Quiz 11: Marketing Channels

________ the manufacturer or service provider is the set of firms that supply the raw materials, components, parts, information, finances, and expertise needed to create a product or service. Downstream from Upstream from Separated from Congruous to Parallel with

When suppliers, distributors, and customers partner with each other to improve the performance of the entire system, they are participating in a ________. value delivery network channel of distribution supply chain demand chain supply and demand chain

Most producers today sell their goods to ________. final users final users and marketing members intermediaries the government at various levels competitors

A company's channel decisions directly affect every ________. channel member marketing decision customer's choices employee in the channel competitor's actions

Distribution channel decisions often involve ________ with other firms, particularly those that involve contracts or relationships with channel partners. short-term commitments long-term commitments major problems financial losses disagreements

From the economic system's point of view, the role of marketing intermediaries is to transform the assortment of products made by producers into the assortment of products wanted by ________. channel members distributors consumers manufacturers marketers

Producers benefit from using intermediaries because they ________. offer greater efficiency in making goods available to target markets bring a fresh point of view to strategy development eliminate risk are generally backlogged with orders refuse to store products for longer than a few days

Intermediaries play an important role in matching ________. dealer with customer supply and demand strategy and product manufacturer to product information and promotion

Channel members add value by bridging the major gaps of ________ that separate goods and services from those who would use them. time, place, and form place, possession, and form time, place, and possession place, time, and need place, need, and distribution

In marketing terms, we say that the number of intermediary levels indicates the ________ of a channel. depth complexity involvement length width

To a producer of goods, a greater number of channel levels means ________ and greater channel complexity. less distance between producer and end consumer less control more potential ideas higher taxes fewer channel members

All of the institutions in a channel are connected by flows, including physical flow, flow of ownership, payment flow, information flow, and ________ flow. promotion acquisition customer return product by-product

A distribution channel is more than a collection of firms connected by various flows; it is a(n) ________ in which people and companies interact to accomplish individual, company, and channel goals. added value chain complex behavioural system corporate marketing system vertical marketing system multichannel system

Channel conflict can ________ different levels of the same channel or ________ firms at the same level of the channel. overlook; include be between; among contractualize; corporatize overcome; eliminate damage; bring together

Historically, ________ have lacked the leadership to assign member roles and manage conflict. corporate vertical marketing systems contractual vertical marketing systems conventional distribution channels administered vertical marketing systems conventional vertical marketing systems

A conventional distribution channel consists of one or more ________ producers, wholesalers, and retailers. product-related independent contract franchised hybrid

A channel consisting of one or more independent producers, wholesalers, or retailers each seeking to maximize its own profits-even at the expense of profits for the channel as a whole-is a(n) ________. vertical marketing system conventional distribution channel independent channel allocation corporate VMS administered vertical marketing system

An advantage of a vertical marketing system (VMS) over a conventional distribution channel is that it acts as a ________ system. unified democratic socially responsible customer-driven task-driven

A corporate VMS has the advantage of controlling the entire distribution chain under ________. a profit-maximizing strategic plan single ownership mass distribution a few intermediaries franchise agreements

Which of the following are the three major types of vertical marketing systems? corporate, contractual, and chain contractual, corporate, and independent corporate, contractual, and administered administered, independent, and franchised corporate, contractual, and task

A distinguishing feature of a contractual VMS is that coordination and conflict management among the independent members of the channel are attained through ________. agents and brokers working partnerships limited liability incorporation contractual agreements natural competitive forces

The most common type of contractual VMS agreement in business is the ________. franchise organization multichannel marketing system conventional marketing channel corporate VMS administered VMS

Leadership in which type of marketing system is assumed not through common ownership or contractual ties, but through the size and power of one or a few dominant channel members? horizontal marketing system administered VMS corporate VMS conventional marketing channel multichannel distribution system

In a ________, two or more companies at one level join together to follow a new marketing opportunity. franchise corporate VMS horizontal marketing system multichannel distribution system conventional distribution channel

Hybrid marketing systems are also called ________. dual distribution systems multichannel distribution systems administered franchises horizontal multichannel systems contractual marketing systems

Which of the following is the most likely disadvantage of adding new channels in a multichannel distribution system? decreasing understanding of complex markets decreasing control over the system fewer opportunities for franchising increasing disintermediation reducing conflict among channel members

Which of the following is a major disadvantage of a multichannel system? channel conflict less net profit fewer domestic sales inefficiencies declining employee morale

Due in a large part to advances in technology, ________ is a major trend whereby product and service producers are bypassing intermediaries and going directly to final buyers, or radically new types of channel intermediaries are emerging to displace traditional ones. the vertical marketing system the corporate marketing system disintermediation the corporate merger the hostile takeover

In many industries, traditional intermediaries are dropping by the wayside because of changes in ________ and the growth of ________ marketing. federal laws; business-to-business provincial/territorial and local laws; target franchise structure; independent technology; direct and online channel design; retail

Which type of product might require a more direct marketing channel to avoid delays and too much handling? lower-priced products perishable products high-priced products products in their maturity stage products in their decline stage

When a company determines the number of channel members to use at each level, three strategies are available: intensive, exclusive, and ________ distribution. multichannel selective international direct extensive

Sometimes a producer chooses only a few dealers in a territory to distribute its products or services.Generally these dealers are given a right to ________ distribution. exclusive selected intensive administered corporate

Which type of distribution is used when the producer wants more than one, but fewer than all, of the intermediaries who are willing to carry its products? exclusive selective intensive dual multichannel

Marketing channel management calls for selecting, managing, ________, and evaluating channel members over time. reducing conflict reducing waste motivating terminating reinstating

A company should think of its intermediaries as both its ________ and ________. competitors; partners customers; partners competitors; marketers customers; employees customers; competitors

Marketing logistics involves which of the following distribution flows? outbound and inbound outbound, inbound, and reverse outbound and reverse inbound and reverse outbound

The difference between distribution centres and storage warehouses is that distribution centres are designed to ________. store goods for longer periods hold larger volumes move goods rather than just store them primarily be owned by the manufacturer be automated

To reduce inventory management costs, many companies use a system called ________, which involves carrying only small inventories of parts or merchandise, often only enough for a few days of operation. reduction-inventory management just-in-time logistics limited inventory logistics supply chain management economic order quantity

Through the use of ________, or "smart tag" technology, a company is able to locate exactly where a product is within the supply chain. RFID PRM VMS IT 3PL

Using ________, retailers can share real-time data on sales and current inventory levels with suppliers who take responsibility for ordering and delivering products to retailers, thereby saving time and money. dual distribution modes continuous inventory replenishment systems the Internet their own trucking and distribution systems integrated distribution

Today, a growing number of firms now outsource some or all of their logistics to ________. cross-functional teams intermediaries channel members third-party logistics providers competitors

Proud Pets, a producer of clothing and accessories for pets, has recently partnered with a regional chain of pet stores.Which of the following would Proud Pets be LEAST likely to expect from its new channel member? promoting its products through advertising assembling and packaging its products for final sale distributing relevant marketing research information identifying raw materials and other productive inputs negotiating on its products' prices

Steve's Physco Skates sells its products to Walmart, which then sells them to consumers.This is an example of a(n) ________. direct marketing channel producer channel indirect marketing channel retailer channel corporate vertical marketing system

Staples Office Supply opened an online store that created competition with many of its dealers.The corporate office created a(n) ________ conflict. channel problematic functional horizontal intermediation

Which of the following is an example of a manufacturer-sponsored retailer franchise system? fast-food restaurants such as McDonald's and Burger King Starbucks operating within Target stores Ford and its network of independent franchised dealers licensed bottlers that bottle and sell Coca-Cola to retailers motels such as Holiday Inn and Ramada Inn

When McDonald's offers its products inside of a Walmart store, it is acting as part of a ________. conventional distribution channel direct marketing channel disintermediated system administered VMS horizontal marketing system

Which of the following is an example of a multichannel distribution system? Walmart locating to several countries Sears' catalog and retail store sales Avon's door-to-door distribution Starbuck's location inside of book stores a hotel providing guest privileges at a health spa across the street

When Amazon began delivering Books directly to customers through delivery instead of using a brick-and-mortar system, Amazon was following the trend of ________. indirect marketing disintermediation a franchise system exclusive distribution selective distribution

Chewing gum is stocked in many outlets in the same market or community; in fact, it is placed in as many outlets as possible.This is an example of ________ distribution. exclusive selective multichannel intensive disintermediated

Which product(s) will most likely be intensively distributed? Olympus digital cameras BMW cars Guess blue jeans Coca-Cola Nike running shoes

Which product will most likely be exclusively distributed? BMW cars Levi's blue jeans Bazooka bubble gum Prairie Farms yogurt Coca-Cola

Tiffany & Co jewelry can only be found in a limited number of intermediaries.This is an example of ________. exclusive distribution intensive distribution quality distribution high-end distribution independent distribution

Max Samuelson is a high-end Montreal-based fashion designer who markets his clothing lines through a limited number of highly reputable retailers.Max uses ________. exclusive distribution exclusive dealing exclusive territorial agreements full-line forcing tying agreements

________ is the basis of all discount operations and is typically used by sellers of convenience goods.Retailers offering this level of service require customers to perform their own "locate-compare-select" process in order to save money. Limited-service Self-service Full-service Specialty-service Wholesale

________, such as Sears, provide more sales assistance because they carry more shopping goods about which customers need information.Their increased operating costs result in higher prices. Self-service retailers Full-service retailers Off-price retailers Limited-service retailers Specialty-service retailers

Which type of stores usually carry more specialty goods for which customers like to be "waited on" and have much higher operating costs, which are passed along to the customer? self-service stores category killer stores full-service stores independent stores off-price stores

Which of the following retailers likely put the most emphasis on salespeople assisting customers? limited-service retailers full-service retailers self-service retailers megaretailers off-price retailers

Specialty stores carry ________ with ________ within them. convenience items; mostly staples narrow product lines; deep assortments narrow product lines; shallow assortments wide product lines; shallow assortments wide product lines; deep assortments

Which type of store carries a wide variety of product lines and differentiates itself through service, but has been squeezed in recent years between more focused and flexible specialty stores on the one hand and more efficient, lower-priced discounters on the other? chain department factory outlet merchant wholesaler independents

Which type of store is much larger than regular supermarkets and offers a large assortment of routinely purchased food products, nonfood items, and services? category killer chain factory outlet superstore off-price

Which type of store carries a deep assortment, has knowledgeable staff, and might actually be viewed as a giant specialty store? category killer chain factory outlet shopping center independent

________ sell standard merchandise at lower prices by accepting lower margins and selling higher volume. Merchant wholesalers Discount stores Full-service retailers Limited-service retailers Factory outlets

________ have filled the ultralow-priced, high-volume gap by buying at less than regular wholesale prices and charging consumers less than retail. Off-price retailers Discount stores Convenience stores Chain store Limited-service retailers

________ are sometimes several stores grouped together.These stores offer prices as low as 50 percent below retail on a wide range of mostly surplus, discounted, or irregular items. Category killers Factory outlets Specialty stores Superstores Power centers

________ operate in warehouse-like facilities, sell a limited selection of items, and offer few frills.Customers pay annual membership fees and are able to purchase goods at deep discounts. Warehouse clubs Independent off-price retailers Factory outlets Discount stores Superstores

Touch-screen kiosks, customer-loyalty cards, handheld shopping assistants, and self-scanning checkout systems are all examples of how retailers use technology to ________. maintain inventory costs send information between stores interact with suppliers decrease the need for promotions meet consumers' technological expectations

________ includes all activities involved in selling goods and services to those buying for resale or business use. Wholesaling Retailing Franchising Discounting Disintermediation

________ buy mostly from producers and sell to retailers and industrial consumers. Independents Factory outlets Wholesalers Discount stores Megaretailers

________ are the largest group of wholesalers.The group can be divided into the two broad types of full-service and limited-service. Brokers Manufacturer sellers Agents Merchant wholesalers Specialty wholesalers

________ and ________ do not take title to goods, and they perform only a few channel functions. Full-service wholesalers; limited-service wholesalers Brokers; agents Branches; office Power centres; independent wholesalers Independent wholesalers; off-price retailers

A(n) ________ brings buyers and sellers together and assists in negotiations. agent broker retailer wholesaler retail convergence

________ represent a buyer or seller on a more permanent basis. Brokers Franchises Agents Retailers Intermediaries

Like retailers, wholesalers must ________ their target markets and ________ themselves effectively, for they cannot serve everyone. define; position position; define discount; franchise franchise; discount identify; compare

At Neiman Marcus, a first-class department store, customers shop for specialty products and have come to expect assistance in every phase of the shopping process.Neiman Marcus is a ________. self-service retailer limited-service retailer full-service retailer specialty store power centre

GameStop sells video games and systems, offering a narrow product line with a deep assortment within that line.GameStop is a(n)________. department store convenience store specialty store category killer off-price retailer

7-Eleven, Stop-N-Go, and Macs, small stores that traditionally have had a primary market of young, blue-collar men, are examples of ________. specialty stores department stores convenience stores supermarkets category killers

Overstock.com, a web seller that buys furniture, clothing, electronics, and more from a variety of producers at less-than-regular wholesale prices and then charges customers less than retail, is a(n) ________. discount store independent off-price retailer factory outlet wholesale club category killer

A growing number of outlet malls now feature upscale brands such as Coach, Polo Ralph Lauren, Dolce & Gabbana, and Giorgio Armani.Which of the following are most likely to protest about this trend to the manufacturers of these brands? membership warehouses agents brokers department stores factory outlets

McDonald's, Subway, and Pizza Hut are all examples of a ________. voluntary chain retailer cooperative franchise full-service retailer power centre

Which of the following is most likely the greatest factor in the increasingly short life cycle of new retail forms? changes in technology economic swings import and export regulations stagnating retail convergence global expansion of major retailers

All of the following are trends in Canadian retail except __________. experiential retailing enhanced use of in-store technology increased gift card usage social media and mobile rapid growth of malls

Which of the following is not a good practice in social media for retailing? monitor the conversations identify a pool of influencers who can spread the right message incentivize influencers to spread the right message bash competitor offerings online to make you look good develop a relationship with the influencers

Retailers use digital technologies to __________. provide a more personalized shopping experience keep certain consumers out of the store charge higher prices avoid customer feedback and complaints eliminate transportation costs

In Canada, online growth rates are __________. decreasing rapidly decreasing modestly increasing at a double-digit rate every year increasing very modestly not changing

Most retailers believe that __________. the Internet is a fad social media is unreliable online retail offers an additional channel to increase reach and sales online retail is an additional channel to provide information but not sales the cost of doing business on the Internet is not justified by sales

A business that primarily sells products and services to consumers is a __________. retailer wholesaler broker agent rack jobber

A business that sells goods and services to other business, who in turn resell the goods or services is a ___________. retailer wholesaler broker agent rack jobber

The Schticky is a reusable lint roller that is sold via television direct response communications.The company that markets the Schticky receives the orders and then arranges to have the Schticky shipped directly to the customer from the supplier.This is an example of __________. drop shipping wholesaling to consumers brokering disintermediation rack jobs

A company that buys merchandise and sets up its own merchandise displays in retail stores is a(n) __________. pop-up store wholesaler broker agent rack jobber

Which of the following is not an intermediary? retailer wholesaler broker manufacturer rack jobber

A(n) _______ is best described as a wholesaler who does not take title to goods, and whose function is to bring buyers and sellers in the channel together. retailer agent broker manufacturer rack jobber

A representative of a buyer who does not take title to goods is a(n) _______. retailer agent broker manufacturer rack jobber

A representative of a seller who does not take title to goods is a(n) _______. retailer agent broker manufacturer rack jobber

A channel structure that has a single owner from production to retail is called a(n) _________. administered vertical marketing system corporate vertical marketing system contractual vertical marketing system corporate vertical ecosystem horizontal marketing system

A channel structure that has one dominant player in the system that coordinates successive stages of production, distribution, and retailing is called a(n) _________. administered vertical marketing system corporate vertical marketing system contractual vertical marketing system corporate vertical ecosystem horizontal marketing system

Many Liquid Nutrition smoothie stores operate under license from the Liquid Nutrition head office.This business model is an example of a(n) __________. administered vertical marketing system corporate vertical marketing system service supply chain franchise horizontal marketing system

Franchising is an example of a(n) __________. administered vertical marketing system corporate vertical marketing system contractual vertical marketing system corporate vertical ecosystem horizontal marketing system

Producing a product or service and making it available to buyers requires building relationships not just with customers, but also with key suppliers and resellers in the company's supply chain.

In creating customer value, it is more important for a company to build relationships with downstream channel partners than with upstream supplier partners.

With the success of the Internet, few producers sell through intermediaries today.

Imaginative distribution systems can be used to gain a competitive advantage.

A major role played by intermediaries is to buy large quantities of products from many producers and break them down into the smaller quantities and broader assortments wanted by consumers.

Members of the marketing channel may help a company complete transactions by performing key functions such as promotion and negotiation.

The producer and the final consumer are part of every type of marketing channel.

In a direct marketing channel, which has no intermediary levels, the company sells directly to consumers.

In a conventional distribution channel, no channel member has much control over the other members, and no formal means exists for assigning roles and resolving channel conflict.

When Sherwin Williams Paint Company has single ownership of integrated, successive stages of production and distribution, it has created a corporate VMS.

The three main types of franchises are manufacturer-sponsored retailers, manufacturer-sponsored wholesalers, and service-firm-sponsored retailers.

When the NewWay Dry Cleaners and The Easy Laundromat in your hometown join forces to follow a new marketing opportunity, they are forming a horizontal marketing system.

Always Fresh Produce Company has a route selling to more than 100 groceries, schools, and restaurants at wholesale prices.Last week the owners opened up a walk-in discounted consumer produce outlet.Always is now using a multichannel distribution system.

Disintermediation is a threat to incumbent retailers in North America.

Disintermediation has occurred when an online marketer takes business away from traditional brick-and-mortar retailers.

Intensive distribution seeks many outlets in a market, while selective distribution seeks only one outlet in a given market area.

The producer and intermediaries need to agree on the terms and responsibilities of each member, including price policies, conditions of sale, territorial rights, and specific services to be performed by each party.

Under the strategy of exclusive distribution, a seller allows only certain retail outlets to carry its products.

The key to managing inventory is to balance the costs and benefits of carrying larger inventories with the costs and benefits of holding less.

Today, fewer companies outsource their logistics to third-party logistics (3PL) providers.

Wholesaling includes all the activities involved in selling products or services directly to final consumers for their personal, nonbusiness use.

Retailers can be classified in terms of several characteristics, including the amount of service they offer, the breadth and depth of their product lines, the relative prices they charge, and how they are organized.

Full-service retailers, such as Sears, provide more sales assistance because they carry more shopping goods about which customers need information.

Limited-service retailers, such as specialty stores and first-class department stores, employ salespeople who assist customers in every phase of the shopping process.

Department stores carry narrow product lines with deep assortments within those lines.

For department stores that have been squeezed between more focused and flexible specialty stores on the one hand, and more efficient, lower-priced discounters on the other, service remains the key differentiating factor.

Category killers carry a deep assortment of a particular product line and have a knowledgeable staff.

Off-price retailers pay regular wholesale prices for their merchandise but maintain low prices by accepting lower margins and selling higher volume.

A discount store buys at less than regular wholesale prices and charges consumers less than retail.

Off-price retailers may, in fact, be divisions of larger retail corporations.

Factory outlets, independent off-price retailers, and warehouse clubs all buy their merchandise in a similar fashion.

In warehouse clubs, customers must independently bring large items to the checkout line.

Intermediaries reduce the number of channel transactions.

Bugatti Veyron is the world's fastest production car and can reach a top speed of 266mph.Bugatti should use a selective distribution channel.

A new trend in retail marketing is shoppable media, which means that customers can purchase products using their personal mobile devices while watching an in-store video.

Canadians and Americans have different shopping patterns related to price, convenience, and reward programs.

Because wholesalers buy mostly from producers and sell mostly to retailers, many of the largest and most important wholesalers are unknown to most final consumers.

A broker brings buyers and sellers together and assists in negotiation.

Explain why "value delivery network" is a more relevant expression to use than the terms supply chain and demand chain.

How do channel members add value to a marketing system?

Describe four of the eight key functions that members of the marketing channel perform.

Compare and contrast a conventional distribution channel with a vertical marketing system (VMS).

Why are multichannel distribution systems gaining popularity today?

How have changes in technology and the growth of online marketing affected the design of marketing channels?

Distinguish between the three distribution strategies.

Why are more and more companies turning to third-party logistics providers (3PLs)?

Retail stores can be classified in terms of several characteristics.Name four of these.

Compare and contrast specialty stores and convenience stores.

Describe the differences between discount stores and off-price retailers.

Explain how wholesalers add value for a producer.

Explain how wholesalers have been able to use technology to cut costs.

How do channel members add value?

What is the role of marketing intermediaries?

Give an example of channel conflict.

Explain channel power in a conventional distribution channel.

Explain channel power in a vertical marketing system.

How can a firm benefit from involvement in a contractual VMS?

Explain Walmart's role in an administered VMS.

How can a firm benefit from participating in a horizontal marketing system?

Give two examples of multichannel distribution systems.

What types of products are intensively distributed?

What types of products are exclusively distributed?

What types of products are selectively distributed?

What is the difference between a storage warehouse and a distribution warehouse?

How can a company benefit from a just-in-time logistics system?

What types of services are provided by a 3PL?

What is the difference between a limited-service and a full-service retailer?

What types of products do specialty stores carry? Give an example of a specialty store.

What types of products may be sold through category killers?

How can discount stores sell merchandise at lower prices?

What might be a major concern for a high-end designer whose merchandise is sold through factory outlets?

How do wholesalers and agents/brokers differ?

Scenario In the 1970s, Shipshewana was only a small town with a hardware store, a grain mill, a shoe store, a small restaurant, and a grocery store.Over the next two decades, the small town transformed into an international tourist attraction, attracting thousands of tourists who are intrigued with the lifestyle of Shipshewana's largest population-the Amish. en and Mary Miller, having grown up within the Amish faith, decided to capitalize on their town's popularity and their woodworking skills.Their shop, Indiana Wood, began with a small display of handmade hickory rocking chairs, Ben Miller's specialty.But within a few months, the display at Indiana Wood included picnic tables, flower boxes, and small handmade novelty items.No other shop offers the same. ary Miller decorated the shop's display room with authentic Amish décor and eventually hired three Amish friends to sew and embroider napkins and other textiles per customer request.In addition, two women from the Amish community sought permission from the Millers to display home-baked pastries and jellies on Tuesdays and Wednesdays, the town's busiest tourist days, when Shipshewana attracts swarms of visitors to its flea market on the south edge of town. Shipshewana is full of specialty shops," Mary Miller stated."People don't come here to buy things made in China or Taiwan.They want real, Amish-made goods." Why might Indiana Wood be classified as a full-service retailer?

Scenario In the 1970s, Shipshewana was only a small town with a hardware store, a grain mill, a shoe store, a small restaurant, and a grocery store.Over the next two decades, the small town transformed into an international tourist attraction, attracting thousands of tourists who are intrigued with the lifestyle of Shipshewana's largest population-the Amish. en and Mary Miller, having grown up within the Amish faith, decided to capitalize on their town's popularity and their woodworking skills.Their shop, Indiana Wood, began with a small display of handmade hickory rocking chairs, Ben Miller's specialty.But within a few months, the display at Indiana Wood included picnic tables, flower boxes, and small handmade novelty items.No other shop offers the same. ary Miller decorated the shop's display room with authentic Amish décor and eventually hired three Amish friends to sew and embroider napkins and other textiles per customer request.In addition, two women from the Amish community sought permission from the Millers to display home-baked pastries and jellies on Tuesdays and Wednesdays, the town's busiest tourist days, when Shipshewana attracts swarms of visitors to its flea market on the south edge of town. Shipshewana is full of specialty shops," Mary Miller stated."People don't come here to buy things made in China or Taiwan.They want real, Amish-made goods." Why do specialty stores flourish in Shipshewana?