Chapter 10 Marketing Channels and Supply Chain Management general content: Multiple-Choice Questions

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Chapter 10

Marketing Channels and Supply Chain Management

GENERAL CONTENT: Multiple-Choice Questions

  1. Caterpillar Company charges premium prices for its heavy equipment. It is successful because _____.

    1. the equipment is high quality

    2. its distribution is unparalleled

    3. its customer support system is strong

    4. all of the above

    5. none of the above

(Answer: d; p. 297; Moderate)

  1. Another reason for Caterpillar’s success is that its dealers _____.

    1. operate at low cost

    2. build strong customer relationships in their communities

    3. are skilled in promotion

    4. discount prices to their best customers

    5. have better product knowledge than their competitors

(Answer: b; p. 298; Moderate)

  1. Why is Caterpillar’s service to dealers and customers such an advantage in winning and keeping customers?

    1. The high-quality equipment reduces downtime combined with fast service.

    2. There is no freight charge on parts with a minimum order.

    3. All service personnel have at least six years’ experience in their jobs.

    4. Employee training is a continuous effort.

    5. All of the above.

(Answer: a; p. 298; Challenging)

  1. Which item is not a reason why Caterpillar enjoys a close working relationship with its dealers?

    1. Extraordinary dealer support.

    2. Dealer performance.

    3. Internet communication.

    4. Dealer profitability.

    5. None of the above.

(Answer: e; p. 298; Moderate)

  1. Which of the following is not a typical supply chain member?

    1. Reseller.

    2. Customer.

    3. Intermediary.

    4. Intermediary’s creditor.

    5. B and C

(Answer: d; p. 299; Easy)

  1. _____ from 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.

    1. Downstream

    2. Upstream

    3. Separated

    4. Congruous

    5. None of the above

(Answer: b; p. 299; Moderate)

  1. According to the author, a better term for supply chain would be _____.

    1. supply and demand chain

    2. demand chain

    3. channel of distribution

    4. distribution channel

    5. physical distribution

(Answer: b; p. 299; Easy)

  1. When suppliers, distributors, and customers partner with each other to improve the performance of the entire system, they are participating in a _____.

    1. value delivery network

    2. channel of distribution

    3. supply chain

    4. demand chain

    5. none of the above

(Answer: a; p. 299; Moderate)

  1. The logistics and distribution manager of BeltWay Enterprises, Inc., regularly deals with the four major questions concerning marketing channels. Which one is not associated?

    1. How do channel firms interact and organize to do the work of the channel?

    2. What is the nature of marketing channels and why are they important?

    3. What problems do companies face in designing and managing their channels?

    4. What role do financial and transportation members play in retaining customers?

    5. B and C

(Answer: d; p. 300; Challenging)

  1. Most producers today sell their goods to _____.

    1. final users

    2. final users and marketing members

    3. intermediaries

    4. the government at various levels

    5. competitors

(Answer: c; p. 300; Easy)

  1. A company’s channel decisions directly affect every other _____.

    1. channel member

    2. marketing decision

    3. customer’s choices

    4. employee in the channel

    5. competitor’s actions

(Answer: b; p. 300; Moderate)

  1. Distribution channel decisions often involve _____ with other firms.

    1. short-term commitments

    2. long-term commitments

    3. major problems

    4. financial losses

    5. disagreements

(Answer: b; p. 301; Moderate)

  1. Joe Blanco has discovered that his intermediaries usually offer his firm more than it can achieve on its own because of their contacts, experience, specialization, and _____.

    1. financial support

    2. fast service

    3. scale of operation

    4. working relationships with foreign distributors

    5. promotional assistance

(Answer: c; p. 301; Moderate)

  1. From the economic system’s point of view, the role of marketing intermediaries is to transform the _____ made by producers into the _____ wanted by consumers.

    1. products; products

    2. assortment of products; products

    3. products; assortment of products

    4. assortment of products; assortment of products

    5. products; needs

(Answer: d; p. 301; Moderate)

  1. Producers benefit from using intermediaries because they _____.

    1. offer greater efficiency in making goods available to target markets

    2. operate less expensively

    3. save a lot of work

    4. are generally backlogged with orders

    5. refuse to store products for longer than a couple of days

(Answer: a; p. 301; Easy)

  1. Intermediaries play an important role in matching _____.

    1. dealer with customer

    2. supply and demand

    3. product to region

    4. A and C

    5. none of the above

(Answer: b; p. 302; Easy)

  1. What are the three gaps that separate goods and services from those who would use them?

    1. Time, place, and form.

    2. Place, possession, and form.

    3. Time, place, and possession.

    4. Place, time, and need.

    5. Place, need, and distribution.

(Answer: c; p. 302; Moderate)

  1. One of the following is not a key function that intermediaries play in completing transactions. Which is it?

    1. Promotion.

    2. Information.

    3. Negotiation.

    4. Financing.

    5. Pricing.

(Answer: e; p. 302; Moderate)

  1. Which one of the following is not a key function that intermediaries play in helping to fulfill a completed transaction?

    1. Physical distribution.

    2. Promotion.

    3. Financing.

    4. Risk taking.

    5. Product assessment.

(Answer: e; p. 302; Challenging)

  1. In marketing terms, we say that the number of intermediary levels indicates the _____ of a channel.

    1. depth

    2. complexity

    3. involvement

    4. length

    5. width

(Answer: d; p. 302; Easy)

  1. As a producer of goods, you would be concerned that a greater number of channel levels means _____ and greater channel complexity.

    1. less profit

    2. less control

    3. more potential ideas

    4. higher taxes

    5. all of the above

(Answer: b; p. 302; Moderate)

  1. All of the institutions in a channel are connected by flows: including physical flow, flow of ownership, payment flow, information flow, and _____flow.

    1. promotion

    2. acquisition

    3. customer

    4. return product

    5. by-product

(Answer: a; p. 302; Challenging)

  1. An advantage of a channel of distribution over selling direct to consumers is that each channel member plays a _____ in the channel.

    1. time-saving part

    2. specialized role

    3. decisional role

    4. informational role

    5. disciplinary role

(Answer: b; p. 303; Moderate)

  1. Historically, conventional channels have lacked the leadership to _____.

    1. assign channel member roles and attain efficiency

    2. attain efficiency and assign member roles

    3. assign member roles and manage conflict

    4. all of the above

    5. none of the above

(Answer: c; p. 305; Challenging)

  1. A conventional distribution channel consists of one or more _____ producers, wholesalers, and retailers.

    1. product-related

    2. independent

    3. contract

    4. estranged

    5. merchant

(Answer: b; p. 305; Easy)

  1. An advantage of a vertical marketing system (VMS) is that it acts as a _____ system.

    1. unified

    2. more efficient

    3. modern

    4. customer-driven

    5. task-driven

(Answer: a; p. 305; Challenging)

  1. A corporate VMS has the advantage of controlling the entire distribution chain under _____.

    1. a profit-maximizing strategic plan

    2. single ownership

    3. mass distribution

    4. a few intermediaries

    5. little control

(Answer: b; p. 305; Easy)

  1. What are the three major types of vertical marketing systems?

    1. Corporate, contractual, and chain.

    2. Contractual, corporate, and independent.

    3. Corporate, contractual, and administered.

    4. Administered, independent, and franchised.

    5. Corporate, contractual, and task.

(Answer: c; p. 305; Moderate)

  1. A distinguishing feature of a contractual VMS is that coordination and conflict among the independent members of the channel are attained through _____.

    1. oral agreements

    2. working partnerships

    3. limited liability corporations

    4. contractual agreements

    5. natural competitive forces

(Answer: d; p. 306; Easy)

  1. The most common type of contractual agreement in business is the ____.

    1. franchise organization

    2. vertical marketing system

    3. conventional marketing channel

    4. corporate VMS

    5. scrambled system

(Answer: a; p. 306; Moderate)

  1. Leadership in this 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. Which system is it?

    1. Horizontal marketing system.

    2. Administered VMS.

    3. Corporate VMS.

    4. Conventional marketing channel.

    5. Dual distribution system.

(Answer: b; p. 307; Easy)

  1. Hybrid marketing systems are also called _____.

    1. dual distribution systems

    2. multichannel distribution systems

    3. administered franchises

    4. horizontal multichannel systems

    5. contractual marketing systems

(Answer: b; p. 307; Moderate)

  1. As marketing manager for Globe Imports and Exports, you want to start reaping the benefits of a multichannel distribution system. You should enjoy all of the following except which one?

    1. Expand sales.

    2. Expand market coverage.

    3. Sell at a higher gross margin.

    4. Gain opportunities to tailor products and services to the needs of diverse segments.

    5. A and B

(Answer: c; p. 308; Challenging)

  1. The use of multichannel systems in the United States is _____.

    1. decreasing

    2. increasing

    3. holding steady

    4. spreading abroad fast

    5. C and D

(Answer: b; p. 307; Easy)

  1. The major disadvantage of a multichannel system is that it is harder to control and it can generate _____.

    1. greater conflict

    2. less net profit

    3. fewer domestic sales

    4. inefficiency

    5. bad employee morale

(Answer: a; p. 308; Easy)

  1. Studies show that ____ is a major trend whereby product and service producers are bypassing intermediaries and going directly to final buyers, or that radically new types of channel intermediaries are emerging to displace traditional ones.

    1. the vertical marketing system

    2. the corporate marketing system

    3. disintermediation

    4. the corporate merger

    5. a hostile takeover

(Answer: c; p. 308; Challenging)

  1. Designing a channel system calls for analyzing consumer needs, setting channel objectives, _____, and evaluation.

    1. establishing a budget

    2. identifying major channel alternatives

    3. seeking regulatory approval

    4. seeking legal advice

    5. measuring objectives

(Answer: b; p. 311; Moderate)

  1. To increase a channel’s service level, it must provide a greater assortment of products, more add-on services, and ______.

    1. lower prices

    2. become more efficient

    3. faster delivery

    4. better terms

    5. follow-up

(Answer: c; p. 312; Moderate)

  1. In establishing add-on services, you would consider all except which of the following?

    1. Delivery.

    2. Credit.

    3. Repairs.

    4. Customer assembly.

    5. Installation.

(Answer: d; p. 312; Easy)

  1. Companies should state their channel objectives in terms of targeted levels of _____.

    1. co-op advertising

    2. fair prices

    3. customer service

    4. efficiency and reduced conflict

    5. profitability

(Answer: c; p. 312; Moderate)

  1. When identifying the major channel alternatives, it is best to consider in terms of types, number, and _____ of intermediaries.

    1. size

    2. power

    3. responsibilities

    4. competitors

    5. none of the above

(Answer: c; p. 312; Easy)

  1. When determining the number of channel members to use at each level, three strategies are available: intensive, exclusive, and _____.

    1. multichannel

    2. selective

    3. international

    4. direct

    5. extensive

(Answer: b; p. 313; Easy)

  1. Sometimes a producer chooses only a few dealers in a market area to distribute its products or services. Generally these dealers are given a right to _____.

    1. exclusive distribution

    2. selective distribution

    3. intensive distribution

    4. administered distribution

    5. corporate distribution

(Answer: a; p. 313; Easy)

  1. 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 _____.

    1. sales volume

    2. territory

    3. legal rights

    4. customers

    5. mission

(Answer: b; p. 314; Moderate)

  1. Evaluating the major alternatives for channel members should be centered on all of the following except which one?

    1. Economic factors.

    2. Control.

    3. Adaptive criteria.

    4. Channel leadership.

    5. None of the above.

(Answer: d; p. 314; Moderate)

  1. It is common for international marketers to _____ their channel strategies for each country.

    1. extend

    2. adapt

    3. restrict

    4. seek approval for

    5. eliminate

(Answer: b; p. 314; Easy)

  1. It is especially difficult for many Western firms to break into the closely knit tradition-bound _____ distribution network.

    1. Chinese

    2. Japanese

    3. Mexican

    4. Canadian

    5. Swedish

(Answer: b; p. 315; Moderate0

  1. China and India each contain more than one billion people. However, the marketers are actually much smaller than they appear because of _____.

    1. inadequate distribution systems

    2. indifference toward Western products

    3. government control

    4. a lack of resources

    5. the religious caste system

(Answer: a; p. 315; Challenging)

  1. You are faced with channel management at work. This calls for selecting, managing, _____, and evaluating channel members over time.

    1. reducing conflict

    2. reducing waste

    3. motivating

    4. all of the above

    5. none of the above

(Answer: c; p. 315; Easy)

  1. When selecting intermediaries, a company should determine and evaluate each channel member’s years in business, other lines carried, growth and profit record, cooperation, and _____.

    1. reputation

    2. financial standing

    3. employees’ skills

    4. executives’ ability to plan strategically

    5. competitors

(Answer: a; p. 316; Challenging)

  1. Most companies practice strong PRM to forge long-term relationships with channel members. What does PRM stand for?

    1. Primary relationship management.

    2. Potential relationship management.

    3. Perennial relationship management.

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