Question 1

Perishables, vending machine products, and highly technical equipment tend to have shorter distribution channels, while low-unit-cost nonperishables tend to be distributed through longer channels.

Accepted Answer

Perishables, vending machine products, and highly technical equipment require faster delivery to the consumer to maintain quality, freshness, or to provide specialized support, thus benefiting from shorter distribution channels. In contrast, low-unit-cost nonperishables can endure longer distribution channels without compromising their value or utility, allowing for more intermediaries to be involved in the distribution process.

Question 2

Selective distribution helps control price cutting since relatively few dealers handle the firm's line.

Accepted Answer

Selective distribution involves choosing a limited number of retailers to sell a company's products, which helps in maintaining better control over the pricing and reduces the likelihood of price cutting among numerous competing retailers.

Question 3

A product warranty that instructs the owner to return the product to the dealer for repair or service in the event of failure during the warranty period creates a dual distribution channel for that product.

Accepted Answer

A product warranty instructing the owner to return the product to the dealer for repair or service does not create a dual distribution channel; it specifies the after-sales service process. A dual distribution channel refers to a situation where a company uses more than one method to sell its products, such as selling directly to consumers and also through retailers.

Question 4

One of the reasons that reverse channels are becoming more important is because of environmental concerns and regulations.

Accepted Answer

Reverse channels, which involve the process of moving goods from their final destination for the purpose of capturing value or proper disposal, are becoming more important due to increasing environmental concerns and regulations aimed at reducing waste and promoting recycling.

Question 5

The dominant and controlling member of a marketing channel is called the channel captain.

Accepted Answer

The statement is true. The channel captain is a member of a marketing channel that exerts dominant and controlling influence over other members of the channel.

Question 6

An intensive distribution strategy suits items with narrow appeal across limited, well-defined groups of customers.

Accepted Answer

An intensive distribution strategy is designed for products with broad appeal across a wide audience, aiming for maximum market coverage by placing products in as many outlets as possible.

Question 7

Changing channel strategies can produce conflicts between established intermediaries and the new outlets for the products.

Accepted Answer

Changing channel strategies often leads to conflicts as established intermediaries may feel threatened by the introduction of new outlets, fearing loss of sales, reduced margins, or diminished control over the market.

Question 8

Exclusive-dealing agreements violate the Competition Act if used by firms with a sizable market share seeking to bar competitors from the market.

Accepted Answer

Exclusive-dealing agreements can violate the Competition Act if they are used by firms with a significant market share to prevent competitors from entering the market, as this can restrict competition and harm the competitive process.

Question 9

Products with wide consumer appeal are candidates for intensive distribution, which uses all available distribution channels.

Accepted Answer

Intensive distribution aims to provide widespread availability of a product, so using all available channels maximizes consumer access and appeal.

Question 10

Relatively standardized items that are also nonperishable and products with low unit costs pass through comparatively long channels of distribution.

Accepted Answer

This is because products that are relatively standardized and nonperishable, such as canned goods or household items, are often sold through a variety of intermediaries who help get the product to consumers. Additionally, products with low unit costs may require high sales volumes to be profitable, which can also require longer distribution channels with multiple intermediaries.

Question 11

When products move through more than one marketing channel to reach different target markets, it is called dual distribution.

Accepted Answer

The answer of When products move through more than one...

Question 12

A manufacturer assigns national sales teams to sell to Walmart, Loblaw Companies, Sobeys, and other large retailers. Smaller retailers and wholesalers are sold through food brokers. In this situation, the manufacturer is utilizing dual distribution.

Accepted Answer

Dual distribution occurs when a company uses more than one marketing channel to reach its market segments. In this case, the manufacturer uses national sales teams for large retailers and food brokers for smaller retailers and wholesalers, constituting a dual distribution strategy.

Question 13

Legal provisions against pollution and conservation laws have increased the importance of reverse channels.

Accepted Answer

This is because reverse channels help in managing and reducing the amount of waste and pollution generated, thus contributing to environmental conservation. Legal provisions have been enacted to encourage companies to implement reverse logistics processes in order to reduce their environmental impact.

Question 14

Product recalls and warranty repairs are examples of reverse channel marketing.

Accepted Answer

Reverse channel marketing involves the process of moving goods from the customer back to the seller or manufacturer, typically for returns, repairs, recycling, or disposal, which includes activities like product recalls and warranty repairs.

Question 15

A soft drink manufacturer that contracts with local bottlers to produce and distribute products within a certain market area is practising selective distribution.

Accepted Answer

Selective distribution involves a producer using a limited number of outlets in a geographical area to sell products, which is what a soft drink manufacturer does by contracting with local bottlers for production and distribution within specific market areas.

Question 16

Business users prefer to deal directly with the manufacturer when purchasing most products, except routine supplies and other small items.

Accepted Answer

Business users often prefer direct dealings with manufacturers for significant purchases to ensure better pricing, customization, and support, while routine supplies and small items are typically sourced through intermediaries for convenience.

Question 17

Exclusive distribution allows manufacturers to control the image, pricing, promotions, and quality of their products.

Accepted Answer

Exclusive distribution limits the number of outlets in which a product is sold, enabling manufacturers to maintain a high level of control over how their products are marketed, priced, and presented, ensuring consistency in brand image and quality.

Question 18

Closed sales territories are geographic areas off-limits to wholesalers because a manufacturer is selling directly through its own sales force.

Accepted Answer

The answer of Closed sales territories are geographic areas off-limits...

Question 19

Exclusive distribution allows greater market coverage than other distributions intensities because of the incentive dealers are provided by their market protection.

Accepted Answer

Exclusive distribution limits market coverage by granting only a few dealers the right to sell a product, focusing on a more selective and premium approach rather than broad market coverage.

Question 20

The profit an intermediary earns depends on the product line. Typically, food wholesalers earn one percent, while durable goods wholesalers can earn five percent.

Accepted Answer

The profit an intermediary, such as a wholesaler, earns can indeed vary significantly depending on the product line. Food wholesalers typically operate on thinner margins, often around one percent, due to the perishable nature of their products and the high volume, low margin nature of the food industry. In contrast, wholesalers dealing in durable goods, which include items meant to last for several years, can command higher margins, sometimes around five percent, due to the higher value and often more specialized nature of these products.

Quiz 12: Marketing Channels and Supply Chain Management