question

The primary purpose of auditing marketing channels is to ________.

answer

Assess each channel member's ability to provide service outputs efficiently

question

Which term refers to channel member activities that produce the service outputs demanded by end-users?

answer

Channel Functions

question

What is the most likely benefit of auditing channel functions?

answer

Identifying gaps in desired service outputs

question

Which term refers to the process the marketing channel uses to handle returned merchandise?

answer

Reverse logistics

question

It is most likely appropriate to remove a channel member from the marketing channel system if the channel member _____.

answer

Performs redundant service output activities

question

Fab Furniture, a furniture wholesaler, owns a 500,000 square-foot warehouse that houses large volumes of home furniture that the firm purchases from multiple manufacturers. The expenses associated with shipping furniture to retailers around the U.S. and running the warehouse are most likely examples of ________ costs.

answer

Physical possession

question

Which of the following statements is most likely true about physical possession in a marketing channel system?

answer

Decreasing inventory holding time typically lowers physical possession costs

question

The combined costs of physical possession and ownership in a channel system are known as ________ costs.

answer

Inventory holding

question

What is the LEAST likely reason for holding inventory?

answer

Shifts in service output needs

question

All of the following would most likely be described in an efficiency template EXCEPT the ________.

answer

Number and significance of service and cost gaps caused by each channel member

question

A(n) ________ indicates the share of total channel profits that each channel member is responsible for generating.

answer

Normative Profit Share

question

According to the equity principle, the compensation of each channel member should be based on the ________.

answer

Value created by the channel member

question

A(n) ________ channel meets the target market segment's service output demands at the minimum cost of performing the channel functions that produce those service outputs.

answer

Zero-based

question

What is the best method for controlling inventory holding costs?

answer

Extending the life of goods

question

Which term refers to the decreasing predictability of end-user demand as the channel member's distance from the end-user increases?

answer

Bullwhip effect

question

Which of the following questions is LEAST relevant to establishing a zero-based channel?

answer

What information sharing activities occur between channel members and customers?

question

Which term refers to the idea that compensation should reflect the normative profit shares of each channel member?

answer

Equity principle

question

Tyrone, the channel manager for Federated Batteries, has built a channel that meets service output demands at a minimum cost, and he has closed all service and cost gaps. The channel created by Tyrone is best described as ________.

answer

Zero-based

question

Which term refers to limitations that create channel gaps and prevent the establishment of a zero-based channel?

answer

Bounds

question

Legal constraints in the local marketplace that hinder the establishment of a zero-based channel are known as ________.

answer

Environmental bounds

question

Country X requires that at least 40% of all suppliers to government agencies be either small or medium-sized vendors. For a large vendor trying to gain a government contract in Country X, this requirement is most likely an example of ________.

answer

Environmental bounds

question

Which term refers to constraints on distribution structures that arise from rules within a company?

answer

Managerial bounds

question

What is the typical source of managerial bounds?

answer

Manufacturer

question

Which of the following most likely occurs if the amount of a service supplied is less than the service demanded?

answer

Service gap

question

Which of the following statements is most likely FALSE?

answer

Channel efficient occurs if service output supply exceeds service output demand

question

Which of the following is most important when determining how to close service gaps?

answer

Identifying the segment for which a service output is appealing

question

When the total cost of performing all channel functions is too high, a(n) _______ most likely occurs.

answer

Cost gap

question

Which of the following statements about cost gaps is most likely true?

answer

A cost gap occurs when the performance of channel functions is jointly inefficient

question

Managers at Global-Tech, a manufacturer of electronic components, want to delay the start of production until the firm receives orders to eliminate inventory holding costs. Global-Tech is most likely engaging in ________.

answer

Postponement

question

Managers at Global-Tech, a manufacturer of electronic components, want to delay the start of production until the firm receives orders. What is the most likely risk of this strategy?

answer

Creating a service gap

question

Managers at Fido's Finest, a pet apparel firm, are expecting a large number of orders for dog sweaters because winter is approaching. In anticipation of these orders, the firm has started manufacturing large batch lots of dog sweaters. Fido's Finest is most likely engaging in ________.

answer

Speculation

question

What is the most likely benefit of speculation?

answer

Increased economies of scale

question

A Service Gap Analysis Template is used to identify service gaps based on ________.

answer

Targeted end-user segments

question

What is the LEAST likely result of a cost gap analysis?

answer

Segmenting end-users by cost gap responses

question

How does CDW implement the equity principle?

answer

Compensating salespeople with the same commission rate for online and personal sales

question

Which of the following statements about product returns is most likely FALSE?

answer

Processing Web returns costs significantly less than handling store returns

question

Which of the following is most likely a true statement about reverse logistics?

answer

Accounting cost transparency is low because of inconsistent tracking

question

Outside-In, an outdoor apparel firm, loses money each month because of returned merchandise. Which of the following actions should Outside-In LEAST likely consider?

answer

Eliminating unnecessary intermediaries

question

Which of the following most likely indicates the existence of a cost gap?

answer

Service levels are too low, and the costs are too high

question

When using an efficiency template, the first step is to ________.

answer

Determine the weights of each channel function

question

Physical possession costs are non-existent for service providers because of the lack of a tangible product.

answer

False

question

It is best to create a separate efficiency template for each channel that distributes the product and for each targeted segment of end-users.

answer

True

question

Violations of the equity principle are a common cause of channel conflicts.

answer

True

question

Speculation involves delaying production until orders are received to eliminate the costs of holding expensive inventory.

answer

False

question

Service gaps occur when the amount of a service supplied is less than the service demanded.

answer

True

question

How do environmental channel bounds and managerial channel bounds differ? What are the potential causes and effects of each?

answer

Environmental bounds are rules outside of the company and constrain channel members from establishing a zero-based channel causes: - local legal restraints - complexity of retailing infrastructure effects: - can't offer needed lvl of service outputs - high costs for channel members Managerial bounds also constrain distribution b/c of rules in the company causes: - desire to control the customer - lack of trust between channel members effects: - prevents managers from implementing less bounded channel design

question

What are the uses and benefits of efficiency templates? What qualitative and quantitative cost information is necessary to complete an efficiency template?

answer

uses & benefits: - reveals how costs of channel functions are shared among channel members - how much each member helps with value-creation - shows how important each function is to the performance of the channel overall Quantitative: - need measures of costs of every activity performed by channel members Qualitative: - can be used to estimate cost weights

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