Question 1

Who is primarily responsible for achieving cooperation that resolves conflict among marketing channel members?

Accepted Answer

The channel captain, who is typically the member with the most power or influence in the marketing channel, is primarily responsible for achieving cooperation that resolves conflict among marketing channel members. They are responsible for guiding and coordinating the activities of other channel members to ensure that they work together cohesively and achieve mutually beneficial outcomes.

Question 2

What type of channel conflict is between two or more wholesalers or two or more retailers?

Accepted Answer

The conflict between two or more wholesalers or two or more retailers is known as horizontal channel conflict. This type of conflict arises when the same level members of a distribution channel engage in a disagreement or dispute. It could be a result of fierce competition, differences in pricing, product assortment, or territory issues.

Question 3

What would occur between KitchenAid and retailers if KitchenAid established an electronic storefront where customers could purchase mixers and accessories from the company's website?

Accepted Answer

Establishing an electronic storefront where customers can purchase products directly from the manufacturer can lead to vertical channel conflicts with retailers who also sell the same products. This is because the manufacturer is now competing with its own retailers and may offer more favorable pricing or promotions on its own website, which can undermine the retailers' sales and relationships with customers.

Question 4

What type of distribution is the process of using every channel available to bring a product to market?

Accepted Answer

The process of using every channel available to bring a product to market is known as intensive distribution. This approach aims to make the product widely available in as many outlets as possible, regardless of the type or size of outlet. This is best suited for products that have mass appeal, such as food and beverages, personal care products, and household items. Intensive distribution ensures maximum reach and availability of the product to the target market, which can help in increasing sales and market share.

Question 5

What does distribution intensity refer to?

Accepted Answer

Distribution intensity refers to the number of intermediaries through which a producer distributes goods in a particular market.

Question 6

What is a planned marketing channel system called that is designed to improve distribution efficiency and cost-effectiveness through functional integration?

Accepted Answer

A vertical marketing system is designed to improve distribution efficiency and cost-effectiveness through functional integration. This system involves a planned channel of distribution where different levels of channel members work together to achieve greater efficiency and economies of scale.

Question 7

What occurs when a selective distribution strategy is chosen by a firm?

Accepted Answer

A selective distribution strategy involves limiting the number of retailers in a market area that can handle a firm's line. This allows the firm to have more control over the distribution and presentation of its products while still reaching a significant number of consumers. Option A is incorrect because a selective distribution strategy does not involve distributing products through all available channels. Option B is incorrect because granting exclusive rights to a single wholesaler or retailer is a form of exclusive distribution, not selective distribution. Option D is incorrect because a selective distribution strategy involves limiting the number of outlets available to the consumer.

Question 8

What is a major difference between an administered vertical marketing system and a contractual system?

Accepted Answer

The key difference between an administered vertical marketing system and a contractual system is the way they are organized. Administered systems rely on the dominant player (channel captain) to coordinate the activities of the other players in the system without a formal agreement, whereas contractual systems rely on formal agreements between all members to coordinate their activities.

Question 9

Lakeview Industries contracts with Marine Motor Distributors to carry its newly patented outboard engine.In exchange for exclusive dealership rights, Marine Motor has agreed to carry the full line of nautical clothing accessories offered by Lakeview.What can this agreement best be described as?

Accepted Answer

This agreement can best be described as a tying agreement because Marine Motor Distributors is required to carry the full line of nautical clothing accessories in exchange for exclusive rights to the outboard engine, linking the sale of two products.

Question 10

Who are marketing intermediaries very beneficial to?

Accepted Answer

Marketing intermediaries can help small producers reach larger customers by using their established distribution channels and networks. Producers with wide product lines and well-financed national manufacturers may not necessarily rely on intermediaries as heavily. Similarly, suppliers with a small market may not benefit as much from intermediaries as they likely have established relationships with their customers already.

Question 11

While exclusive distribution is legal for companies first entering a market, what does such an agreement violate if used by firms with a sizable market share seeking to bar competitors from the market?

Accepted Answer

Exclusive distribution agreements used by firms with a sizable market share to bar competitors from the market violate the Competition Act which prohibits anti-competitive behaviors.

Question 12

Who is the dominant and controlling member of a marketing channel?

Accepted Answer

The channel captain, also known as the channel leader or the dominant member, is the organization or member of a marketing channel that wields the most power and control over the other members. They are responsible for coordinating the activities of the other members and making sure they are all working towards the same goal. The channel captain is usually the manufacturer or producer of the product being sold, but it could also be a powerful retailer or wholesaler.

Question 13

What type of marketing channel conflict can result when identically branded products are carried in competing retail pharmacies, discount houses, department stores, convenience stores, and mail-order houses?

Accepted Answer

Horizontal conflict occurs when organizations at the same level of the marketing channel, such as competing retailers, are in disagreement or competition, for example, when identically branded products are available through various retail formats.

Question 14

What type of distribution has a limited number of marketing intermediaries in a geographic region?

Accepted Answer

The answer of What type of distribution has a limited...

Question 15

What are goods called when they are manufactured abroad under license from a Canadian manufacturer, and then sold in the Canadian market in competition with Canadian-produced goods from the Canadian manufacturer?

Accepted Answer

These are known as grey goods or parallel imports. They are produced under license from a Canadian manufacturer but are then imported and sold in Canada by third-party sellers at a lower price. This can create competition for the Canadian manufacturer's goods in the domestic market.

Question 16

Sherwin-Williams Paint Company sells the paint it manufactures through its company-owned retail paint stores.What type of marketing system is the company's marketing channel?

Accepted Answer

Sherwin-Williams Paint Company's marketing channel is a corporate marketing system as it owns and operates its own retail paint stores to sell its manufactured paint products.

Question 17

What is a common characteristic of a channel when the unit price of the product is low?

Accepted Answer

When the unit price of a product is low, it often necessitates a longer channel to distribute the product efficiently and cost-effectively, reaching a wider market without significantly increasing the price per unit. This is because the costs and logistics of distributing low-cost items directly from producer to consumer can be prohibitive, making intermediaries like wholesalers and retailers necessary to achieve economies of scale.

Question 18

What must a wholesaler do to grow profitably in a competitive environment?

Accepted Answer

Cutting costs may not always be feasible or sustainable in the long run, making tying agreements can lead to legal issues, and exclusive distribution can limit the variety of products offered. Providing better service at a lower cost is a more viable strategy that can attract and retain customers in a competitive environment.

Question 19

When can an intermediary be eliminated from a marketing channel?

Accepted Answer

An intermediary can be eliminated from a marketing channel when another intermediary or a new system replaces it. This can happen for various reasons, such as an intermediary becoming obsolete due to technological advancements, or the introduction of a new more efficient intermediary that makes the previous one redundant.

Question 20

What is the difference between a retail cooperative and a wholesale-sponsored voluntary chain?

Accepted Answer

In a retail cooperative, the retailers purchase ownership shares of the cooperative and have a say in the decision-making process. On the other hand, in a wholesale-sponsored voluntary chain, the retailer independently owns their business, but they have a contractual agreement with the wholesaler for purchasing and marketing support. The wholesaler does not have ownership shares in the retailer's business, and they do not have a say in the decision-making process. Therefore, option C is the correct answer.

Quiz 11: Marketing Channels and Supply Chain Management