Chapter 12: Marketing Channels: Delivering Customer Values
Which of the following describes a just-in-time logistics system? A. Just-in-time logistics systems allow producers and retailers to carry small inventories to last for only a few days of operations. B. Just-in-time logistics systems allow producers and retailers to carry large amounts of inventory. C. Just-in-time logistic systems eliminate the need for forecasting. D. Just-in-time logistics systems ensure that new stock arrives at least one week before it is needed. E. Just-in-time logistics systems greatly increase inventory-carrying and inventory-handling costs.
A. Just-in-time logistics systems allow producers and retailers to carry small inventories to last for only a few days of operations.
The franchise organization is the most common type of __________ VMS (vertical marketing system). A. contractual B. corporate C. conventional D. horizontal E. administered
A. contractual
Companies today see channel members as first-line customers and practice strong ________. A. partner relationship management B. discount pricing strategies C. consumer advertising strategies D. trade promotion strategies E. B2B selling
A. partner relationship management
________ involves reusing, recycling, refurbishing, or disposing of broken, unwanted, or excess products returned by consumers or resellers. A. Reverse logistics B. Outbound logistics C. Warehousing D. Inventory management E. Inbound logistics
A. reverse logistics
Using ________, the customer shares real-time data on sales and current inventory levels with the supplier. The supplier then takes full responsibility for managing inventories and deliveries. A. vendor-managed inventory B. just-in-time logistics systems C. piggybacking D. RFID E. reverse logistics
A. vendor-managed inventory
Large retailers like Walmart have enormous channel control due to their size and power. Which type of channel arrangement does this represent? A. A contractual VMS B. An administered VMS C. A conventional distribution channel D. A corporate VMS E. A franchise organization
B. an administered VMS
Distribution channels are more than simple collections of firms tied together by various flows. Which of the following statements is NOT a characteristic of distribution channels? A. They are complex behavioral systems in which people and companies interact to accomplish individual, company, and channel goals. B. Channel systems stand still, restricting formation of new intermediary systems. C. Some channel systems consist of only informal interactions among loosely organized firms. D. A marketing channel consists of firms that have partnered for their common good. E. Some channels consist of formal interactions guided by strong organizational structures.
B. channel systems stand still, restricting formation of new intermediary systems
Channel members should be selected on the basis of all of the following attributes except __________. A. cooperativeness B. competitiveness C. reputation D. years in business E. growth and profit record
B. competitiveness
Channel members should be selected on the basis of all of the following attributes except __________. A. years in business B. competitiveness C. cooperativeness D. growth and profit record E. reputation
B. competitiveness
Historically, __________ have lacked leadership and power, often resulting in damaging conflict and poor performance. A. vertical marketing systems B. conventional distribution channels C. administered vertical marketing systems D. corporate vertical marketing systems E. contractual vertical marketing systems
B. conventional distribution channels
The concept of __________ recognizes that providing better customer service and trimming distribution costs require teamwork. A. supply chain management B. integrated logistics management C. physical distribution management D. warehouse management E. inventory management
B. integrated logistics management
From the producer's point of view, a greater number of levels of marketing channel means __________. A. less control and less channel complexity B. less control and greater channel complexity C. no control and greater channel complexity D. no control and no channel complexity E. more control and greater channel complexity
B. less control and greater channel complexity
In making products and services available to consumers, channel members add value. Key functions performed by the marketing channels include all of the following except __________. A. promotion B. pricing C. matching D. negotiation E. distribution of information
B. pricing
Which channel partners in a company's supply chain are upstream from a manufacturer or producer? A. Wholesalers B. Suppliers C. Customers D. Retailers E. Business distributors
B. suppliers
When the company has defined its channel objectives, it should next identify its major channel alternatives in terms of the types of intermediaries, the number of intermediaries, and ________. A. whether to use intensive or exclusive distribution B. the responsibilities of channel members C. the profitability of the channel D. economic criteria E. consumer needs
B. the responsibilities of channel members
Distribution channels are more than simple collections of firms tied together by various flows. Which of the following statements is NOT a characteristic of distribution channels? A. Some channels consist of formal interactions guided by strong organizational structures. B. They are complex behavioral systems in which people and companies interact to accomplish individual, company, and channel goals. C. Channel systems stand still, restricting formation of new intermediary systems. D. Some channel systems consist of only informal interactions among loosely organized firms. E. A marketing channel consists of firms that have partnered for their common good.
C. Channel systems stand still, restricting formation of new intermediary systems.
Which of the following is a reason that producers use marketing channels and channel intermediaries? A. Using marketing channels allows producers to retain control over how and to whom they sell their products. B. The reduced costs of using channel intermediaries offsets the inefficiencies of marketing channels. C. Marketing channel members are able to transform the assortments of products made by producers into the assortments wanted by consumers. D. Marketing channel decisions require only a short-term commitment. E. Using channel intermediaries increases the number of contacts with customers.
C. Marketing channel members are able to transform the assortments of products made by producers into the assortments wanted by consumers.
Channel members' performance should be evaluated against standards which include all of the following except __________. A. average inventory levels B. sales quotas C. channel management D. treatment of damaged and lost goods E. customer delivery time
C. channel management
Historically, __________ have lacked leadership and power, often resulting in damaging conflict and poor performance. A. vertical marketing systems B. contractual vertical marketing systems C. conventional distribution channels D. administered vertical marketing systems E. corporate vertical marketing systems
C. conventional distribution channel
A(n) __________ has no intermediary levels. A. manufacturer-sponsored wholesaler franchise system B. conventional distribution channel C. direct marketing channel D. indirect marketing channel E. manufacturer-sponsored retailer franchise system
C. direct marketing channel
When a single firm sets up two or more marketing channels to reach one or more customer segments, it is using a(n) ________. A. administered VMS B. corporate VMS C. multichannel distribution system D. contractual VMS E. franchise organization
C. multichannel distribution system
Companies now use ________ and supply chain management software to help recruit, train, organize, manage, motivate, and evaluate relationships with channel partners. A. logistics B. customer relationship management C. partner relationship management D. distribution centers E. channel management
C. partner relationship management
When setting channel objectives, companies should state the objectives in terms of ________. A. competitor's objectives B. the length of the channel C. targeted levels of customer service D. expected profitability E. exclusive distribution arrangements
C. targeted levels of consumer service
Which of the following is an example of horizontal channel conflict? A. A consumer complaining to a retailer about the service he or she received B. A consumer complaining to a producer about the quality of a product C. A retailer complaining about a producer's pricing D. A Ford dealer complaining that another Ford dealer is advertising in its territory E. A retailer complaining about receiving damaged goods from a wholesaler
D. a ford dealer complaining that another ford dealer is advertising in its territory Horizontal conflicts occurs among firms at the same levels of the channel Vertical conflict occurs between a retailer and producer
Producers of ________ typically use intensive distribution for their products. A. consumer electronics B. luxury brands C. furniture D. convenience goods E. home appliance brands
D. convenience goods
________ is a strategy in which the seller requires that dealers not handle competitors' products. A. Exclusive distribution B. Intensive distribution C. Full-line forcing D. Exclusive dealing E. Exclusive territorial agreements
D. exclusive dealing
The concept of __________ recognizes that providing better customer service and trimming distribution costs require teamwork. A. physical distribution management B. inventory management C. warehouse management D. integrated logistics management E. supply chain management
D. integrated logistics management
The length of a channel is indicated by the number of ________. A. retailers in the channel B. final consumers C. producers D. intermediary levels E. wholesalers in the channel
D. intermediary levels
From the producer's point of view, a greater number of levels of marketing channel means __________. A. no control and greater channel complexity B. more control and greater channel complexity C. no control and no channel complexity D. less control and greater channel complexity E. less control and less channel complexity
D. less control and greater channel complexity
Companies today are placing greater emphasis on logistics for several reasons, which include all of the following except __________. A. companies can gain a powerful competitive advantage by using improved logistics to give customers better service or lower prices B. logistics affects the environment and a firm's environmental sustainability efforts C. improvements in information technology have created opportunities which did not exist before D. limited product variety has created problems for logistics management E. improved logistics can yield tremendous cost savings to both a company and its customers
D. limited product variety has created problems for logistics management
One key function performed by channel members is ________, shaping offers to meet the buyer's needs, including activities such as manufacturing, grading, assembling, and packaging. A. promotion B. contact C. risk taking D. matching E. negotiating
D. matching
What is the first step in marketing channel design? A. Identifying the number of intermediaries to use B. Setting channel objectives C. Identifying the types of intermediaries to use D. Evaluating major channel alternatives E. Analyzing consumer needs
E. analyzing consumer needs
Channel members' performance should be evaluated against standards which include all of the following except __________. A. customer delivery time B. average inventory levels C. treatment of damaged and lost goods D. sales quotas E. channel management
E. channel management
The franchise organization is the most common type of __________ VMS (vertical marketing system). A. corporate B. administered C. conventional D. horizontal E. contractual
E. contractual
Sherwin-Williams sells its paint and other branded products exclusively through company-owned retail stores. Sherwin-Williams has established a(n) ________. A. administered VMS B. contractual VMS C. direct marketing channel D. conventional distribution channel E. corporate VMS
E. corporate VMS
A(n) __________ has no intermediary levels. A. manufacturer-sponsored wholesaler franchise system B. manufacturer-sponsored retailer franchise system C. indirect marketing channel D. conventional distribution channel E. direct marketing channel
E. direct marketing channel (Mary Kay Cosmetics and GEICO)
________ is a practice whereby a producer agrees to sell a brand to a dealer only if the dealer agrees to sell some or all of the rest of its line. A. Intensive distribution B. Exclusive territorial agreements C. Exclusive dealing D. Exclusive distribution E. Full-line forcing
E. full-line forcing
Companies today are placing greater emphasis on logistics for several reasons, which include all of the following except __________. A. improvements in information technology have created opportunities which did not exist before B. logistics affects the environment and a firm's environmental sustainability efforts C. improved logistics can yield tremendous cost savings to both a company and its customers D. companies can gain a powerful competitive advantage by using improved logistics to give customers better service or lower prices E. limited product variety has created problems for logistics management
E. limited product variety has created problems for logistics management
In making products and services available to consumers, channel members add value. Key functions performed by the marketing channels include all of the following except __________. A. promotion B. matching C. negotiation D. distribution of information E. pricing
E. pricing
What are the four major functions of logistics? A. Inventory management, transportation, shipping, and warehousing B. Retailing, inventory management, transportation, and logistics information management C. Warehousing, inventory management, retailing, and logistics information management D. Warehousing, inventory management, transportation, and retailing E. Warehousing, inventory management, transportation, and logistics information management
E. Warehousing, inventory management, transportation, and logistics information management
contractual VMS
a VMS in which independent firms at different levels of production and distribution join together through contracts
corporate VMS
a VMS that combines successive stages of production and distribution under single ownership-channel leadership is established through common ownership
administered VMS
a VMS that coordinates successive stages of production and distribution through the size and power of one o the parties
Horizontal marketing system
a channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity
conventional distribution channel
a channel consisting of one or more independent produces, wholesalers, and retailers, each a separate business seeking to maximize its own profits, perhaps even at the expense of profits for the system as a whole
vertical marketing system (VMS)
a channel structure in which producers, wholesalers, and retailers act as a unified system. one channel members owns the other, has contracts with them, or has so much power that they'll all cooperate
franchise organization
a contractual VMS in which a channel member, called a franchisor, links several stages in the production-distribution process
distribution center
a large, highly automated warehouse designed to receive goods from various plants and suppliers, take orders, fill them efficiently, and deliver goods to customers as quickly as possible
channel level
a layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer
indirect marketing channels
a marketing channel containing one or more intermediary level
direct marketing channel
a marketing channel that has no intermediary levels
value delivery network
a network composed of the company, supplier, distributors, and ultimately, customers who partner with each other to improve the performance of the entire system in delivering customer value
marketing channel (distribution channel)
a set of interdependent organizations that help make a products or service available for use or consumption by the consumer or business user
third-party logistics provider (3PL)
an independent logistics provider that performs any or all of the functions require to get a client's product to market
multimodal transportation
combining two or more modes of transportation
Marketing channel design
designing effective marketing channels by analyzing customer needs, setting channel objectives, identifying major channel alternatives, and evaluating those alternatives
channel conflict
disagreements among marketing channel members on goals, roles, and rewards -- who should do what and for what rewards
multichannel distribution system
distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments
exclusive distribution
giving a limited number of dealers the exclusive right to distribute the company's products in their territories
supply chain management
managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company resellers, and final consumers
marketing logistics (physical distribution)
planning, implementing, and controlling the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet customer requirements at a profit
marketing channel management
selecting, managing, and motivating individual channel members and evaluating their performance over time
intensive distribution
stocking the product in as many outlets as possible
disintermediation
the cutting out of marketing channel intermediaries by product or service produces or the displacement of traditional resellers by radical new types of intermediaries
integrated logistics management
the logistics concept that emphasizes teamwork -- both inside the company and among all the marketing channel organizations -- to maximize the performance of the entire distribution system
selective distribution
the use of more than one but fewer than all of the intermediaries that are willing to carry the company's products