Marketing Channels Exam 2 – Flashcards
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The dynamic nature of channel management effectively mandates that to make distribution decisions, the channel manager:
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Formulate a marketing channel strategy.
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Channel strategy is best conducted:
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By following a set of guiding principles basis.
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The corporate level planning process is concerned with:
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Communicating corporate guidelines, business definition, and mission.
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Which of the following is a false statement about Edward D. Jones and Company?
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The company maintains a pretax profit of 10% which is below the industry average.
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___________ is, the broad principles by which the firm expects to achieve its distribution objectives for its target market(s).:
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Channel strategy.
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To achieve distribution objectives, most firms will have to address all of the following except:
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Impact of distribution on operations planning.
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The main reason WD-40 is in 75 percent of all U.S. households seems to be:
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Its retail distribution channels.
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Caterpillar's CEO, Donald V. Fites, makes it clear that the biggest reason for Caterpillar's success has been:
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Its system of distribution and product support.
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The most fundamental distribution decision of all for any firm or organization to consider is the role:
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Distribution will play in the firm's overall objectives and strategies.
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The more crucial distribution objectives are to a firm's long-run success:
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The higher the level of management at which it should be considered.
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Volvo GM Heavy Truck Corporation cited in the text illustrates:
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Customer service is key.
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Making distribution a priority is most appropriate for which of the following?
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No such generality can be made.
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How much emphasis should be placed on each strategic variable of the marketing mix is:
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A question without a general answer.
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Which of the following is not a condition that argues for placing strategic emphasis on distribution in the marketing mix?
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Little vulnerability exists because of strong competitor attention to distribution.
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Partnerships with dealers, such as that enjoyed by Caterpillar tractors are based largely on:
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Long-term channel strategy.
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Which of the following statements regarding the marketing mix is true?
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Distribution can offer a more favorable basis for developing the competitive edge because it is not easily copied.
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Competitive advantages gained through distribution tend to be:
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Long-lived.
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All of the following are competitive advantages earned in distribution that are not easily copied by competitors except:
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Understanding of the firm's target market.
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Many manufacturers have neglected distribution because:
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Independent channel members can be difficult to control.
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A well-developed marketing channel comprised of the right channel members can create __________ between the manufacturer and channel members.
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Synergy
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The principal lesson BMW learned from Michael Dell of Dell Computer is:
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Custom made distribution can attract customers.
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Channel strategy should guide channel design so as to help the firm attain:
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Differential advantage.
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Which of the following statements regarding synergy through distribution is false?
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It is sometimes referred to as e-commerce.
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The strategic alliance between Procter & Gamble and Wal-Mart is an example of the __________ that can be created between manufacturers and channel members.
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Synergy
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Channel design should be viewed as:
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One component in the firm's attempt to gain differential advantage.
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______________ refers to a firm's attainment of an advantageous position in the market relative to competitors.
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Differential advantage
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Infiniti's approach to selling cars, according to the company, stresses:
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Aims to communicate to its dealers that they must be the best and create high consumer expectations.
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The reputation a manufacturer acquires among channel members for furnishing products, services, financial returns, and systems that are in some way superior to those offered by competing manufacturers is referred to as:
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Channel position.
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A well positioned channel:
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Means the channel members support the strategy the manufacturer is using to gain differential advantage.
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From the perspective of __________, channel members are an extension of the manufacturer's own organization.
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Customers
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If a manufacturer's products are "middle of the road" in quality and aimed at the mass market, its distribution strategy should stress:
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Broad coverage of the market.
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When Mattel sells Barbie's younger sister, Kelly, only at Target stores, Mattel is engaging in:
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Channel member selection strategy.
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After the channel has been designed, the channel manager still has to address fundamental strategic questions regarding all of the following except:
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The intensity of distribution.
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How close a channel relationship any given manufacturer should develop with its channel members is really a question of:
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Strategy
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Generally the greater the degree of distribution intensity the __________ will be the closeness of the channel relationship.
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Looser
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The tactics a channel manager can use to motivate channel members:
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Are very diverse in approach.
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Payment by the manufacturer for obtaining space on retailers' shelves is commonly referred to as a:
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Slotting allowance.
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DPA stands for: Distribution price allocation. Distribution product advertising. Distribution portfolio analysis. Distribution production alternatives. Distribution promotion analysis.
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Distribution portfolio analysis.
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The channel manager should attempt to promote __________ among the elements of the marketing mix.
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the highest level of synergy
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The evaluation of channel member performance is likely to be treated as an afterthought unless:
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Provision for evaluation is made in the design and management of the channel.
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Channel design refers to all of the following except:
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The development of methods used to motivate channel members.
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Channels that have not been designed have taken on their existing structure through:
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Evolution
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In marketing channels, the term "reengineering" refers to:
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Modification of an existing channel.
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The perspective used by producers and manufacturers with respect to channel design is one of a firm looking:
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Down the channel toward the market.
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Which of the following does not engage in channel design?
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Facilitating agencies
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Which of the following is not a step in the channel design decision process?
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Forecast changes in the environment.
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Channel design strategy is __________ differential advantage.
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often one component of
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Using channel design __________ should be uppermost in the channel manager's thinking.
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as a means for gaining differential advantage
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When a channel manager undertakes channel design, what distribution decision already should have been made?
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The role of distribution in the firm's overall objectives and strategies
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Which of the following is not one of the basic phases of the paradigm of the channel design decision?
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Developing specialization and division of labor
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For a producer of computer-based training programs for businesses, all of the following should precipitate a channel design decision except:
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Deleting one training program from the product line.
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There are generally considered to be _______ reasons for making channel design decisions.
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an indefinite number of
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According to the text, the most basic variable affecting channel design is:
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The target market.
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A key part of Frito-Lay's success in distributing its snack products at a level that allows the company to dominate retailers' shelves is:
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Hand-held computers used by drivers/salespeople.
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Distribution objectives must be set:
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With an eye toward objectives and policies of the firm.
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Which of the following is not an example of a well-stated distribution objective?
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Our distribution objective is to ensure our customers have as many opportunities as possible to purchase our carpeting and curtains.
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A congruency check of a distribution objective means that:
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The distribution objective does not conflict with other objectives and policies of the firm.
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The distribution objective must be congruent with:
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The other elements of the marketing mix.
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The channel manager's specification of distribution tasks is:
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Situationally dependent.
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The specific kind of distribution tasks required are mainly a function of:
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The distribution objective.
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The allocation of distribution tasks should include consideration of all of the following except:
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The number of channel managers at each level.
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A major cause of the failure of many dot-com companies can be traced to:
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Underestimating the distribution tasks needed to link firms with customers.
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When developing alternative channel structures, the number of levels the channel manager considers may be limited by all of the following except:
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Short-term objectives.
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The Internet has affected the number of levels in a channel by:
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Allowing manufacturers to add a direct two level channel to their existing options.
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Given five possible channel structures, two degrees of intensity, and four different types of intermediaries, the maximum number of possible channel alternatives would be:
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40
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A channel manager may choose more than one channel structure in order to:
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Reach the target market effectively and efficiently.
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As a dimension of channel structure, types of intermediaries really pertains to:
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The basic types of distribution tasks performed.
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Intensity:
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Refers to the number of intermediaries at each level of the marketing channel.
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A marketing strategy that focuses on carefully chosen target markets will most likely stress:
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Selective or exclusive distribution.
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Selective distribution is:
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When not all available distributors are used, rather a carefully chosen group.
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According to Michael Dell, founder of Dell Computers, the typical computer retailer:
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Lacked technical expertise.
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The longest channels are expected for all of the following except:
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Goods purchased online by consumers.
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Short channels are preferred for:
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Firms that desire a high level of channel control.
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More channel levels and more intermediaries are expected for:
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Markets requiring many contacts.
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Heuristics that relate particular variables with possible channel structures should be viewed as:
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A rough reflection of fairly typical relationships among variables affecting channel structure.
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The usual operational measure of market size is:
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The number of buying units (consumer or industrial).
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In general, the more geographically dispersed the market:
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The more difficult and expensive is distribution.
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For distant manufacturers it can be generalized that:
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The use of intermediaries will decrease distribution costs.
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Which of the following is not one of the market behavior variables?
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What customers buy
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All other factors being equal, in general there is __________ between the degree of standardization of products and channel length.
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a positive relationship
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Products that are in the introductory stage of the product life cycle often need heavy promotion. This tends to foster:
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Shortened channels.
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Product variables affecting channel structure include all of the following except:
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Availability of inputs/supplies.
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In distribution, economies of scope are needed to overcome:
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Low unit value.
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Which of the following heuristics about the relationship between a manufacturer's characteristics and channel design is false?
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The larger the firm the less flexibility it has because of its internal bureaucracy and the complexity of its product line.
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When the unit value of a product is high relative to its size and weight, what is the best distribution channel?
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Direct distribution
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Assuming total cost for a direct channel of $100,000 and an average gross margin on sales of 25%, the sales volume needed to cover these costs would be:
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$400,000
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The intermediary variables are:
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Availability, cost and services.
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In practice, the channel manager is usually not able to choose an optimal channel structure in the strict sense of the term for all of the following reasons except:
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Maximizing long-term profits can be achieved with a number of alternative channel structures.
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According to Aspinwall, short channels are expected for products with a:
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High gross margin.
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Aspinwall's approach to channel design:
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Puts too much emphasis on product characteristics as the determinant of channel structure.
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According to the financial approach, choosing a channel structure is analogous to:
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An investment decision of capital budgeting.
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Shortening the channel will __________ the amount of capital necessary for distribution.
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increase
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The most difficult problem with making the financial approach to choosing a channel structure operational is:
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Obtaining accurate estimates of future revenues and costs from alternative channel structures.
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Approaches that attempt to identify all channel structure variables explicitly and then attempt to express the relationships among them in quantitative terms were referred to in the text as:
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Management science approaches.
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Which of the following is not a key limitation of Transaction Cost Analysis (TCA)?
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It is difficult to implement.
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In the weighted factor score approach, all of the following are criteria for choosing channel structure except:
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Decision factors must be less than seven.
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The total score arrived at in the weighted factor score approach represents:
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A quantitative representation of management's judgment on the merits of a particular channel alternative.
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The distribution costing approach to choosing channel structure:
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Requires that management make some cost and revenue estimates.
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The __________approach to selecting the "best" channel structure focuses on synthesizing traditional economic analysis with behavioral concepts.
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transaction cost analysis
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The selection of channel members according to the text is __________ the selection of employees.
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as important as
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The selection of channel members:
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Is sometimes necessary even though the basic channel structure remains the same.
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Which of the following is an incorrect statement about manufacturers and producers choosing a two-level channel structure?
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They need to develop specific criteria to evaluate channel members.
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The selection of channel members:
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Can occur even when channel structure is not altered.
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As a general rule, the higher the level of selectivity of distribution:
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The greater the emphasis on selection.
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As a general rule, the greater the intensity of distribution:
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The less the emphasis on selection.
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If a channel has been structured to emphasize intensive distribution:
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Less emphasis is placed on selection.
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In highly intensive distribution, the selection criteria for channel members:
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Amount to "Can they pay their bills?"
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According to the text, the most important source for finding prospective channel members is:
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Field sales organizations.
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The manufacturer's salespeople are often able to do all of the following except:
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Provide objective evaluations of channel members.
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Trade sources used for finding prospective channel members include all of the following except:
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Local newspapers.
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The best way for the manufacturer to obtain information about potential intermediaries from customers is by _______________ to learn customers' views about distributors in their market area.
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conducting surveys
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A significant problem with using the sales force to find prospective channel members is that:
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Salespeople may not devote much effort to finding new channel members because they may not be adequately rewarded for doing so.
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Trade shows and conventions:
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Are generally useful sources for finding new channel members.
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In general, the most specific source of information on prospective channel members in a particular industry is:
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The appropriate trade association.
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Typically, the producers and manufacturers receiving the highest number of inquiries from prospective channel members are:
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Those who are generally considered to be the most prestigious in the industry.
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A channel member uses __________ as a source for prospective channel members for firsthand appraisal of the actual performance of the prospective channel members.
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customers
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Which of the following statements about channel member selection criteria lists is true?
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A changing environment may require the firm to alter its emphasis.
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Generalized lists of channel member selection criteria:
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Can help the channel member to develop his or her own specialized list.
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Which of the following statements is a false statement about Hlavacek and McCuistion's channel member selection criteria for technical product sold in industrial markets?
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A distributor that is a "small business" will be able to focus more attention on specific products.
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Yeoh and Calantone identify six categories of selection criteria that reflect the _________ distributors must possess to be effective representatives in foreign markets.
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core competencies
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The list of selection criteria offered by Pegram may be described as:
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Empirically based.
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According to Pegram, the most frequently used criterion for judging the acceptability of prospective channel members is:
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Credit and financial rating.
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In the selection of foreign distributors as laid out by Yeoh and Calantone, which of the following criteria was not cited in a study of foreign distributors' selection processes mentioned in the textbook?
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Ethnicity
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_________ is the selection criterion that reflects a prospective intermediary's enthusiasm, initiative, and aggressiveness.
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Attitude
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The selection criterion that refers to __________ reflects the degree to which there is a continuity of management if the principal dies.
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management succession
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A prospective channel member's ability to blanket the geographical territory that the manufacturer would like to reach is referred to as the __________ criterion.
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market coverage
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A prospective wholesaler channel member's sales strength can be measured by:
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The number and quality of its sales reps.
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Selecting channel members with market coverage overlap is especially problematic for:
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Financial support
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Securing the prospective channel members as actual channel members is usually the:
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Third step in the selection process.
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The trade magazine advertisement for Snyder's pretzel manufacturer offers _______ as an inducement to prospective channel members.
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advertising support
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According to Pegram's research, ______________ between manufacturers and intermediaries have become the norm for relationships in many channels of distribution.
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partnerships or strategic alliances
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One of the best measures of a manufacturer's commitment to helping channel members to achieve their objectives is by:
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Offering a management assistance program.
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In using its product line to secure new channel members, it is most important for the manufacturer to stress:
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The profit potential of the product.
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Which company in the text advertised in a trade magazine offering a "Category Management Partner" program as an inducement to potential channel members?
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3M
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Why does it make sense to sell high-priced and exclusive merchandise such as diamonds, rare Cognac, or Waterford Crystal, through warehouse club channels?
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Two-thirds of the shoppers at a warehouse club are business owners, many of whom are successful and affluent.
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The emphasis on channel design strategy is to help the firm gain ___________.
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a competitive sustainable advantage
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The market constructs used in the text to analyze markets in relation to channel design strategy consists of all of the following dimensions except:
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Market reputation.
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According to the text, the most complex market dimension is:
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Market behavior.
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It is the __________ that should drive channel design.
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needs and wants of the market being targeted
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Selecting channel members with market coverage overlap is especially problematic for:
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Manufacturers in highly selective distribution.
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The __________ variables are the most fundamental variables in channel design.
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market variables
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The fact that South East Asia, as well as the former Eastern Bloc countries of Central and Eastern Europe have become important locations for emerging markets is most closely related to which dimension of the Framework for Market Analysis discussed in the text?
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Market geography
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What presents the most formidable challenges for distribution channels when firms deal with distant markets by selling products on the Internet?
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Fulfillment logistics and customer service
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Market geography refers to:
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How distant markets are from the producer or manufacturer.
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According to Bucklin's distance and lot size model, other things being equal, the greater the distance between a producer (manufacturer) and his markets, the higher the probability that a channel using intermediaries will be:
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Less expensive.
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Changing market locations, resulting from geographical boundaries of existing markets expanding or the opening up of new, more distant markets, should signal the channel manager that:
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Modifications in channel structure may be needed.
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In terms of market geography, the channel manager's responsibilities are to:
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Delineate the geographic location of target markets.
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Which of the following is not a type of geographical area for which census data are available?
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PIPs
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Key published sources for locating markets include all of the following except:
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The International Business Guide to Distributors.
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MSA stands for:
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Metropolitan Statistical Area.
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Market size refers to:
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The number of buyers in a given market.
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If market geography and market size are both increasing, the average cost of serving buyers is sure to:
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Cannot be determined with the information provided.
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Market density refers to:
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The number of buyers in a geographic unit.
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According to the concept of efficient congestion, dense markets can __________ in the performance of several important distribution tasks.
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increase the level of efficiency
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The opportunity to achieve a relatively high level of customer service at low cost is higher in more:
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Concentrated markets than in more dispersed markets.
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Congested markets promote efficiency in the performance of all of the following distribution tasks except:
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Efficiency is promoted for all of the above.
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Although channel members are faced with intense competition in dense markets, they have the offsetting advantage of ________ found in high density markets.
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efficient congestion
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By 2010, consumer online sales reached approximately what level of sales?
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under $175million
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In the text's example on marketing channel structures in Japan, the principal causes of the long channel structures in Japan are:
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The market behavior of the Japanese consumer and the historical background of Japanese society.
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The four subdimensions of market behavior discussed in the text are:
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How, when, and where the market buys, and who does the buying.
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The "Come See the Softer Side of Sears" campaign was an attempt by the retailer to address_________ consumers shopped for more fashionable clothing.
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where
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In 2010, it is estimated that about ______ percent of the retail sales were made over the Internet.
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4
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Seasonal variations in buyer behavior tend to create:
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"Peaks and valleys" in the manufacturer's production scheduling.
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Manufacturers that experience wide seasonal demand variations should:
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Include the willingness to buy off-season as a channel member selection criteria.
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Which of the following is not a consequence of industrial distributors that keep "bankers hours"?
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Customer service is enhanced since buyers can easily be served during the business day
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Consumers willing to travel somewhat further to gain access to a store with special services are exhibiting:
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Trade-off behavior.
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For stores selling shopping goods, a location that is nearer to consumers is generally __________ would be the case for stores selling convenience goods.
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less important than what
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Customers will often forgo ambiance and atmosphere in favor of ___________ when shopping for toys or computers.
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lower prices or one-stop shopping
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Less prime retail locations may be offset somewhat through all of the following except:
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Close-to-home convenience.
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Recent research into industrial buyer behavior suggests that:
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Industrial buyers may not behave in a completely rational manner.
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"Where customers buy" refers to:
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The type of retail outlet.
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Which of the following is not considered to be an example of the "how" subdimension of buyer behavior?
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Taking time to browse rather than quickly making a purchase
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When consumers shop in a retailer's store, buy from its catalog, and buy from its Web site, this is a phenomenon known as:
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Threetailing.
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When there are changes in how customers make their purchases, the channel manager needs to determine:
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Whether these changes are temporary or long-term.
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The set of people who participate in industrial buying decisions and are responsible for the consequences resulting from the decision are known as:
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Buying center.
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People in industrial organizations who have the power to decide on product requirements and/or suppliers are known as:
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Deciders.
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Which of the following purchase roles is the most difficult to analyze?
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Decider
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Generally, as the channel structure grows longer and the degree of control exercised by the manufacturer:
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Decreases.
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