Question 1

A by-product of the rise of the Internet has been an increase in vertical and horizontal channel conflict.

Accepted Answer

The rise of the Internet has indeed led to an increase in both vertical and horizontal channel conflict. This is because the Internet allows manufacturers to sell directly to consumers, bypassing traditional intermediaries (vertical conflict), and it also intensifies competition among retailers and distributors at the same level (horizontal conflict).

Question 2

The primary source of horizontal conflict is scrambled merchandising.

Accepted Answer

Scrambled merchandising occurs when retailers broaden their product lines into areas not traditionally associated with their type of business, leading to increased competition and conflict among retailers of different types over the same customer base. This is a primary source of horizontal conflict, where entities at the same level of the market (e.g., retailers) compete.

Question 3

Vertical conflict occurs when firms at one level of the channel argue with firms at another level.

Accepted Answer

Vertical conflict occurs between different levels of the same channel, such as a manufacturer and a retailer, rather than between firms at the same level.

Question 4

Channel conflict sometimes stems from a manufacturer's attempts to bypass wholesalers and deal directly with retailers or consumers.

Accepted Answer

Channel conflict can occur when a manufacturer decides to bypass intermediaries like wholesalers and sell directly to retailers or consumers, potentially undermining the business of the wholesalers.

Question 5

Wholesalers can improve their competitive position by developing middlemen's brands.

Accepted Answer

Wholesalers can enhance their competitive position by developing and promoting their own brands (often referred to as private labels or middlemen's brands), which can offer higher profit margins and unique products that differentiate them from competitors.

Question 6

The slotting fee trend occurs most commonly with new products that are trying to get shelf space in supermarkets.

Accepted Answer

Slotting fees are payments made by manufacturers to retailers to secure shelf space for their new products, which is a common practice in the competitive supermarket industry.

Question 7

The manufacturer is the most appropriate member to control the distribution channel.

Accepted Answer

The manufacturer may not always be the most appropriate member to control the distribution channel because intermediaries like wholesalers and retailers often have better access to end markets, more expertise in distribution, and stronger relationships with customers, making them potentially more effective in certain aspects of distribution.

Question 8

Channel control becomes unlawful when it substantially lessens competition, creates a monopoly, or restrains trade.

Accepted Answer

Channel control becomes unlawful under antitrust laws when it substantially lessens competition, creates a monopoly, or otherwise restrains trade, as these actions can harm consumers and the economy by limiting choices and driving up prices.

Question 9

Exclusive dealing occurs when a small appliance manufacturer requires a retailer to carry its entire line of appliances in order to stock its popular ice cream maker.

Accepted Answer

The answer of Exclusive dealing occurs when a small appliance...

Question 10

Under no condition is an exclusive-territory policy legal.

Accepted Answer

An exclusive-territory policy can be legal if it does not violate antitrust laws and is used in a manner that promotes competition rather than restricts it.

Question 11

_____ _____ actually take title to the products they help to market.

Accepted Answer

The answer of _____ _____ actually take title to the...

Question 12

A _____ _____ always includes both the producer and the final customer for the product in its present  form as well as any middlemen such as retailers and wholesalers.

Accepted Answer

The answer of A _____ _____ always includes both the...

Question 13

Each Christmas, Heritage Farm offers gift givers a chance to buy the yield of one pecan tree to give to someone on their gift lists. Heritage Farm sends the recipient a card at Christmas time and, as soon as the pecans are harvested in the fall, Heritage Farm sends them to the recipient. This is an example of _____  distribution.

Accepted Answer

The answer of Each Christmas, Heritage Farm offers gift givers...

Question 14

A _____ _____ _____ is a tightly coordinated distribution channel designed specifically to improve  operating efficiency and marketing effectiveness.

Accepted Answer

The answer of A _____ _____ _____ is a tightly...

Question 15

Ace Hardware Stores, Domino's pizza restaurants, IGA grocery stores, and 7-Eleven convenience stores are all examples of _____ vertical marketing systems.

Accepted Answer

The answer of Ace Hardware Stores, Domino's pizza restaurants, IGA...

Question 16

_____ distribution places most of the advertising and promotion burden on the producer.

Accepted Answer

The answer of _____ distribution places most of the advertising...

Question 17

The only place in the entire United States where you can buy one-of-a-kind decorative art pieces created by Lord and Lockridge is at the Birmingham Frame and Art Company. This is an extreme example of  _____ distribution.

Accepted Answer

The answer of The only place in the entire United...

Question 18

______ _____ exists when one channel member perceives another channel member to be acting in a way  that prevents the first member from achieving its distribution objectives.

Accepted Answer

The answer of ______ _____ exists when one channel member...

Question 19

Toys "R" Us and Wal-Mart can experience _____ conflict, but a toy manufacturer and a toy distribution  center cannot.

Accepted Answer

The answer of Toys "R" Us and Wal-Mart can experience...

Question 20

Some retailers demand producers pay a so-called _____ _____ in order to get their products placed on the  store's shelves.

Accepted Answer

The answer of Some retailers demand producers pay a so-called...

Quiz 14: Channels of Distribution

A by-product of the rise of the Internet has been an increase in vertical and horizontal channel conflict.

The primary source of horizontal conflict is scrambled merchandising.

Vertical conflict occurs when firms at one level of the channel argue with firms at another level.

Channel conflict sometimes stems from a manufacturer's attempts to bypass wholesalers and deal directly with retailers or consumers.

Wholesalers can improve their competitive position by developing middlemen's brands.

The slotting fee trend occurs most commonly with new products that are trying to get shelf space in supermarkets.

The manufacturer is the most appropriate member to control the distribution channel.

Channel control becomes unlawful when it substantially lessens competition, creates a monopoly, or restrains trade.

Exclusive dealing occurs when a small appliance manufacturer requires a retailer to carry its entire line of appliances in order to stock its popular ice cream maker.

Under no condition is an exclusive-territory policy legal.

_ _ actually take title to the products they help to market.

A _ _ always includes both the producer and the final customer for the product in its present form as well as any middlemen such as retailers and wholesalers.

A ___ _ ___ is a tightly coordinated distribution channel designed specifically to improve operating efficiency and marketing effectiveness.

Ace Hardware Stores, Domino's pizza restaurants, IGA grocery stores, and 7-Eleven convenience stores are all examples of _____ vertical marketing systems.

_____ distribution places most of the advertising and promotion burden on the producer.

The only place in the entire United States where you can buy one-of-a-kind decorative art pieces created by Lord and Lockridge is at the Birmingham Frame and Art Company. This is an extreme example of _____ distribution.

__ _ exists when one channel member perceives another channel member to be acting in a way that prevents the first member from achieving its distribution objectives.

Toys "R" Us and Wal-Mart can experience _____ conflict, but a toy manufacturer and a toy distribution center cannot.

Some retailers demand producers pay a so-called _ _ in order to get their products placed on the store's shelves.