves the ability to force someone to comply with demands against their will, typically through threats or punishment. Requesting a behavior that is warranted under the contract is an exercise of legitimate power, based on rights granted by the contractual agreement, not coercive power.

Question 18

In competitive markets with low entry barriers, the optimal channel structure will inevitably change over time.

Accepted Answer

In competitive markets with low entry barriers, new competitors can easily enter the market and disrupt the existing channel structure. This can happen due to the introduction of new technologies, changing customer preferences, or other factors. To remain competitive, firms need to adapt their channel structure and may need to explore alternative channels or partnerships. Therefore, the optimal channel structure in such markets will inevitably change over time.

Question 19

Which of the following types of power is objectively observable?

Accepted Answer

Coercive power is objectively observable as it involves the use of punishment or threat of punishment to influence behavior, which can be easily measured and observed. Legitimate power, group power, expert power, and referent power, on the other hand, may not be as easily observable as they are based on subjective perceptions and relationships.

Question 20

Apple Inc., together with subsidiaries, designs, manufactures, and markets personal computers, mobile phones, and media devices. It also sells software, services, and third-party digital content. Apple is a highly respected brand across the globe. What kind of channel power does this respect give Apple?

Accepted Answer

The answer of Apple Inc., together with subsidiaries, designs, manufactures,...

Quiz 17: Designing and Managing Integrated Marketing Channels