Question 1

Describe the three sources of power for a channel captain.

Accepted Answer

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Question 2

Which type of vertical marketing system (VMS) gives an organization more control over both supply sources and resale of its products, while at the same time increasing the organization's capital investment and its fixed costs?

Accepted Answer

The corporate vertical marketing system (VMS) gives an organization more control over both supply sources and resale of its products, while at the same time increasing the organization's capital investment and its fixed costs. In a corporate VMS, a single entity controls the entire distribution chain, from production to retail. This allows for extensive control over suppliers and retailers, but also requires a significant financial investment to create and maintain the system.

Question 3

When Sherwin-Williams Paint Company has single ownership of integrated, successive stages of production, distribution and retail, it has created a corporate VMS.

Accepted Answer

A corporate VMS (Vertical Marketing System) involves a single firm owning and controlling multiple successive stages of production, distribution and retail. Sherwin-Williams Paint Company is an example of a corporate VMS because it owns the production, distribution and retail of its paint products.

Question 4

Tiffany & Co jewelry can only be found in a very limited number of intermediaries. This is an example of ________ distribution.

Accepted Answer

Exclusive distribution means that the product is only sold through a limited number of intermediaries, often with high-end or luxury products. This is a deliberate strategy to maintain a certain level of prestige and exclusivity around the brand.

Question 5

Compare and contrast a conventional marketing system with a vertical marketing system (VMS).

Accepted Answer

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Question 6

In a conventional marketing system, no channel member has much control over the other members, and no formal means exists for assigning roles and resolving channel conflict.

Accepted Answer

In a conventional marketing system, each channel member operates independently, and there is no dominant member to control or coordinate the activities of the others, leading to a lack of formal mechanisms for assigning roles and resolving conflicts.

Question 7

Exchanges that occur in the grey market are illegal.

Accepted Answer

Exchanges in the grey market are not technically illegal, but they are not regulated by official institutions and may involve transactions that are illegal or unethical.

Question 8

Which of the following is most likely intensively distributed?

Accepted Answer

Coca-Cola beverages are most likely intensively distributed as they can be found in almost every grocery store, convenience store, and restaurant.

Question 9

A brand of variety stores is part of a wholesaler-sponsored voluntary chain. This means these retailers are members of a(n) ________ vertical marketing system (VMS).

Accepted Answer

A wholesaler-sponsored voluntary chain is an example of a contractual VMS, where independent retailers join together to access the resources and buying power of a larger organization (in this case, a wholesaler). The retailers are bound by a contractual agreement with the wholesaler, but they still retain their independence as individual businesses.

Question 10

An environmental analysis is an important step in distribution planning.

Accepted Answer

An environmental analysis helps to identify potential environmental impacts and regulatory requirements that may affect distribution planning. It also helps to assess the sustainability of the distribution system and identify opportunities for reducing environmental impacts.

Question 11

Compare and contrast the three distribution strategies, giving examples of products that might be distributed through each strategy.

Accepted Answer

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Question 12

A franchise organization is a type of contractual VMS.

Accepted Answer

A franchise organization is a specific type of contractual vertical marketing system in which a franchisor allows a franchisee to use their intellectual property, branding, and business methods in exchange for payment of an initial fee and ongoing royalties.

Question 13

The first step in planning a channel strategy is to determine what markets need to be reached.

Accepted Answer

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Question 14

Chewing gum is stocked in many outlets in the same market or community; in fact, it is placed in as many outlets as possible. This is an example of ________ distribution.

Accepted Answer

Intensive distribution is a strategy where a company places its products in as many outlets as possible. This is commonly used for convenience products and is the most effective way to ensure widespread availability and accessibility to customers. Therefore, the best answer is D) intensive distribution.

Question 15

Intensive distribution seeks many outlets in a market, while selective distribution seeks only one outlet in a given market area.

Accepted Answer

Intensive distribution seeks to have a product available in as many outlets as possible in a given market area, while selective distribution seeks to carefully choose and limit the number of outlets in a given area.

Question 16

Increasingly commonplace today is the appearance of two different franchise chains under the same roof, such as Pizza-Hut and Taco Bell. This is an example of a(n) ________ marketing system.

Accepted Answer

This is an example of a horizontal marketing system where two or more companies at the same level come together to collaborate and offer their products or services in the same physical location.

Question 17

When the NewWay Dry Cleaners and The Easy Laundromat in your hometown join forces to pursue a new marketing opportunity, they are forming a horizontal marketing system.

Accepted Answer

A horizontal marketing system involves two or more companies at the same level coming together to pursue a common opportunity, such as NewWay Dry Cleaners and The Easy Laundromat joining forces.

Question 18

Selective distribution strategies are most suitable for convenience products.

Accepted Answer

Selective distribution strategies are more appropriate for specialty or luxury products where a certain level of exclusivity is important. Convenience products are generally distributed through intensive distribution channels to make them widely available to consumers.

Question 19

Which type of vertical marketing system (VMS) gives an organization more control over resale of its products, while at the same time increasing the organization's capital investment and its fixed costs?

Accepted Answer

Corporate vertical marketing systems involve the ownership or control of multiple levels of the distribution channel, giving the organization more control over resale of its products. This type of VMS typically requires a higher capital investment and fixed costs compared to other types of VMS such as conventional or contractual systems.

Question 20

Which of the following is most likely exclusively distributed?

Accepted Answer

BMW automobiles are usually exclusively distributed through authorized dealerships and are not sold through other channels such as online retailers or discount stores.

Quiz 11: Deliver the Goods: Determine the Distribution Strategy