Chapter 14

D.) Channel conflict (Channel members may have conflicting goals resulting in channel conflict.)

Almost a million fans are willing to buy subscriptions to watch Major League Baseball (MLB) games online at MLB.com. That business is worth more than $100 million to MLB. But this online broadcast takes those fans away from the broadcasters that pay MLB hundreds of millions of dollars for the right to carry the games. Which of the following is likely to occur between MLB and broadcast television? A.) Horizontal market share B.) Lateral channel takeover C.) Niche market conflict D.) Channel conflict E.) Market share conflict

D.) logistical (Storing for later sale to retailers is a logistical function.)

Serenity is a manufacturer of outdoor fountains that are popular in gardens. Even though fountains represent a product category that does not sell year-round due to inclement weather, Serenity's sales remain steady all year because it sells to wholesale distributors that stock the product. Serenity sells to wholesale distributors that perform _____ functions for the manufacturer. A.) financial B.) transactional C.) Facilitating D.) logistical E.) promotional

B.) contact efficiency (Marketing channels provide contact efficiencies by reducing the number of stores customers must shop in to complete their purchases.)

Marketing channels make distribution simpler by reducing the number of transactions required to get products from manufacturers to consumers. This is called: A.) forward integration B.) contact efficiency C.) elimination of temporal discrepancies D.) sorting E.) reciprocity

C.) Exclusive (This is the definition of exclusive distribution.)

Which level of distribution intensity is the most restrictive and entails establishing only one or a few dealers within a given geographic area? A.) Selective B.) Intensive C.) Exclusive D.) Dual E.) Premium

B.) Logistics (This describes the logistics function.)

_____ describes the process of strategically managing the efficient flow and storage of raw materials, in-process inventory, and finished goods from point of origin to point of consumption. A.) Contract logistics B.) Logistics C.) Cross-docking D.) Disintermediation E.) Channel facilitation

C.) industrial distributors (Industrial distributors are used for distributing industrial, not consumer, products.)

All of the following are typical channel members in marketing channels for consumer products EXCEPT: A.) retailers B.) agent/brokers C.) industrial distributors D.) producers E.) wholesalers

E.) do not take title to merchandise (Agents and brokers represent retailers, wholesalers, or manufacturers in sales situations, but the agent or broker generally has little input into the terms of the sale. Agents and brokers generally receive a fee or commission and do not take title, control, or risk concerning the merchandise.)

Agents and brokers: A.) have a great deal of control and risk invested in the goods B.) only represent manufacturers in sales situations C.) have a great deal of input on the terms of the sale D.) generally are on salary with the manufacturer E.) do not take title to merchandise

D.) marketing channel or channel of distribution (A marketing channel is a business structure of interdependent organizations that reaches from the point of product origin to the consumer.)

Kayak.com is a company that allows customers to efficiently search databases to find the best airline and hotel deals all over the Web. Kayak does not make bookings but rather provides recommendations for the best travel plans. Travel providers pay Kayak a commission when customers click through to their sites. Kayak.com, travelers, the airlines, and the hotels are all part of a: A.) facilitating agency B.) marketing mix intermediary C.) selective promotion channel D.) marketing channel or channel of distribution E.) transportation channel or channel of movement

D.) strategic channel alliance (Strategic channel alliances use another manufacturer's already-established channel and are used when the creation of marketing channel relationships may be expensive and time-consuming.)

When Delphi-Grundig, a manufacturer of state-of-the-art car radios, decided to expand its marketing efforts into countries in which its products are not currently available, it did not have the time or resources to spend on developing new channels of distribution. Delphi-Grundig should consider a(n): A.) industrial distributor B.) franchising system C.) reverse channel D.) strategic channel alliance E.) channel cooperative

C.) Cooperative (Cooperative relationships are between companies that take the form of informal partnership with moderate levels of trust and information sharing as needed to further each company's goals.)

Which channel relationship is less ambiguous than an arm's-length relationship but without the longer-term and/or capital investment required to achieve full integration? A.) Negotiated B.) Functional C.) Cooperative D.) Hierarchical E.) Intermediate

E.) Integrated (Integrated relationships are tightly connected, with linked processes across and between firm boundaries and high levels of trust and interfirm commitment.)

_____ distribution channel relationships are situations where one company, or several companies acting as one, performs all channel functions. A.) Arm's-length B.) Functional C.) Cooperative D.) Hierarchical E.) Integrated

C.) Dual (Dual distribution (multiple distribution), is the use of two (or more) channels to distribute the same product to target markets.)

_____ distribution occurs when a producer selects two or more different channels to distribute the same products to target markets. A.) Selective B.) Intensive C.) Dual D.) Contractual E.) Cumulative

A.) horizontal conflict (Horizontal conflict occurs among channel members at the same level--retail in this example.)

Goodyear tire dealers were hurt financially when Goodyear made the decision to distribute its tires through retailers such as Sears and Walmart in addition to the exclusive dealerships it had established. The conflict that occurred at the retail level is an example of: A.) horizontal conflict B.) trade loading C.) value-added pricing D.) exclusive distribution E.) channel partnering

C.) Channel partnering (This is the definition of channel partnering, which is also called channel cooperation.)

_____ is the joint effort of all channel members to create a channel that serves customers and creates a competitive advantage. A.) Selective partnering B.) Direct distribution C.) Channel partnering D.) Intensive integration E.) Closed channel distribution

D.) Gray marketing (These channels include unauthorized channels intermediaries.)

_____ occurs when products are distributed through unauthorized marketing channels. A.) Black marketing B.) Countertrading C.) Channel malfeasance D.) Gray marketing E.) Reverse channeling

D.) temporal (This is the definition of a temporal discrepancy.)

A(n) _____ discrepancy is created when a product is produced but a consumer is not ready to purchase it. A.) quantity B.) supply C.) possession D.) temporal D.) assortment

E.) Possession

All of the following are sorting activities EXCEPT: A.) assorting B.) accumulation C.) sorting out D.) allocation E.) possession

A.) allocating (Allocating is breaking a homogeneous supply into smaller and smaller lots ("breaking bulk").)

Breaking bulk at the wholesale level is called: A.) allocating B.) accumulation C.) storing D.) downsizing E.) grading

B.) multiple (Multiple distribution occurs when a producer selects two or more different channels to distribute the same products to target markets.)

Customers can purchase Hewlett-Packard computers from retail stores like Best Buy and Office Depot, online directly from HP, and through various catalogs. HP is using a(n) _____ distribution arrangement. A.) intensive B.) multiple C.) exclusive D.) cumulative E.) aggregated

C.) discrepancy of assortment (A manufacturer may only produce one product, yet additional products may be required to actually use the first product. This creates a discrepancy of assortment.)

McKesson Wholesalers provides healthcare products to pharmacies. It purchases bandages, gauze, antibacterial cream, and ointments from a variety of different manufacturers and resells them to pharmacies so that many of the items a customer might need for a cut will be available in the store. McKesson is aiding consumers by overcoming a: A.) spatial discrepancy B.) discrepancy of quantity C.) discrepancy of assortment D.) demand discrepancy E.) discrepancy of possession

C.) cooperative (Cooperative channel relationships include nonequity agreements such as franchising and licensing as well as equity-based joint ventures and strategic alliances.)

Some countries, such as the Peoples Republic of China and to some extent India, require foreign companies to form joint ventures with domestic firms in order to enter a market. This requirement often forces technology transfers and managerial control to the domestic partner. These types of equity agreements also require the establishment of a(n) _____ channel relationship. A.) arm's-length B.) functional C.) cooperative D.) hierarchical E.) integrated

D.) direct channel (Direct channels are typical in business and industrial markets.)

Vutek manufactures printing machines used to print high-resolution graphics for billboards, bus cards, banners, and posters. For distribution, you would expect Vutek to use a: A.) network of facilitating agents B.) horizontally integrated channel C.) reciprocal channel D.) direct channel E.) vertical marketing system

C.) vertical conflict (This describes vertical conflict, which typically occurs between the manufacturer and wholesaler or between the manufacturer and retailer.)

Channel conflict that occurs between different levels in a marketing channel is referred to as: A.) horizontal conflict B.) primary conflict C.) vertical conflict D.) secondary conflict E.) parallel conflict

C.) channel power (Channel power is the capacity of a particular marketing channel member to control or influence the behavior of other channel members.)

Wal-Mart is the largest retailer in the world, and many consumer packaged-goods manufacturers like Kraft have offices in Bentonville, Arkansas, where Wal-Mart is headquartered. Wal-Mart has the ability to influence manufacturers to lower their prices so that it can deliver on its low-price guarantee to consumers. Wal-Mart possesses: A.) channel influence B.) channel supremacy C.) channel power D.) channel exclusivity E.) channel clout

B.) A hair salon (A hair salon is the only service listed.)

Which of the following businesses is most likely to have a problem with distribution because production and consumption of the product occurs simultaneously? A.) A company that manufacturers bicycles B.) A hair salon C.) A retailer that sells mattresses D.) A soft drink bottler E.) A wholesaler that specializes in athletic equipment

D.) spatial (Markets are often scattered over large geographic regions, yet a manufacturer may only have one location in the country. This creates a spatial discrepancy.)

YKK slide fasteners (zippers) are made in Macon, Georgia, yet manufactures all over the world use zippers to manufacture, clothes, luggage, shoes, and other items. Wholesalers around the world primarily help to overcome a(n) _____ discrepancy. A.) creation B.) temporal C.) assortment D.) spatial E.) ownership

D.) selective (Selective distribution is achieved by screening dealers to eliminate all but a few in any single geographic area. Shopping goods and some specialty goods that consumers are willing to search for are sold by selective distribution.)

Husqvarna Viking manufactures sewing machines. The company carefully screens its dealers to ensure a quality dealer image and service ability. Only a few dealers are chosen in any single geographic area. This is an example of _____ distribution. A.) dual B.) intensive C.) exclusive D.) selective E.) controlled

C.) Cooperative (Cooperative channel relationships include nonequity agreements such as franchising and licensing as well as equity-based joint ventures and strategic alliances.)

In 1935, Howard Johnson teamed up with Reginald Sprague to establish the first modern restaurant franchise. Their idea was to let independent operators use the same name, food, supplies, logo and even building design in exchange for a fee. In terms of the type of channel relationships established, this nonequity agreement would require a _____ relationship. A.) negotiated B.) functional C.) cooperative D.) hierarchical E.) segregated

E.) direct channel (Producers use the direct channel to sell directly to consumers.)

One configuration of a marketing channel entails producers selling to consumers with no intermediaries involved. This is called a: A.) limited distribution system B.) conventional channel C.) vertical marketing system D.) reciprocal channel E.) direct channel

D.) Selective (Selective distribution is achieved by screening dealers to eliminate all but a few in any single geographic area. Shopping goods and some specialty goods that consumers are willing to search for are sold by selective distribution.)

Polo brand apparel is only available in fine department stores or from Polo retail stores. Which distribution strategy has Polo adopted? A.) Extensive B.) Intensive C.) Premium D.) Selective E.) Pioneering

C.) a strategic channel alliance (A strategic channel alliance is a cooperative agreement between businesses to use each other's already-established distribution channels.)

Selfridges is the second-largest department store in Great Britain. It works with House of Frasier, one of its competitors, to reduce operating costs by sharing channels of distribution to ship goods from 1,500-plus suppliers. Selfridges and House of Frasier are engaged in: A.) vertical conflict B.) an integrated supply chain C.) a strategic channel alliance D.) an information-based distribution channel E.) a distribution cooperative

A.) channel power (Channel power is a channel members' ability to control or influence the behavior of other channel members.)

The capacity of a particular marketing channel member to control or influence the behavior of other channel members is known as: A.) channel power B.) channel conflict C.) channel control D.) channel dominance E.) channel inversion

A.) spatial (This is the definition of a spatial discrepancy.)

The difference between the location of a producer and the location of widely scattered markets represents a(n) _____ discrepancy. A.) spatial B.) temporal C.) assortment D.) quantity E.) ownership

D.) take title to the products they sell (Taking title means they own the merchandise and control the terms of the sale.)

The major characteristic that is used to differentiate among types of intermediaries is whether they: A.) install exchange barriers such as location, time, and quantity B.) create specialization of labor C.) create economies of scale D.) take title to the products they sell E.) raise profit margins for independent middlemen

E.) physical distribution and sorting

Transactional channel functions include all of the following activities EXCEPT: A.) contacting buyers B.) promoting the products to be sold C.) taking the risks associated with product inventories D.) negotiating the sale E.) physical distribution and sorting

D.) marketing channel or channel of distribution (This is the definition of a marketing channel, also called the channel of distribution.)

A _____ is a business structure of interdependent organizations that reaches from the point of product origin to the consumer. A.) facilitating agency or place member B.) marketing mix intermediary C.) selective distribution channel D.) marketing channel or channel of distribution E.) transportation channel or channel of movement

B.) channel captain (The channel captain is a member of a marketing channel that exercises authority and power over the activities of other channel members.)

A channel leader is also called a(n): A.) intermediary leader B.) channel captain C.) channel facilitator D.) distribution supervisor E.) channel gatekeeper

E.) temporal (A temporal discrepancy is created when a product is produced but a consumer is not ready to purchase it.)

Cutter & Buck is a high-end fashion sportswear company. Even though swimwear is a product category that does not sell year-round, its sales remain steady all year because Cutter & Buck sells to wholesale distributors that stock the product. Its wholesale distributors are helping to overcome a(n) _____ discrepancy. A.) assortment B.) spatial C.) possession D.) quantity E.) temporal

C.) channel leader (The channel captain is a member of a marketing channel that exercises authority and power over the activities of other channel members. DeBeers has control over delivery, inventory, and so on.)

DeBeers sells most of the diamonds it produces to industry. The company controls over 90 percent of the market and has great power over its distributors. In its marketing channel, DeBeers would be considered a: A.) channel authority B.) channel member C.) channel leader D.) channel gatekeeper E.) power broker

A.) possession (Channels facilitate the end goal of possession of the goods, but they do not help to overcome a discrepancy of possession.)

Distribution channels aid in overcoming barriers to exchange that are created in the production process by overcoming all of the following types of discrepancies EXCEPT: A.) possession B.) assortment C.) quantity D.) spatial E.) temporal

A.) product characteristics, buyer consideration, and market characteristics (The correct answer combines both internal and external elements. The internal elements can be controlled by the manufacturer, while external environmental factors cannot.)

Generally, _____ determine what type of intermediary a manufacturer should use: A.) product characteristics, buyer consideration, and market characteristics B.) only internal environmental characteristics C.) competitive conditions and government regulations D.) all controllable marketing factors E.) only noncontrollable environmental factors

A.) channel captain (A channel captain exercises authority and power over the other channel members.)

Honda uses just-in-time manufacturing to build its Odyssey minivans. Five companies that make component parts for the Honda Odyssey relocated to Alabama and states bordering Alabama when Honda announced plans to build a new Odyssey manufacturing plant in Alabama. This relocation in order to provide efficient delivery of goods indicates that Honda is a: A.) channel captain B.) horizontal integrator C.) distribution champion D.) distribution ombudsman E.) demand maverick

A.) dual or multiple distribution (Horizontal conflict occurs when more than one channel is used to handle the same brand.)

Horizontal channel conflict occurs most often when manufacturers practice: A.) dual or multiple distribution B.) trade loading C.) promotional pricing D.) direct distribution E.) channel distribution

E.) gray marketing (Gray marketing occurs when products are distributed through unauthorized marketing channels.)

It seems counterintuitive, but Jon Jordan, CEO of Southern Audio Services (SAS) in Baton Rouge, wants to curb the number of dealers who are selling his car speakers. Jordan understands that he can't handpick all his vendors, but he never expected the rise in unauthorized dealers that came with the e-commerce boom. When Jordan decided to look for the SAS name on eBay, he came up thousands of sellers. These eBay sellers are engaging in: A.) black marketing B.) channel malfeasance C.) counter trading D.) reverse channeling E.) gray marketing

C.) channel captain (A channel captain or channel leader is a member of the marketing channel that exercises authority and power over the activities of other members in the channel.)

Johns Manville is the only manufacturer to offer a complete line of formaldehyde-free fiberglass building insulation, which offers superior energy efficiency in hard-to-reach cathedral ceilings and flat roof cavities; plus it is an excellent sound control for interior floors. As the only manufacturer and patent holder of this revolutionary insulation, Johns Manville has great power over its dealers. It is an example of a: A.) channel authority B.) channel regulator C.) channel captain D.) channel gatekeeper E.) power broker

A.) discrepancy of quantity (A discrepancy of quantity is the difference between the amount of product produced and the amount an end user wants to buy.)

Kraft Foods produces millions of packages of Chips Ahoy cookies each year, but consumers only want to purchase one package at a time. This difference between the amount Kraft produces and the amount a consumer wants to buy is referred to as a: A.) discrepancy of quantity B.) discrepancy of assortment C.) spatial discrepancy D.) temporal discrepancy E.) discrepancy of possession

A.) production and consumption are simultaneous (In a service environment, services are produced and consumed at the same time.)

One thing that sets service distribution apart from traditional manufacturing distribution is that in a service environment: A.) production and consumption are simultaneous B.) production setbacks can be remedied by using safety stock C.) faster modes of transportation can offset service production problems D.) service distribution benefits are more tangible E.) service distribution has a narrower focus

A.) Exclusive (Extensive distribution, the most restrictive form of distribution, entails establishing one or a few dealers within a given geographic area. Because buyers need to be willing to search or travel to acquire the product, this form of distribution is limited to consumer specialty goods, a few shopping goods, and major industrial equipment.)

Rolex is an expensive brand of watches. The company has a policy of only having one or two dealers within a given large geographic area. Buyers of Rolex watches will travel extensively to acquire just the right watch. This is an illustration of which level of distribution intensity? A.) Exclusive B.) Intensive C.) Selective D.) Reciprocal E.) Premium

E.) direct channel (The manufacturer sells directly to the consumer.)

The only way that Jim Keeler in New Mexico can get a box of Carolyn Popwell's Festive Holiday Truffles from Washington is to order it through the mail. Popwell, who makes the candy by hand, uses a(n) _____ exclusively. A.) exclusive distribution system B.) conventional channel C.) vertical marketing system D.) reciprocal channel E.) direct channel

A.) transactional, logistical, and facilitating

The three basic functions channel intermediaries perform are: A.) transactional, logistical, and facilitating B.) contacting, negotiating, and ownership C.) promoting, distributing, and bulk-breaking D.) assorting, accumulating, and allocating E.) financing, mediating, and storing

A.) Arm's length (The arm's-length relationship is considered to be temporary.)

This summer, college student Pat is planning on selling kites at Panama City Beach. He has found some suppliers and has preordered all of the kites he thinks he can sell this summer. What type of a distribution channel relationship does Pat have with his suppliers? A.) Arm's length B.) Functional C.) Cooperative D.) Hierarchical E.) Integrated

C.) taking title (This is the definition of taking title.)

When an intermediary in the channel of distribution owns the merchandise and controls the terms of the sale, this is referred to as: A.) complete control B.) exclusive distribution C.) taking title D.) contact efficiency E.) economies of scale

A.) Minimizing wait times (The other two areas are managing service capacity, and providing delivery through distribution channels.)

Which of the following is a main area of concern for service distribution? A.) Minimizing wait times B.) Maximizing sales C.) Creating a one-to-one relationship with customers D.) Providing easy to use Internet help E.) Reducing risk

C.) Risk taking (Transactional functions include contacting and promoting, negotiating, and risk taking.)

Which of the following is a transactional function performed by intermediaries? A.) Sorting B.) Researching C.) Risk taking D.) Physically distributing E.) Storing

B.) minimizing wait times, managing service capacity, and providing delivery through distribution channels (Service industries are customer oriented and must manage intangible services by minimizing wait times, managing service capacity, and providing delivery through distribution channels.)

You are responsible for physical distribution of your company's service and should focus on: A.) ensuring the intangibility of the service so that physical distribution becomes a less important factor B.) minimizing wait times, managing service capacity, and providing delivery through distribution channels C.) making sure production and consumption are simultaneous D.) setting quality standards, choosing faster transportation modes, and using safety stock E.) customer-oriented order processing and inventory control

C.) Agents and brokers (Agents and brokers simply facilitate the sale of a product from producer to end user.)

_____ are intermediaries who facilitate the sales of a product from producer to end user by representing retailers, wholesalers, or manufacturers and providing little input as to the terms of the sale. A.) Marketing facilitators B.) Channel cooperatives C.) Agents and brokers D.) Merchant wholesalers E.) Channel functionaries

C.) Cooperative (Cooperative relationships are between companies that take the form of informal partnership with moderate levels of trust and information sharing as needed to further each company's goals.)

_____ channel relationships include nonequity agreements such as franchising and licensing as well as equity-based joint ventures and strategic alliances. A.) Arm's-length B.) Functional C.) Cooperative D.) Hierarchical E.) Integrated

B.) quantity (This is the definition of the discrepancy of quantity.)

A discrepancy of _____ is the difference between the amount of product produced and the amount an end user wants to buy. A.) space B.) quantity C.) assortment D.) accumulation E.) possession

B.) channel control (Channel control is when one channel member actually affects another.)

A situation that occurs when one marketing channel member intentionally affects another member's behavior is called: A.) channel power B.) channel control C.) channel conflict D.) channel dominance E.) channel inversion

C.) producer factors (Financial, managerial, and marketing issues are producer factors.)

Canesta Company has developed a virtual keyboard out of light to be used with cell phones and PDAs. The product beams an image of a keyboard on a desk, allowing the user to type on the image. The words are picked up by the user's digital device. When introduced to the market, the device will sell for less than $50. If, in choosing its channel, Canesta is most concerned about its lack of financial, managerial, and marketing resources to support the product's introduction, then its choice of channels will largely be influenced by: A.) factors of ownership B.) market factors C.) producer factors D.) product factors E.) internal environmental characteristics

E.) Selective (Screening dealers will promote a quality image for the product. Price is also a factor in its level of distribution intensity. It is not a convenience good.)

Canesta Company has developed a virtual keyboard out of light to be used with cell phones and PDAs. The product beams an image of a keyboard on a desk, allowing the user to type on the image. The words are picked up by the user's digital device. When introduced to the market, the device will sell for less than $50. What level of distribution intensity should the company use? A.) Exclusive B.) Controlled C.) Extensive D.) Reciprocal E.) Selective

D.) Researching and financing

Which of the following are examples of facilitating functions performed by wholesaling intermediaries? A.) Sorting and storing B.) Risk taking and promotion C.) Assorting, accumulating, grading, and allocating D.) Researching and financing E.) Financial management and storing

E.) intensive (Intensive distribution is distribution aimed at maximum market coverage. It is used for many convenience goods that need to be available in every outlet where the potential customer might want to buy them.)

Chewing gum and soft drinks are sold in grocery stores, service stations, convenience stores, drugstores, discount stores, and motel vending machines. This is a an example of a(n) _____ distribution strategy. A.) exclusive B.) reciprocal C.) selective D.) horizontal E.) intensive

B.) distribution channel (Its unusual retail venues added to the brand's mystique.)

Jones Soda is positioned as the anti-Coke. In the early years, few mainstream retailers sold Jones Soda. Fans had to get their Jones fix in surf shops, tattoo parlors, and bookstores, adding to the brand's mystique. Jones Soda used its _____ to create a competitive advantage. A.) channel ascendancy B.) distribution channel C.) channel conflict D.) channel focus E.) vertical integration

D.) risk taking (Risk taking is a transactional activity)

Marketing channels perform all of the following logistical activities EXCEPT: A.) sorting B.) storing C.) physically distributing D.) risk taking E.) breaking bulk

A.) Retailers (Retailers are firms that sell mainly to consumers.)

Which of the following intermediaries sell mainly to consumers? A.) Retailers B.) Merchant wholesalers C.) Agents D.) Brokers E.) Specialists

A.) Arm's length (These types of relationships are often referred to as "arm's-length" relationships due to the companies' unwillingness or lack of ability to develop a closer type of relationship.)

Which of the following types of distribution channel relationships is considered to be temporary? A.) Arm's length B.) Functional C.) Cooperative D.) Hierarchical E.) Integrated

B.) accumulating (Accumulating is combining similar stocks into a larger homogeneous supply.)

With respect to the sorting logistical function, _____ is the combining of similar stocks into a larger homogeneous supply. A.) sorting out B.) accumulating C.) allocating D.) breaking bulk E.) assorting

B.) Selective (This is a description of selective distribution.)

_____ distribution is achieved by screening dealers to eliminate all but a few in any single geographic area. Shopping goods and some specialty products that consumers are willing to search for are sold this way. A.) Intensive B.) Selective C.) Exclusive D.) Dual E.) Controlled

A.) merchant wholesaler (This is the definition of a merchant wholesaler.)

A(n) _____ is an institution that buys goods from manufacturers, takes title to these goods, and resells them to businesses, government agencies, and/or other wholesalers or retailers. A.) merchant wholesaler B.) agent C.) drop shipper D.) channel cooperative E.) marketing cooperative

D.) product factors (Stage of the product life cycle is a product factor.)

Canesta Company has developed a virtual keyboard out of light to be used with cell phones and PDAs. The product beams an image of a keyboard on a desk, allowing the user to type on the image. The words are picked up by the user's digital device. When introduced to the market, the device will sell for less than $50. If, in choosing its channel, Canesta is most concerned about the life cycle of the device, then its choice of channels will largely be influenced by: A.) factors of production B.) customer characteristics C.) ownership factors D.) product factors E.) market factors

D.) exclusive (Exclusive distribution, the most restrictive form of distribution, entails establishing one or a few dealers within a given geographic area. Because buyers need to be willing to search or travel to acquire the product, this form of distribution is limited to consumer specialty goods, a few shopping goods, and major industrial equipment.)

Caterpillar, the manufacturer of tractors and other earthmoving equipment, has an extremely high market share, which means customers seek the dealers out regardless of where they are. There are approximately 50 Caterpillar dealers in the United States--one in each state. From this information, you can surmise that Caterpillar uses _____ distribution. A.) selective B.) premium C.) intensive D.) exclusive E.) inclusive

D.) direct channel (For customized business products requiring detailed specifications, the most common channel structure is the direct channel because of the amount of interaction and direct communication required.)

Centigon is a manufacturer of customized armored vehicles for military, private, presidential, and commercial uses. Each armored vehicle is designed to deliver security on the road while also achieving optimum levels of performance and comfort. For distribution, you would expect Centigon to use a: A.) network of facilitating agents B.) horizontally integrated channel C.) reciprocal channel D.) direct channel E.) vertical marketing system

C.) discrepancy of assortment (By providing the central buying function on behalf of its customers, Certified Grocers overcomes the discrepancy of assortment and is able to offer many different brands of similar items.)

Certified Grocers Midwest, Inc., the Chicago-based grocery wholesale cooperative, provides all kinds of meats, cereals, canned and fresh fruits and vegetables, beauty aids, healthcare items, and pet products to the supermarkets in its channel. Certified Grocers is aiding consumers by overcoming: A.) spatial discrepancy B.) discrepancy of quantity C.) discrepancy of assortment D.) demand discrepancy E.) discrepancy of possession

D.) horizontal conflict (This is the definition of horizontal conflict, which occurs at the same level of distribution such as two or more different wholesalers or two or more different retailers.)

Channel conflict that occurs among channel members on the same level is known as: A.) primary conflict B.) organic conflict C.) internal conflict D.) horizontal conflict E.) vertical conflict

C.) is often caused by an inability of some channel members to keep up with the changing times (In a broad context, channel conflict can be good for a channel. It is sometimes caused by ideological differences. It appears as vertical or horizontal.)

Channel conflict: A.) always has an adverse effect on the members of the channel B.) is not caused by ideological differences, because such differences would prevent the members from ever operating as a channel C.) is often caused by an inability of some channel members to keep up with the changing times D.) can appear as either internal or external E.) does not occur when multiple distribution channels are used

B.) industrial distributors (In many ways, an industrial distributor is like a supermarket for organizations.)

Companies selling standardized items of moderate or low value to other businesses (not to consumers) often use: A.) retailers B.) industrial distributors C.) wholesalers D.) bulk breakers E.) industrial resellers

B.) merchant wholesaler (A merchant wholesaler is an institution that buys goods from manufacturers and resells them to other wholesalers and retailers. Merchant wholesalers receive and take title to the goods, own warehouses, and ship the products they sell.)

Long Island Lefty provides retailers and other businesses with the latest and the best products for left-handed consumers. It buys all types of products from a variety of manufacturers and stores the merchandise in its New York warehouse until purchased by buyers. Long Island Lefty does not sell to end users and is an example of a(n): A.) agent or broker B.) merchant wholesaler C.) retailer D.) consumer market E.) hypermarket intermediary

E.) gray marketing (Gray marketing occurs when products are distributed through unauthorized marketing channels.)

Many large champagne sellers do their own importing and desire to maintain independent price points in different markets. Thus, a bottle of champagne might cost $45 in the United States, while the same bottle might be only 20 euros (about $30) in France. It is often profitable to buy the wine in Europe, typically from an unauthorized distributor, and resell it in the United States. U.S. wine merchants who do so would be engaging in: A.) black marketing B.) channel malfeasance C.) counter trading D.) reverse channeling E.) gray marketing

C.) specialization and division of labor (The concept of specialization and division of labor involves breaking down a complex task into smaller, simpler ones and allocating them to specialists, creating greater efficiency and lower average production costs.)

Marketing channels can achieve economies of scale through: A.) overcoming spatial discrepancies B.) contact expertise C.) specialization and division of labor D.) overcoming temporal discrepancies E.) overcoming discrepancies of quantity

A.) Sorting (Logistical functions include physically distributing, storing, and sorting products.)

Which of the following is a logistical function performed by intermediaries? A.) Sorting B.) Negotiating C.) Financing D.) Risk taking E.) All of these choices

E.) Integrated (Integrated distribution channel relationships are situations where one company, or several companies acting as one, performs all channel functions.)

One of the earliest, largest, and most famous examples of vertical integration was the Carnegie Steel Company. The company controlled not only the mills where the steel was manufactured but also the mines where the iron ore was extracted, the coal mines that supplied the coal, the ships that transported the iron ore, and the railroads that transported the coal to the factory. Carnegie Steel had a(n) _____ channel relationship. A.) arm's-length B.) functional C.) cooperative D.) hierarchical E.) integrated

A.) improving service delivery (The Internet is an alternative channel for delivering these deals. Kayak is a service organization.)

Paul operates Kayak.com, a company that allows customers to efficiently search company databases and find the best airline and hotel deals all over the Web. Kayak does not make bookings but rather provides recommendations for the best travel plans. Travel providers pay Kayak a commission for most customers who click through to their sites. Paul wants his users to have as short and sweet an experience on Kayak as possible. Time is of the essence in responding to any customer question, especially in this day where airfare can increase dramatically in just a couple of hours. Paul is devoted to: A.) improving service delivery B.) maximizing queues C.) reducing discrepancies of assortment D.) reducing wait time E.) managing service capacity

D.) vertical (Vertical conflict is a channel conflict that occurs between different levels of a marketing channel.)

Polo brand apparel can be purchased through fine department stores nationwide. However, Polo apparel can also be purchased through Polo stores, which creates the potential for _____ conflict in the channel of distribution. A.) primary B.) secondary C.) horizontal D.) vertical E.) parallel

A.) take title to a product (Retailers and merchant wholesalers own the merchandise and control the terms of its ultimate sale.)

Retailers and merchant wholesalers are examples of intermediaries that: A.) take title to a product B.) create temporal and spatial discrepancies C.) use consumer promotions D.) do not benefit from any economies of scale E.) are accurately described by all of these statements

A.) Strategic channel alliances (Alliances are used most often when the creation of marketing channel relationships may be too expensive and time-consuming.)

Which of the following enables a company to use another manufacturer's already established channel? A.) Strategic channel alliances B.) Relationship channels C.) Reverse channels D.) Multiple distribution systems E.) Nontraditional channelization

E.) temporal (A temporal discrepancy is created when a product is produced but a consumer is not ready to purchase it. Several of those discrepancies are being partially overcome, but the main one is temporal.)

Vicobello is a major manufacturer of outdoor fountains that are popular in gardens. Even though fountains represent a product category that does not sell year-round due to inclement weather, Vicobello's sales remain steady all year because it sells to wholesale distributors that stock the product. Its wholesale distributors are primarily helping to overcome a(n) _____ discrepancy. A.) assortment B.) spatial C.) possession D.) quantity E.) temporal

B.) merchant wholesaler (A merchant wholesaler is an institution that buys goods from manufacturers and resells them to other wholesalers and retailers. Merchant Wholesalers receive and take title to the goods, own warehouses, and ship the products they sell.)

W.W. Grainger, Inc., is one of the world's largest business-to-business distributors of equipment, component parts, and supplies in the United States and Canada. It has ownership title to over 220,000 products, which are stocked in one national and nine regional warehouses to guarantee product availability and quick service to the many manufacturers who are its customers. W.W. Grainger is an example of a(n): A.) agent or broker B.) merchant wholesaler C.) retailer D.) consumer market E.) hypermarket intermediary

A.) Discrepancy of assortment (This is the definition of the assortment discrepancy.)

Which of the following is the lack of all the items a customer needs to receive full satisfaction from a product or products? A.) Discrepancy of assortment B.) Discrepancy of quantity C.) Spatial discrepancy D.) Temporal discrepancy E.) Discrepancy of possession

A.) M&M's candies (Only M&M's candies are a low-value product that is frequently purchased. Low-value products are commonly sold in a variety of locations.)

Which of the following manufacturers most likely uses intensive distribution? A.) M&M's candies B.) Jen-Weld windows C.) Calloway golf clubs D.) Rollerblade in-line skates E.) Smith & Wesson firearms

A.) Industrial customers tend to buy in larger quantities and require more customer service. (Industrial customers' buying habits are very different from those of consumers, and they tend to buy in larger quantities and require more customer service.)

Which of the following statements concerning how market factors affect channel decisions is true? A.) Industrial customers tend to buy in larger quantities and require more customer service. B.) Geographically concentrated target markets should be served with an indirect sales force. C.) Widely dispersed markets require fewer intermediaries. D.) New firms in extremely competitive markets will be more successful if they use indirect channels. E.) A very large market requires fewer intermediaries.

A.) Arm's length (These types of relationships are often referred to as "arm's-length" relationships due to the companies' unwillingness or lack of ability to develop a closer type of relationship.)

With the _____ channel relationship, both parties retain their independence and pursue their own interests while attempting to benefit from the goods or services provided by the other. A.) arm's-length B.) functional C.) cooperative D.) hierarchical E.) integrated

C.) Intensive distribution (The objective of intensive distribution is to achieve mass-market selling.)

_____ is distribution aimed at maximum market coverage. It is used for many convenience goods and supplies that need to be available in every outlet where the potential customer might want to buy them. A.) Selective distribution B.) Channel franchising C.) Intensive distribution D.) Horizontal channeling E.) Exclusive distribution

B.) Logistics (This is the definition of logistics.)

_____ is the efficient and cost-effective forward and reverse flow and storage of goods, services, and related information into, through, and out of channel member companies. A.) Disintermediation B.) Logistics C.) Materials handling D.) Intermodal transportation E.) Contract logistics