Question 1

Which of the following is a vertical marketing system that typically involves single ownership of two or more levels of a channel?
A)An administered system
B)A contractual system
C)A franchisee system
D)A corporate system

Accepted Answer

A corporate system involves single ownership of two or more levels of a channel, making it a vertically integrated system. An administered system is a loosely coordinated system where one member takes the lead in managing the channel, but other members are largely independent. A contractual system involves independent firms at different levels of the channel who join through contracts to obtain economies of scale and coordination. A franchisee system involves an independent dealer who operates under a licensed franchise agreement with a supplier or manufacturer.

Question 2

_____ are channels in which members are more dependent on one another and develop long-term working relationships in order to improve the efficiency and effectiveness of the system.
A)Channel integration systems
B)Vertical marketing systems
C)Parallel marketing channels
D)Systemic marketing channels

Accepted Answer

The description matches the characteristics of vertical marketing systems, where members work closely together and depend on each other to improve the overall efficiency and effectiveness of the system.

Question 3

Forward integration is typically evident when a:
A)manufacturer purchases wholesalers.
B)wholesaler purchases manufacturers.
C)producer sells wholesalers to retailers.
D)retailer purchases manufacturers.

Accepted Answer

Forward integration occurs when a company moves down the supply chain, gaining control over distribution or retail. When a manufacturer purchases wholesalers, it is moving forward in the supply chain.

Question 4

Which of the following vertical marketing systems is characterized by the presence of a channel leader?
A)Administered systems
B)Contractual systems
C)Structured systems
D)Corporate systems

Accepted Answer

Administered systems are characterized by the presence of a channel leader, which is a powerful organization that coordinates and controls the activities of other channel members.

Question 5

Which of the following is true of a corporate vertical marketing system?
A)It unites independent retailers for the purposes of pool buying to improve their competitive position.
B)It has a strong channel leader at or near the end of the channel.
C)It is exemplified by the franchise system of a popular apparel store.
D)It involves a manufacturer's single ownership of two or more levels of a channel.

Accepted Answer

A corporate vertical marketing system involves a manufacturer's single ownership of two or more levels of a channel, such as owning both the manufacturing and retailing stages.

Question 6

The dependence in administered vertical marketing systems can result from the existence of a strong:
A)buyer preference.
B)corporate system.
C)channel leader.
D)distributor network.

Accepted Answer

The dependence in administered vertical marketing systems often results from the presence of a channel leader who has significant power or influence over the distribution chain. This channel leader may act as a coordinator or integrator of the various levels within the system, facilitating communication, setting goals, and enforcing policies. The other options (buyer preference, corporate system, distributor network) do not necessarily imply a hierarchical or systemic relationship that would generate dependence.

Question 7

Which of the following is true of wholesaler-sponsored voluntary chains?
A)They involve a parent company and an independent firm entering into a contractual relationship to set up and operate a business in a particular way.
B)They involve a group of independent retailers uniting and agreeing to pool buying and managerial resources to improve competitive position.
C)They involve a wholesaler contracting with a number of retailers performing channel functions for them.
D)They involve a retailer assuming ownership of a primary manufacturer through the presence of a channel leader.

Accepted Answer

Wholesaler-sponsored voluntary chains involve a wholesaler contracting with a number of independent retailers to perform certain channel functions for them, such as bulk purchasing, marketing, and distribution, to improve competitiveness against larger chains.

Question 8

GreenFizz,a popular beverage manufacturer,licenses wholesalers in various markets to buy its syrup concentrate.These wholesalers are then allowed to process it further by carbonating and packaging GreenFizz's products to sell to retailers in their local markets.In this case,GreenFizz is participating in a(n)_____ vertical marketing system.
A)selective
B)administered
C)corporate
D)contractual

Accepted Answer

GreenFizz is using a contractual vertical marketing system because they are licensing wholesalers to carry out specific tasks, such as carbonating and packaging, in exchange for the right to sell GreenFizz's products in their local markets. The terms of this agreement are outlined in a contract between GreenFizz and the wholesalers.

Question 9

In the context of vertical marketing systems,_____ are the most similar to conventional channels.
A)administered systems
B)contractual systems
C)structured systems
D)corporate systems

Accepted Answer

Administered systems are the most similar to conventional channels because they rely on informal relationships and control from a dominant channel member, such as the manufacturer or a large retailer. While there may be some cooperation and coordination between members, there is no formal contractual arrangement or ownership of the other members. This is similar to a conventional channel where the manufacturer may have some control over distribution, but ultimately the retailers are independent entities making their own decisions.

Question 10

Which of the following is true of administered vertical marketing systems?
A)They involve a parent company and an independent firm entering into a contractual relationship to set up and operate a business in a particular way.
B)They involve a group of independent retailers uniting and agreeing to pool buying and managerial resources to improve competitive position.
C)They involve a wholesaler contracting with a number of retailers performing channel functions for it.
D)They involve a high degree of interorganizational planning and management and depend on the presence of a channel leader.

Accepted Answer

Administered vertical marketing systems involve a high degree of interorganizational planning and management and depend on the presence of a dominant channel leader who coordinates the activities of other channel members. This leader can be a manufacturer or a retailer who has substantial control over other channel members.

Question 11

Which of the following is true of retail cooperative organizations?
A)They involve a parent company and an independent firm entering into a contractual relationship to set up and operate a business in a particular way.
B)They involve a group of independent retailers uniting and agreeing to pool buying and managerial resources to improve competitive position.
C)They involve a wholesaler contracting with a number of retailers performing channel functions for them.
D)They involve a retailer assuming ownership of a primary manufacturer through the presence of a channel leader.

Accepted Answer

Retail cooperative organizations involve a group of independent retailers uniting and agreeing to pool buying and managerial resources to improve their competitive position. This allows them to achieve economies of scale and compete with larger retailers. The other options do not accurately describe retail cooperative organizations.

Question 12

Curexa,a popular health food store,obtains over 50 percent of the goods it sells in its retail stores from wholesalers that it partially or wholly owns.In this case,Curexa is participating in a _____ vertical marketing system.
A)retail cooperative
B)contractual
C)selective wholesale
D)corporate

Accepted Answer

In a corporate VMS, a single entity controls the entire distribution channel, from production to retail. Therefore, as Curexa wholly or partially owns the wholesalers from which it obtains over 50% of its goods, it is participating in a corporate VMS.

Question 13

Which of the following is a type of contractual vertical marketing systems where a group of independent retailers unite and agree to pool buying and managerial resources to improve competitive position?
A)Retail cooperative organizations
B)Wholesaler-sponsored voluntary chains
C)Retail franchising programs
D)Wholesaler corporate channel programs

Accepted Answer

Retail cooperative organizations involve a group of independent retailers pooling their resources to improve their competitive position. The cooperative may involve joint buying, marketing, and even shared ownership of distribution centers. Examples of retail cooperatives include Ace Hardware and Associated Grocers. Wholesaler-sponsored voluntary chains (B), retail franchising programs (C), and wholesaler corporate channel programs (D) are all other types of contractual vertical marketing systems, but they do not involve independent retailers pooling their resources like retail cooperatives do.

Question 14

A corporate vertical marketing system is exemplified by:
A)a florist shop that buys from a wholesale plant nursery.
B)a coffee producer who owns one of his regular retailers.
C)the relationship of an independent retail giant with its suppliers.
D)the franchise system of a popular apparel store.

Accepted Answer

A corporate vertical marketing system involves a single company that owns and controls all stages of production and distribution. In this case, the coffee producer owns one of their regular retailers, allowing them to have complete control over the distribution of their product. Option A is an example of a conventional vertical marketing system; Option C is an example of a contractual vertical marketing system; and Option D is an example of a franchise system, which is a type of contractual vertical marketing system.

Question 15

Which of the following views of distribution channels recognizes that much can be gained by developing long-term commitments and harmony among channel members?
A)Channel integration
B)Vertical marketing
C)Relationship marketing
D)Strategic maneuvering

Accepted Answer

Relationship marketing recognizes the value of building long-term relationships and harmony between channel members to maximize benefits for all parties involved. This approach emphasizes communication, trust, and cooperation among channel partners. It is focused on creating and maintaining mutually beneficial partnerships that allow all parties to achieve their goals and objectives.

Question 16

Which of the following is true of franchises?
A)They involve a parent company and an independent firm entering into a contractual relationship to set up and operate a business in a particular way.
B)They involve a group of independent retailers uniting and agreeing to pool buying and managerial resources to improve competitive position.
C)They involve a wholesaler contracting with a number of retailers performing channel functions for them.
D)They involve a retailer assuming ownership of a primary manufacturer through the presence of a channel leader.

Accepted Answer

Franchises involve a parent company and an independent firm entering into a contractual relationship to set up and operate a business in a particular way. The independent firm, or franchisee, pays a fee and agrees to follow certain rules and guidelines set by the parent company, or franchisor, in exchange for the right to use the brand name and business model.

Question 17

A retail cooperative organization,a wholesaler-sponsored voluntary chain,and various franchising programs are the three major types of _____ vertical marketing systems.
A)administered
B)contractual
C)structured
D)corporate

Accepted Answer

The three major types of vertical marketing systems are administered, contractual, and corporate. Among these, retail cooperative organizations, wholesaler-sponsored voluntary chains, and franchising programs are all examples of contractual vertical marketing systems in which independent firms work together by contract to accomplish a coordinated marketing objective. Therefore, the best choice is B) contractual.

Question 18

_____ is a manufacturer's purchase of wholesalers or retailers who distribute its products.
A)Forward integration
B)Contractual marketing
C)A manufacturer-sponsored voluntary chain
D)A franchising program

Accepted Answer

Forward integration involves the manufacturer purchasing the distribution channels that sell its products, including wholesalers and retailers. The other options listed involve marketing arrangements between the manufacturer and the distributors, but do not involve direct ownership or control of the distribution channels.

Question 19

An administered vertical marketing system is exemplified by:
A)an independent retailer uniting with other retailers to manage resources jointly.
B)the franchise program of a parent company with an independent contractor.
C)the long-term relationship of a popular retailer with its regular suppliers.
D)a wholesaler who contracts with many retailers to carry out distribution.

Accepted Answer

An administered vertical marketing system involves a dominant player in the supply chain exerting control over the other participants. In this case, the popular retailer is the dominant player, and they use their influence to coordinate activities with their regular suppliers. This allows for efficient coordination and communication between the two parties, which can benefit both the retailer and the suppliers.

Question 20

A contractual vertical marketing system is exemplified by:
A)a florist shop that buys from a wholesale plant nursery.
B)a coffee producer who owns a chain of coffee shops.
C)the relationship of a popular grocery chain of stores with its suppliers.
D)the franchise system of a reputed sandwich brand.

Accepted Answer

A contractual vertical marketing system involves independent firms at different levels of production and distribution integrating their programs on a contractual basis to obtain more economies or sales impact than they could achieve alone. The franchise system of a reputed sandwich brand is a prime example of this, where the franchisor and franchisees operate under an agreed contract to sell the franchised products or services.

Quiz 10: Distribution Strategy

Which of the following is a vertical marketing system that typically involves single ownership of two or more levels of a channel?

_____ are channels in which members are more dependent on one another and develop long-term working relationships in order to improve the efficiency and effectiveness of the system.

Forward integration is typically evident when a:

Which of the following vertical marketing systems is characterized by the presence of a channel leader?

Which of the following is true of a corporate vertical marketing system?

The dependence in administered vertical marketing systems can result from the existence of a strong:

Which of the following is true of wholesaler-sponsored voluntary chains?

In the context of vertical marketing systems,_____ are the most similar to conventional channels.

Which of the following is true of administered vertical marketing systems?

Which of the following is true of retail cooperative organizations?

Curexa,a popular health food store,obtains over 50 percent of the goods it sells in its retail stores from wholesalers that it partially or wholly owns.In this case,Curexa is participating in a _____ vertical marketing system.

Which of the following is a type of contractual vertical marketing systems where a group of independent retailers unite and agree to pool buying and managerial resources to improve competitive position?

A corporate vertical marketing system is exemplified by:

Which of the following views of distribution channels recognizes that much can be gained by developing long-term commitments and harmony among channel members?

Which of the following is true of franchises?

A retail cooperative organization,a wholesaler-sponsored voluntary chain,and various franchising programs are the three major types of _____ vertical marketing systems.

_____ is a manufacturer's purchase of wholesalers or retailers who distribute its products.

An administered vertical marketing system is exemplified by:

A contractual vertical marketing system is exemplified by: