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Marketing Channels

Which type of strategy did Walmart decide to use to compete with Amazon?
Mass distribution via its own online channel
Internet-based channels
have become a mainstream channel in the channel mixes of many firms.
A sustainable competitive advantage is one that
is difficult for competitors to match.
According to the text, the most promising avenue for gaining a sustainable competitive advantage today is through an emphasis on
Channel strategy
According to the text, the technology that is likely to have the greatest impact on marketing channels is
The Internet
According to the text, the confusion over the definition of the marketing channel stems mainly from which of the following causes?
The differing perspectives or viewpoints used.
The text argues that the role of marketing channels in marketing management is
Of strategic importance in many cases
Consumers often view the marketing channel as simply:
A lot of middlemen standing between them and the producer of the product
According to the view taken in the text, the marketing channel may be defined as
the external contactual organization that management operates to achieve its distribution objectives
When Wal-Mart is performing negotiatory functions, it is involved in
Transferring title, selling, and buying
A distinction is made between channel members and facilitating agencies because
The channel management problems are often different for channel members versus facilitating agencies
Management of the marketing channel frequently does not involve
Interorganizational management
When a firm finally invents the Star-Trek® Transporter, its marketing channel will come into existence only after
The negotiatory functions have taken place
Marketing channel management should be considered
A major strategic area of marketing management
The channel manager is:
Anyone in the firm who makes marketing channel decisions
Because the Sales Coordinator at Borden, Inc. makes channel decisions, he/she can be considered
A channel manager
Channel management should be viewed as
One of the major strategic areas of marketing management
Management should develop and operate the marketing channel in such a way as to
Support and enhance the other strategic variables of the marketing mix
The Coors Company has decided to focus on channel strategy as the key factor in achieving sustainable competitive advantage because
The relationship between a manufacturer and its channel members is not copied easily by competitors
Channel management is concerned mainly with
The entire process of setting up and operating the contactual organization
In general, basic decisions in channel strategy usually __________ operating decisions in logistics management
Precede
The five flows in marketing channels discussed in the text are
Ownership, product, negotiation, promotion, information
The five flows discussed in the text
Convey the dynamic nature of marketing channels
When considering the flows in the marketing channel for lawn tractors, product flows __________ and negotiation flows __________
Up the channel; both up and down
In the context of the channel flows concept, logistics involves
Management of the product flow
From the standpoint of the channel flows concept, only those parties who participate in the __________ flows are considered members of the marketing channel
Negotiation and ownership
The Internet and World Wide Web has connected millions of people and institutions and
Is an important determinant in the use of intermediaries in marketing channels
Using the concept of specialization and division of labor, a channel manager might engage in any of the following activities except
Allocate transportation of product to the retailer
The concept of specialization and division of labor
Is of equal importance in production and distribution
The only major difference between the specialization and division of labor principle as applied to a production versus a distribution situation is
Production tasks are often allocated intra-organizationally, while distribution tasks are frequently allocated inter-organizationally
The channel manager should allocate the distribution task to
Those firms that can perform them most efficiently
In the development of channel strategy, the channel manager is faced with
An allocation decision
Contactual efficiency viewed from the channel manager’s perspective is
The relationship between negotiation effort relative to achieving the distribution objective
Four heavy equipment producers decide to sell their forklifts directly to 12 warehouses. The number of contacts necessary is
48
Ten manufacturers of wallpaper all sell through one wholesaler to five retailers. The number of contacts needed for all of the manufacturers to contact all of the retailers is
15
Ten manufacturers of wallpaper all sell through one wholesaler to five retailers. The number of contacts needed for all of the manufacturers to contact all of the retailers is
15
Ten producers of garden tools all sell through one wholesaler to five retailers. The number of contacts needed for all of the manufacturers to contact all of the retailers is __________. If the wholesaler were eliminated from the channel, the number of contacts needed would be
15; 50
A hot tub manufacturer estimates it will take ten personal sales calls, each of which costs $250, and 25 phone calls, each costing $25, to get five retailers to carry its product. The measure of contactual efficiency in dollar terms is
$3,125
The channel structure depicted as M->W->R->C indicates
The channel manager has allocated distribution tasks to his/her own firm, wholesalers, retailers and consumers
Ideally, the channel manager would like to exercise __________ over which firms in the channel perform the distribution tasks
Total control
A multi-channel strategy means
A company reaches its customers through more than one channel
In order to reach its customers, Ralph Lauren apparel uses all of the following in its multi-channel strategy, except
Catalogs
For accounting firms and other producers of services
Marketing channels often include agents or brokers
In developing and managing the ancillary structure versus the channel structure, the problems faced by the channel manager are
Usually less difficult and complex
In contrast to the development of channel structure, when the channel manager develops ancillary structure, he or she is dealing with facilitating agencies that are
Outside of the channel decision-making process
Gazelle does not adequately use
Distribution channels
The fundamental determinant of whether a firm is a member of a marketing channel is
If the firm performs negotiatory functions
The basic divisions of the marketing channel are:
Producers and manufacturers; intermediaries; and final users
In the commercial channel, participants who are specifically excluded are
Consumer and industrial final users
__________ are members of the target market
Final users
Facilitating agencies:
Perform non-negotiatory functions
Which of the following is not a facilitating agency
Binney & Smith
In the context of the management perspective used in the text, it is appropriate to view final users as
Target markets
The technology and scale economies that enable producers and manufacturers to operate at a low average cost for production are
Often lacking in the performance of distribution tasks
Intermediaries’ average costs curves for distribution tend to be __________ those of manufacturers
Lower than
Procter & Gamble and Kellogg often face __________ average costs for distribution tasks when they attempt to perform them by themselves
High
Clayton Tennis Equipment, a manufacturer, cannot perform distribution tasks efficiently so it uses Jackson Sports Equipment as a wholesaler to distribute its products in the Midwest. Clayton likely is inefficient in performing distribution tasks because
Jackson can spread its fixed costs across products from multiple manufacturers
The Census of Wholesale Trade classifies wholesalers into the following three categories
Manufacturers’ sales branches and offices; agents, brokers, and commission merchants; and merchant wholesalers
The Census of Wholesale Trade classifies wholesalers as all of the following except
Full-function or limited function wholesalers.
The Census of Wholesale Trade classifies wholesalers into __________ kinds of business groups
18
___________ are firms that primarily buy, take title to, store, and physically handle products
Merchant wholesalers
During the decade from 1992 to 2002, Census data show that the percentage of total wholesale sales enjoyed by merchant wholesalers:
Decreased slightly
Agents, brokers, and commission merchants’ percentage of total wholesale sales in 2002 was
9% to 14%
In recent years, trends in wholesaling are showing a tendency towards
Consolidation
Most wholesalers could be characterized with regard to their size as:
Relatively small businesses
Absolute sales of all three types of wholesalers _________ during the period 1992 to 2002
Increased substantially
Sales patterns of the different types of wholesalers since 1948 have
Varied across different types of wholesalers
Economic concentration in terms of percentage of total wholesale sales enjoyed by most merchant wholesalers in their respective line of trade is
Relatively low
Merchant wholesalers are particularly well suited for performing all of the following distribution tasks for their suppliers except
Serving as the firms’ outside sales force
Several studies, including the Brown and Herring report, suggest the wholesaler’s role in __________ will grow even more important to manufacturers
providing sales contacts
Customer support provided by merchant wholesalers to manufacturers is often referred to as
Value-added services
Merchant wholesalers are not involved in
Rendering services pertaining to the sale of goods
_____________ refers to the wholesaler’s ability to bring together an assortment of products from a variety of manufacturers
Assortment convenience
Agents and brokers
Do not take title to goods
Agents, brokers, and commission merchants generally
do not take title to products
Manufacturers’ agents are often referred to as
Manufacturer’s representatives
Which of the following is a false statement about the manufacturer’s sales branches of Bella Manufacturing, Inc.?
The branches service regions of the country
A basic phenomenon in the ranks of retailers since 1948 has been
The increase of average sales per store
Between 1948 and 2002 for retail establishments
Average sales increased and the number of stores decreased
Trends in retailing in the U.S. suggest
Average dollar sales per store has increased
General merchandise, single line stores, and specialty stores are so named based on which of the following classification bases?
Kind of business
Which of the following would not be classified as retailers?
food broker
Distribution tasks that were formerly the province of the wholesaler or manufacturer have increasingly
Been taken over by larger retailers
Stores that dominate a particular line of merchandise and have large shares of the market are often referred to as
Category killers
The potential of retail intermediaries for performing distribution tasks
Has increased
The Census of Retail Trade classified retailers into _____ major groups by kind of business
12
Economic concentration in many kinds of retail businesses is
Increasing
Virtually all retailers serve as
Selling agents for their suppliers
All of the following are reasons for retailers gaining power in the marketing channels except
Increased expertise of managers
Retailers have been using scanner data to perform all of the following except
Pay and promotion analysis
“Threetailing” is a term used to describe
The convergence of in-store, catalog, and online channels
Kohl’s discount department store has used all of the following techniques of marketing strategy except
Increase use of multi-media advertising techniques
Which of the following is a false statement about Fresh Market’s use of marketing strategy to reach its target market?
The store size is larger than those of major competitors
The term “gatekeeper” as used in the textbook refers to
The power of retailers in the channel
For channel managers, what are variables in the external environment?
Interest rates, emerging competitors, birth rates, inflation rates
For the channel manager, the external environments can be ranked, from most important to least important, as:
There is no single sequence for all industries at all times
The channel manager must analyze the external environment in terms of its impact on:
All channel participants
According to the text, the most pervasive and obvious environmental force affecting managers in all kinds of business and nonbusiness organizations has been:
Economic environment
By the close of the 20th century, it was said about recessions that
Information technology could be used to warn businesses of potential economic slowdowns and companies could make adjustments
To deal with inflation and recession, channel managers should do all of the following except
Increase production and inventory
The “official” definition of a recession among professional economists is:
Two consecutive quarters of decline in GDP
As consumer spending slows down in recessionary periods, marketing channels for __________ usually feel the impact earliest
consumer durable goods
Which of the following is a false statement about the 2007-2008 recession?
Consumer spent less on the Internet
In a recession, intermediaries are at greatest risk if:
They cannot sell their heavy inventories
During recessionary periods, channel members at the wholesale and retail levels are likely to
Lose sales volume
In inflationary times, channel members can expect consumer spending to
Be unpredictable
In inflationary times, intermediaries generally can be expected to
Pressure manufacturers for special deals
To help intermediaries through periods of high inflation, manufacturers can do all of the following except
Decrease inventory turnover
Deflation on a wide scale resulting in a decline in prices across a broad spectrum of goods and services
Has not occurred in the U.S. since the 1930s
Other economic issues of concern to channel members include all of the following except
New companies entering the marketplace
The real interest rate is
The nominal rate of interest minus the inflation rate
When the value of the U.S. dollar is high
The price of U.S. products increases relative to foreign products
During periods of low inflation
It becomes more difficult to pass price increases through the channel
During periods of low inflation, passing price increases through the channel
Becomes more difficult
To cope with periods of slow economic growth, channel managers need to
Increase productivity
Competition between Kmart and Wal-Mart is an example of
Horizontal competition
“Competition between an independent hardware store and the hardware department of a Sears store is an example of
Intertype competition
McDonald’s competition with Burger King is an example of
Horizontal competition
A wholesaler attempts to secure retailer acceptance for its own brand of guitars. That wholesaler also carries similar guitars from a manufacturer of a nationally known brand. This is an illustration of
Vertical competition
Vertical marketing systems are typically divided into the following three basic categories
Administered, contractual, and corporate
Pure Play e-tailers, such as Amazon and Etoys, competing with ‘bricks and mortar’ companies is an example of what type of competition?
Intertype
Gift wrapping paper on a grocer’s shelf is an example of
Scrambled merchandise
Retailers like to sell their own brands because of all of the following except
Consumers prefer private label products
_______________ is the tem most commonly used to describe interconnectedness and interdependencies of countries around the world
Globalization
“____________ has created world-class customer expectations that need to be satisfied through world-class channel strategy, design and management.”
Globalization
In some of the countries in Tropical Africa, very long channels with many layers of intermediaries are common. Such channel structures within the sociocultural context of
Rational and reasonably efficient
The Japanese distribution system that links together manufacturers, wholesalers and retail sales outlets is called
Keiretsu
___________ is the term that refers to interaction in networks comprised of individuals or organizations that are linked together based on some type of common interest
Social networking
From a marketing channels perspective, social networking has
It has made consumers more demanding about the channels they choose
Changes in technology occur:
Do not occur evenly or predicatively change over time
Computerized inventory control systems available to all channel members will mean
More time for the manufacturer to plan production schedules
A relatively new technology that uses an electronic tag to track people or products using radio waves is called?
RFID tag
All technology has both up sides and down sides. To manufacturers, the downside of electronic scanners and computerized inventory control systems is
Retailers react very quickly to sales and thus can suddenly stop ordering slow-selling product
Which of the following is not a relatively new type of technology that can have a major impact on marketing channels?
Uniform Product Codes
An Internet-based technology that enables both large and small businesses and organizations to utilize computer applications without having to have their own hardware, software, office computing space, and staff is called
Cloud computing
The channel manager must __________ the legal environment as it affects the channel
have a general knowledge of
The Simplicity Pattern case indicates that manufacturers
Cannot assume the courts will rule that retailers with different operating characteristics are not in competition
K&B Products, a producer of perfumes, prohibits its intermediaries from selling competitive perfume products. K&B is engaged in
Exclusive dealing
A piece of federal legislation that specifically deals with price discrimination is the
Robinson-Patman Act
The _______________ Act passed in 1914 granted powers to investigate and enforce unfair methods of competition in interstate commerce
Federal Trade Commission
A federal act that specifically deals with the anticompetitive issues of acquisitions and mergers through vertical integration is the
Celler-Kefauver Act
An increasing number of manufacturers are opening their own stores that carry the same merchandise sold by independent retailers. This practice introduces a potential legal question regarding
Dual distribution
When Häagen Dazs, the Pillsbury-owned premium ice cream company, told its wholesalers that its policy was to sell only through wholesalers that did not sell competing products, Häagen Dazs was engaging in
Exclusive dealing
When a supplier requires its channel members to carry a broad group of its products in order to sell any particular product in the supplier’s line, the supplier is involved in
Full-line forcing
Price maintenance laws enacted by state governments that allowed retail price fixing, were no longer exempted from federal antitrust legislation with the repeal of the
Miller-Tydings and McGuire Acts
The “Colgate Doctrine” is
The legal basis for sellers to use their own criteria and judgment in selecting channel members
Territorial restrictions constitute one of the major types of
Resale restrictions
Interbrand competition versus intrabrand competition has been evaluated by the courts in considering
Resale restrictions
Dual distribution occurs when
Two or more different channel structures for the same product exist
The Business Electronics Corp. v. Sharp Electronics Corp. case has generally
Made it easier for manufacturers to exercise price control over channel members
An example of ____________ occurred when Microsoft included the Internet Explorer software into its Windows operating system
a tying agreement
_____________ exist(s) when a supplier requires its channel members to carry a broad line of its products
Full-line forcing

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