Question 1

What is the first stage of building channel commitment?
A) Establishing mutual commitment
B) Building an expectation of continuity
C) Developing a differentiation strategy
D) Forming a joint partnership
E) Defining economic rewards

Accepted Answer

The first stage of building channel commitment is to build an expectation of continuity. It involves creating a feeling of stability and reliability in the relationship between the manufacturer and the channel partner. By emphasizing the importance of a long-term partnership, the manufacturer can encourage the channel partner to invest time and resources in building a successful business together.

Question 2

Which action taken by a downstream channel member would most likely enhance commitment in a channel relationship?
A) Developing relationships with other suppliers
B) Limiting the exchange of sensitive information
C) Preventing suppliers from seeing too many weaknesses
D) Participating closely in the supplier's marketing efforts
E) Making changes to shipping and warehousing strategies

Accepted Answer

Participating closely in the supplier's marketing efforts would be the most likely action to enhance commitment in a channel relationship. By doing so, the downstream channel member is actively contributing to the success of the supplier and building a stronger partnership. This can lead to increased trust and loyalty between the two parties. Developing relationships with other suppliers, limiting the exchange of sensitive information, preventing suppliers from seeing too many weaknesses, and making changes to shipping and warehousing strategies may also be important actions in a channel relationship, but would be less likely to directly enhance commitment.

Question 3

Relational governance,vertical quasi-integration,and strategic alliance are terms used to describe ________.
A) licensing agreements
B) organizational cultures
C) logistical partnerships
D) channel relationships
E) multinational enterprises

Accepted Answer

Relational governance, vertical quasi-integration, and strategic alliance are all terms used to describe channel relationships between firms. They refer to different types of collaborative arrangements and levels of integration between firms in a supply chain or distribution network.

Question 4

Which statement about commitment in a channel relationship is most likely true?
A) Commitment in a channel relationship can be easily observed and measured.
B) A committed organization wants the relationship to continue indefinitely.
C) True commitment requires only minor investments of time and money.
D) Commitment is indicated by a cordial relationship with partners.
E) Short-term channel relationships indicate strong commitment.

Accepted Answer

A committed organization wants the relationship to continue indefinitely. This is because commitment involves a willingness to invest time, resources, and effort into building a long-term partnership with channel partners. It is not easily observed or measured, and requires significant investments of time and money to foster a strong, collaborative relationship. Cordial relationships may be an indication of good rapport, but true commitment goes beyond surface-level interactions. Short-term relationships are unlikely to foster the level of commitment necessary for sustained success in the channel.

Question 5

Which of the following statements would LEAST likely be made by the committed party in a channel relationship?
A) We defend them when others criticize them.
B) We are patient with their mistakes, even those that cause us trouble.
C) We will dedicate whatever resources it takes to grow the business we do with them.
D) We spend enough time with their people to work out problems and misunderstandings.
E) We are continually looking for another organization as a business partner to add to this one.

Accepted Answer

The committed party in a channel relationship would not likely be looking for another organization as a business partner to add to the current one. This would suggest a lack of loyalty and commitment to the current partner. The other statements all demonstrate a high level of commitment and dedication to the partner.

Question 6

Before building a channel relationship with downstream partners,a manufacturer should most likely ________.
A) consolidate its wholesaling efforts
B) respect the value of intermediaries
C) engage in vertical integration
D) develop financial incentives
E) coordinate marketing efforts

Accepted Answer

Before building a channel relationship with downstream partners, it is important for a manufacturer to respect the value of intermediaries. This means recognizing the role of wholesalers and other intermediaries in reaching the end consumer and acknowledging their contribution to the marketing and distribution process. This understanding can help build trust and collaboration between the manufacturer and downstream partners, leading to a more successful and effective channel strategy. Consolidating wholesaling efforts, engaging in vertical integration, developing financial incentives, and coordinating marketing efforts may also be important steps, but they do not address the fundamental need to respect and partner with intermediaries.

Question 7

Burton Manufacturing wants to motivate downstream channel members to represent Burton products in new and current markets,but the firm does not want to build strong channel relationships.How can Burton most likely accomplish this goal?
A) Integrating vertically
B) Exerting reward power
C) Increasing internal sales
D) Utilizing coercive power
E) Outsourcing logistical efforts

Accepted Answer

By exerting reward power, Burton Manufacturing can offer incentives to downstream channel members to represent Burton products in new and current markets without having to build strong channel relationships. This allows for motivation without the need for close collaboration or strong ties between the manufacturer and the channel members. Integrating vertically, increasing internal sales, utilizing coercive power, and outsourcing logistical efforts do not address the specific goal of motivating downstream channel members without building strong relationships.

Question 8

All of the following have resulted from the relationship between Wal-Mart and P&G EXCEPT ________.
A) fewer stockouts
B) lower logistics costs
C) increased opportunity costs
D) constant store-level sales data
E) simplified inventory management

Accepted Answer

The relationship between Wal-Mart and P&G has not resulted in increased opportunity costs; it has actually led to lower costs and improved efficiency in inventory management, resulting in fewer stockouts, lower logistics costs, and constant store-level sales data.

Question 9

Why are more manufacturers most likely seeking committed relationships with wholesalers?
A) The number of small, independent wholesalers is growing.
B) Market information can only be gathered from wholesalers.
C) The number of wholesalers is shrinking because of consolidation.
D) Marketing efforts must be closely coordinated with global wholesalers.
E) Reward power typically has little effect on wholesaler efforts and motives.

Accepted Answer

The reason why more manufacturers are most likely seeking committed relationships with wholesalers is due to the fact that the number of wholesalers is shrinking because of consolidation. This means there are fewer wholesalers to partner with, making it more important for manufacturers to establish long-term relationships with those that remain.

Question 10

Which term best refers to a manufacturer's relationship-specific investments in a channel partner?
A) Supplier pledges
B) Exclusive distributions
C) Relationship portfolios
D) Compatible investments
E) Idiosyncratic investments

Accepted Answer

Idiosyncratic investments refer to a manufacturer's relationship-specific investments in a channel partner. These investments are made to enhance the trust and cooperation between the manufacturer and the channel partner, and include actions such as providing training, offering financial support, and customizing products to meet the partner's specific needs.

Question 11

What is the primary reason that building strong relationships with all channel partners is unwise?
A) Committed relationships cannot be clearly identified.
B) Strong relationships do not correlate with improved profits.
C) Only one channel member financially benefits from a relationship.
D) Differentiation strategies fail to benefit from channel commitment.
E) Strong relationships are difficult and costly to create and maintain.

Accepted Answer

Strong relationships are indeed difficult and costly to create and maintain. This involves significant time, effort, and resources, which might not always lead to proportional benefits, making it unwise to pursue strong relationships with all channel partners.

Question 12

What is the primary purpose of making idiosyncratic investments?
A) Building channel commitment
B) Limiting the supplier's risk
C) Increasing entry barriers
D) Aligning marketing strategies
E) Enhancing brand equity

Accepted Answer

Idiosyncratic investments are specialized investments made by a company in a relationship with another party (such as a supplier or distributor) that are specifically tailored to that relationship. The primary purpose of these investments is to build channel commitment by creating a situation where both parties have a vested interest in maintaining and enhancing the relationship, due to the unique value that has been created through these specialized investments.

Question 13

MDF Manufacturing wants to build a committed relationship with a distributor.How would MDF most likely benefit from a committed channel relationship?
A) Reducing inventory holding costs
B) Ensuring a stable supply of products
C) Lowering entry barriers in the industry
D) Enhancing understanding of the market
E) Differentiating from other intermediaries

Accepted Answer

The answer of MDF Manufacturing wants to build a committed...

Question 14

How did John Deere benefit from having strong,committed relationships with its dealer network?
A) The firm convinced dealers to service John Deer products sold by Home Depot.
B) The firm transitioned dealers from homeowner sales to commercial farm sales.
C) The firm persuaded dealers to promote Home Depot through their Web sites.
D) The firm used reward power to convert local dealers into franchises.
E) The firm demanded that small dealers consolidate in urban areas.

Accepted Answer

John Deere benefited from its strong, committed relationships with its dealer network by convincing dealers to service John Deere products sold by Home Depot. This strategy helped maintain high service standards and customer satisfaction for their products, regardless of where they were purchased.

Question 15

What benefit of a strong,committed channel relationship is shared by both upstream and downstream channel members?
A) Guaranteeing market access
B) Getting closer to customers and dealers
C) Building profitable, competitive advantages
D) Increasing stockouts while lowering expenses
E) Providing new products quickly to global markets

Accepted Answer

A strong, committed channel relationship allows both upstream and downstream channel members to build profitable, competitive advantages. This is because a strong relationship allows for better communication, increased trust, and greater collaboration, which can lead to more efficient and effective operations, better product development, and improved customer service. Both parties benefit from these advantages, helping them to stay competitive in the marketplace.

Question 16

Which of the following is the best barrier to entry against future competitors?
A) Product price cuts
B) Unique product features
C) Highly fragmented wholesalers
D) Effective distribution networks
E) High-functioning logistical services

Accepted Answer

The answer of Which of the following is the best...

Question 17

Malcolm Motorcycles is the exclusive dealer of Harley-Davidson Motorcycles in Rhode Island.Harley-Davidson has most likely shown its commitment to Malcolm Motorcycles through ________.
A) reciprocity
B) selectivity
C) dedicated personnel
D) compatible strategies
E) idiosyncratic investments

Accepted Answer

Selectivity refers to the practice of choosing a limited number of dealers to maintain exclusivity and ensure high standards, which aligns with Malcolm Motorcycles being the exclusive dealer.

Question 18

Which of the following would LEAST likely increase continuity expectations in a channel relationship?
A) Two-way communication
B) Reputation for fair dealing
C) Combined stakes
D) Imbalanced power
E) Trust

Accepted Answer

Imbalanced power in a channel relationship would likely decrease continuity expectations because the weaker party may feel like they cannot rely on the stronger party to maintain consistent behavior or fulfill promises.

Question 19

In most longstanding channel relationships,commitment is best described as ________.
A) symmetrical
B) isolated
C) asymmetrical
D) partisan
E) short-term

Accepted Answer

The answer of In most longstanding channel relationships,commitment is best...

Question 20

Which term refers to the idea that relational states belong to organizations and outlive personnel turnover?
A) Organizational memory
B) Idiosyncratic investment
C) Organizational culture
D) Relationship velocity
E) Relationship balance

Accepted Answer

Organizational memory refers to the idea that relational states, such as processes and routines, belong to organizations and outlive personnel turnover. It is the idea that an organization can remember and retain knowledge and experience even as individual employees come and go. Idiosyncratic investment, on the other hand, refers to the unique skills and knowledge that employees bring to their jobs, which can be lost when they leave the organization. Organizational culture refers to the shared values, beliefs, and behaviors that define the character of an organization, while relationship velocity and balance are not related to the concept of relational states belonging to organizations.

Quiz 12: Managing Channel Relationships

What is the first stage of building channel commitment?

Which action taken by a downstream channel member would most likely enhance commitment in a channel relationship?

Relational governance,vertical quasi-integration,and strategic alliance are terms used to describe ________.

Which statement about commitment in a channel relationship is most likely true?

Which of the following statements would LEAST likely be made by the committed party in a channel relationship?

Before building a channel relationship with downstream partners,a manufacturer should most likely ________.

Burton Manufacturing wants to motivate downstream channel members to represent Burton products in new and current markets,but the firm does not want to build strong channel relationships.How can Burton most likely accomplish this goal?

All of the following have resulted from the relationship between Wal-Mart and P&G EXCEPT ________.

Why are more manufacturers most likely seeking committed relationships with wholesalers?

Which term best refers to a manufacturer's relationship-specific investments in a channel partner?

What is the primary reason that building strong relationships with all channel partners is unwise?

What is the primary purpose of making idiosyncratic investments?

MDF Manufacturing wants to build a committed relationship with a distributor.How would MDF most likely benefit from a committed channel relationship?

How did John Deere benefit from having strong,committed relationships with its dealer network?

What benefit of a strong,committed channel relationship is shared by both upstream and downstream channel members?

Which of the following is the best barrier to entry against future competitors?

Malcolm Motorcycles is the exclusive dealer of Harley-Davidson Motorcycles in Rhode Island.Harley-Davidson has most likely shown its commitment to Malcolm Motorcycles through ________.

Which of the following would LEAST likely increase continuity expectations in a channel relationship?

In most longstanding channel relationships,commitment is best described as ________.

Which term refers to the idea that relational states belong to organizations and outlive personnel turnover?