Chapter 12 Study Questions

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. Channel systems stand​ still, restricting formation of new intermediary systems. B. Some channel systems consist of only informal interactions among loosely organized firms. C. They are complex behavioral systems in which people and companies interact to accomplish​ individual, company, and channel goals. D. Some channels consist of formal interactions guided by strong organizational structures. E. A marketing channel consists of firms that have partnered for their common good.

A

Channel​ members' performance should be evaluated against standards which include all of the following except​ __________. A. channel management B. sales quotas C. average inventory levels D. treatment of damaged and lost goods E. customer delivery time

A. Channel management; this is responsibility of the corporation and is not used in the performance evaluation of channel members.

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. limited product variety has created problems for logistics management D. improvements in information technology have created opportunities which did not exist before E. improved logistics can yield tremendous cost savings to both a company and its customers

C

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. 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. D. The reduced costs of using channel intermediaries offsets the inefficiencies of marketing channels. E. Marketing channel decisions require only a​ short-term commitment.

C; The role of marketing intermediaries is to transform the assortments of products made by producers into the assortments wanted by consumers. Marketing channel members buy large quantities from many producers and break them down into the smaller quantities and broader assortments desired by consumers.

Which of the following describes a​ just-in-time logistics​ system? A. ​Just-in-time logistics systems greatly increase​ inventory-carrying and​ inventory-handling costs. 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 allow producers and retailers to carry small inventories to last for only a few days of operations. E. ​Just-in-time logistics systems ensure that new stock arrives at least one week before it is needed.

D

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 retailer complaining about receiving damaged goods from a wholesaler C. A retailer complaining about a​ producer's pricing D. A consumer complaining to a producer about the quality of a product E. A Ford dealer complaining that another Ford dealer is advertising in its territory

E; Horizontal conflict occurs among firms at the same level of the channel.

Large retailers like Walmart have enormous channel control due to their size and power. Which type of channel arrangement does this​ represent?

administered vertical marketing system​ (VMS): based on the size or power of a channel member

What is the first step in marketing channel​ design?

analyzing consumer needs; finding out what target consumers want from the channel.

Channel members should be selected on the basis of all of the following attributes except​ __________.

competitiveness

conventional distribution channel

consists of one or more independent​ producers, wholesalers, and retailers

The franchise organization is the most common type of​ __________ VMS​ (vertical marketing​ system).

contractual; a channel member called a franchisor links several stages in the​ production-distribution process

Producers of​ ________ typically use intensive distribution for their products.

convenience goods; strategy in which they stock their products in as many outlets as possible

​Historically, __________ have lacked leadership and​ power, often resulting in damaging conflict and poor performance.

conventional distribution channels

​Sherwin-Williams sells its paint and other branded products exclusively through​ company-owned retail stores.​ Sherwin-Williams has established​ a(n) ________.

corporate vertical marketing system​ (VMS)

​A(n) ​ __________ has no intermediary levels.

direct marketing channel; the company sells directly to consumers. For​ example, Mary Kay Cosmetics and Amway sell their products through home and office sales parties and online Web sites and social​ media

​________ is a strategy in which the seller requires that dealers not handle​ competitors' products.

exclusive dealing

​________ 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.

full-line forcing

The concept of​ __________ recognizes that providing better customer service and trimming distribution costs require teamwork.

integrated logistics management

The length of a channel is indicated by the number of​ ________.

intermediary levels

From the​ producer's point of​ view, a greater number of levels of marketing channel means​ __________.

less control and greater channel complexity

Producers of __________ typically use exclusive distribution for their products.

luxury brands

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.

matching

When a single firm sets up two or more marketing channels to reach one or more customer​ segments, it is using​ a(n) ________.

multichannel distribution system

Companies now use​ ________ and supply chain management software to help​ recruit, train,​ organize, manage,​ motivate, and evaluate relationships with channel partners.

partner relationship management

Companies today see channel members as​ first-line customers and practice strong​ ________.

partner relationship management to forge​ long-term partnerships with channel members

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​ __________.

pricing; Members of the marketing channel perform many​ functions, but pricing is not one of them.

​________ involves​ reusing, recycling,​ refurbishing, or disposing of​ broken, unwanted, or excess products returned by consumers or resellers.

reverse logistics

Which channel partners in a​ company's supply chain are upstream from a manufacturer or​ producer?

suppliers; upstream from the company is the set of firms that supply the raw​ materials, components,​ parts, information,​ finances, and expertise needed to create a product or service.

When setting channel​ objectives, companies should state the objectives in terms of​ ________.

targeted levels of customer service

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​ ________.

the responsibilities of channel members

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.

vendor-managed inventory​ (VMI)

Conflict between a retailer and producer is _______ channel conflict.

vertical

What are the four major functions of​ logistics?

warehousing, inventory​ management, transportation, and logistics information management.