Marketing Chapter 10

Which of the following statements about channel systems is true?

Channel members informally agree to cooperate with each other in administered channel systems.

Why is the assortment process beneficial?

Consumers often find it convenient to shop for products created by many different firms all in one place.

When franchisees demand protected markets, which of the following approaches is most appropriate?

Exclusive distribution, in which each franchisee is assigned an exclusive territory, is typically used when franchisees want protected markets.

In the context of the relationship between consumer product classes and ideal Place objectives, which of the following statements is true?

Homogeneous shopping goods favor low-cost retailers.

Which of the following best explains the concept of "discrepancies" in the marketplace?

The assortment and quantity of products required by a customer may be different from those produced by a manufacturer.

What are examples of direct distribution?

Website based e-commerce systems, and delivery services like UPS and FedEx

channel captain

a manager who helps direct the activities of a whole channel and tries to avoid or solve channel conflicts.

A channel of distribution is

a series of firms or individuals who participate in the flow of products from producer to final user or consumer

vertical integration

acquiring firms at different levels of channel activity

Regrouping

adjust the quantities or assortments of products handled at each level in a channel of distribution.

product-market committment

all members focusing on the same target market at the end of the channel and sharing the various marketing functions in appropriate ways

Channel of Distribution

any series of firms or individuals who participate in the flow of products from producer to final user or consumer

vertical marketing system

are channel systems in which the whole channel focuses on the same target market at the end of the channel.

Why would a firm choose to sell directly to the final customer or consumer?

because the want to control the whole marketing job

What type of products are usually sold direct to customer?

business products

Why is place important?

can drastically change the competition in a product market

consumers of household goods prefer to for...?

certain products at certain places. usually all together

When a channel has a shared "product-market commitment"

channel members focus on the same target market at the end of the channel.

reverse channels

channels used to retrieve products that customers no longer want.

corporate channel system

corporate ownership all along the channel—we might say the firm is going "direct."

direct marketing

direct communication between a seller and an individual customer using a promotion method other than personal selling.

Direct marekting doesn't mean

direct distribution

what do service firms often use?

direct distribution

Which of the following approaches to international marketing gives a parent firm complete control over its marketing strategy planning?

direct investment

When a firm chooses only one wholesaler or retailer to sell its products in each geographic area, this is known as ______ distribution.

exclusive

Which method of entering international markets generally involves the least risk?

exporting

Website based e-commerce systems...

give many firms direct access to customers

A channel captain is best described as a manager who

helps direct the activities of the whole channel

For a product, market exposure beyond the ideal level

increases the total cost of marketing

When a firm's target market is accustomed to shopping at certain retailers or wholesalers, that firm will probably need to use ______ channels of distribution to reach its desired customers.

indirect

In the market environment, discrepancies of quantity occur because

individual producers often make larger quantities of products than individual consumers normally want to buy.

Nuxall Confections produces a variety of different candies. Nuxall Confections wants its candies to be available anywhere a consumer might look for them and as a result uses a wide variety of intermediaries to distribute them, including grocery stores, drugstores, convenience stores, gas stations, and vending machines. This is an example of ________ distribution.

intensive

Many firms that use direct marketing distribute their products through...?

intermediaries

most consumer products are sold through...

intermediaries

Accumulating

involves collecting products from many small producers.

Bulk-breaking

involves dividing larger quantities into smaller quantities as products get closer to the final market.

exclusive distribution

is selling through only one intermediary in a particular geographic area.

selective distribution

is selling through only those intermediaries who will give the product special attention

What is a negative of direct distribution?

it usually requires a significant investment in facilities, people, information, and technology

Traditional channel systems are characterized by channel partners who

lack a shared market commitment

Bubble Gums Inc. of Chicago, Illinois, sold the rights to sell its patented toys outside the United States to an Australian company, Phoenix Junior Inc. In return, Phoenix Junior Inc. has to pay 40 percent of its total sales of the patented toys as royalties to Bubble Gums Inc. Which of the following approaches to entering international markets is Bubble Gums Inc. using in this scenario?

licensing

Wholesalers and retailer who carry competing products will most likely...

make decisions that are in their own interests

Ideal market exposure

makes a product available widely enough to satisfy target customers' needs but not exceed them. Too much exposure only increases the total cost of marketing.

Place

making goods and services available in the right quantities and locations when the customer wants them

Assorting

means putting together a variety of products to give a target market what it wants.

Sorting

means separating products into grades and qualities desired by different target markets

Discrepancy of assortment

means the difference between the lines a typical producer makes and the assortment final consumers or users want

​Discrepancy of quantity

means the difference between the quantity of products it is economical for a producer to make and the quantity final users or consumers normally want.

vertical conflicts

occur between firms at different levels of a channel of distribution

horizontal conflicts

occur between firms at the same level in a channel of distribution

multichannel distribution

occurs when a producer uses several competing channels to reach the same target market

Firms are likely to prefer selective distribution when intermediaries

offer added support for exclusivity

dealers, distributers, agents

often independent and not company employees

When producers want to handle the distribution job entirely by themselves, they

operate their own stores or sell directly to customers through a website.

Although some intermediaries may resent this approach, a manufacturer may have to use "multichannel distribution" because

present channel members are doing a poor job

Direct marketing is primarily concerned with what?

promotion area, not place decisions

Accumulating, bulk-breaking, sorting, and assorting are _____ activities performed by channel specialists to adjust discrepancies.

regrouping

Marketing managers need to plan for ______ that can retrieve products that customers no longer want.

reverse channels

intensive distribution

selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product

Homogeneous shopping goods

shopping goods favor low-cost retailers as customers focus mostly on low prices. Customers will search for specialty goods, so the higher cost of widespread distribution may not be needed.

heterogeneous

shopping goods should have outlets that provide information—knowledgeable salespeople who can provide insights about different brands and models and online stores with videos or information.

administered channel system

the channel members informally agree to cooperate with one another.

contractual channel system

the channel members informally agree to cooperate with one another.

traditional channel system

the various channel members make little or no effort to cooperate with one another

What is a benefit of having an intermediary?

they are able to anticipate customer needs quicker and more accurately, thus reducing inventory costs.

Vibgyor Phones Inc., a cell phone manufacturer, expects its retailers not to sell other brands of cell phones in their stores. However, most retailers disagree with this, arguing that their profitability is reduced when they carry only one brand. Such conflicts are referred to as ______ conflicts.

vertical

Fyx Autos Inc., an automobile company, has acquired one of its major distributors. This is referred to as

vertical integration (Acquiring firms at different levels of channel activity is called vertical integration. Corporate channel systems may develop by vertical integration.)

Which of the following is not true regarding channels of distribution?

Most consumer products are sold directly to consumers by the products' producers.