Exam 10: Marketing Channels: Delivering Customer Value

Differentiate between intensive distribution, exclusive distribution, and selective distribution strategies. Provide examples of products that would be appropriate for each.

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Question 1

Correct Answer:

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Companies must determine the number of channel members to use at each level of a value network chain. Three strategies are available: intensive distribution, exclusive distribution, and selective distribution. Producers of convenience products and common raw materials typically seek intensive distribution-a strategy in which they stock their products in as many outlets as possible. These products must be available where and when consumers want them. For example, toothpaste, candy, and other similar items are sold in millions of outlets to provide maximum brand exposure and consumer convenience. Kraft, Coca-Cola, Kimberly-Clark, and other consumer goods companies distribute their products in this way. By contrast, some producers purposely limit the number of intermediaries handling their products. The extreme form of this practice is exclusive distribution, in which the producer gives only a limited number of dealers the exclusive right to distribute its products in their territories. Exclusive distribution is often found in the distribution of luxury brands. Between intensive and exclusive distribution lies selective distribution - the use of more than one but fewer than all of the intermediaries who are willing to carry a company's products. Most television, furniture, and home appliance brands are distributed in this manner.

Given Coke's (Coca Cola) availability in many different locations, from restaurants to grocery stores, to vending machines, and the product availability at many major events, it is safe to suggest that Coke uses selective distribution.

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(True/False)

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Question 2

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False

When Dairy Queen entered the Canadian market in 1953 the company sold license agreements to individuals that covered a specific geographic area. The franchisee (the individual who purchased the franchise from Dairy Queen), was given exclusive rights to open Dairy Queen locations in that area. The company could not sell new franchises within that area. As the company sought to grow sales it could not increase market penetration because the franchisee alone could decide to add locations in that territory. Many of the franchisees were satisfied with just one location in a territory that could easily have supported three or more locations (compare this with Tim Hortons who only offer franchises for a specific location and not a territory). Because Dairy Queen wanted to grow the number of locations and the franchisees were satisfied with one in their area, _ _ resulted.

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Question 3

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Many athletic stadiums enter into contractual agreements with national beverage companies and food franchises to distribute only their brand-name products at the respective venues. This is an example of .

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Question 4

distribution typically allows manufacturers to develop good working relationships with intermediaries and expect a better-than-average selling effort. It also gives producers good market coverage with more control and less cost than intensive distribution.

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Question 5

Which of the following is true of an intensive distribution strategy?

(Multiple Choice)

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Question 6

Producers use marketing intermediaries because they .

(Multiple Choice)

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Question 7

When Toyota announces a product recall on its Camry model due to a faulty igniter, they are using to coordinate with dealers and car owners.

(Multiple Choice)

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Question 8

Which mode of transportation is best for carrying perishable goods to distant markets?

(Multiple Choice)

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Question 9

Compare a conventional distribution channel and a vertical marketing system.

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Question 10

Customer-centred logistics starts with the marketplace and works backward to the factory.

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Question 11

In a(n) marketing system, leadership over production and distribution is assumed through the size and power of one or a few dominant channel members.

(Multiple Choice)

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Question 12

More than 80 percent of McDonald's restaurants worldwide are owned and operated by franchisees. This illustrates a(n) _ marketing system.

(Multiple Choice)

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Question 13

Which of the following is most efficient for short hauls of high-value merchandise and is highly flexible in its routing and time schedules?

(Multiple Choice)

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Question 14

How do companies generally manage and motivate their channel members? What technological tools are available to help with this task?

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Question 15

Global marketers must usually adapt their channel strategies to the existing structures within each country.

(True/False)

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Question 16

Bateman Gray Motors sells the cars it produces using dedicated dealers who only sell Bateman Gray's products at their outlets. What kind of marketing strategy has Bateman Gray adopted with its car dealers?

(Multiple Choice)

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Question 17

Integrating the entire distribution chain - from its own design and manufacturing operations to distribution through its own managed stores - has turned Spanish clothing chain Zara into the world's fastest-growing fast-fashion retailer. This is an example of a(n) marketing system.

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Question 18

Differentiate between the three types of franchises and provide examples of each type.

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Question 19

Kevin Pinker is a freelance computer programmer who writes computer algorithms for companies such as SoftStar and BlueHill. SoftStar and BlueHill use these algorithms to make specific programs based on online market research. These programs are then sold to the online retailer, Abundon, which then sells them to individual consumers and businesses. Which of the following is a marketing intermediary in this chain?

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Question 20

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Differentiate between intensive distribution, exclusive distribution, and selective distribution strategies. Provide examples of products that would be appropriate for each.

Given Coke's (Coca Cola) availability in many different locations, from restaurants to grocery stores, to vending machines, and the product availability at many major events, it is safe to suggest that Coke uses selective distribution.

Many athletic stadiums enter into contractual agreements with national beverage companies and food franchises to distribute only their brand-name products at the respective venues. This is an example of .

distribution typically allows manufacturers to develop good working relationships with intermediaries and expect a better-than-average selling effort. It also gives producers good market coverage with more control and less cost than intensive distribution.

Which of the following is true of an intensive distribution strategy?

Producers use marketing intermediaries because they .

When Toyota announces a product recall on its Camry model due to a faulty igniter, they are using to coordinate with dealers and car owners.

Which mode of transportation is best for carrying perishable goods to distant markets?

Compare a conventional distribution channel and a vertical marketing system.

Customer-centred logistics starts with the marketplace and works backward to the factory.

In a(n) marketing system, leadership over production and distribution is assumed through the size and power of one or a few dominant channel members.

More than 80 percent of McDonald's restaurants worldwide are owned and operated by franchisees. This illustrates a(n) _ marketing system.

Which of the following is most efficient for short hauls of high-value merchandise and is highly flexible in its routing and time schedules?

How do companies generally manage and motivate their channel members? What technological tools are available to help with this task?

Global marketers must usually adapt their channel strategies to the existing structures within each country.

Bateman Gray Motors sells the cars it produces using dedicated dealers who only sell Bateman Gray's products at their outlets. What kind of marketing strategy has Bateman Gray adopted with its car dealers?

Integrating the entire distribution chain - from its own design and manufacturing operations to distribution through its own managed stores - has turned Spanish clothing chain Zara into the world's fastest-growing fast-fashion retailer. This is an example of a(n) marketing system.

Differentiate between the three types of franchises and provide examples of each type.

Marketing: Creating Customer Value and Engagement

Company and Marketing Strategy: Partnering to Build Customer Engagement, Value, and Relationships

Analyzing the Marketing Environment

Managing Marketing Information to Gain Customer Insights

Understanding Consumer and Business Buyer Behaviour

Customer Value-Driven Marketing Strategy: Creating Value for Target Customers

Products, Services, and Brands: Building Customer Value

Developing New Products and Managing the Product Life Cycle

Pricing: Understanding and Capturing Customer Value

Retailing and Wholesaling

Engaging Consumers and Communicating Customer Value: Advertising and Public Relations

Personal Selling and Sales Promotion

Direct, Online, Social Media, and Mobile Marketing

The Global Marketplace

Sustainable Marketing: Social Responsibility and Ethics

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