Deck 12: Managing Channel Relationships

Question 1

What is the first stage of building channel commitment?

A) Establishing mutual commitment
B) Building an expectation of continuity
C) Developing a differentiation strategy
D) Forming a joint partnership
E) Defining economic rewards

Answer 1

B

Question 2

Which action taken by a downstream channel member would most likely enhance commitment in a channel relationship?

A) Developing relationships with other suppliers
B) Limiting the exchange of sensitive information
C) Preventing suppliers from seeing too many weaknesses
D) Participating closely in the supplier's marketing efforts
E) Making changes to shipping and warehousing strategies

Answer 2

D

Question 3

Relational governance,vertical quasi-integration,and strategic alliance are terms used to describe ________.

A) licensing agreements
B) organizational cultures
C) logistical partnerships
D) channel relationships
E) multinational enterprises

Answer 3

D

Question 4

Which statement about commitment in a channel relationship is most likely true?

A) Commitment in a channel relationship can be easily observed and measured.
B) A committed organization wants the relationship to continue indefinitely.
C) True commitment requires only minor investments of time and money.
D) Commitment is indicated by a cordial relationship with partners.
E) Short-term channel relationships indicate strong commitment.

Question 5

Which of the following statements would LEAST likely be made by the committed party in a channel relationship?

A) We defend them when others criticize them.
B) We are patient with their mistakes, even those that cause us trouble.
C) We will dedicate whatever resources it takes to grow the business we do with them.
D) We spend enough time with their people to work out problems and misunderstandings.
E) We are continually looking for another organization as a business partner to add to this one.

Question 6

Before building a channel relationship with downstream partners,a manufacturer should most likely ________.

A) consolidate its wholesaling efforts
B) respect the value of intermediaries
C) engage in vertical integration
D) develop financial incentives
E) coordinate marketing efforts

Question 7

Burton Manufacturing wants to motivate downstream channel members to represent Burton products in new and current markets,but the firm does not want to build strong channel relationships.How can Burton most likely accomplish this goal?

A) Integrating vertically
B) Exerting reward power
C) Increasing internal sales
D) Utilizing coercive power
E) Outsourcing logistical efforts

Question 8

All of the following have resulted from the relationship between Wal-Mart and P&G EXCEPT ________.

A) fewer stockouts
B) lower logistics costs
C) increased opportunity costs
D) constant store-level sales data
E) simplified inventory management

Question 9

Why are more manufacturers most likely seeking committed relationships with wholesalers?

A) The number of small, independent wholesalers is growing.
B) Market information can only be gathered from wholesalers.
C) The number of wholesalers is shrinking because of consolidation.
D) Marketing efforts must be closely coordinated with global wholesalers.
E) Reward power typically has little effect on wholesaler efforts and motives.

Question 10

Which term best refers to a manufacturer's relationship-specific investments in a channel partner?

A) Supplier pledges
B) Exclusive distributions
C) Relationship portfolios
D) Compatible investments
E) Idiosyncratic investments

Question 11

What is the primary reason that building strong relationships with all channel partners is unwise?

A) Committed relationships cannot be clearly identified.
B) Strong relationships do not correlate with improved profits.
C) Only one channel member financially benefits from a relationship.
D) Differentiation strategies fail to benefit from channel commitment.
E) Strong relationships are difficult and costly to create and maintain.

Question 12

What is the primary purpose of making idiosyncratic investments?

A) Building channel commitment
B) Limiting the supplier's risk
C) Increasing entry barriers
D) Aligning marketing strategies
E) Enhancing brand equity

Question 13

MDF Manufacturing wants to build a committed relationship with a distributor.How would MDF most likely benefit from a committed channel relationship?

A) Reducing inventory holding costs
B) Ensuring a stable supply of products
C) Lowering entry barriers in the industry
D) Enhancing understanding of the market
E) Differentiating from other intermediaries

Question 14

How did John Deere benefit from having strong,committed relationships with its dealer network?

A) The firm convinced dealers to service John Deer products sold by Home Depot.
B) The firm transitioned dealers from homeowner sales to commercial farm sales.
C) The firm persuaded dealers to promote Home Depot through their Web sites.
D) The firm used reward power to convert local dealers into franchises.
E) The firm demanded that small dealers consolidate in urban areas.

Question 15

What benefit of a strong,committed channel relationship is shared by both upstream and downstream channel members?

A) Guaranteeing market access
B) Getting closer to customers and dealers
C) Building profitable, competitive advantages
D) Increasing stockouts while lowering expenses
E) Providing new products quickly to global markets

Question 16

Which of the following is the best barrier to entry against future competitors?

A) Product price cuts
B) Unique product features
C) Highly fragmented wholesalers
D) Effective distribution networks
E) High-functioning logistical services

Question 17

Malcolm Motorcycles is the exclusive dealer of Harley-Davidson Motorcycles in Rhode Island.Harley-Davidson has most likely shown its commitment to Malcolm Motorcycles through ________.

A) reciprocity
B) selectivity
C) dedicated personnel
D) compatible strategies
E) idiosyncratic investments

Question 18

Which of the following would LEAST likely increase continuity expectations in a channel relationship?

A) Two-way communication
B) Reputation for fair dealing
C) Combined stakes
D) Imbalanced power
E) Trust

Question 19

In most longstanding channel relationships,commitment is best described as ________.

A) symmetrical
B) isolated
C) asymmetrical
D) partisan
E) short-term

Question 20

Which term refers to the idea that relational states belong to organizations and outlive personnel turnover?

A) Organizational memory
B) Idiosyncratic investment
C) Organizational culture
D) Relationship velocity
E) Relationship balance

Question 21

Which term refers to the positive,affective response to the financial rewards generated by a channel relationship?

A) Economic satisfaction
B) Strong commitment
C) Deep motivation
D) Economic utility
E) Intrinsic reward

Question 22

Which term best describes the free merchandising seminars offered by Philip Morris sales reps in France?

A) Selectivity
B) Generic investments
C) Economic satisfaction
D) Channel commitment
E) Idiosyncratic investments

Question 23

Which statement about procedural justice is most likely true?

A) Procedural justice refers to the fairness of rewards.
B) Profits and investments determine procedural justice.
C) Procedural justice is difficult to observe on a regular basis.
D) Perceptions of procedural justice stem from daily interactions.
E) Distributive justice has more impact than procedural justice on fairness perceptions.

Question 24

Which of the following would LEAST likely produce noneconomic satisfaction in a channel relationship?

A) Procedural fairness
B) Coercive strategies
C) Distributive fairness
D) Information exchange
E) Absence of dysfunctional conflict

Question 25

Company X and Company Z have enduring,substantial connections that cause the two firms to function according to their perceived single,shared interest.Which term best describes this situation?

A) Relational channel partnership
B) Functional arrangement
C) Transactional relationship
D) Global conglomeration
E) Joint partnership

Question 26

Which of the following is most likely a characteristic of the exploration phase of a marketing channel relationship?

A) Growing interdependence
B) Deepening motivation
C) Expanding benefits
D) Increasing expectations
E) Emerging norms

Question 27

Which term refers to gaining equitable rewards from a channel relationship regardless of daily interaction patterns?

A) Procedural fairness
B) Coercive strategies
C) Distributive fairness
D) Social capital
E) Functional conflict

Question 28

Which of the following would LEAST likely promote trust between marketing channel members?

A) Daily interactions
B) Mutual cooperation
C) Formalized procedures
D) Decentralized decision making
E) Stable organizational environments

Question 29

Super Shoes,an athletic shoe retailer,wants to create and maintain a strong channel relationship with Puma,a shoe manufacturer.What most likely motivates Super Shoes to want a relationship with Puma?

A) Enhancing market understanding
B) Keeping more routes to market open
C) Rebalancing power in the value chain
D) Becoming the supplier's preferred outlet
E) Creating barriers to entry for other brands

Question 30

Why would a supplier most likely choose a channel partner with goal congruence?

A) Distribution exclusivity
B) Lower chance of conflict
C) Expansion of social capital
D) Knowledge of product market
E) Reduced investment requirements

Question 31

Which term refers to confidence that a channel member is honest and benevolent?

A) Commitment
B) Motivation
C) Satisfaction
D) Loyalty
E) Trust

Question 32

Which term refers to the rate and direction of change in commitment?

A) Functional conflict
B) Relationship velocity
C) Relationship level
D) Channel power
E) Goal congruence

Question 33

What is a drawback of the stages-of-development idea of marketing channel relationships?

A) Regression means that the relationship will completely fail.
B) Commitment is the most important development stage.
C) Relationship development is rarely linear and orderly.
D) The concept fails to consider upstream motivations.
E) Momentum must be maintained throughout channels.

Question 34

What is the LEAST likely reason that most firms have a portfolio of relationships with varying degrees of closeness?

A) Aligning strategy and tactics
B) Gathering market information
C) Managing inventory logistics
D) Covering their markets
E) Meeting customer needs

Question 35

A channel member that receives equitable treatment on a daily basis regardless of the rewards derived from the relationship is most likely experiencing ________.

A) Procedural fairness
B) Economic rewards
C) Distributive fairness
D) Idiosyncratic benefits
E) Generic channel investments

Question 36

Which statement about the decline and dissolution phase of a marketing channel relationship is most likely FALSE?

A) Dissolution typically occurs gradually.
B) Decline often occurs without realization.
C) Dissolutions are usually accompanied by acrimony.
D) Both parties typically become dissatisfied equally and at the same time.
E) Increasing dissatisfaction tends to cause one party to withhold investments.

Question 37

What is the first phase of a marketing channel relationship?

A) Expansion
B) Awareness
C) Exploration
D) Commitment
E) Dissolution

Question 38

In terms of distributive fairness,low absolute rewards shared with a dealer most likely seem fair if ________.

A) the dealer makes big investments
B) other dealers are highly profitable
C) the dealer has alternative uses for its resources
D) other opportunities are appealing to the dealer
E) the manufacturer invests heavily in the relationship

Question 39

Which phase of a marketing channel relationship is most likely characterized by increased communication,cooperation,and goal congruence?

A) Expansion
B) Awareness
C) Exploration
D) Commitment
E) Dissolution

Question 40

What is the most likely benefit of choosing a distributor that a supplier already knows?

A) Mutual trust
B) Shared target markets
C) Ensured profitability
D) Existing social capital
E) Similar strategic goals

Question 41

Why do most firms maintain a portfolio of channel partners at varying relationship strengths? What are the benefits of maintaining weak relationships?

Question 42

Studies indicate that economic satisfaction is closely connected to trust in a channel relationship,but noneconomic satisfaction has little impact.

Question 43

What are idiosyncratic investments? How do they affect channel relationships? Provide examples of idiosyncratic investments to illustrate your response.

Question 44

Some manufacturers are not interested in committed relationships with downstream channel members because they view independent intermediaries as competition.

Question 45

What is relationship velocity? What is the purpose and benefit of determining relationship velocity?

Question 46

How has technology contributed to the committed relationship between P&G and Wal-Mart? How do both firms benefit from the relationship?

Question 47

Daily interactions between individuals in the channel determine the level of trust in the channel relationship.

Question 48

Evidence shows that channel partnerships increase profits and require limited financial investments,so firms should strive to build strong relationships with all channel partners.

Question 49

Commitment in longstanding channel relationships is typically asymmetrical.

Question 50

What role does trust play in a channel relationship? What factors cause trust to grow in a channel relationship?