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Marketing Management, 14e (Kotler/Keller) Chapter 15 Designing and Managing Integrated Marketing Channels 1) ________ are sets of interdependent

organizations participating in the process of making a product or service available for use or consumption. A) Marketing channels B) Interstitials C) Communication channels ) !ales territories ") Marketing terrains Ans#er$ A %age &ef$ '1( )b*ective$ 1 ifficult+$ "as+ ,) -hich of the follo#ing entities in the marketing channel is a merchant. A) #holesalers B) brokers C) sales agents ) #arehouses ") advertising agencies Ans#er$ A %age &ef$ '1/ )b*ective$ 1 ifficult+$ "as+ 0) A1n) ________ is a facilitator #ho assists in the distribution process. A) advertising agenc+ B) sales agent C) manufacturer2s representative ) broker ") #holesaler Ans#er$ A %age &ef$ '1/ )b*ective$ 1 ifficult+$ "as+

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') A manufacturer uses the compan+2s sales force and trade promotions to carr+5 promote5 and sell products to end users. -hich of the follo#ing strategies is this manufacturer using. A) personalization strateg+ B) tailoring strateg+ C) push strateg+ ) pull strateg+ ") consumer promotion strateg+ Ans#er$ C %age &ef$ '1/ )b*ective$ 1 ifficult+$ "as+ () 7otal Beverages5 a maker of fruit *uices and health drinks5 recentl+ launched a ne# brand of packaged drinking #ater called A8ua%ure. In order to induce distributors to carr+ the product5 7otal offers all its intermediaries a free refrigerator to store bottles of A8ua%ure. 7his is an e9ample of a ________. A) consumer promotion B) push strateg+ C) back#ard flo# ) reverse flo# ") pull strateg+ Ans#er$ B %age &ef$ '1/ )b*ective$ 1 AAC!B$ Anal+tic skills ifficult+$ Moderate /) !pike Inc. is a sports#ear manufacturer that recentl+ launched its ne# line of customizable running shoes. 7he shoes come #ith a digital component that allo#s them to adapt to the runner2s biomechanics. 7o promote this ne# product5 !pike launches an advertising campaign and also ropes in a famous athlete to endorse the product. 7his is an e9ample of a ________. A) trade promotion B) reverse flo# C) push strateg+ ) pull strateg+ ") back#ard flo# Ans#er$ %age &ef$ '1/ )b*ective$ 1 AAC!B$ Anal+tic skills ifficult+$ Moderate

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:) -hen is a pull strateg+ appropriate. A) #hen there is lo# brand lo+alt+ B) #hen consumers are able to perceive differences bet#een brands C) #hen brand choice is made in the store ) #hen it is a lo# involvement purchase ") #hen the product is an impulse item Ans#er$ B %age &ef$ '1/ )b*ective$ 1 ifficult+$ "as+ ;) <sing the push strateg+ is most appropriate #hen ________. A) consumers are able to perceive differences bet#een brands B) the product being sold is an impulse item C) there is high brand lo+alt+ for the product ) the product is a high involvement purchase ") consumers choose the brand before the+ go to the store Ans#er$ B %age &ef$ '1/ )b*ective$ 1 ifficult+$ Moderate =) A firm uses its sales force to sell to large accounts and outbound telemarketing to sell to medium>sized accounts. 7he firm is using ________ marketing. A) h+brid B) pull C) personalized ) vertical ") internal Ans#er$ A %age &ef$ '1/ )b*ective$ 1 ifficult+$ "as+ 14) A computer manufacturing compan+ allo#s customers to place orders online5 #hich the+ can later pick up from a convenient retail location. -hich of the follo#ing terms best represents this practice. A) channel integration B) mass customization C) online personalization ) push strateg+ ") internal marketing Ans#er$ A %age &ef$ '1: )b*ective$ 1 ifficult+$ "as+
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11) -hich of the follo#ing is the most accurate description of a value net#ork. A) A s+stem of partnerships and alliances that a firm creates to source5 augment5 and deliver its offerings. B) A s+stem of organizations and resources involved in moving a product from supplier to customer. C) An arrangement #hereb+ an organization transforms inputs into finished goods. ) A net#ork that allo#s an organization take the finished products to the end>users. ") A communication net#ork that allo#s an organization to transfer information to end> customers. Ans#er$ A %age &ef$ '1: )b*ective$ 1 ifficult+$ Moderate 1,) Companies should first think of the target market and then design the suppl+ chain back#ard from that point. 7his strateg+ is called ________. A) demand chain planning B) resource planning C) e9ternal channel planning ) materials planning ") strategic business planning Ans#er$ A %age &ef$ '1: )b*ective$ 1 ifficult+$ "as+ 10) -hich of the follo#ing channel functions constitute onl+ a back#ard flo#. A) movement of ph+sical goods B) placing orders #ith manufacturers C) persuasive communication ) storage of ph+sical goods ") overseeing actual transfer of o#nership Ans#er$ B %age &ef$ '1; )b*ective$ , ifficult+$ Moderate 1') Identif+ the channel function that constitutes both back#ard and for#ard flo#. A) obtaining funds for financing B) storage of ph+sical goods C) persuasive communication ) movement of ph+sical goods ") overseeing actual transfer of o#nership Ans#er$ A %age &ef$ '1; )b*ective$ , ifficult+$ Moderate
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1() %roducers often shift some functions to intermediaries. -hich of the follo#ing is the most significant benefit of doing this. A) It increases customer lo+alt+. B) It provides the producer #ith greater control over operations. C) It reduces the amount of direct customer interaction. ) It lo#ers the producer2s costs and prices. ") It ensures greater information securit+. Ans#er$ %age &ef$ '1= )b*ective$ , ifficult+$ "as+ 1/) -hich of the follo#ing is an e9ample of a zero>level channel. A) A compan+ takes online orders from customers and ships the products to them. B) An organization uses a combination of direct salespeople and sales agencies to increase sales. C) A compan+ sells its products through #holesalers and retailers. ) A compan+ sells its products through chains of supermarkets and other large sellers. ") A large compan+ forms alliances #ith smaller companies to increase sales coverage. Ans#er$ A %age &ef$ ',4 )b*ective$ , AAC!B$ Anal+tic skills ifficult+$ Moderate 1:) -hich of the follo#ing entities is present in a zero>level marketing channel. A) consumers B) retailers C) brokers ) *obbers ") #holesalers Ans#er$ A %age &ef$ ',4 )b*ective$ , ifficult+$ "as+ 1;) A direct marketing channel is a ________. A) one>level channel B) t#o>level channel C) zero>level channel ) three>level channel ") reverse>flo# channel Ans#er$ C %age &ef$ ',4 )b*ective$ , ifficult+$ "as+

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1=) A *obber in a three>level marketing channel is a1n) ________. A) small>scale #holesaler B) e9ternal broker C) advertising agent ) independent evaluator ") communication channel Ans#er$ A %age &ef$ ',1 )b*ective$ , ifficult+$ "as+ ,4) -hich of the follo#ing activities is a reverse>flo# channel of marketing. A) ra# materials movement B) product rec+cling C) materials ordering ) finished goods storage ") customer order placement Ans#er$ B %age &ef$ ',1 )b*ective$ , ifficult+$ Moderate ,1) 7o+ota has an advantage over ?e9us due to the fact that there are more 7o+ota dealers5 #hich helps customers save on transportation and search costs in bu+ing and repairing an automobile. -hich of the follo#ing service outputs relates to this competitive advantage. A) spatial convenience B) service backup C) lot size ) #aiting time ") deliver+ time Ans#er$ A %age &ef$ ',, )b*ective$ 0 ifficult+$ "as+ ,,) As a service output produced b+ marketing channels5 product variet+ refers to the ________. A) units the channel permits a customer to purchase at once B) assortment provided b+ the marketing channel C) add>on services provided b+ the channel ) abilit+ of a product to provide incremental value ") degree to #hich the channel makes it eas+ for customers to purchase a product Ans#er$ B %age &ef$ ',0 )b*ective$ 0 ifficult+$ Moderate

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,0) -hich of the follo#ing terms refers to the add>on services5 such as credit5 deliver+5 installation5 and repairs5 provided b+ a marketing channel. A) service backup B) product accessories C) e9ternal products ) product variet+ ") service e9tensions Ans#er$ A %age &ef$ ',0 )b*ective$ 0 ifficult+$ "as+ ,') Atbure9 is a furniture manufacturing compan+ in the <nited !tates. 7he compan+ provides a si9t+ da+ credit period and "MI options to customers and also offers on>site deliver+ and installation. 7hese special benefits refer to #hich of the follo#ing service outputs. A) good service backup B) large product variet+ C) spatial convenience ) large lot size ") short #aiting time Ans#er$ A %age &ef$ ',0 )b*ective$ 0 AAC!B$ Anal+tic skills ifficult+$ Moderate ,() -hich of the follo#ing t+pes of distribution involves severel+ limiting the number of channel intermediaries. A) e9clusive B) selective C) intensive ) aggressive ") retail Ans#er$ A %age &ef$ ',' )b*ective$ 0 ifficult+$ "as+

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,/) -hich of the follo#ing allo#s a firm to maintain control over the service level and obtain more dedicated and kno#ledgeable selling. A) selective distribution B) intensive distribution C) push strateg+ ) e9clusive distribution ") pull strateg+ Ans#er$ %age &ef$ ',' )b*ective$ 0 ifficult+$ Moderate ,:) -hich of the follo#ing channel alternatives is most suited to handle comple9 products and transactions. A) sales forces B) the Internet C) dealers ) telemarketers ") direct mails Ans#er$ A %age &ef$ ',' )b*ective$ 0 ifficult+$ "as+ ,;) -hich of the follo#ing is a ma*or disadvantage of using the Internet as a marketing channel. A) It is less effective for comple9 products. B) It lacks convenience and practicalit+. C) It cannot be used to reach a #ide audience. ) It is considered e9pensive. ") It causes the compan+ to lose direct contact #ith customers. Ans#er$ A %age &ef$ ',' )b*ective$ 0 ifficult+$ Moderate

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,=) Armon Apparels designs5 manufactures5 and distributes athletic apparel and accessories for men and #omen. 7he compan+ has onl+ nine distributors across the <nited !tates. 7hese distributors control a nation#ide net#ork of /44 retailers. 7he compan+ does not sell its products through other channels. 7his is an e9ample of ________ distribution. A) selective B) intensive C) e9clusive ) internal ") passive Ans#er$ A %age &ef$ ',( )b*ective$ 0 AAC!B$ Anal+tic skills ifficult+$ Moderate 04) "9clusive dealing arrangements are mainl+ used b+ companies looking for an edge in markets increasingl+ driven b+ ________. A) price B) efficienc+ C) product variet+ ) add>on services ") spatial convenience Ans#er$ A %age &ef$ ',( )b*ective$ 0 ifficult+$ "as+ 01) An intensive distribution strateg+ serves #ell for ________. A) premium cars B) commercial trucks C) private label products ) industrial e8uipment ") ne#spapers Ans#er$ " %age &ef$ ',( )b*ective$ 0 ifficult+$ "as+

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0,) -hich of the follo#ing products is most likel+ to be sold using an e9clusive distribution strateg+. A) designer luggage B) cigarettes C) alcoholic beverages ) car fuel ") medicine Ans#er$ A %age &ef$ ',( )b*ective$ 0 AAC!B$ Anal+tic skills ifficult+$ Moderate 00) -hich of the follo#ing covers pa+ment terms and producer guarantees. A) conditions of sale B) pricing policies C) e9clusive dealings ) mutual services ") territorial rights Ans#er$ A %age &ef$ ',/ )b*ective$ 0 ifficult+$ "as+ 0') ________ call1s) for the producer to establish a schedule of discounts and allo#ances that intermediaries see as e8uitable and sufficient. A) "9clusive dealings B) Mutual services C) 7erritorial rights ) %rice polic+ ") 7+ing agreements Ans#er$ %age &ef$ ',/ )b*ective$ 0 ifficult+$ "as+

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0() "lectrobar5 a "uropean manufacturer of industrial kitchen#are5 sells to industrial canteens5 restaurants5 hotels5 and so forth. 7he compan+ provides a one>+ear #arrant+ on all products and also allo#s customers to pa+ in installments@the+ pa+ fift+ percent on deliver+ and the rest as e8ual installments. 7his refers to #hich element in the Atrade>relations mi9A. A) price polic+ B) conditions of sale C) distributors2 territorial rights ) e9clusive dealings ") mutual services and responsibilities Ans#er$ B %age &ef$ ',/ )b*ective$ 0 AAC!B$ Anal+tic skills ifficult+$ Moderate 0/) -hich of the follo#ing channels is associated #ith the lo#est cost per transaction. A) Internet B) telemarketing C) retail stores ) distributor ") sales force Ans#er$ A %age &ef$ ',/ )b*ective$ 0 ifficult+$ "as+ 0:) -hich marketing channel is associated #ith the highest value added per sale. A) retail stores B) sales force C) distributors ) Internet ") telemarketing Ans#er$ B %age &ef$ ',/ )b*ective$ 0 ifficult+$ "as+

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0;) -hich of the follo#ing problems is most likel+ #hen a sales agenc+ is used instead of compan+ salespeople. A) 7he compan+ #ill find it difficult to control the sales process. B) 7he+ do not take title to goods or negotiate purchases or sales. C) 7he value>added per sale is the lo#est for sales agencies. ) Agencies #ill pa+ less attention to customers #ho bu+ the most or in large volumes. ") !ales agencies are often difficult to access due to strict contractual obligations. Ans#er$ A %age &ef$ ',: )b*ective$ 0 ifficult+$ Moderate <se of %o#er 1!cenario) Broomer manufactures fashion apparel for #omen5 men5 and children. Its products are in high demand and apparel stores are more than #illing to carr+ and sell Broomer2s garments. 7he compan+ recentl+ introduced a ne# clothing line named AInducerA5 targeted at the +outh. 6o#ever5 the ne# line is not #ell>received b+ the market5 and sales fail to take off even three months after its launch. 0=) In an effort to boost sales5 Broomer offers its retailers a higher margin for promoting and selling products from the AInducerA line to customers. 7his is an e9ample of ________ po#er. A) coercive B) re#ard C) passive ) e9pert ") referent Ans#er$ B %age &ef$ ',; )b*ective$ ' AAC!B$ Anal+tic skills ifficult+$ Moderate '4) Because of the acceptance that the other Broomer products have in the market5 retailers are #illing to stock items from the ne# AInducerA line of clothing. 7his is an e9ample of ________ po#er. A) referent B) passive C) legitimate ) coercive ") re#ard Ans#er$ A %age &ef$ ',; )b*ective$ ' AAC!B$ Anal+tic skills ifficult+$ Moderate

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'1) Broomer threatens to #ithdra# all its other products from the retailers2 stores if the+ are un#illing to push products from the AInducerA line. 7his is an e9ample of ________ po#er. A) re#ard B) coercive C) legitimate ) e9pert ") referent Ans#er$ B %age &ef$ ',; )b*ective$ ' AAC!B$ Anal+tic skills ifficult+$ Moderate ',) ________ po#er can be effective5 but its e9ercise produces resentment and can lead the intermediaries to organize countervailing po#er. A) Coercive B) &e#ard C) ?egitimate ) "9pert ") &eferent Ans#er$ A %age &ef$ ',; )b*ective$ ' ifficult+$ "as+ '0) A manufacturer offers its intermediaries an e9tra benefit for performing a promotional activit+. 7his is an e9ample of the use of ________ po#er. A) re#ard B) coercive C) functional ) e9pert ") referent Ans#er$ A %age &ef$ ',; )b*ective$ ' ifficult+$ "as+ '') A manufacturer is using legitimate po#er #hen it ________. A) re8uests a behavior that is #arranted under the selling contract B) threatens to #ithdra# a resource or terminate a relationship C) offers intermediaries an e9tra benefit for performing specific acts or functions ) makes the intermediaries sell more of a particular product b+ offering re#ards ") sells more products b+ making use of its reputation in the market Ans#er$ A %age &ef$ ',; )b*ective$ ' ifficult+$ Moderate
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'() 6e#lett>%ackard is a highl+ respected brand. Man+ retailers #ant to be associated #ith the brand because of this reputation. -hat kind of po#er does 6e#lett>%ackard obtain due to this reputation. A) referent B) functional C) legitimate ) coercive ") re#ard Ans#er$ A %age &ef$ ',; )b*ective$ ' ifficult+$ "as+ '/) -hich of the follo#ing t+pes of po#er is ob*ectivel+ observable. A) coercive po#er B) legitimate po#er C) group po#er ) e9pert po#er ") referent po#er Ans#er$ A %age &ef$ ',; )b*ective$ ' ifficult+$ "as+ ':) A ne# firm t+picall+ starts as a local operation selling in a fairl+ circumscribed market b+ ________. A) finding and developing ne# intermediaries B) using a fe# e9isting intermediaries C) forming partnerships #ith the market leader ) creating a special channel ") forming partnerships #ith other firms Ans#er$ B %age &ef$ ',= )b*ective$ ' ifficult+$ Moderate ';) -ho #ill most likel+ be #illing to pa+ for high>value>added channels. A) earl+ bu+ers of a product B) internal customers of a compan+ C) small and matured bu+ers of an industr+ ) consumers of lo# involvement products ") repeat customers of a product Ans#er$ A %age &ef$ ',= )b*ective$ ' ifficult+$ "as+
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'=) A producer must modif+ its channel design and arrangements if ________. A) consumer bu+ing patterns change B) the competition in the market stabilizes C) the product is in the gro#th stage of its life c+cle ) the market size remains unchanged for a particular period ") the firm2s profits stabilize Ans#er$ A %age &ef$ ',= )b*ective$ ' ifficult+$ "as+ (4) -hat is the ma*or difference bet#een a conventional marketing channel and a vertical marketing s+stem 1BM!). A) "lements in a conventional marketing channel act as separate businesses #hereas the elements in a BM! act as a unified s+stem. B) A BM! has man+ intermediaries #hereas a conventional marketing channel has a limited number of intermediaries. C) A BM! is characterized b+ an independent producer #hereas a conventional marketing channel is characterized b+ multiple producers. ) A conventional marketing channel has elements such as retailers and #holesalers #hereas these elements are not present in a BM!. ") %roducers have complete control over the other members in a conventional marketing channel #hereas this control is minimal in a BM!. Ans#er$ A %age &ef$ '01 )b*ective$ ( ifficult+$ Moderate (1) A1n) ________ includes the producer5 #holesaler1s)5 and retailer1s) acting as a unified s+stem. A) parallel marketing channel B) vertical marketing s+stem C) e9tensive marketing channel ) internal marketing s+stem ") conventional marketing channel Ans#er$ B %age &ef$ '01 )b*ective$ ( ifficult+$ "as+

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(,) A1n) ________ vertical marketing s+stem combines successive stages of production and distribution under single o#nership. A) corporate B) administered C) contractual ) regulator+ ") controlled Ans#er$ A %age &ef$ '0, )b*ective$ ( ifficult+$ "as+ (0) 7he most advanced suppl+>distributor arrangements for ________ vertical marketing s+stems rel+ on distribution programming. A) corporate B) administered C) contractual ) regulator+ ") controlled Ans#er$ B %age &ef$ '0, )b*ective$ ( ifficult+$ "as+ (') &otter Carder Inc. is a large>scale paint manufacturer and is kno#n for its #ide range of decorative paint products and industrial coatings. In addition to making paints5 the compan+ also o#ns and operates the retail stores #hich sell its products. 7his is an e9ample of a1n) ________ vertical marketing s+stem. A) administered B) contractual C) referent ) corporate ") regulated Ans#er$ %age &ef$ '0, )b*ective$ ( AAC!B$ Anal+tic skills ifficult+$ Moderate

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(() An administered BM! coordinates successive stages of production and distribution through ________. A) an automated central control unit B) single o#nership C) the combined efforts of all its members ) the establishment of contractual obligations ") the size and po#er of one of the members Ans#er$ " %age &ef$ '0, )b*ective$ ( ifficult+$ Moderate (/) A1n) ________ BM! consists of independent firms at different levels of production and distribution5 integrating their programs on a contractual basis to obtain more economies or sales impact than the+ could achieve alone. A) administered B) contractual C) corporate ) regulated ") referent Ans#er$ B %age &ef$ '00 )b*ective$ ( ifficult+$ "as+ (:) A group of small sellers take the initiative and organize a ne# business entit+ to carr+ on #holesaling and possibl+ some production. 7his initiative is called a1n) ________. A) retailer cooperative B) franchise organization C) area>based cartel ) sponsored voluntar+ chain ") alternate selling channel Ans#er$ A %age &ef$ '00 )b*ective$ ( ifficult+$ "as+ (;) In a retailer cooperative5 ________. A) profits are e8uall+ divided among members B) members plan their advertising *ointl+ C) nonmembers cannot bu+ through the co>op ) members rel+ on distribution programming ") members standardize their selling practices Ans#er$ B %age &ef$ '00 )b*ective$ ( ifficult+$ Moderate
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(=) A group of small grocer+ shops forms a ne# business entit+ to bu+ products directl+ from manufacturers. 7he group bu+s products in bulk #hich are then distributed among members. 7his helps the shops obtain better profit margins. -hich of the follo#ing t+pes of vertical marketing s+stem can be observed here. A) contractual B) corporate C) administered ) controlled ") regulator+ Ans#er$ A %age &ef$ '00 )b*ective$ ( AAC!B$ Anal+tic skills ifficult+$ Moderate /4) A franchise organization is an e9ample of a1n) ________ vertical marketing s+stem. A) corporate B) administered C) contractual ) regulator+ ") controlled Ans#er$ C %age &ef$ '00 )b*ective$ ( ifficult+$ "as+ /1) In a ________ marketing s+stem5 t#o or more unrelated companies put together resources or programs to e9ploit an emerging marketing opportunit+. A) reverse flo# B) vertical C) horizontal ) lateral ") for#ard flo# Ans#er$ C %age &ef$ '00 )b*ective$ ( ifficult+$ "as+

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/,) -hich of the follo#ing is a ma*or advantage of adding more channels for selling. A) It helps the compan+ increase its market coverage. B) It helps the compan+ reduce its fi9ed costs. C) It reduces the likelihood of channel conflict. ) It is the best strateg+ for selling lo#>involvement consumer products. ") It results in economies of scale. Ans#er$ A %age &ef$ '0' )b*ective$ ( ifficult+$ Moderate /0) ________ channel conflict occurs bet#een channel members at the same level. A) 6orizontal B) Bertical C) Multichannel ) Administrative ") Contractual Ans#er$ A %age &ef$ '0( )b*ective$ ( ifficult+$ "as+ /') Alcart !olutions is a large distributor of Aldor phones in Canada. 7he compan+ distributes products to various retailers in the De# Bruns#ick province. &ecentl+ Aldor received several complaints from its retailers that their orders are not delivered on time. 7he+ also complain that Alcart offers preferential treatment to some of the other retailers in the region. 7his is an e9ample of ________ conflict. A) multichannel B) horizontal C) vertical ) intermediate ") parallel Ans#er$ C %age &ef$ '0/ )b*ective$ ( AAC!B$ Anal+tic skills ifficult+$ Moderate

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/() A franchisee o#ner is unsatisfied because the manufacturer provides more benefits to a #holesaler. 7his conflict is an e9ample of a1n) ________ conflict. A) horizontal B) vertical C) intermediate ) multichannel ") parallel Ans#er$ %age &ef$ '0/ )b*ective$ ( ifficult+$ "as+ //) A manufacturer #ants to achieve rapid market penetration through a lo#>price polic+. 6o#ever5 its dealers prefer to #ork #ith high margins and pursue short>run profitabilit+. 7he ma*or reason for this conflict is ________. A) goal incompatibilit+ B) unclear roles C) ambiguous rights ) differences in perception ") dependence on the manufacturer Ans#er$ A %age &ef$ '0/ )b*ective$ ( ifficult+$ "as+ /:) Ceneral Motors2 e9ecutives #ork for a short time in some dealerships5 and some dealership o#ners #ork in CM2s dealer polic+ department. 7his strateg+ helps the compan+ avoid conflicts #ith its dealers. 7his is an e9ample of the ________ strateg+. A) emplo+ee e9change B) dual compensation C) *oint membership ) co>optation ") diplomac+ Ans#er$ A %age &ef$ '0: )b*ective$ ( ifficult+$ Moderate

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/;) &E Corp. is a large manufacturer of electronic goods and sells its products through distributors and retailers. In order to keep pace #ith the gro#ing use of the Internet5 the compan+ decides to start selling online. 7he compan+ faces stiff opposition from its retailers as the+ believe that this #ill significantl+ reduce their profits. 7he compan+ attempts to eliminate this resistance b+ offering its retailers commissions for processing and delivering orders received via the -eb. 7his is an e9ample of #hich of the follo#ing conflict resolution strategies. A) dual compensation B) *oint membership C) arbitration ) co>option ") strategic pricing Ans#er$ A %age &ef$ '0: )b*ective$ ( AAC!B$ Anal+tic skills ifficult+$ Moderate /=) Co>optation is an effort b+ one organization to #in the support of the leaders of another b+ ________. A) including them in advisor+ councils B) engaging in mediation and arbitration C) encouraging *oint memberships in trade associations ) encouraging emplo+ee e9changes ") offering strategic *ustifications Ans#er$ A %age &ef$ '0: )b*ective$ ( ifficult+$ Moderate :4) -instar is a large scale manufacturer #hich has more than a hundred partners across the globe. -hen making decisions concerning distribution and channel optimization5 the compan+ invites members from its channel partners to be part of its advisor+ committee. 7his helps the compan+ maintain harmon+ #ith its partners. -hich of the follo#ing conflict resolution techni8ues is -instar using. A) diplomatic counselling B) mediation C) arbitration ) co>option ") *oint membership Ans#er$ %age &ef$ '0: )b*ective$ ( AAC!B$ Anal+tic skills ifficult+$ Moderate

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:1) -hich of the follo#ing channel conflict resolution techni8ues is used onl+ if ever+thing else proves ineffective. A) legal recourse B) mediation C) arbitration ) co>option ") superordinate goals Ans#er$ A %age &ef$ '0; )b*ective$ ( ifficult+$ "as+ :,) -hich of the follo#ing is the most complete and accurate description of a pure>click compan+. A) 7hese are companies that launch a -eb site #ithout an+ previous e9istence as a firm. B) 7hese firms2 business models are based on advertising revenue. C) 7hese are established companies that have an online site for selling products. ) 7hese companies get paid ever+ time a user visits their -eb site. ") 7hese companies sell online space to other -eb sites and are paid for the service. Ans#er$ A %age &ef$ '0= )b*ective$ / AAC!B$ <se of I7 ifficult+$ Moderate :0) A large retail chain in the <nited !tates decides to e9pand its operations b+ adding an online site for e>commerce. 7his is called a1n) ________ compan+. A) B,B B) brick>and>mortar C) m>commerce ) pure>click ") brick>and>click Ans#er$ " %age &ef$ '0= )b*ective$ / AAC!B$ <se of I7 ifficult+$ "as+

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:') An Internet service provider 1I!%) is a1n) ________ compan+. A) pure>click B) brick and click C) brick>and>mortar ) m>commerce ") one>level Ans#er$ A %age &ef$ '0= )b*ective$ / AAC!B$ <se of I7 ifficult+$ "as+ :() F!" !ecurities "9change is the largest stock e9change in Africa. 7he F!" provides a market #here securities can be traded freel+ under a regulated procedure. 7he compan+ acts as an intermediar+ bet#een the traders. F!" is an e9ample of a1n) ________. A) internal broker B) infomediar+ C) customer communit+ ) market maker ") third part+ arbitrator Ans#er$ %age &ef$ '0= )b*ective$ / AAC!B$ Anal+tic skills ifficult+$ Moderate :/) "99on Consulting5 #orks as an agent on behalf of business consumers to collect information on various industrial products. -hen faced #ith bu+ing decisions5 businesses can approach "99on to obtain detailed information on the various options available to them. 7he compan+ earns revenue b+ selling such information to various customers. Marten Consulting can be called a1n) ________. A) infomediar+ B) market maker C) customer communit+ ) third part+ arbitrator ") informant Ans#er$ A %age &ef$ '0= )b*ective$ / AAC!B$ Anal+tic skills ifficult+$ Moderate

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::) Consumer surve+s suggest that one of the most significant inhibitors of online shopping is the absence of ________. A) pleasurable e9periences B) competitive prices C) ade8uate technical information ) after>sales service ") facilities to compare offerings Ans#er$ A %age &ef$ '0= )b*ective$ / AAC!B$ <se of I7 ifficult+$ "as+ :;) -hich of the follo#ing is a ma*or threat facing the brick>and>mortar manufacturers #hen the+ add an e>commerce channel. A) It creates the possibilit+ of a backlash from the e9isting intermediaries. B) It increases the likelihood of product cannibalization. C) !uccessful implementation leads to a significant increase in operational costs. ) It significantl+ increases the resource re8uirements of the organization. ") ">commerce channels often have lo# potential for attracting customers. Ans#er$ A %age &ef$ ''4 )b*ective$ / AAC!B$ <se of I7 ifficult+$ Moderate :=) -hich of the follo#ing is an e9ample of a brick>and>click compan+. A) IGB Industries5 a compan+ that sells products using various channels such as Internet5 retailers5 direct outlets5 and franchisees. B) )pera5 a -eb bro#ser and Internet suite developed b+ )pera !oft#are5 performs common tasks such as displa+ing -eb sites and sending and receiving e>mail messages. C) Atrutron5 a compan+ that offers its customers access to the Internet using data transmission technolog+. ) eBa+ Inc.5 an American compan+5 facilitates online auctions and shopping to people and businesses across the globe to bu+ and sell a broad variet+ of goods and services. ") HahooI Inc.5 an American corporation5 provides services via the Internet such as directories5 e>mail5 ne#s5 advertising5 online mapping5 and so on. Ans#er$ A %age &ef$ ''4 )b*ective$ / AAC!B$ Anal+tic skills ifficult+$ Moderate

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;4) M>commerce refers to ________. A) conducting business using mobile channels B) the use of mass media communications to attract customers C) providing mobile and on>site services to customers ) the use of a specific medium to communicate #ith prospects ") using the Internet as a medium for doing business Ans#er$ A %age &ef$ ''1 )b*ective$ / ifficult+$ "as+ ;1) Marketing channels are the set of path#a+s a product or service follo#s after production5 culminating in purchase and consumption b+ the final end user. Ans#er$ 7&<" %age &ef$ '1( )b*ective$ 1 ifficult+$ "as+ ;,) !ales agents and brokers are called facilitators in a marketing channel. Ans#er$ GA?!" %age &ef$ '1/ )b*ective$ 1 ifficult+$ "as+ ;0) A pull strateg+ is particularl+ appropriate #hen there is lo# brand lo+alt+ in a categor+5 brand choice is made in the store5 the product is an impulse item5 and product benefits are #ell understood. Ans#er$ GA?!" %age &ef$ '1/ )b*ective$ 1 ifficult+$ "as+ ;') Companies should first think of the target market and then design the suppl+ chain back#ard from that point. 7his strateg+ is called demand chain planning. Ans#er$ 7&<" %age &ef$ '1: )b*ective$ 1 ifficult+$ "as+ ;() A marketing channel overcomes the time5 place5 and possession gaps that separate goods and services from those #ho need or #ant them. Ans#er$ 7&<" %age &ef$ '1; )b*ective$ , ifficult+$ "as+

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;/) Marketing channel functions such as storage and movement and communications constitute a back#ard flo# of activities. Ans#er$ GA?!" %age &ef$ '1; )b*ective$ , ifficult+$ "as+ ;:) All functions in a marketing channel use scarce resources and can be shifted among channel members. Ans#er$ 7&<" %age &ef$ '1= )b*ective$ , ifficult+$ "as+ ;;) A zero>level marketing channel t+picall+ uses a #holesaler and a retailer. Ans#er$ GA?!" %age &ef$ ',4 )b*ective$ , ifficult+$ "as+ ;=) 7he flo# of materials to refurbish products for resale constitutes a reverse flo#. Ans#er$ 7&<" %age &ef$ ',1 )b*ective$ , ifficult+$ "as+ =4) ?ot size refers to the total number of units a channel can transmit from the manufacturer2s place to the service outlet. Ans#er$ GA?!" %age &ef$ ',, )b*ective$ 0 ifficult+$ "as+ =1) Add>on services such as credit5 deliver+5 installation5 and repairs provided b+ the marketing channel are referred to as service backup. Ans#er$ 7&<" %age &ef$ ',0 )b*ective$ 0 ifficult+$ "as+ =,) %roducts such as heating and cooling s+stems are usuall+ sold and maintained b+ the compan+ or b+ franchised dealers. Ans#er$ 7&<" %age &ef$ ',0 )b*ective$ 0 ifficult+$ "as+
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=0) -hen economic conditions are depressed5 producers #ant to move goods to market using longer channels. Ans#er$ GA?!" %age &ef$ ',0 )b*ective$ 0 ifficult+$ "as+ =') Intensive distribution relies on onl+ some of the intermediaries #illing to carr+ a particular product. Ans#er$ GA?!" %age &ef$ ',( )b*ective$ 0 ifficult+$ "as+ =() Intensive distribution is becoming a mainsta+ for specialists looking for an edge in markets increasingl+ driven b+ price. Ans#er$ GA?!" %age &ef$ ',( )b*ective$ 0 ifficult+$ "as+ =/) An intensive distribution strateg+ serves #ell for products such as snack foods and soft drinks. Ans#er$ 7&<" %age &ef$ ',( )b*ective$ 0 ifficult+$ "as+ =:) istributors2 territorial rights define the terms under #hich the producer #ill enfranchise other distributors. Ans#er$ 7&<" %age &ef$ ',/ )b*ective$ 0 ifficult+$ "as+ =;) Manufacturers can obtain greater control over the selling process b+ using a sales agenc+. Ans#er$ GA?!" %age &ef$ ',: )b*ective$ 0 ifficult+$ "as+

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==) After a compan+ has chosen a channel s+stem5 it must select5 train5 motivate5 and evaluate individual intermediaries for each channel. Ans#er$ 7&<" %age &ef$ ',: )b*ective$ ' ifficult+$ "as+ 144) Channel po#er is the abilit+ to alter channel members2 behavior so the+ take actions the+ #ould not have taken other#ise. Ans#er$ 7&<" %age &ef$ ',; )b*ective$ ' ifficult+$ "as+ 141) A manufacturer is using re#ard po#er #hen it offers intermediaries an e9tra benefit for performing specific acts or functions. Ans#er$ 7&<" %age &ef$ ',; )b*ective$ ' ifficult+$ "as+ 14,) -hen a manufacturer re8uests a behavior that is #arranted under the contract5 the manufacturer is using coercive po#er. Ans#er$ GA?!" %age &ef$ ',; )b*ective$ ' ifficult+$ "as+ 140) A manufacturer obtains referent po#er #hen it has special kno#ledge that intermediaries value. Ans#er$ GA?!" %age &ef$ ',; )b*ective$ ' ifficult+$ "as+ 14') Coercive and referent po#er are sub*ective and depend on the abilit+ and #illingness of parties to recognize them. Ans#er$ GA?!" %age &ef$ ',; )b*ective$ ' ifficult+$ "as+

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14() In competitive markets #ith lo# entr+ barriers5 the optimal channel structure #ill inevitabl+ change over time. Ans#er$ 7&<" %age &ef$ ',= )b*ective$ ' ifficult+$ "as+ 14/) "arl+ bu+ers might be #illing to pa+ for high>value>added channels5 but later bu+ers #ill s#itch to lo#er>cost channels. Ans#er$ 7&<" %age &ef$ ',= )b*ective$ ' ifficult+$ "as+ 14:) 7he first step in global channel planning is to get close to customers. Ans#er$ 7&<" %age &ef$ '01 )b*ective$ ' ifficult+$ "as+ 14;) A conventional marketing channel includes the producer5 #holesalers5 and retailers acting as a unified s+stem. Ans#er$ GA?!" %age &ef$ '01 )b*ective$ ( ifficult+$ "as+ 14=) Bertical marketing s+stems achieve economies through size5 bargaining po#er5 and elimination of duplicated services. Ans#er$ 7&<" %age &ef$ '0, )b*ective$ ( ifficult+$ "as+ 114) A corporate vertical marketing s+stem combines successive stages of production and distribution under single o#nership. Ans#er$ 7&<" %age &ef$ '0, )b*ective$ ( ifficult+$ "as+ 111) Advanced suppl+>distributor arrangements for administered vertical marketing s+stems do not rel+ on distribution programming. Ans#er$ GA?!" %age &ef$ '0, )b*ective$ ( ifficult+$ "as+
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11,) &etailer cooperatives allo# nonmember retailers to bu+ through them and share the profits. Ans#er$ GA?!" %age &ef$ '00 )b*ective$ ( ifficult+$ "as+ 110) <nrelated companies put together resources or programs in horizontal marketing s+stems. Ans#er$ 7&<" %age &ef$ '00 )b*ective$ ( ifficult+$ "as+ 11') Adding more marketing channels increases the channel cost of selling. Ans#er$ GA?!" %age &ef$ '0' )b*ective$ ( ifficult+$ "as+ 11() Conflicts bet#een various franchisees of a compan+ are an e9ample of vertical channel conflict. Ans#er$ GA?!" %age &ef$ '0( )b*ective$ ( ifficult+$ "as+ 11/) Multichannel conflicts are common #hen the members of one channel get a lo#er price based on larger>volume purchases. Ans#er$ 7&<" %age &ef$ '0/ )b*ective$ ( ifficult+$ "as+ 11:) ual compensation pa+s e9isting channels for sales made through ne# channels. Ans#er$ 7&<" %age &ef$ '0: )b*ective$ ( ifficult+$ "as+ 11;) "9clusive dealings and t+ing agreements are illegal and prohibited b+ la#. Ans#er$ GA?!" %age &ef$ '0; )b*ective$ ( ifficult+$ "as+

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11=) Brick>and>click companies are those that have launched a -eb site #ithout an+ previous e9istence as a firm. Ans#er$ GA?!" %age &ef$ '0= )b*ective$ / AAC!B$ <se of I7 ifficult+$ "as+ 1,4) %rice pressure #ill be more for undifferentiated products than differentiated products. Ans#er$ 7&<" %age &ef$ ''4 )b*ective$ / ifficult+$ "as+ 1,1) -hat are marketing channels. Briefl+ e9plain some of the different t+pes of intermediaries. Ans#er$ Marketing channels are sets of interdependent organizations participating in the process of making a product or service available for use or consumption. 7he+ are the set of path#a+s a product or service follo#s after production5 culminating in purchase and consumption b+ the final end user. !ome intermediariesJsuch as #holesalers and retailersJbu+5 take title to5 and resell the merchandiseK the+ are called merchants. )thersJbrokers5 manufacturers2 representatives5 sales agentsJsearch for customers and ma+ negotiate on the producer2s behalf but do not take title to the goodsK the+ are called agents. !till othersJtransportation companies5 independent #arehouses5 banks5 advertising agenciesJassist in the distribution process but neither take title to goods nor negotiate purchases or salesK the+ are called facilitators. %age &ef$ '1(>'1/ )b*ective$ 1 ifficult+$ Moderate 1,,) "9plain the concept of a value net#ork. Ans#er$ A compan+ can be seen as being at the center of a value net#ork5 a s+stem of partnerships and alliances that a firm creates to source5 augment5 and deliver its offerings. A value net#ork includes a firm2s suppliers and its suppliers2 suppliers5 and its immediate customers and their end customers. 7he value net#ork includes valued relationships #ith others such as universit+ researchers and government approval agencies. A compan+ needs to orchestrate these parties in order to deliver superior value to the target market. Managing a value net#ork means making increasing investments in information technolog+ 1I7) and soft#are. Girms have introduced suppl+ chain management 1!CM) soft#are and invited such soft#are firms as !A% and )racle to design comprehensive enterprise resource planning 1"&%) s+stems to manage cash flo#5 manufacturing5 human resources5 purchasing5 and other ma*or functions #ithin a unified frame#ork. %age &ef$ '1:>'1; )b*ective$ 1 ifficult+$ Moderate

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1,0) -hat are the various functions performed b+ members of a marketing channel. %rovide e9amples. Ans#er$ !ome of the functions that the members of a marketing channel perform 1storage and movement5 title5 and communications) constitute a for#ard flo# of activit+ from the compan+ to the customerK other functions 1ordering and pa+ment) constitute a back#ard flo# from customers to the compan+. !till others 1information5 negotiation5 finance5 and risk taking) occur in both directions. %age &ef$ '1; )b*ective$ , ifficult+$ "as+ 1,') Briefl+ e9plain the various levels of marketing channels. Ans#er$ A zero>level channel5 also called a direct marketing channel5 consists of a manufacturer selling directl+ to the final customer. 7he ma*or e9amples are door>to>door sales5 home parties5 mail order5 telemarketing5 7B selling5 Internet selling5 and manufacturer>o#ned stores. A one>level channel contains one selling intermediar+5 such as a retailer. A t#o>level channel contains t#o intermediaries. In consumer markets5 these are t+picall+ a #holesaler and a retailer. A three>level channel contains three intermediaries. In the meatpacking industr+5 #holesalers sell to *obbers5 essentiall+ small>scale #holesalers5 #ho sell to small retailers. %age &ef$ ',4>',1 )b*ective$ , ifficult+$ Moderate 1,() Briefl+ e9plain the various service outputs that marketing channels produce. Ans#er$ Channels produce five service outputs$ 11) ?ot size$ 7he number of units the channel permits a t+pical customer to purchase on one occasion. 1,) -aiting and deliver+ time$ 7he average time customers #ait for receipt of goods. Customers increasingl+ prefer faster deliver+ channels. 10) !patial convenience$ 7he degree to #hich the marketing channel makes it eas+ for customers to purchase the product. 1') %roduct variet+$ 7he assortment provided b+ the marketing channel. Dormall+5 customers prefer a greater assortment because more choices increase the chance of finding #hat the+ need5 although too man+ choices can sometimes create a negative effect. 1() !ervice backup$ Add>on services 1credit5 deliver+5 installation5 repairs) provided b+ the channel. 7he greater the service backup5 the greater the #ork provided b+ the channel. %age &ef$ ',,>',0 )b*ective$ 0 ifficult+$ Moderate

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1,/) "9plain the three distribution strategies based on the number of intermediaries. Ans#er$ "9clusive distribution$ 7his strateg+ focuses on severel+ limiting the number of intermediaries. It2s appropriate #hen the producer #ants to maintain control over the service level and outputs offered b+ the resellers5 and it often includes e9clusive dealing arrangements. B+ granting e9clusive distribution5 the producer hopes to obtain more dedicated and kno#ledgeable selling. It re8uires a closer partnership bet#een seller and reseller and is used in the distribution of ne# automobiles5 some ma*or appliances5 and some #omen2s apparel brands. !elective distribution$ 7his distribution strateg+ relies on onl+ some of the intermediaries #illing to carr+ a particular product. -hether established or ne#5 the compan+ does not need to #orr+ about having too man+ outletsK it can gain ade8uate market coverage #ith more control and less cost than intensive distribution. Intensive distribution$ 7his strateg+ places the goods or services in as man+ outlets as possible. 7his strateg+ serves #ell for snack foods5 soft drinks5 ne#spapers5 candies5 and gum@products consumers bu+ fre8uentl+ or in a variet+ of locations. %age &ef$ ','>',( )b*ective$ 0 ifficult+$ Moderate 1,:) -hat is channel po#er. "9plain the various t+pes of channel po#ers. Ans#er$ Channel po#er is the abilit+ to alter channel members2 behavior so the+ take actions the+ #ould not have taken other#ise. Coercive po#er$ A manufacturer threatens to #ithdra# a resource or terminate a relationship if intermediaries fail to cooperate. 7his po#er can be effective5 but its e9ercise produces resentment and can lead the intermediaries to organize countervailing po#er. &e#ard po#er$ 7he manufacturer offers intermediaries an e9tra benefit for performing specific acts or functions. &e#ard po#er t+picall+ produces better results than coercive po#er5 but intermediaries ma+ come to e9pect a re#ard ever+ time the manufacturer #ants a certain behavior to occur. ?egitimate po#er$ 7he manufacturer re8uests a behavior that is #arranted under the contract. As long as the intermediaries vie# the manufacturer as a legitimate leader5 legitimate po#er #orks. "9pert po#er$ 7he manufacturer has special kno#ledge the intermediaries2 value. )nce the intermediaries ac8uire this e9pertise5 ho#ever5 e9pert po#er #eakens. 7he manufacturer must continue to develop ne# e9pertise so intermediaries #ill #ant to continue cooperating. &eferent po#er$ 7he manufacturer is so highl+ respected that intermediaries are proud to be associated #ith it. Companies such as IBM5 Caterpillar5 and 6e#lett>%ackard have high referent po#er. Coercive and re#ard po#er are ob*ectivel+ observableK legitimate5 e9pert5 and referent po#er are more sub*ective and depend on the abilit+ and #illingness of parties to recognize them. %age &ef$ ',; )b*ective$ ' ifficult+$ Moderate

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1,;) Comment on the challenges and opportunities that international markets pose. Ans#er$ International markets pose distinct challenges5 including variations in customers2 shopping habits5 but opportunities at the same time. Behavior of markets and preferences for intermediaries differ across countries. Goreign markets provide an opportunit+ for gro#th and e9pansion. Man+ pitfalls also e9ist in global e9pansion5 and retailers must also be able to defend their home turf from the entr+ of foreign retailers. %age &ef$ '04>'01 )b*ective$ ' ifficult+$ "as+ 1,=) -hat is a vertical marketing s+stem 1BM!). -hat are the various t+pes BM!s. Ans#er$ A vertical marketing s+stem includes the producer5 #holesaler1s)5 and retailer1s) acting as a unified s+stem. )ne channel member5 the channel captain5 o#ns or franchises the others or has so much po#er that the+ all cooperate. 7here are three t+pes of BM!s$ corporate5 administered5 and contractual. A corporate BM! combines successive stages of production and distribution under single o#nership. An administered BM! coordinates successive stages of production and distribution through the size and po#er of one of the members. Manufacturers of dominant brands can secure strong trade cooperation and support from resellers. A contractual BM! consists of independent firms at different levels of production and distribution5 integrating their programs on a contractual basis to obtain more economies or sales impact than the+ could achieve alone. %age &ef$ '01>'00 )b*ective$ ( ifficult+$ Moderate 104) ifferentiate bet#een pure>click companies and brick>and>click companies. Ans#er$ %ure>click companies are those that have launched a -eb site #ithout an+ previous e9istence as a firm5 #hile brick>and>click companies are e9isting companies that have added an online site for information or e>commerce. 7here are several kinds of pure>click companies$ search engines5 Internet service providers 1I!%s)5 commerce sites5 transaction sites5 content sites5 and enabler sites. Brick>and>click companies are formed b+ adding an e>commerce channel to an e9isting business. %age &ef$ '0= )b*ective$ / AAC!B$ <se of I7 ifficult+$ "as+

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101) !#eet 7reats is a startup confectioner+ manufacturer that sells chocolates5 boiled s#eets5 toffees5 marshmallo#s5 *ell+ candies5 and so on. !hould the firm adopt a push or a pull strateg+. "9plain +our ans#er. Ans#er$ Considering that !#eet 7reats is a startup5 its products are likel+ to have lo# brand lo+alt+. Moreover5 its products are likel+ to be impulse items. 7hus5 a push strateg+ #ould be more suitable. %age &ef$ '1/ )b*ective$ 1 AAC!B$ Anal+tic skills ifficult+$ Moderate 10,) 7he Dorticon Croup provides and manages computers and net#ork s+stems for businesses and communities. Dorticon sells its products through various means@it uses its sales force to sell to large customers and telemarketing to sell to smaller customers. 7he compan+ also sells its products via the Internet. Briefl+ e9plain the marketing approach being used b+ the compan+. Ans#er$ 7he compan+ is using h+brid channels or multichannel marketing #hich involves the use of t#o or more marketing channels to reach customer segments. In multichannel marketing5 each channel targets a different segment of bu+ers5 or different need states for one bu+er5 and delivers the right products in the right places in the right #a+ at the least cost. %age &ef$ '1/>'1: )b*ective$ 1 AAC!B$ Anal+tic skills ifficult+$ Moderate 100) Carolds !tores operates as a lo# price retailer. It offers home fashion products5 such as #all decor5 frames5 candles5 bath and bedding products5 furniture5 home accents5 and kitchen products. 7he firm has sho#rooms and retail stores across <nited !tates. Customers can bu+ products in three different #a+s$ 11) the+ can place orders online and have the products shipped to their homesK 1,) the+ can bu+ directl+ from the sho#rooms and retail outletsK or 10) the+ can place orders online and pick them up from the nearest sho#room. -hat are the benefits that Carolds !tores could achieve b+ using various channels to sell to customers. Ans#er$ 7he compan+ can increase its sales b+ targeting different segments of customers through various channels. Multichannel marketing allo#s the compan+ to deliver the right products in the right places in the right #a+ at the least cost. %age &ef$ '1: )b*ective$ 1 AAC!B$ Anal+tic skills ifficult+$ Moderate

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10') Cortron Consultants provides business consulting services for startups. It helps customers design their suppl+ chains b+ first evaluating the target market and then proceeds back#ard from that point. -hat is this strateg+ of reverse design called. Briefl+ e9plain. Ans#er$ 7his strateg+ is called demand chain planning. 7his helps the companies have a clear focus on the target market. %age &ef$ '1: )b*ective$ 1 AAC!B$ Anal+tic skills ifficult+$ Moderate 10() Members of a marketing channel perform three t+pes of functions. %rovide e9amples of these three functions in the conte9t of a publishing compan+ that publishes books and magazines. Ans#er$ 7he storage and movement of books from the compan+ to the customer constitutes a for#ard flo#. )rdering books and pa+ing for them constitute a back#ard flo# from customers to the compan+. !haring information and risk taking are activities that occur in both directions. %age &ef$ '1; )b*ective$ , ifficult+$ Moderate 10/) ell computers is a manufacturer of computers. ell accepts orders for computers online and ships the products to the customer. epict the likel+ ph+sical flo# of materials in this case. Ans#er$ !uppliers JL7ransporters >L -arehouses>L ell >L7ransporters>L Customers %age &ef$ '1= )b*ective$ , AAC!B$ Anal+tic skills ifficult+$ Moderate 10:) "ureka Gorbes5 an Asian consumer appliances compan+5 sells its vacuum cleaners through door>to door sales. 7his allo#s the compan+ to obtain a high conversion ratio. Comment on the length of the channel in the case of "ureka Gorbes2 vacuum cleaners. Ans#er$ 7he compan+ is using a zero>level channel5 i.e. the manufacturer sells directl+ to the final customer. 7his is the shortest channel. %age &ef$ ',4 )b*ective$ , AAC!B$ Anal+tic skills ifficult+$ Moderate

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10;) )rion Airlines is an American airline that provides domestic and international air transport services. "9plain the five service outputs provided b+ marketing channels #ith reference to )rion. Ans#er$ ?ot sizeJCustomers ma+ be allo#ed to book as man+ tickets as the+ #ant5 sub*ect to availabilit+. -aiting and deliver+ time > 7his #ould refer to the average time customers take to book their tickets. !patial convenienceJ7his refers to the ease of booking tickets. 7he location of )rion2s retail ticketing outlets and #hether the compan+ offers online ticket booking services #ould be classified under spatial convenience. %roduct variet+J7his refers to the assortment provided b+ the marketing channel in terms of travel destinations5 holida+ packages5 hotel bookings5 car rental services5 and the like. !ervice backupJ7his refers to the add>on services provided b+ the channel such as credit5 discounts5 deliver+5 refunds5 and so on. %age &ef$ ',,>',0 )b*ective$ 0 AAC!B$ Anal+tic skills ifficult+$ Moderate 10=) &avake is a manufacturer of high>end designer apparel. Competition in the apparel industr+ is ver+ severe and the market is driven b+ price. -hat distribution strateg+ #ould be best suited to help &avake obtain an edge over its competitors. Ans#er$ 7he compan+ can use e9clusive distribution. It severel+ limits the number of intermediaries and reduces costs. 7his #ould help the compan+ maintain greater control over service levels. %age &ef$ ','>',( )b*ective$ 0 AAC!B$ Anal+tic skills ifficult+$ Moderate 1'4) Dational Beverage Corp. produces and distributes a #ide range of beverages. It offers a selection of flavored soft drinks5 *uices5 sparkling #aters5 energ+ drinks5 nutritionall+>enhanced #aters5 and other specialt+ beverages. -hat distribution strateg+ #ill be most suitable for the compan+2s products. Ans#er$ 7he compan+ has to use intensive distribution5 #hich places the goods or services in as man+ outlets as possible. 7his strateg+ serves #ell for products consumers bu+ fre8uentl+ or in a variet+ of locations. %age &ef$ ',( )b*ective$ 0 AAC!B$ Anal+tic skills ifficult+$ Moderate

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1'1) Apple Inc.5 together #ith subsidiaries5 designs5 manufactures5 and markets personal computers5 mobile phones and media devices. It also sells soft#are5 services5 and third>part+ digital content. Apple is a highl+ respected brand across the globe. -hat kind of channel po#er does this respect give Apple. Ans#er$ Apple is so highl+ respected that intermediaries are proud to be associated #ith it. 7his gives Apple referent po#er. %age &ef$ ',; )b*ective$ ' AAC!B$ Anal+tic skills ifficult+$ Moderate 1',) Atroni9 !olutions is a ma*or manufacturer of electronic measuring devices in the <.!. 7he compan+ often threatens to terminate its relationship #ith its intermediaries if the+ do not agree #ith its terms and conditions. -hat channel po#er does Atroni9 use. -hat are its effects. Ans#er$ 6ere5 the manufacturer is using coercive po#er. 7his po#er can be effective5 but its e9ercise produces resentment and can lead the intermediaries to organize countervailing po#er. %age &ef$ ',; )b*ective$ ' AAC!B$ Anal+tic skills ifficult+$ Moderate 1'0) A group of entrepreneurs is planning to start a food processing compan+. Comment on the likel+ evolution of the compan+2s marketing channels. Ans#er$ 7he firm is likel+ to start as a local operation selling in a fairl+ circumscribed market5 using a fe# e9isting intermediaries. At this stage5 it is often difficult to convince the available intermediaries to handle the firm2s line. If the firm is successful5 it might branch into ne# markets #ith different channels. In smaller markets5 the firm might sell directl+ to retailersK in larger markets5 through distributors. %age &ef$ ',= )b*ective$ ' AAC!B$ Anal+tic skills ifficult+$ Moderate 1'') MM Industries5 a manufacturer of composite metal products5 sells its products using a conventional marketing channel. 7he compan+ decides to adopt a vertical marketing s+stem to improve its performance. -hat advantages could this provide. Ans#er$ "ach entit+ in a conventional channel is a separate business seeking to ma9imize its o#n profits5 even if this goal reduces profit for the s+stem as a #hole. A vertical marketing s+stem5 b+ contrast5 acts as a unified s+stem. 7his #ould make the compan+ more profitable. BM!s achieve economies through size5 bargaining po#er5 and elimination of duplicated services. %age &ef$ '01>'0, )b*ective$ ( AAC!B$ Anal+tic skills ifficult+$ Moderate

0; Cop+right 3 ,41, %earson "ducation5 Inc. %ublishing as %rentice 6all

1'() Altrude95 Inc.5 is involved in the manufacture5 distribution5 and sale of consumer electronics. 7he compan+ sources over half the products it sells from companies it partl+ or #holl+ o#ns. It also o#ns a large retail chain and sells its products through them. -hat marketing s+stem is Altrude9 using. Ans#er$ 7he compan+ is using a corporate BM!. A corporate BM! combines successive stages of production and distribution under single o#nership. %age &ef$ '0, )b*ective$ ( AAC!B$ Anal+tic skills ifficult+$ Moderate 1'/) 7rue Balue is a retailer>o#ned cooperative #ith over '5444 independent retail locations #orld#ide. Members of 7rue Balue o#n their individual stores and operate independentl+. 7rue Balue helps its members procure materials at a lo# cost. -hat kind of a marketing s+stem is 7rue Balue. "9plain briefl+. Ans#er$ 7rue Balue is a t+pe of contractual BM!. It is a retail cooperative #herein retailers take the initiative and organize a ne# business entit+ to carr+ on #holesaling and possibl+ some production. %age &ef$ '00 )b*ective$ ( AAC!B$ Anal+tic skills ifficult+$ Moderate 1':) Glash esigns is an apparel manufacturing compan+ and has adopted a franchising model to distribute and sells its garments. 7he compan+ recentl+ received complaints from a particular franchisee that another competing franchisee #as infringing on its territor+. -hat t+pe of conflict is this. Ans#er$ 7his is an e9ample of horizontal channel conflict5 bet#een channel members at the same level. %age &ef$ '0( )b*ective$ ( AAC!B$ Anal+tic skills ifficult+$ Moderate 1';) Crafted Fe#els is a *e#elr+ manufacturer that sells its designs to various *e#elr+ retailers. 7he retailers often complain that the compan+2s online store acts as a competitor and reduces their profitabilit+. -hat t+pe of conflict is this. Briefl+ e9plain. Ans#er$ 7his is a case of multichannel conflict. It e9ists #hen the manufacturer has established t#o or more channels that sell to the same market. %age &ef$ '0/ )b*ective$ ( AAC!B$ Anal+tic skills ifficult+$ Moderate

0= Cop+right 3 ,41, %earson "ducation5 Inc. %ublishing as %rentice 6all

1'=) <ltraMotion %ictures produces and distributes music and television entertainment in the <nited !tates. 7he compan+ distributes music in partnership #ith a large music retailer5 Gromen 7unes. Gromen e9ecutives often #ork for a short time #ith <ltraMotion and some of the <ltraMotion e9ecutives #ork at the retail outlets to stud+ Gromen2s operations. 7his strateg+ minimizes the conflicts bet#een partners. -hat strateg+ is being used here. Briefl+ e9plain. Ans#er$ 7his strateg+ of managing channel conflict is called an emplo+ee e9change #hich involves the e9change of persons bet#een t#o or more channel levels. 7hus participants can gro# to appreciate each other2s point of vie#. %age &ef$ '0: )b*ective$ ( AAC!B$ Anal+tic skills ifficult+$ Moderate 1(4) eBa+ Inc. is an online auction and shopping compan+. %rocter M Camble is an American multinational corporation that manufactures a #ide range of consumer goods. Both companies sell their products online. 6o# are these companies different from a marketing channel perspective. Ans#er$ eBa+ is a pure>click compan+ #hereas %rocter M Camble is a brick>and>click compan+. %ure>click companies are companies that have launched a -eb site #ithout an+ previous e9istence as a firm. Brick>and>click companies are e9isting companies that have added an online site for information or e>commerce. %age &ef$ '0=>''4 )b*ective$ / AAC!B$ Anal+tic skills ifficult+$ Moderate

'4 Cop+right 3 ,41, %earson "ducation5 Inc. %ublishing as %rentice 6all