Question 1

From a producer's viewpoint, which of the following is an advantage of intensive distribution over selective distribution?
A) Intermediaries' price-cutting may be reduced.
B) Intermediaries' facilities will be more convenient for customers.
C) Intermediaries can be required to carry larger stocks.
D) More aggressive selling can be expected from intermediaries.
E) Better service can be required from intermediaries.

Accepted Answer

Intensive distribution aims to provide widespread availability of a product, thus intermediary facilities being more convenient for customers is an advantage as it increases the product's accessibility.

Question 2

Intermediaries are needed LEAST when the desired degree of market exposure is:
A) intensive.
B) ideal.
C) selective.
D) exclusive.
E) None of these choices is correct.

Accepted Answer

Intermediaries are needed least when the desired degree of market exposure is exclusive, as this approach involves limiting the distribution to a very select group of retailers or distributors. By doing this, the company can maintain a greater degree of control over product quality and pricing, while also creating a more exclusive image for the brand. Therefore, intermediaries are not necessary in this scenario.

Question 3

Which of the following statements about ideal market exposure is true?
A) As a firm goes from exclusive to intensive distribution, it loses progressively more control over price and service offered by retailers.
B) A producer usually should seek maximum market exposure.
C) Intensive distribution means trying to sell through all retail stores.
D) It is necessary to get almost 100 percent market exposure to justify national promotion.
E) All of these statements about ideal market exposure are true.

Accepted Answer

As a firm increases its distribution intensity from exclusive to intensive, it typically loses control over how its products are priced and serviced by retailers, as more retailers are involved.

Question 4

Which of the following is true of selective distribution?
A) It is commonly needed for convenience products and business supplies used by all offices.
B) It is selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product.
C) It is selling through only one intermediary in a particular geographic area.
D) It is making a product available widely enough to satisfy target customers' needs but not exceed them.
E) It is selling through only those intermediaries who will give the product special attention.

Accepted Answer

Selective distribution involves selling through intermediaries who will give the product special attention, ensuring that the product is available to target customers without saturating the market.

Question 5

"Selective distribution" means selling through:
A) retailers but not wholesalers.
B) multichannel distribution.
C) all responsible and suitable wholesalers.
D) only those wholesalers and retailers who give the product special attention.
E) only one wholesaler or retailer in each geographic area.

Accepted Answer

Selective distribution involves selling through a limited number of wholesalers and retailers who are chosen based on their ability to give the product special attention, such as providing expert advice or offering a high level of customer service. This approach is often used for premium or luxury products.

Question 6

Selective distribution:
A) is likely to reduce high administrative expenses caused by a large proportion of small orders.
B) may be suitable for all categories of products.
C) is becoming more popular.
D) is a good idea if some of the available intermediaries are not financially solid.
E) All of these alternatives are correct.

Accepted Answer

Selective distribution is a strategy in which a manufacturer selects a limited number of intermediaries to distribute its products. This can help to reduce high administrative expenses caused by a large proportion of small orders, as the manufacturer can focus its efforts on a smaller number of larger orders. Selective distribution can also be suitable for all categories of products, as it allows the manufacturer to target specific markets and customer segments. Additionally, selective distribution is becoming more popular, as manufacturers seek to gain greater control over their distribution channels and improve their efficiency. Finally, selective distribution can be a good idea if some of the available intermediaries are not financially solid, as it allows the manufacturer to reduce its risk of exposure to bad debt.

Question 7

______________ means selling a product only through those intermediaries who will give the product special attention.
A) Multichannel distribution
B) Selective distribution
C) Administered distribution
D) Exclusive distribution
E) Intensive distribution

Accepted Answer

Selective distribution involves selling a product through a limited number of intermediaries who are expected to give the product special attention, ensuring a better fit between the product and the outlet.

Question 8

Intermediaries are needed MOST when the desired degree of market exposure is:
A) selective.
B) intensive.
C) exclusive.
D) administered.
E) None of these is a good answer.

Accepted Answer

Intensive market exposure requires intermediaries to promote and distribute the product widely and aggressively. Examples of intensive distribution channels include mass merchandisers, supermarkets, and convenience stores.

Question 9

Horizontal arrangements among competing retailers, wholesalers, or producers to limit sales by customer or territory have consistently been
A) shown to increase competition.
B) a regular practice in the U.S.
C) encouraged in the U.S. but not in many international markets.
D) a successful strategy for entering international markets.
E) ruled illegal by the U.S. Supreme Court.

Accepted Answer

Horizontal arrangements to limit sales by customer or territory, also known as horizontal price-fixing or horizontal market division, are illegal in the U.S. and have been ruled as a violation of the Sherman Antitrust Act by the U.S. Supreme Court. Such arrangements are considered anti-competitive and restrict free trade.

Question 10

______________ means selling a product through only one wholesaler or retailer in a particular geographic area.
A) Exclusive distribution
B) Direct distribution
C) Intensive distribution
D) Multichannel distribution
E) Selective distribution

Accepted Answer

Exclusive distribution means selling a product through only one wholesaler or retailer in a particular geographic area, which can help to create a sense of prestige and scarcity surrounding the product. This approach may be appropriate for high-end or luxury products, or for products with a unique selling proposition that requires a specialized sales strategy.

Question 11

When McDonald's corporate headquarters offers a local McDonald's franchise to a franchisee on Bourbon Street in New Orleans, this is an example of ___________ distribution.
A) intensive
B) operational
C) selective
D) exclusive
E) administered

Accepted Answer

Exclusive distribution involves granting a franchisee the rights to operate in a specific location, limiting the number of outlets in a particular area, which is typical for franchise agreements like McDonald's.

Question 12

Quiet Drive Mufflers are sold only through Car Parts Now retailers. This retailer has only one store in any given geographic area to minimize competition between stores. Quiet Drive Mufflers uses _____ distribution.
A) intensive
B) ideal
C) selective
D) specialized
E) exclusive

Accepted Answer

Quiet Drive Mufflers uses exclusive distribution, as they only sell through one retailer in a given geographic area, thus limiting availability and creating exclusivity.

Question 13

If a producer has a technically superior and expensive product-which has achieved brand preference-and wants retailers to provide aggressive promotion and maximum customer service, this producer should seek:
A) Multichannel distribution.
B) Exclusive distribution.
C) Administered distribution.
D) Intensive distribution.
E) Selective distribution.

Accepted Answer

Exclusive distribution would be the best choice for a producer with a technically superior and expensive product that has achieved brand preference and wants retailers to provide aggressive promotion and maximum customer service. This is because exclusive distribution involves limiting the number of retailers that are allowed to sell the product. This helps to maintain the image and exclusivity of the product while allowing the producer to exert more control over the marketing and promotion of the product among a select group of retailers who can provide the desired level of customer service.

Question 14

A selective distribution policy might be used to avoid selling to wholesalers or retailers that:
A) Place orders that are too small.
B) Make too many returns.
C) Request too much service.
D) Have poor credit.
E) All of these alternatives are correct.

Accepted Answer

A selective distribution policy can be used to carefully choose which retailers or wholesalers to sell to in order to ensure they have a certain level of service, credit, and ordering habits. Avoiding those who place small orders, make many returns, request excessive service, or have poor credit can help to maintain both the brand reputation and profitability. Therefore, all of these alternatives are correct.

Question 15

Selling through only one wholesaler or retailer in a particular geographic area is called:
A) Ideal market distribution.
B) Intensive distribution.
C) Selective distribution.
D) Exclusive distribution.
E) Equivalent distribution.

Accepted Answer

Exclusive distribution restricts the sale of a product to only one wholesaler or retailer in a particular geographic area, allowing for more control over the product's pricing and image. This strategy is often used for luxury or niche products.

Question 16

"Exclusive distribution" means selling through:
A) the most prestigious retail outlets.
B) only one wholesaler or retailer in a particular geographic area.
C) only responsible and suitable retailers or wholesalers.
D) retailers that handle specialty products.
E) only those wholesalers or retailers who will give the product special attention.

Accepted Answer

Exclusive distribution refers to the strategy of selling a product only through a single wholesaler or retailer in a particular geographic area. This limits the availability of the product and creates a perception of exclusivity, which can help to strengthen brand image and appeal to certain customer segments.

Question 17

Legal concerns about channel of distribution arrangements are most likely to arise when:
A) a traditional channel system is involved.
B) there are horizontal arrangements between firms at the same level of the channel.
C) the firm is using intensive distribution.
D) a firm uses multichannel distribution to reach its target markets.
E) a corporate channel system is involved.

Accepted Answer

Horizontal arrangements between firms at the same level of the channel can lead to legal concerns such as price fixing and market allocation, which are violations of antitrust laws. Other channel arrangements may also have legal considerations, but horizontal arrangements are the most likely to lead to legal issues.

Question 18

If a producer's marketing manager wants intermediaries to take over all responsibility for promoting his product he probably should use
A) exclusive distribution.
B) selective distribution.
C) intensive distribution.
D) a vertically integrated distribution system.
E) Any of these, since every channel member must support a product with promotion.

Accepted Answer

Exclusive distribution often involves agreements where the intermediary takes significant responsibility for the promotion and sale of the product, as they are usually granted exclusive rights to sell in a specific territory, motivating them to invest in marketing efforts.

Question 19

Which degree of market exposure would probably be most suitable for a heterogeneous shopping product which has achieved brand preference and sells for about $300?
A) Concentrated distribution
B) Selective distribution
C) Administered distribution
D) Intensive distribution
E) Exclusive distribution

Accepted Answer

A heterogeneous shopping product that has achieved brand preference and sells at $300 would most likely benefit from selective distribution. This would allow for the product to be available through a limited number of outlets that are chosen based on their ability to cater to the target market's needs and preferences. This approach enables a balance between market coverage and control over brand image and visibility.

Question 20

Exclusive distribution
A) should generally be used only if it is not possible to generate intermediary interest in intensive distribution.
B) is legal as long as it does not involve vertical channel arrangements.
C) arrangements between a producer and intermediary are illegal for most types of products, and thus they are not very common in the U.S.
D) usually involves intermediaries who are willing to take over all responsibility for promoting the producer's product.
E) None of these alternatives are correct.

Accepted Answer

Exclusive distribution usually involves intermediaries who are willing to take on significant responsibilities, including the promotion of the producer's product, in exchange for the exclusive rights to sell the product in a specific area.

Quiz 10: Place and Development of Channel Systems

From a producer's viewpoint, which of the following is an advantage of intensive distribution over selective distribution?

Intermediaries are needed LEAST when the desired degree of market exposure is:

Which of the following statements about ideal market exposure is true?

Which of the following is true of selective distribution?

"Selective distribution" means selling through:

Selective distribution:

______________ means selling a product only through those intermediaries who will give the product special attention.

Intermediaries are needed MOST when the desired degree of market exposure is:

Horizontal arrangements among competing retailers, wholesalers, or producers to limit sales by customer or territory have consistently been

______________ means selling a product through only one wholesaler or retailer in a particular geographic area.

When McDonald's corporate headquarters offers a local McDonald's franchise to a franchisee on Bourbon Street in New Orleans, this is an example of ___________ distribution.

Quiet Drive Mufflers are sold only through Car Parts Now retailers. This retailer has only one store in any given geographic area to minimize competition between stores. Quiet Drive Mufflers uses _____ distribution.

If a producer has a technically superior and expensive product-which has achieved brand preference-and wants retailers to provide aggressive promotion and maximum customer service, this producer should seek:

A selective distribution policy might be used to avoid selling to wholesalers or retailers that:

Selling through only one wholesaler or retailer in a particular geographic area is called:

"Exclusive distribution" means selling through:

Legal concerns about channel of distribution arrangements are most likely to arise when:

If a producer's marketing manager wants intermediaries to take over all responsibility for promoting his product he probably should use

Which degree of market exposure would probably be most suitable for a heterogeneous shopping product which has achieved brand preference and sells for about $300?

Exclusive distribution