Question 1

A contractual vertical marketing system is an arrangement whereby

Accepted Answer

In a contractual vertical marketing system, independent production and distribution firms collaborate through contracts to achieve greater efficiency and marketing impact than they could individually.

Question 2

There are four popular types of franchising, one of which is

Accepted Answer

Service-sponsored franchise systems are a common type of franchising where a service provider licenses its business model and brand to franchisees.

Question 3

There are three variations of contractual systems: wholesaler-sponsored voluntary chains, retailer-sponsored cooperatives, and

Accepted Answer

Franchising is the third variation of contractual systems, alongside wholesaler-sponsored voluntary chains and retailer-sponsored cooperatives.

Question 4

Franchising is one form of

Accepted Answer

Franchising is a type of contractual vertical marketing system where a franchisor licenses its business model and brand to franchisees, creating a structured and consistent distribution channel.

Question 5

IGA and Ben Franklin variety and craft stores are examples of

Accepted Answer

IGA and Ben Franklin stores are examples of wholesaler-sponsored voluntary chains, where independent retailers band together to increase buying power and operational efficiency.

Question 6

Cessna is considered the volume leader in the executive jet market. It has been described as "almost totally vertically integrated." This quote means that Cessna

Accepted Answer

Vertical integration means that Cessna owns multiple stages of its production and distribution process, which is what is meant by owning several entities in the traditional marketing channel.

Question 7

A large company produces paint and other home decorating products. Its goal is to choose the marketing channel arrangement that will give it the most control over supply sources. Which marketing channel system should this company choose?

Accepted Answer

A corporate vertical marketing system provides the most control over supply sources because the company owns multiple levels of the distribution and production process, allowing for direct oversight and management.

Question 8

Forward integration refers to

Accepted Answer

Forward integration occurs when a producer owns or controls an intermediary at the next level down in the marketing channel, such as a manufacturer owning a retail outlet.

Question 9

Tiffany & Co. manufactures about half of the fine jewelry items for sale in its stores and boutiques worldwide. Tiffany & Co. practices

Accepted Answer

The answer of Tiffany & Co. manufactures about half of...

Question 10

Corporate vertical marketing systems

Accepted Answer

Corporate vertical marketing systems offer more control over supply sources or resale of products by integrating various stages of production and distribution under a single ownership.

Question 11

Ace Hardware is a national ________ that allows its members, retailers of paint and hardware products, to concentrate their buying power through wholesalers and plan collaborative promotional and pricing activities.

Accepted Answer

Ace Hardware is a retailer-sponsored cooperative where independent retailers join together to increase their buying power and collaborate on marketing and promotions.

Question 12

Franchising refers to

Accepted Answer

Franchising is a contractual arrangement where a parent company (franchisor) allows an individual or firm (franchisee) to operate a business under its established name and according to specific rules.

Question 13

When a retailer owns a manufacturing operation, it is referred to as

Accepted Answer

Backward integration occurs when a company expands its role to fulfill tasks formerly completed by businesses up the supply chain, such as a retailer owning a manufacturing operation.

Question 14

Which type of contractual vertical marketing system involves small independent retailers forming an organization that operates a wholesale facility cooperatively?

Accepted Answer

In a retailer-sponsored cooperative, small independent retailers come together to form an organization that operates a wholesale facility cooperatively, allowing them to benefit from economies of scale and increased bargaining power.

Question 15

A contractual arrangement between a parent company and an individual or firm that allows the latter to operate a certain type of business under an established name and according to specific rules is referred to as

Accepted Answer

Franchising is a contractual arrangement where a parent company (franchisor) allows an individual or firm (franchisee) to operate a business under its established name and system.

Question 16

Apple now operates over 500 Apple retail stores around the world to sell its innovative products such as the iPhone and Apple Watch. Apple uses

Accepted Answer

Forward integration occurs when a company expands its business activities to include control over the direct distribution or supply of its products, such as Apple operating its own retail stores.

Question 17

When a producer owns an intermediary at the next level down in the marketing channel, it is referred to as

Accepted Answer

Forward integration occurs when a producer owns or controls the intermediary at the next level down in the marketing channel, moving closer to the end consumer.

Question 18

A retailer-sponsored cooperative involves

Accepted Answer

A retailer-sponsored cooperative involves small, independent retailers forming an organization that operates a wholesale facility cooperatively.

Question 19

21st Century Fox is the name for Fox's broadcast/cable TV networks and TV/movie studios. Since most of the shows produced at its TV production unit and many of the movies made at its studio are only televised on its cable TV networks, 21st Century Fox is an example of

Accepted Answer

21st Century Fox is an example of a corporate vertical marketing system because it owns and controls multiple levels of the production and distribution process, including TV networks and movie studios.

Question 20

A vertical marketing system that involves a contractual relationship between a wholesaler and small independent retailers to standardize and coordinate buying practices, merchandising programs, and inventory management efforts is referred to as

Accepted Answer

A wholesaler-sponsored voluntary chain is a vertical marketing system where a wholesaler enters into a contractual relationship with independent retailers to standardize and coordinate buying practices, merchandising programs, and inventory management efforts.

Quiz 15: Managing Marketing Channels and Supply Chains