Marketing 410 Marketing Channels - Flashcards

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Which type of strategy did Walmart decide to use to compete with Amazon?

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Mass distribution via its own online channel

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Internet-based channels

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have become a mainstream channel in the channel mixes of many firms.

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A sustainable competitive advantage is one that

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is difficult for competitors to match.

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According to the text, the most promising avenue for gaining a sustainable competitive advantage today is through an emphasis on

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Channel strategy

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According to the text, the technology that is likely to have the greatest impact on marketing channels is

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The Internet

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According to the text, the confusion over the definition of the marketing channel stems mainly from which of the following causes?

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The differing perspectives or viewpoints used.

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The text argues that the role of marketing channels in marketing management is

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Of strategic importance in many cases

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Consumers often view the marketing channel as simply:

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A lot of middlemen standing between them and the producer of the product

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According to the view taken in the text, the marketing channel may be defined as

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the external contactual organization that management operates to achieve its distribution objectives

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When Wal-Mart is performing negotiatory functions, it is involved in

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Transferring title, selling, and buying

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A distinction is made between channel members and facilitating agencies because

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The channel management problems are often different for channel members versus facilitating agencies

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Management of the marketing channel frequently does not involve

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Interorganizational management

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When a firm finally invents the Star-Trek® Transporter, its marketing channel will come into existence only after

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The negotiatory functions have taken place

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Marketing channel management should be considered

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A major strategic area of marketing management

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The channel manager is:

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Anyone in the firm who makes marketing channel decisions

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Because the Sales Coordinator at Borden, Inc. makes channel decisions, he/she can be considered

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A channel manager

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Channel management should be viewed as

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One of the major strategic areas of marketing management

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Management should develop and operate the marketing channel in such a way as to

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Support and enhance the other strategic variables of the marketing mix

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The Coors Company has decided to focus on channel strategy as the key factor in achieving sustainable competitive advantage because

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The relationship between a manufacturer and its channel members is not copied easily by competitors

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Channel management is concerned mainly with

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The entire process of setting up and operating the contactual organization

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In general, basic decisions in channel strategy usually __________ operating decisions in logistics management

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Precede

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The five flows in marketing channels discussed in the text are

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Ownership, product, negotiation, promotion, information

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The five flows discussed in the text

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Convey the dynamic nature of marketing channels

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When considering the flows in the marketing channel for lawn tractors, product flows __________ and negotiation flows __________

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Up the channel; both up and down

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In the context of the channel flows concept, logistics involves

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Management of the product flow

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From the standpoint of the channel flows concept, only those parties who participate in the __________ flows are considered members of the marketing channel

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Negotiation and ownership

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The Internet and World Wide Web has connected millions of people and institutions and

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Is an important determinant in the use of intermediaries in marketing channels

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Using the concept of specialization and division of labor, a channel manager might engage in any of the following activities except

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Allocate transportation of product to the retailer

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The concept of specialization and division of labor

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Is of equal importance in production and distribution

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The only major difference between the specialization and division of labor principle as applied to a production versus a distribution situation is

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Production tasks are often allocated intra-organizationally, while distribution tasks are frequently allocated inter-organizationally

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The channel manager should allocate the distribution task to

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Those firms that can perform them most efficiently

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In the development of channel strategy, the channel manager is faced with

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An allocation decision

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Contactual efficiency viewed from the channel manager's perspective is

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The relationship between negotiation effort relative to achieving the distribution objective

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Four heavy equipment producers decide to sell their forklifts directly to 12 warehouses. The number of contacts necessary is

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48

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Ten manufacturers of wallpaper all sell through one wholesaler to five retailers. The number of contacts needed for all of the manufacturers to contact all of the retailers is

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15

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Ten manufacturers of wallpaper all sell through one wholesaler to five retailers. The number of contacts needed for all of the manufacturers to contact all of the retailers is

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15

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Ten producers of garden tools all sell through one wholesaler to five retailers. The number of contacts needed for all of the manufacturers to contact all of the retailers is __________. If the wholesaler were eliminated from the channel, the number of contacts needed would be

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15; 50

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A hot tub manufacturer estimates it will take ten personal sales calls, each of which costs $250, and 25 phone calls, each costing $25, to get five retailers to carry its product. The measure of contactual efficiency in dollar terms is

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$3,125

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The channel structure depicted as M->W->R->C indicates

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The channel manager has allocated distribution tasks to his/her own firm, wholesalers, retailers and consumers

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Ideally, the channel manager would like to exercise __________ over which firms in the channel perform the distribution tasks

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Total control

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A multi-channel strategy means

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A company reaches its customers through more than one channel

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In order to reach its customers, Ralph Lauren apparel uses all of the following in its multi-channel strategy, except

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Catalogs

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For accounting firms and other producers of services

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Marketing channels often include agents or brokers

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In developing and managing the ancillary structure versus the channel structure, the problems faced by the channel manager are

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Usually less difficult and complex

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In contrast to the development of channel structure, when the channel manager develops ancillary structure, he or she is dealing with facilitating agencies that are

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Outside of the channel decision-making process

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Gazelle does not adequately use

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Distribution channels

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The fundamental determinant of whether a firm is a member of a marketing channel is

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If the firm performs negotiatory functions

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The basic divisions of the marketing channel are:

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Producers and manufacturers; intermediaries; and final users

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In the commercial channel, participants who are specifically excluded are

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Consumer and industrial final users

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__________ are members of the target market

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Final users

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Facilitating agencies:

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Perform non-negotiatory functions

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Which of the following is not a facilitating agency

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Binney & Smith

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In the context of the management perspective used in the text, it is appropriate to view final users as

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Target markets

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The technology and scale economies that enable producers and manufacturers to operate at a low average cost for production are

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Often lacking in the performance of distribution tasks

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Intermediaries' average costs curves for distribution tend to be __________ those of manufacturers

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Lower than

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Procter & Gamble and Kellogg often face __________ average costs for distribution tasks when they attempt to perform them by themselves

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High

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Clayton Tennis Equipment, a manufacturer, cannot perform distribution tasks efficiently so it uses Jackson Sports Equipment as a wholesaler to distribute its products in the Midwest. Clayton likely is inefficient in performing distribution tasks because

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Jackson can spread its fixed costs across products from multiple manufacturers

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The Census of Wholesale Trade classifies wholesalers into the following three categories

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Manufacturers' sales branches and offices; agents, brokers, and commission merchants; and merchant wholesalers

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The Census of Wholesale Trade classifies wholesalers as all of the following except

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Full-function or limited function wholesalers.

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The Census of Wholesale Trade classifies wholesalers into __________ kinds of business groups

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18

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___________ are firms that primarily buy, take title to, store, and physically handle products

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Merchant wholesalers

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During the decade from 1992 to 2002, Census data show that the percentage of total wholesale sales enjoyed by merchant wholesalers:

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Decreased slightly

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Agents, brokers, and commission merchants' percentage of total wholesale sales in 2002 was

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9% to 14%

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In recent years, trends in wholesaling are showing a tendency towards

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Consolidation

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Most wholesalers could be characterized with regard to their size as:

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Relatively small businesses

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Absolute sales of all three types of wholesalers _________ during the period 1992 to 2002

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Increased substantially

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Sales patterns of the different types of wholesalers since 1948 have

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Varied across different types of wholesalers

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Economic concentration in terms of percentage of total wholesale sales enjoyed by most merchant wholesalers in their respective line of trade is

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Relatively low

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Merchant wholesalers are particularly well suited for performing all of the following distribution tasks for their suppliers except

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Serving as the firms' outside sales force

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Several studies, including the Brown and Herring report, suggest the wholesaler's role in __________ will grow even more important to manufacturers

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providing sales contacts

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Customer support provided by merchant wholesalers to manufacturers is often referred to as

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Value-added services

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Merchant wholesalers are not involved in

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Rendering services pertaining to the sale of goods

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_____________ refers to the wholesaler's ability to bring together an assortment of products from a variety of manufacturers

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Assortment convenience

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Agents and brokers

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Do not take title to goods

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Agents, brokers, and commission merchants generally

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do not take title to products

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Manufacturers' agents are often referred to as

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Manufacturer's representatives

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Which of the following is a false statement about the manufacturer's sales branches of Bella Manufacturing, Inc.?

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The branches service regions of the country

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A basic phenomenon in the ranks of retailers since 1948 has been

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The increase of average sales per store

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Between 1948 and 2002 for retail establishments

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Average sales increased and the number of stores decreased

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Trends in retailing in the U.S. suggest

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Average dollar sales per store has increased

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General merchandise, single line stores, and specialty stores are so named based on which of the following classification bases?

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Kind of business

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Which of the following would not be classified as retailers?

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food broker

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Distribution tasks that were formerly the province of the wholesaler or manufacturer have increasingly

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Been taken over by larger retailers

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Stores that dominate a particular line of merchandise and have large shares of the market are often referred to as

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Category killers

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The potential of retail intermediaries for performing distribution tasks

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Has increased

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The Census of Retail Trade classified retailers into _____ major groups by kind of business

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12

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Economic concentration in many kinds of retail businesses is

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Increasing

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Virtually all retailers serve as

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Selling agents for their suppliers

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All of the following are reasons for retailers gaining power in the marketing channels except

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Increased expertise of managers

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Retailers have been using scanner data to perform all of the following except

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Pay and promotion analysis

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"Threetailing" is a term used to describe

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The convergence of in-store, catalog, and online channels

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Kohl's discount department store has used all of the following techniques of marketing strategy except

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Increase use of multi-media advertising techniques

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Which of the following is a false statement about Fresh Market's use of marketing strategy to reach its target market?

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The store size is larger than those of major competitors

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The term "gatekeeper" as used in the textbook refers to

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The power of retailers in the channel

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For channel managers, what are variables in the external environment?

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Interest rates, emerging competitors, birth rates, inflation rates

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For the channel manager, the external environments can be ranked, from most important to least important, as:

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There is no single sequence for all industries at all times

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The channel manager must analyze the external environment in terms of its impact on:

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All channel participants

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According to the text, the most pervasive and obvious environmental force affecting managers in all kinds of business and nonbusiness organizations has been:

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Economic environment

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By the close of the 20th century, it was said about recessions that

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Information technology could be used to warn businesses of potential economic slowdowns and companies could make adjustments

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To deal with inflation and recession, channel managers should do all of the following except

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Increase production and inventory

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The "official" definition of a recession among professional economists is:

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Two consecutive quarters of decline in GDP

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As consumer spending slows down in recessionary periods, marketing channels for __________ usually feel the impact earliest

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consumer durable goods

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Which of the following is a false statement about the 2007-2008 recession?

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Consumer spent less on the Internet

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In a recession, intermediaries are at greatest risk if:

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They cannot sell their heavy inventories

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During recessionary periods, channel members at the wholesale and retail levels are likely to

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Lose sales volume

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In inflationary times, channel members can expect consumer spending to

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Be unpredictable

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In inflationary times, intermediaries generally can be expected to

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Pressure manufacturers for special deals

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To help intermediaries through periods of high inflation, manufacturers can do all of the following except

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Decrease inventory turnover

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Deflation on a wide scale resulting in a decline in prices across a broad spectrum of goods and services

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Has not occurred in the U.S. since the 1930s

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Other economic issues of concern to channel members include all of the following except

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New companies entering the marketplace

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The real interest rate is

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The nominal rate of interest minus the inflation rate

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When the value of the U.S. dollar is high

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The price of U.S. products increases relative to foreign products

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During periods of low inflation

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It becomes more difficult to pass price increases through the channel

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During periods of low inflation, passing price increases through the channel

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Becomes more difficult

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To cope with periods of slow economic growth, channel managers need to

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Increase productivity

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Competition between Kmart and Wal-Mart is an example of

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Horizontal competition

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"Competition between an independent hardware store and the hardware department of a Sears store is an example of

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Intertype competition

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McDonald's competition with Burger King is an example of

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Horizontal competition

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A wholesaler attempts to secure retailer acceptance for its own brand of guitars. That wholesaler also carries similar guitars from a manufacturer of a nationally known brand. This is an illustration of

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Vertical competition

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Vertical marketing systems are typically divided into the following three basic categories

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Administered, contractual, and corporate

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Pure Play e-tailers, such as Amazon and Etoys, competing with 'bricks and mortar' companies is an example of what type of competition?

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Intertype

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Gift wrapping paper on a grocer's shelf is an example of

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Scrambled merchandise

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Retailers like to sell their own brands because of all of the following except

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Consumers prefer private label products

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_______________ is the tem most commonly used to describe interconnectedness and interdependencies of countries around the world

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Globalization

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"____________ has created world-class customer expectations that need to be satisfied through world-class channel strategy, design and management."

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Globalization

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In some of the countries in Tropical Africa, very long channels with many layers of intermediaries are common. Such channel structures within the sociocultural context of

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Rational and reasonably efficient

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The Japanese distribution system that links together manufacturers, wholesalers and retail sales outlets is called

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Keiretsu

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___________ is the term that refers to interaction in networks comprised of individuals or organizations that are linked together based on some type of common interest

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Social networking

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From a marketing channels perspective, social networking has

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It has made consumers more demanding about the channels they choose

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Changes in technology occur:

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Do not occur evenly or predicatively change over time

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Computerized inventory control systems available to all channel members will mean

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More time for the manufacturer to plan production schedules

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A relatively new technology that uses an electronic tag to track people or products using radio waves is called?

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RFID tag

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All technology has both up sides and down sides. To manufacturers, the downside of electronic scanners and computerized inventory control systems is

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Retailers react very quickly to sales and thus can suddenly stop ordering slow-selling product

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Which of the following is not a relatively new type of technology that can have a major impact on marketing channels?

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Uniform Product Codes

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An Internet-based technology that enables both large and small businesses and organizations to utilize computer applications without having to have their own hardware, software, office computing space, and staff is called

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Cloud computing

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The channel manager must __________ the legal environment as it affects the channel

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have a general knowledge of

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The Simplicity Pattern case indicates that manufacturers

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Cannot assume the courts will rule that retailers with different operating characteristics are not in competition

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K&B Products, a producer of perfumes, prohibits its intermediaries from selling competitive perfume products. K&B is engaged in

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Exclusive dealing

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A piece of federal legislation that specifically deals with price discrimination is the

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Robinson-Patman Act

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The _______________ Act passed in 1914 granted powers to investigate and enforce unfair methods of competition in interstate commerce

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Federal Trade Commission

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A federal act that specifically deals with the anticompetitive issues of acquisitions and mergers through vertical integration is the

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Celler-Kefauver Act

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An increasing number of manufacturers are opening their own stores that carry the same merchandise sold by independent retailers. This practice introduces a potential legal question regarding

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Dual distribution

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When Häagen Dazs, the Pillsbury-owned premium ice cream company, told its wholesalers that its policy was to sell only through wholesalers that did not sell competing products, Häagen Dazs was engaging in

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Exclusive dealing

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When a supplier requires its channel members to carry a broad group of its products in order to sell any particular product in the supplier's line, the supplier is involved in

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Full-line forcing

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Price maintenance laws enacted by state governments that allowed retail price fixing, were no longer exempted from federal antitrust legislation with the repeal of the

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Miller-Tydings and McGuire Acts

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The "Colgate Doctrine" is

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The legal basis for sellers to use their own criteria and judgment in selecting channel members

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Territorial restrictions constitute one of the major types of

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Resale restrictions

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Interbrand competition versus intrabrand competition has been evaluated by the courts in considering

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Resale restrictions

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Dual distribution occurs when

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Two or more different channel structures for the same product exist

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The Business Electronics Corp. v. Sharp Electronics Corp. case has generally

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Made it easier for manufacturers to exercise price control over channel members

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An example of ____________ occurred when Microsoft included the Internet Explorer software into its Windows operating system

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a tying agreement

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_____________ exist(s) when a supplier requires its channel members to carry a broad line of its products

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Full-line forcing

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