UNL: MRKT341: Chapter 10

1. Which of the following is not a typical supply chain member?
a. reseller
b. customer
c. wholesaler
d. retailer’s creditor
e. producer
(e; p. 293; Easy)
2. _____ the manufacturer or service provider is the set of firms that supply the raw materials, components, parts, information, finances, and expertise needed to create a product or service.
a. Downstream from
b. Upstream from
c. Separated from
d. Congruous to
e. Parallel with
(b; p. 293; Moderate)
3. According to the author, companies would benefit from thinking of a ________ instead of a supply chain.
a. supply and demand chain
b. demand chain
c. channel of distribution
d. distribution channel
e. physical distribution
(b; p. 293; Easy) {AACSB: Analytic Thinking}
4. When suppliers, distributors, and customers partner with each other to improve the performance of the entire system, they are participating in a ________.
a. value delivery network
b. channel of distribution
c. supply chain
d. demand chain
e. supply and demand chain
(a; p. 293; Moderate) {AACSB: Communication}
5. Most producers today sell their goods to ________.
a. final users
b. final users and marketing members
c. intermediaries
d. the government at various levels
e. competitors
(c; p. 294; Easy)
6. A company’s channel decisions directly affect every ________.
a. channel member
b. marketing decision
c. customer’s choices
d. employee in the channel
e. competitor’s actions
(b; p. 294; Moderate) {AACSB: Analytic Thinking}
7. Distribution channel decisions often involve ________ with other firms.
a. short-term commitments
b. long-term commitments
c. major problems
d. financial losses
e. disagreements
(b; p. 294; Moderate) {AACSB: Communication}
8. Joe Blanco, like other producers, has discovered that his intermediaries usually offer his firm more than it can achieve on its own. Which of the following is most likely an advantage that Joe creates by working with intermediaries?
a. financial support
b. fast service
c. scale of operation
d. working relationships with foreign distributors
e. strategy development
(c; p. 294; Moderate) {AACSB: Reflective Thinking}
9. From the economic system’s point of view, the role of marketing intermediaries is to transform the assortment of products made by producers into the assortment of products wanted by ________.
a. channel members
b. distributors
c. consumers
d. manufacturers
e. marketers
(c; p. 294; Easy) {AACSB: Analytic Thinking}
10. Producers benefit from using intermediaries because they ________.
a. offer greater efficiency in making goods available to target markets
b. bring a fresh point of view to strategy development
c. eliminate risk
d. are generally backlogged with orders
e. refuse to store products for longer than a couple of days
(a; p. 294; Easy) {AACSB: Analytic Thinking}
11. Intermediaries play an important role in matching ________.
a. dealer with customer
b. supply and demand
c. product to region
d. manufacturer to product
e. information and promotion
(b; p. 295; Moderate)
13. Which of the following is not a key function that intermediaries play in completing transactions?
a. promotion
b. information
c. negotiation
d. financing
e. negotiation
(d; p. 295; Moderate) {AACSB: Analytic Thinking}
14. Which of the following is not a key function that intermediaries play in helping to fulfill a completed transaction?
a. physical distribution
b. promotion
c. financing
d. risk taking
e. storing goods
(b; p. 295; Challenging) {AACSB: Analytic Thinking}
15. In marketing terms, we say that the number of intermediary levels indicates the ________ of a channel.
a. depth
b. complexity
c. involvement
d. length
e. width
(d; p. 296; Easy)
16. As a producer of goods, you would most likely be concerned that a greater number of channel levels means ________ and greater channel complexity.
a. less profit
b. less control
c. more potential ideas
d. higher taxes
e. less input
(b; p. 296; Moderate) {AACSB: Analytic Thinking}
17. All of the institutions in a channel are connected by flows, including physical flow, flow of ownership, payment flow, information flow, and ________ flow.
a. promotion
b. acquisition
c. customer
d. return product
e. by-product
(a; p. 296; Challenging) {AACSB: Communication}
18. More than a simple collection of firms connected by various flows, a distribution channel is a(n) ________.
a. added value chain
b. complex behavioral system
c. corporate marketing system
d. vertical marketing system
e. multichannel system
(b; p. 296; Moderate) {AACSB: Communication}
19. An advantage of a channel of distribution over selling direct to consumers is that each channel member plays a ________ in the channel.
a. time-saving part
b. specialized role
c. decisional role
d. informational role
e. disciplinary role
(b; p. 297; Moderate)
20. _____ conflict, which occurs between different levels of the same channel, is more common than ________ conflict, which occurs among firms at the same level of the channel.
a. Horizontal; vertical
b. Vertical; horizontal
c. Contractual; corporate
d. Corporate; franchise
e. Wholesaler; retailer
(b; p. 297; Moderate) {AACSB: Communication}
21. Historically, conventional channels have lacked the leadership to ________.
a. assign channel member roles and attain efficiency
b. attain efficiency and assign member roles
c. assign member roles and manage conflict
d. set standard pricing and promotions
e. set standard pricing and packaging
(c; p. 297; Challenging) {AACSB: Communication}
22. A conventional distribution channel consists of one or more ________ producers, wholesalers, and retailers.
a. product-related
b. independent
c. contract
d. estranged
e. merchant
(b; p. 298; Moderate)
23. A channel consisting of one or more independent producers, wholesalers or retailers that are seeking to maximize their own profits even at the expense of profits for the channel as a whole is a ________.
a. vertical marketing system
b. conventional distribution channel
c. independent channel allocation
d. vertical distribution structure
e. administered vertical marketing system
(b; p. 298; Moderate)
24. An advantage of a vertical marketing system (VMS) is that it acts as a ________ system.
a. unified
b. more efficient
c. modern
d. customer-driven
e. task-driven
(a; p. 298; Challenging)
25. A corporate VMS has the advantage of controlling the entire distribution chain under ________.
a. a profit-maximizing strategic plan
b. single ownership
c. mass distribution
d. a few intermediaries
e. little control
(b; p. 298; Easy)
26. What are the three major types of vertical marketing systems?
a. corporate, contractual, and chain
b. contractual, corporate, and independent
c. corporate, contractual, and administered
d. administered, independent, and franchised
e. corporate, contractual, and task
(c; p. 298; Moderate)
27. A distinguishing feature of a contractual VMS is that coordination and conflict management among the independent members of the channel are attained through ________.
a. oral agreements
b. working partnerships
c. limited liability corporations
d. contractual agreements
e. natural competitive forces
(d; p. 300; Easy) {AACSB: Communication}
28. The most common type of contractual VMS agreement in business is the ________.
a. franchise organization
b. vertical marketing system
c. conventional marketing channel
d. corporate VMS
e. scrambled system
(a; p. 300; Moderate)
29. Leadership in which type of marketing system is assumed not through common ownership or contractual ties but through the size and power of one or a few dominant channel members?
a. horizontal marketing system
b. administered VMS
c. corporate VMS
d. conventional marketing channel
e. dual distribution system
(b; p. 301; Moderate) {AACSB: Communication}
30. In a ________, two or more companies at one level join together to develop a new marketing opportunity.
a. franchise
b. corporate VMS
c. horizontal marketing system
d. multichannel distribution system
e. conventional distribution channel
(c; p. 301; Moderate)
31. Hybrid marketing systems are also called ________.
a. dual distribution systems
b. multichannel distribution systems
c. administered franchises
d. horizontal multichannel systems
e. contractual marketing systems
(b; p. 301; Moderate)
32. As marketing manager for Globe Imports and Exports, you want to start reaping the benefits of a multichannel distribution system. You will likely enjoy all of the following except which one?
a. expanded sales
b. expanded market coverage
c. selling at a higher gross margin
d. opportunities to tailor products and services to the needs of diverse segments
e. decreased conflict among members of the channel
(c; p. 302; Challenging) {AACSB: Analytic Thinking}
33. The use of multichannel systems in the United States is ________.
a. decreasing
b. increasing
c. holding steady
d. spreading abroad fast
e. declining abroad
(b; p. 302; Moderate)
34. The major disadvantage of a multichannel system is that it is harder to control and it can generate ________.
a. greater conflict
b. less net profit
c. fewer domestic sales
d. inefficiency
e. declining employee morale
(a; p. 302; Easy) {AACSB: Analytic Thinking}
35. Due in a large part to advances in technology, ________ is a major trend whereby product and service producers are bypassing intermediaries and going directly to final buyers, or radically new types of channel intermediaries are emerging to displace traditional ones.
a. the vertical marketing system
b. the corporate marketing system
c. disintermediation
d. the corporate merger
e. the hostile takeover
(c; p. 303; Moderate) {Use of IT}
36. In many industries, traditional intermediaries are dropping by the wayside because of changes in ________and the growth of ________ marketing.
a. federal laws; business-to-business
b. state and local laws; target
c. franchise structure; independent
d. technology; direct and online
e. channel design; retail
(d; p. 303; Moderate) {Use of IT}
37. Designing a channel system calls for analyzing consumer needs, setting channel objectives, ________, and evaluation.
a. establishing a budget
b. identifying major channel alternatives
c. seeking regulatory approval
d. seeking legal advice
e. measuring objectives
(b; p. 305; Moderate)
38. Which of the following should be the first step in designing a marketing channel?
a. identifying channel objectives
b. identifying what consumers want from the channel
c. analyzing channel alternatives
d. evaluating intermediaries
e. exploring international opportunities
(b; p. 305; Easy)
39. To increase a channel’s service level, the channel must provide a greater assortment of products, more add-on services, and ________.
a. lower prices
b. more efficiency
c. faster delivery
d. better customer communication
e. follow-up
(c; p. 305; Moderate)
40. Companies should state their channel objectives in terms of targeted levels of _________.
a. co-op advertising
b. fair prices
c. customer service
d. efficiency and reduced conflict
e. profitability
(c; p. 306; Moderate) {AACSB: Communication}
41. When a company is identifying its major channel alternatives, it should consider its choices in terms of types, number, and ________ of intermediaries.
a. size
b. power
c. responsibilities
d. competitors
e. none of the above
(c; p. 306; Easy)
42. Which type of product might require a more direct marketing channel to avoid delays and too much handling?
a. lower-priced products
b. perishable products
c. high-priced products
d. products in their maturity stage
e. products in their decline stage
(b; p. 306; Moderate) {AACSB: Analytic Thinking}
43. When determining the number of channel members to use at each level, three strategies are available: intensive, exclusive, and ________.
a. multichannel
b. selective
c. international
d. direct
e. extensive
(b; p. 306; Moderate)
44. Sometimes a producer chooses only a few dealers in a territory to distribute its products or services. Generally these dealers are given a right to ________ distribution.
a. exclusive
b. selected
c. intensive
d. administered
e. corporate
(a; p. 307; Moderate)
45. Which type of distribution is used when the producer wants more than one, but fewer than all, of the intermediaries who are willing to carry its products?
a. exclusive
b. selective
c. intensive
d. dual
e. multichannel
(b; p. 307; Moderate)
46. When establishing the responsibilities of channel members, the producer must establish a list price, give a fair set of discounts for intermediaries, and define each channel member’s ________.
a. sales volume
b. territory
c. legal rights
d. customers
e. mission
(b; p. 307; Moderate)
47. Channel members should be evaluated using all of the following criteria except which one?
a. economic factors
b. control
c. adaptive criteria
d. channel leadership
e. none of the above
(d; p. 307; Moderate)
48. When a company compares the likely sales, costs, and profitability of different channel alternatives, it is using ________ criteria to evaluate its channel options.
a. selective
b. adaptive
c. economic
d. control
e. distribution
(c; p. 307; Moderate)
49. It is common for international marketers to ________ their channel strategies for each country.
a. extend
b. adapt
c. restrict
d. seek approval for
e. eliminate
(b; p. 308; Easy) {AACSB: Multicultural and Diversity}
50. China and India each contain more than one billion people. However, the profitable markets are actually much smaller than they appear because of ________.
a. inadequate distribution systems
b. indifference toward Western products
c. government control
d. high regional taxes
e. the religious caste system
(a; p. 308; Challenging) {AACSB: Multicultural and Diversity}
51. Marketing channel management calls for selecting, managing, ________, and evaluating channel members over time.
a. reducing conflict
b. reducing waste
c. motivating
d. pruning
e. reinstating
(c; p. 308; Moderate)
52. A company should think of its intermediaries as both its ________ and ________.
a. competitors; partners
b. customers; partners
c. competitors; marketers
d. customers; marketers
e. customers; competitors
(b; p. 309; Moderate)
53. Most companies practice strong PRM to forge long-term relationships with channel members. What does PRM stand for?
a. primary relationship management
b. potential relationship management
c. perennial relationship management
d. partner relationship management
e. personnel roster maintenance
(d; p. 309; Easy) {AACSB: Communication}
54. Sometimes a seller requires its dealers to abstain from handling competitors’ products in an arrangement called _______.
a. exclusive distribution
b. exclusive dealing
c. selective distribution
d. exclusive pricing
e. disintermediation
(b; p. 310; Moderate) {AACSB: Ethical Reasoning}
55. Exclusive dealing is legal as long as it does not ________ or tend to create a monopoly, and as long as both parties enter into the agreement ________.
a. substantially lessen competition; coercively
b. restrict trade; voluntarily
c. substantially lessen competition; voluntarily
d. interfere with competitors; forcefully
e. create a smaller market; permanently
(c; p. 310; Challenging) {AACSB: Ethical Reasoning}
56. Exclusive territorial agreements are normal practices in ________.
a. vertical marketing systems
b. franchises
c. integrated marketing systems
d. horizontal marketing systems
e. supply chain management
(b; p. 310; Moderate) {AACSB: Ethical Reasoning}
57. _____ describes those arrangements whereby the producer of a strong brand sells its brand to a dealer only if the dealer will take some or all of the rest of the line.
a. Exclusive distribution
b. Exclusive dealing
c. Exclusive tying
d. A tying agreement
e. Disintermediation
(d; p. 311; Moderate) {AACSB: Ethical Reasoning}
58. Marketing logistics involves getting the right product to the right customer in the right place at the right time. Which one of the following is not included in this process?
a. planning the physical flow of goods and services
b. implementing the plan for the flow of goods and services
c. controlling the physical flow of goods, services, and information
d. gathering customer’s ideas for new products
e. planning the flow of logistics information to meet customer requirements at a profit
(d; p. 311; Easy) {AACSB: Analytic Thinking}
59. Marketing logistics involves which of the following types of distribution?
a. outbound and inbound
b. outbound, inbound, and reverse
c. outbound and reverse
d. inbound and reverse
e. outbound
(b; p. 311; Moderate)
60. Which of the following is not an area of responsibility for a logistics manager?
a. information systems
b. warehousing
c. marketing
d. inventory
e. purchasing
(c; p. 311; Moderate) {AACSB: Analytic Thinking}
61. Which of the following innovations has created opportunities for significant gains in distribution efficiency?
a. tying agreements
b. Web-based logistics systems
c. partner relationship management
d. contractual vertical marketing systems
e. storage warehouses
(b; p. 312; Moderate) {AACSB: Use of IT}
62. The goal of marketing logistics should be to provide a ________ level of customer service at the least cost.
a. maximum
b. targeted
c. moderate
d. minimum
e. competitive
(b; p. 312; Moderate)
63. The difference between distribution centers and storage warehouses is that distribution centers are designed to ________.
a. store goods for longer periods
b. hold larger volumes
c. move goods rather than just store them
d. primarily be owned by the manufacturer
e. be automated
(c; p. 313; Easy) {AACSB: Analytic Thinking}
64. To reduce inventory management costs, many companies use a system called ________, which involves carrying only small inventories of parts or merchandise, often only enough for a few days of operation.
a. reduction-inventory management
b. just-in-time logistics
c. limited inventory logistics
d. supply chain management
e. economic order quantity
(b; p. 313; Moderate) {AACSB: Use of IT}
65. With the use of ________, or “smart tag” technology, a company is able to know exactly where a product is located within the supply chain.
b. PRM
c. VMS
d. IT
e. 3PL
(a; p. 313; Moderate) {AACSB: Use of IT}
66. Which of the following transportation modes is used for digital products?
a. trucks
b. rail
c. the Internet
d. air
e. ship
(c; p. 314; Easy) {AACSB: Use of IT}
67. In choosing a transportation mode for a product, shippers must balance the considerations of speed, dependability, cost, and ________.
a. weight
b. customer choice
c. availability
d. distance
e. company reputation
(c; p. 315; Challenging)
68. Match these intermodal transportation combinations with the terms below: rail and trucks, water and trucks, and water and rail.
a. fishyback; airtruck; and trainship
b. piggyback; airtruck; and fishyback
c. trainship; fishyback; and piggyback
d. piggyback; fishyback; and trainship
e. piggyback, fishyback, and birdyback
(d; p. 315; Moderate)
69. Companies manage their supply chains through ________.
a. skilled operators
b. information
c. the Internet
d. transportation modes
e. competitors
(b; p. 315; Moderate) {AACSB: Communication}
70. When major producers or suppliers work directly with a major retailer in ordering and shipping products, they often use ________ to save time and money.
a. dual distribution modes
b. continuous inventory replenishment systems
c. the Internet
d. their own trucking and distribution systems
e. integrated distribution
(b; p. 315; Moderate) {AACSB: Use of IT}
71. Julie Newmar recognizes that her company needs to provide better customer service and trim distribution costs through teamwork, both inside the company and among all the marketing channel organizations. Julie will begin the practice of ________.
a. integrated logistics management
b. supply chain management
c. customer relationship management
d. horizontal marketing system management
e. disintermediation
(a; p. 315; Moderate) {AACSB: Reflective Thinking}
72. What is the goal of integrated supply chain management?
a. reduce costs
b. increase services with minimal cost
c. harmonize all of the company’s logistics decisions
d. reduce conflict and increase cooperation among channel members
e. all of the above
(c; p. 315; Moderate) {AACSB: Communication}
73. Smart companies coordinate their logistics strategies and forge strong partnerships with suppliers and customers to improve customer service and reduce channel costs through ________.
a. cross-functional teams
b. cross-company teams
c. partnering
d. cross-functional, cross-company teams
e. segregated departmentalization
(d; p. 315; Challenging) {AACSB: Communication}
74. The success of each channel member depends on the performance of ________.
a. key channel members
b. the entire supply chain
c. the channel captain
d. the manufacturer
e. the wholesaler
(b; p. 316; Moderate)
75. Today, a growing number of firms now outsource some or all of their logistics to ________.
a. cross-functional teams
b. disintermediaries
c. channel members
d. third-party logistics providers
e. competitors
(d; p. 316; Easy)
116. In designing its marketing channel, Chairs for Every Occasion has moved from a make-and-sell view of its business, which focused on productive inputs and factory capacity as a starting point for marketing planning, to a sense-and respond view, which begins instead with the needs of target customers. With this new view, Chairs for Every Occasion is developing its ________.
a. supply chain
b. wholesaler chain
c. demand chain
d. logistics
e. vertical marketing system
(c; p. 293; Moderate) {AACSB: Reflective Thinking}
117. Proud Pets, a producer of clothing and accessories for pets, has recently partnered with a regional chain of pet stores. Which of the following would Proud Pets be least likely to expect from its new channel member?
a. promoting its products through advertising
b. assembling and packaging its products for final sale
c. distributing relevant marketing research information
d. identifying raw materials and other productive inputs
e. negotiating on its products’ prices
(d; p. 295; Moderate) {AACSB: Reflective Thinking}
118. Steve’s Physco Skates sells their products to Wal-Mart, who then sells them to the consumer. This is an example of a ________.
a. direct marketing channel
b. producer channel
c. indirect marketing channel
d. retailer channel
e. corporate vertical marketing system
(c; p. 296; Moderate) {AACSB: Reflective Thinking}
119. Joanie Calvert is experiencing a disagreement with intermediaries in the channel over who should do what and for what rewards. Joanie is experiencing ________.
a. channel delusion
b. channel conflict
c. channel distintermediation
d. channel mismanagement
e. channel intermediation
(b; p. 297; Easy) {AACSB: Reflective Thinking}
120. When two Burger King restaurants have a disagreement over who should be able to sell in quantity at a discount to local athletic teams, they are in a ________ conflict.
a. vertical
b. problematic
c. no-win
d. horizontal
e. functional
(d; p. 297; Moderate) {AACSB: Reflective Thinking}
121. Staples Office Supply opened an online store that created competition with many of its dealers. The corporate office created a ________ conflict.
a. vertical
b. problematic
c. no-win
d. horizontal
e. intermediation
(a; p. 297; Moderate) {AACSB: Reflective Thinking}
122. Which of the following is an example of horizontal channel conflict?
a. managers of two separate Holiday Inns disagreeing over what constitutes poor service
b. United Airlines competing with Northwest Airlines for customers
c. disgruntled factory workers complaining about a small pay raise
d. the BMW dealership in Fort Wayne complaining that the BMW dealership in Indianapolis is situated too close
e. A and D
(e; p. 297; Challenging) {AACSB: Reflective Thinking}
123. Which of the following is an example of a manufacturer-sponsored retailer franchise system?
a. fast-food restaurants such as McDonald’s and Burger King
b. Starbucks operating within Target stores
c. Ford and its network of independent franchised dealers
d. licensed bottlers that bottle and sell Coca-Cola to retailers
e. motels such as Holiday Inn and Ramada Inn
(c; p. 301; Moderate) {AACSB: Reflective Thinking}
124. When McDonald’s offers its products inside of a Wal-Mart store, it is acting as part of a ________.
a. conventional distribution channel
b. corporate VMS
c. contractual VMS
d. administered VMS
e. horizontal marketing system
(c; p. 300; Challenging) {AACSB: Reflective Thinking}
125. Which of the following is an example of a multichannel distribution system?
a. Wal-Mart locating to several countries
b. J. C. Penney’s catalog and retail store sales
c. Avon’s door-to-door distribution
d. Starbuck’s location inside of book stores
e. a hotel providing guest privileges at a health spa across the street
(b; p. 301; Moderate) {AACSB: Reflective Thinking}
126. Chewing gum is stocked in many outlets in the same market or community; in fact, it is placed in as many outlets as possible. This is an example of ________ distribution.
a. exclusive
b. selective
c. multichannel
d. intensive
e. disintermediated
(d; p. 306; Moderate) {AACSB: Reflective Thinking}
127. Which product(s) will most likely be intensively distributed?
a. Olympus digital cameras
b. BMW cars
c. Guess blue jeans
d. Coca-Cola
e. Nike running shoes
(d; p. 306; Easy) {AACSB: Reflective Thinking}
128. Which product will most likely be exclusively distributed?
a. BMW cars
b. Levi’s blue jeans
c. Bazooka bubble gum
d. Prairie Farms yogurt
e. Coca-Cola
(a; p. 307; Easy) {AACSB: Reflective Thinking}
129. Tiffany & Co jewelry can only be found in a limited number of intermediaries. This is an example of ________.
a. exclusive distribution
b. intensive distribution
c. quality distribution
d. high-end distribution
e. independent distribution
(a; p. 307; Moderate) {AACSB: Reflective Thinking}
130. Why is it important for manufacturers to be sensitive to the needs of their dealers?
a. Dealers have few legal rights.
b. Poorly performing dealers will be replaced.
c. Dealers are the most important component of the value delivery system.
d. Dealer support is essential to creating value for the customer.
e. Manufacturers cannot break commitments to channel members.
(d; p. 310; Moderate) {AACSB: Analytic Thinking}
131. Max Samuelson is a high-end fashion designer who markets his clothing lines through a limited number of highly reputable retailers. Max uses ________.
a. exclusive distribution
b. exclusive dealing
c. exclusive territorial agreements
d. full-line forcing
e. tying agreements
(a; p. 310; Challenging) {AACSB: Reflective Thinking}
132. Jewels for the Rich and Famous sells very exclusive jewelry with a minimum price of $25,000 to customers around the world. Speed of delivery to distant markets is a must. Management should consider using ________ as its main carrier.
a. rail
b. air
c. truck
d. the Internet
e. water
(b; p. 314; Moderate) {AACSB: Analytic Thinking}
133. Grayville Rock and Gravel, located in a seaport town, sells rock, gravel, and sand to local markets. It has just been awarded a contract with a company 500 miles down the coast. Management should consider switching from truck to ________ transport.
a. water
b. rail
c. pipeline
d. air
e. none of the above
(a; p. 314; Moderate) {AACSB: Analytic Thinking}
134. When Home Depot allows key suppliers to use its stores as a testing ground for new merchandising programs, it is implementing a ________.
a. shared services
b. partnership management
c. shared project
d. third-party project
e. cross-functional, cross-company team
(c; p. 316; Moderate) {AACSB: Reflective Thinking}
135. UPS Supply Chain Solutions, which handles all of its clients’ “grunt work” associated with logistics, is an example of ________.
a. integrated logistics management
b. a distribution center
c. selective distribution
d. a third-party logistics provider
e. a cross-functional, cross-company team
(d; p. 316; Moderate) {AACSB: Reflective Thinking}
When Walmart tells L’Oreal that they will only pay 90% of what they paid last year for their makeup, this can lead to ____________________________ .

a. Vertical channel conflict
b. Dual distribution
c. Horizontal channel conflict
d. An integrated supply chain

a. Vertical channel conflict
Crowbar Records used to sell its music, in CDs, through a network of retail outlets, record stores, and music dealers. After the advent of MP3 technology, it decided to shift from using any of these agents and sell its music independently from the company’s Web site, using personal mail, and other social networking techniques to inform potential customers about upcoming music and promotions. Which of the following types of marketing systems has Crowbar newly adopted?

a. horizontal marketing system
b. vertical marketing system
c. administered vertical marketing system
d. direct marketing channel
e. contractual vertical marketing system

d. direct marketing channel
Orion Steels is the chief provider of metals to the Accline Car Company. The Accline Car Company has two models of vehicles – one for commercial and ordinary consumers, and another for professional car racing teams. The Accline Car Company has designated dealers to sell their commercial cars to consumers, while racing cars are sold directly to the racing teams. In such a distribution channel, which of the following would be considered a horizontal conflict?
a. conflicts between Orion Steels and Accline dealers
b. conflicts between the Accline Car Company and its dealers
c. conflicts between sellers of the Accline consumer cars and racing cars
d. conflicts between two Accline consumer car dealers
e. conflicts between Orion Steels and the Accline Car Co.
d. conflicts between two Accline consumer car dealers
TentaCola is a leading soft drink manufacturer with franchises all around the world. It creates franchises by licensing its trademark cola syrup to a bottling company in a given geographical area. The bottlers then bottle the drink and sell the finished products to retailers. Which of the following types of franchises does TentaCola follow?
a. manufacturer-sponsored wholesaler franchise system
b. service-firm-sponsored retailer franchise system
c. manufacturer-sponsored retailer franchise system
d. manufacturer-sponsored reseller franchise system
e. manufacturer-sponsored service firm franchise system
a. manufacturer-sponsored wholesaler franchise system
Spirits Inc. owns a vineyard that produces large volumes of wine to sell. Five years ago, they decided it would be more profitable if the company also opened its own line of wine vendors. Last year, after being frustrated with growing transportation costs, the business bought several trucks and now handles all deliveries of wine. What type of Vertical Marketing System (VMS) does this represent?
a. Corporate VMS
b. Contractual VMS
c. Administered VMS
d. None of the above, this is not a VMS
a. Corporate VMS
12. What are the three gaps that separate goods and services from those who would use them?

a. time, place, and form
b. place, possession, and form
c. time, place, and possession
d. place, time, and need
e. place, need, and distribution

(c; p. 295; Moderate)
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