Exam 13: Marketing Channels

Redbox Movie DVD sales represent a $16 billion market,and rentals make up another $7.5 billion.Naturally,production studios would prefer consumers purchase DVDs rather than rent them.Production studios like Twentieth-Century Fox,Warner Bros. ,and General Electric refused to sell new releases to Redbox,a DVD vending machine company,until almost a month after new releases arrived in stores.Redbox,the ubiquitous DVD rental red kiosks found in and outside of convenience stores,grocery stores,drugstores,fast-food restaurants,and Walmart,is cutting in on production companies' profits.These studios are tangled in lawsuits with Redbox.Sony,Paramount,and Lionsgate,on the other hand,permit distribution through Redbox,and Disney allows third-party distribution to Redbox.With more than 20,000 kiosks now in operation,Redbox ranks fifth in DVD rental revenues,which is impressive considering the rental fee is only $1.00.But Blockbuster is trying to steal vending market share by allowing NCR Corporation,known for ATM machines,to license its name to place Blockbuster Express kiosks in similar types of locations. -Refer to Redbox.Video stores that distribute DVDs usually also sell popcorn,candy,soft drinks,and entertainment publications.Basically,they overcome discrepancies of quantity and assortment by combining products into collections or assortment that consumers want available in one place.Which channel function does this describe?

Transactional channel functions include all of the following activities EXCEPT:

Shopping goods are usually distributed selectively.Consumers are willing to look around for them but may not be willing to search or travel extensively to acquire the product.

Which of the following enables a company to use another manufacturer's already established channel?

One of the earliest,largest,and most famous examples of vertical integration was the Carnegie Steel Company.The company controlled not only the mills where the steel was manufactured but also the mines where the iron ore was extracted,the coal mines that supplied the coal,the ships that transported the iron ore,and the railroads that transported the coal to the factory.Carnegie Steel had a(n)_____ channel relationship.

When Delphi-Grundig,a manufacturer of state-of-the-art car radios,decided to expand its marketing efforts into countries in which its products are not currently available,it did not have the time or resources to spend on developing new channels of distribution.Delphi-Grundig should consider a(n):

Canesta Company has developed a virtual keyboard out of light to be used with cell phones and PDAs.The product beams an image of a keyboard on a desk,allowing the user to type on the image.The words are picked up by the user's digital device.When introduced to the market,the device will sell for less than $50.If,in choosing its channel,Canesta is most concerned about its lack of financial,managerial,and marketing resources to support the product's introduction,then its choice of channels will largely be influenced by:

_____ distribution channel relationships are situations where one company,or several companies acting as one,performs all channel functions.

Certified Grocers Midwest,Inc. ,the Chicago-based grocery wholesale cooperative,provides all kinds of meats,cereals,canned and fresh fruits and vegetables,beauty aids,healthcare items,and pet products to the supermarkets in its channel.Certified Grocers is aiding consumers by overcoming:

Metallurgical Designs makes gold and silver charms for necklaces and bracelets.It markets its charms to a few retailers in any one region and promotes them intensively to those retailers.This is an example of intensive distribution.

Canesta Company has developed a virtual keyboard out of light to be used with cell phones and PDAs.The product beams an image of a keyboard on a desk,allowing the user to type on the image.The words are picked up by the user's digital device.When introduced to the market,the device will sell for less than $50.What level of distribution intensity should the company use?

Caterpillar,the manufacturer of tractors and other earthmoving equipment,has an extremely high market share,which means customers seek the dealers out regardless of where they are.There are approximately 50 Caterpillar dealers in the United States--one in each state.From this information,you can surmise that Caterpillar uses _____ distribution.

Reciprocal conflict occurs among channel members on the same level,such as two or more different wholesalers or two or more different retailers that handle the same manufacturer's brands.

Which of the following is a transactional function performed by intermediaries?

Marketing channels perform all of the following logistical activities EXCEPT:

Describe how information technology is impacting contact efficiency.

Which of the following is the lack of all the items a customer needs to receive full satisfaction from a product or products?

The three basic functions a channel intermediary provides are transactional,logistical,and facilitating functions.

The Internet has led to the emergence of three new forms of industrial distribution.Briefly describe and give an example of each.

DeBeers sells most of the diamonds it produces to industry.The company controls over 90 percent of the market and has great power over its distributors.In its marketing channel,DeBeers would be considered a: