MKT 6301 Distribution Chapter 12

An agent is a middleman who buys from manufacturers and sells to retailers. T or F

False

Channel members are likely to have significant bargaining power over the marketing manager of large and powerful corporations. T or F

False

Motivating customers to ask for your brand name is known as "push." T or F

False

Once designed, the basic structure of a channel system does not change. T or F

False

Since they are flexible and dynamic, channel systems can be easily changed for a marketing strategy. T or F

False

Very few conflicts arise in managing a channel system. T or F

False

While it is preferable for products to have distribution, it is not critical. T or F

False

__________ are organizations that buy products from a variety of vendors, assemble them in a package, and resell the package to specialized segments. a.CRMs b.VARs c.OEMs d.ATMs

b.VARs

Which of the below describes a business unit that negotiates purchases or sales but does not take title to the goods?

b.agent

Tailoring the product to a customer's needs is best described by which of the following channel functions?

b.matching/customizing

For some products, this channel may actually be part of the manufacturing process by performing assembly or other "finishing" parts of the process.

b.product assembly

According to the textbook, which of the following examples best represents channel conflict for company-owned sites?

c. Apple Computer selling computers over the Internet and through other channel members

A company typically uses __________ when it is an ingredient in another company's products. a.ATMs b.CRMs c.OEMs d.VARs

c. OEMs

The purpose of a system of distribution channels is to provide __________ means of getting your products to customers and customers to your products.

c. an efficient

Under __________, the idea is that retailers plan marketing and strategy for an entire group of products rather than on a brand by brand basis.

c. category management system

According to the text, all of the following are channel functions except:

c. competitor management

Most channel members are in business solely to act as an intermediary between firms and customers. However, sometimes channel members become __________.

c. competitors

In which of the following do retailers, wholesalers, and marketing managers work together to attempt to accurately forecast demand?

c. continuous replenishment program

Which of the following describes two concepts created from the need for category management to be efficient?

c. efficient consumer response and continuous replenishment program

The value chain can be used to determine various bases for advantage and include all of the following except:

c. foreign exchange rate

According to the text, all of the following are examples of how you may enter a foreign market except:

c. government agency

Indirect channels of distribution are critical to the success of a business and therefore must be treated __________.

c. like customers & with respect

According to the text, a marketing channel implies physical distribution and is called __________.

c. logistics

According to text, which of the following is not a general channel structure?

c. ma and pa shops

Many Web sites can be best described by which of the following?

b. they are complimentary to other marketing channels

__________ are organizations that buy products from a variety of vendors, assemble them in a package, and resell the package to specialized segments. a.OEMs b.VARs c.ATMs d.CRMs

b. VARs

The process of reducing costs throughout the entire distribution system is best described by which of the following?

b. efficient consumer response

"Category Killers" are large retailers selling products in a particular product category at a discount. T or F

True

A careful analysis of customer behavior leads to a better understanding of what kind of channel structure is necessary to satisfy the different segments. T or F

True

A wholesaler is a middleman who buys from manufacturers and sells to retailers. T or F

True

Distribution is a key element of the marketing mix and an important part of the marketing strategy. T or F

True

From a marketing perspective, one of the major uses of the Internet is as a communications medium. T or F

True

In a Hybrid system, the channel members perform complementary functions. T or F

True

Indirect channels can reach more customers and perform functions that the sales force cannot, the down side is that they are not necessarily working exclusively for you. T or F

True

One of the major sources of channel conflict is goal divergence. T or F

True

One of the problems with using a variety of channels (multiple-channel system) is loss of control of part of the system. T of F

True

One of the problems with using a variety of channels (multiple-channel system) is loss of control of part of the system. T or F

True

The marketing manager must think in terms of maximizing profits for or meeting the goals of the entire system. T or F

True

The purpose of a system of distribution channels is to provide an efficient means of getting your products to customers and customers to your products. T or F

True

There are two broad categories of channels: direct and indirect channels. T or F

True

When the distribution system is characterized by channel members purchasing and taking title to products, risk is shifted from the manufacturer to channel members. T or F

True

A key component to consider when structuring channels of distribution is the __________.

a. Customers' needs

List alternative ways to resolve channel conflicts.

a. Demarcating product lines b. Working with channel members to develop joint solutions c. Putting more money into push and pull activities d. Developing financial arrangements such as commissions and higher margins e. Charging higher prices in the direct channel.

Discuss efficient consumer response (ECR) and the continuous replenishment program (CRP).

a. ECR is the process of reducing costs throughout the entire distribution system, resulting in lower prices and increased consumer demand. b. CRP is part of ECR; members of the supply chain partner with supermarkets. Retailers, wholesalers, and marketing managers work together to attempt to forecast demand accurately; these forecasts drive the electronic inventory replenishment system. When it works, CRP can reduce inventories at both the retail and warehouse levels up to 60%. c. The difficult part is getting manufacturers and retailers to work together because both must be open about their strategies and performance.

"Category Killers," large retailers selling products in a particular product category at a discount, all rely on __________ to keep costs down and ensure the lowest prices.

b. information-intensive operations

List and briefly describe five of the major channel functions as discussed in the text.

a. Marketing research-because channel members often have direct contact with customers, it is an ideal situation for collecting information about customers and competitor behavior. b. Communications-an important role of the channels is to communicate information about the product or service to customers. c. Contact-some channel members seek out and interact with customers. Independent agents and wholesalers develop retail accounts for products. d. Matching/customizing-a valuable service provided by the channels is matching or attempting to tailor the product to a customer's needs. e. Negotiation-in many cases, channels also negotiate price. f. Physical distribution-for product with physical characteristics, channels also provide basic logistical services. g. Financing-for durable goods such as TV and video cameras, an advantage of using a retail system is that the burden of financing falls on the retailers rather than the manufacturers. h. Risk-taking-when the distribution system is characterized by channel members purchasing and therefore taking title to a product, risk is shifted from the manufacturer to the channel member. i. Service-channels can also provide repair service, answer customers' questions about how to use the product, and provide warranty support. j. Relationship management-the channel member can enhance (or harm) the quality of the relationship between the selling firm and the customer. k. Product assembly-for some products, the channel may actually be part of the manufacturing process, performing assembly or other "finishing" parts of the process.

List and briefly describe the situations in which channel members are likely to have significant bargaining power over the marketing manager.

a. The channel's sales volume is large relative to the product's total sales volume; in this case, channel members with high sales volumes are going to be more effective in extracting terms such as delivery and push promotions. b. The product is not well differentiated from competitors; if the product is perceived to be a commodity by customers, then channel members can play your product against others; that is, they can appear to be (or actually be) indifferent to keeping your brand on the shelf. c. The channel has low switching costs (i.e., it is easy to find an alternative to replace your product). d. The channel poses a credible threat of backward integration or competing with you. e. The channel has better information than you about market conditions.

A common myth about channel systems is that once they are designed, the basic structure __________. a.all of these b.is set in stone c.does not change d.is permanent

a. all of these

According to the text, Russia suffers from the following problem(s): a.all of these b.shortfall of disposable income c.lack of a high-quality distribution system d.black market

a. all of these

Manufacturers, in the process of selling consumer products, may deal with which channel members? a.all of these b.retailers c.wholesalers d.agents or brokers

a. all of these

Under which of the systems below must the manufacturer be concerned about meeting not only its own objectives but also the objectives of the retailer?

a. category management system

In structuring channel conflict resolutions, it is necessary to research the channels. You can do this by talking to all of the following except:

a. customers

According to the text, intermediaries have remained successful by engaging in all of the following activities except:

a. downsizing

According to the text, in China, foreign firms are often __________ to set up their own distribution networks.

a. forbidden

The market where trademarked goods are sold through channels of distribution that are not authorized by the holder of the trademark is known as:

a. gray

When the channel member can enhance (or harm) the quality of the relationship between the selling firm and the customer, the channel member is engaging in __________.

a. relationship management

Which of the following are more concerned with how a particular product category is selling rather than a particular brand?

a. retailer

When the distribution system is characterized by the channel member purchasing and therefore taking title to the products, the transaction is called __________.

a. risk-taking

According to the text, all of the following are participants in the channel system except:

a. the government

Which of the following is false regarding indirect channels of distribution?

a. the indirect channel is primarily an agency for physical distribution of goods

__________ is (are) used to complement other marketing channels in a number of ways, such as customer service, providing timely new product information, etc.

a.Web sites

All of the following are components of the value-added chain of distribution channels except: a.competitor b.manufacturer c.suppliers d.customer

a.competitor

In formulating Marketing Strategy, companies such as Amway, Tupperware, and Mary Kay Cosmetics differentiate on the basis of __________ as opposed to __________.

a.door-to-door; retail sales

In the era of category management, which of the following best describes the key role of the salesperson?

a.he or she is the link between marketing managers interested mainly in their brands and retailers interested mainly in their categories

A middleman who buys from manufacturers and sells to retailers is called a __________.

a.jobber

Which of the following best describes retailers' scarce resources?

a.selling space

With regard to the personal computer industry as discussed in the text, which of the following was not mentioned in the textbook as a major change in distribution channels?

c. mail order has become a very small and unimportant channel

Which of the following best describes an agent who generally operates on an extended contractual basis, often sells within an exclusive territory and handles non-competing but related lines of goods?

c. manufacturer's agent

Channel members are likely to have significant bargaining power over the marketing manager in all of the following cases except:

c. marketing manager is working for WalMart

Because channel members often have direct contact with customers, it is ideal for collecting information about customer and competitor behavior. Which of the following channel functions best describes this event?

c. marketing research

Retailers have category managers who are empowered to do which of the following?

c. operate their categories as separate businesses

Product categories are considered to be the business units that should be customized on a store-by-store basis to satisfy customer needs. Which of the following best describes this?

c. product category management

Which of the following is not an advantage to using an indirect channel?

c. product customization is important

According to the textbook, what is the estimated amount of online retail sales in the US on the Web in 2005?

c.$170 billion

A company typically uses __________ when it is an ingredient in another company's products. a.CRMs b.ATMs c.OEMs d.VARs

c.OEMs

Key questions that must be addressed when making channel decisions are all of the following except:

c.Which channel members are the cheapest to buy?

Manufacturers, in the process of selling consumer products, may deal with which channel members?

c.all of these

Which of the following systems creates a problem where confusion about who should receive a commission on a sale, or how it should be divided, when several channel members are involved?

c.multiple channel system

According to the text, it is difficult to enter Japan's retail market because it engages in the following tactic(s):

d. all of these

The concept that customers must have access to your product or service to be able to purchase it represents which of the following?

d. channels of distribution

All of the following are components of the value-added chain of distribution channels except:

d. competitor

Some channel members seek out and interact with customers. This channel function is known as:

d. contact

As customer knowledge increases, all of the following are evolving trends except:

d. increased need for personalized services

As customer knowledge increases, all of the following are evolving trends except: a.increased sales through mass resellers b.increased sales through the Internet c.increased sales through superstores d.increased need for personalized services

d. increased need for personalized services

According to the text, a Hybrid Channel System includes the following Marketing Channels except:

d. internet

Which of the following is false regarding the basic structure of channel systems?

d. once a channel system is designed, the basic structure does not change

Direct channels appear to be better than indirect channels in all of the following cases except:

d. one-stop shopping for many products is important

In providing basic logistical services, the channel member is providing which channel function?

d. physical distribution

According to the text, which of the following is a key reason for picking a particular channel system?

d. to differentiate your product or service from the competition

When launching an existing or a new product in a new market domestically or overseas, it is important to structure the distribution channels so the costs become __________ costs rather than __________.

d. variable; fixed

The following are illustrations of channel conflict resolutions except:

d.eliminating the most offensive channel

A business that assists in the performance of distribution tasks other than buying, selling, and transferring title is best described by which of the following?

d.facilitating agent

Which of the following marketing intermediaries is a business that assists in the performance of distribution tasks other than buying, selling, and transferring title?

d.facilitating agent

The European retailing scene today is __________ the United States.

d.similar to

In order to compete with "category killer" stores, local stores must offer __________ to warrant the customer loyalty.

d.sufficient service