Question 1

Horizontal conflict in channels of distribution occurs:

Accepted Answer

Horizontal conflict occurs among firms that operate at the same level in the distribution channel, such as retailers competing with other retailers or wholesalers competing with other wholesalers.

Question 2

Which of the following offers the best example of horizontal channel conflict?

Accepted Answer

Horizontal channel conflict occurs between businesses at the same level in the distribution channel. In this case, both a funeral home and a florist selling burial caskets are retailers, making it an example of horizontal channel conflict.

Question 3

Sparkling wine producers in Spain are convinced their sparkling wine is superior to that produced in France, but wine distributors continue to give preferential treatment to the French wine producers. This situation could lead to _____ between the Spanish wine producers and the French wine producers.

Accepted Answer

The situation described involves two groups at the same level in the supply chain (Spanish wine producers and French wine producers) potentially having disagreements or competition, which is referred to as horizontal conflict.

Question 4

Which of the following offers the greatest potential for horizontal channel conflict?

Accepted Answer

Horizontal channel conflict occurs between intermediaries at the same level in a distribution channel. Kroger supermarkets and the Green Door, a retail florist, are both retailers, making them more likely to experience horizontal channel conflict.

Question 5

A primary source of horizontal conflict is:

Accepted Answer

Scrambled merchandising, which occurs when retailers carry any product lines they think they can sell profitably, often leads to horizontal conflict as it increases competition among retailers selling similar or the same products.

Question 6

Vertical channel conflict occurs when:

Accepted Answer

Vertical channel conflict occurs when members at different levels within the same channel (e.g., manufacturer, wholesaler, retailer) disagree or argue, often about how to distribute value or control practices within the channel.

Question 7

_____ refers to when middlemen diversify by adding product lines not traditionally carried by their type of business.

Accepted Answer

Scrambled merchandising occurs when retailers add goods and services that may be unrelated to each other and to the firm's original business. This diversification strategy aims to attract more customers by offering a wider range of products.

Question 8

When Loomis Hardware started carrying items that consumers do not expect to find in a hardware store, such as Rowe pottery, silk flower arrangements, pewter wind chimes, and ornate picture frames, the store's management was using:

Accepted Answer

Scrambled merchandising refers to a retail strategy where a store carries a wide variety of products that are not traditionally related to each other or the store's original focus, aiming to increase foot traffic and sales by appealing to a broader customer base.

Question 9

Panama Florist carries seasonal decorations, gardening tools, insecticides, gardening books, romance novels, sunscreen, as well as the fresh flowers and plants that you expect to find at a retail florists. Panama Florist uses:

Accepted Answer

Scrambled merchandising refers to a retail strategy where a store sells a wide variety of unrelated products or services, which is what Panama Florist is doing by offering items far beyond what is traditionally expected in a florist shop.

Question 10

Which of the following statements about scrambled merchandising is True?

Accepted Answer

Scrambled merchandising occurs when a retailer adds goods and services that may be unrelated to each other and to the firm's original business. All the examples provided, from Target and Wal-Mart adding groceries to their product lines, an insurance company offering home mortgage loans, to a bookstore adding a coffee shop, illustrate the concept of scrambled merchandising by showing how businesses diversify their offerings beyond their traditional scope. This can involve consumers, middlemen, and producers, as they all can play roles in the diversification of product and service offerings that characterize scrambled merchandising.

Question 11

Which of the following statements about vertical channel conflict is True?

Accepted Answer

Vertical channel conflict often arises between different levels of the same channel, such as between a producer and a wholesaler or between a producer and a retailer, due to disagreements over goals, roles, or rewards.

Question 12

Which of the following offers the greatest potential for vertical channel conflict?

Accepted Answer

Vertical channel conflict occurs between different levels within the same distribution channel, such as between a manufacturer and a retailer. Toys R Us (a retailer) and Mattel (a toy manufacturer) represent different levels within the same distribution channel, making this option the most likely scenario for vertical channel conflict.

Question 13

Which of the following offers the greatest potential for vertical channel conflict?

Accepted Answer

Vertical channel conflict is most likely between different levels within the same distribution channel, such as a retailer and a manufacturer. Toys "R" Us (a retailer) and Fisher-Price (a toy manufacturer) exemplify this potential for conflict, as disagreements may arise over pricing, branding, and distribution strategies.

Question 14

Sparkling wine producers in Spain are convinced their sparkling wine is superior to that produced in France, but wine distributors continue to give preferential treatment to the French wine producers. This situation could lead to _____ between the Spanish wine producers and the wine distribution companies.

Accepted Answer

Vertical conflict occurs between different levels within a distribution channel, such as between producers (Spanish wine producers) and distributors (wine distribution companies).

Question 15

_____ typically occurs between producer and wholesaler or between producer and retailer.

Accepted Answer

Vertical conflict typically occurs between different levels in a distribution channel, such as between a producer and wholesaler or between a producer and retailer.

Question 16

For which of the following products is a manufacturer very unlikely to use a wholesaler for product distribution?

Accepted Answer

Made-to-order bridal gowns are typically sold directly from the manufacturer (designer or boutique) to the consumer. This is because they are highly customized products that require specific measurements and customer preferences, making it impractical to go through a wholesaler.

Question 17

A manufacturer of _____ will most likely bypass a wholesaler in the distribution of its product.

Accepted Answer

Expensive designer jewelry manufacturers are more likely to bypass wholesalers due to the high value and often personalized nature of their products, preferring direct sales to retailers or customers to maintain control over the brand and customer experience.

Question 18

Direct distribution is advantageous when the product:

Accepted Answer

Direct distribution allows for better control over the installation and technical service process, ensuring that customers receive the proper support and service for products that require it.

Question 19

For which of the following products would direct distribution be most advantageous?

Accepted Answer

Direct distribution is most advantageous for a private tutoring service because it allows for personal interaction and customization of the service to meet the individual needs of the student. This direct interaction is crucial for assessing the student's requirements and providing tailored tutoring sessions.

Question 20

As a result of vertical channel conflicts, a wholesaler may decide to try to improve its competitive position. Which of the following is the best course of action for a wholesaler to use to improve its competitive position?

Accepted Answer

Improving internal performance can enhance efficiency, reduce costs, and improve service quality, thereby strengthening the wholesaler's competitive position in the distribution channel.

Quiz 14: Channels of Distribution

Horizontal conflict in channels of distribution occurs:

Which of the following offers the best example of horizontal channel conflict?

Which of the following offers the greatest potential for horizontal channel conflict?

A primary source of horizontal conflict is:

Vertical channel conflict occurs when:

_____ refers to when middlemen diversify by adding product lines not traditionally carried by their type of business.

When Loomis Hardware started carrying items that consumers do not expect to find in a hardware store, such as Rowe pottery, silk flower arrangements, pewter wind chimes, and ornate picture frames, the store's management was using:

Panama Florist carries seasonal decorations, gardening tools, insecticides, gardening books, romance novels, sunscreen, as well as the fresh flowers and plants that you expect to find at a retail florists. Panama Florist uses:

Which of the following statements about scrambled merchandising is True?

Which of the following statements about vertical channel conflict is True?

Which of the following offers the greatest potential for vertical channel conflict?

Which of the following offers the greatest potential for vertical channel conflict?

_____ typically occurs between producer and wholesaler or between producer and retailer.

For which of the following products is a manufacturer very unlikely to use a wholesaler for product distribution?

A manufacturer of _____ will most likely bypass a wholesaler in the distribution of its product.

Direct distribution is advantageous when the product:

For which of the following products would direct distribution be most advantageous?

As a result of vertical channel conflicts, a wholesaler may decide to try to improve its competitive position. Which of the following is the best course of action for a wholesaler to use to improve its competitive position?