Question 1

American Hospital Supply helps its customers (hospitals) manage inventory and streamline order processing for hundreds of medical supplies. The source of American Hospital Supply's power is its

Accepted Answer

A) economic influence. 
B) expertise. 
C) identification with a particular channel member. 
D) legitimate rights through contracts. 
E) governmental contracts.

Question 2

Physically moving a product to customers is an example of a __________ function.

Accepted Answer

A) transactional 
B) logistical 
C) facilitating 
D) selling 
E) sorting

Question 3

Allowing consumers to buy products by interacting with various advertising media without a face-to-face meeting with a salesperson is referred to as

Accepted Answer

A) an indirect marketing channel. 
B) a direct marketing channel. 
C) a multimarketing channel. 
D) a channel bypass marketing. 
E) personal selling.

Question 4

Full-line forcing is a special kind of __________. This practice involves a supplier requiring that a channel member carry its full line of products in order to sell a specific item in the supplier's line.

Accepted Answer

A) resale restriction 
B) vertical integration 
C) exclusive dealing 
D) refusal to deal 
E) tying arrangement

Question 5

There are four popular types of franchising: (1) manufacturer-sponsored retail franchise systems, (2) manufacturer-sponsored wholesale franchise systems, (3) service-sponsored franchise systems, and (4) __________.

Accepted Answer

A) service-sponsored retail franchise systems 
B) wholesaler-sponsored franchise systems 
C) horizontal-marketing franchise systems 
D) contractual-sponsored franchise systems 
E) customer-generated franchise systems

Question 6

Resale restrictions have been prosecuted under the Sherman Act. Today, however, the courts apply the __________ in such cases and consider whether such restrictions have a "demonstrable economic effect."

Accepted Answer

A) laissez-faire rule 
B) caveat emptor principle 
C) rule of reason 
D) invisible hand standard 
E) FTC Act provision

Question 7

Several artists in Charleston, South Carolina, have created an arrangement to sell their paintings. They have set up an art gallery in downtown Charleston so tourists and art lovers can look at their paintings and buy the ones they like. Each artist takes a turn acting as the salesclerk at the gallery. In terms of the marketing channel, the gallery is acting as

Accepted Answer

A) an ultimate consumer. 
B) a manufacturer. 
C) a wholesaler. 
D) a retailer. 
E) a distributor.

Question 8

A channel member (producer, wholesaler, or retailer) who coordinates, directs, and supports other channel members is referred to as a

Accepted Answer

A) channel champion. 
B) channel general. 
C) channel captain. 
D) channel director. 
E) channel coordinator.

Question 9

When one channel member believes another channel member is engaged in behavior that prevents it from achieving its goals, it is referred to as

Accepted Answer

A) distributor dissension. 
B) marketing channel discord. 
C) partnership divergence. 
D) channel conflict. 
E) channel dissonance.

Question 10

What is the first step in choosing the right supply chain?

Accepted Answer

A) Understand the supply chain. 
B) Develop a list of qualified channel members. 
C) Enumerate logistics specifications. 
D) Compare multiple-channel alternatives. 
E) Understand the customer.

Question 11

The word cost-effective as it relates to the definition of logistics management implies that

Accepted Answer

A) while it is important to drive down logistics costs, all channel members must equally benefit financially or the chain will not function effectively. 
B) speed of delivery must be measured against increased savings. 
C) while it is important to drive down logistics costs, customer buying requirements must be a part of the equation. 
D) the need for multiple carriers always results in lower profit margins and therefore should be avoided. 
E) the choice of intermediaries should be made on their ability to perform their tasks efficiently even if additional costs must be passed on to the consumer.

Question 12

Which of the following statements best describes the difference between a corporate vertical marketing system and an administered vertical marketing system?

Accepted Answer

A) Administered vertical marketing systems gain power through ownership while corporate vertical marketing systems gain power through contractual agreement. 
B) Administered vertical marketing systems gain power through the size and influence of one channel member and through ownership, rather than through contractual arrangement. 
C) Administered vertical marketing systems gain power through contractual agreements and ownership rather than through size. 
D) Administered vertical marketing systems are usually larger and more profitable than corporate vertical marketing systems. 
E) Administered vertical marketing systems achieve coordination at successive stages of production and distribution by the size and influence of one channel member rather than through ownership.

Question 13

A supplier's attempt to stipulate to whom distributors may resell the supplier's products and in what specific geographical areas or territories they may sell is referred to as

Accepted Answer

A) full-line forcing. 
B) exclusive dealing. 
C) a refusal to deal. 
D) a resale restriction. 
E) a tying arrangement.

Question 14

Retailers and industrial distributors prefer exclusive distribution for two reasons. One is that

Accepted Answer

A) it is the most common form of distribution intensity. 
B) it eliminates channel conflict. 
C) it is usually chosen for convenience. 
D) it has market coverage benefits. 
E) it limits head-to-head competition for an identical product.

Question 15

Rather than compete with large greeting card companies for shelf space in supermarkets, several smaller card companies place their cards in pack-and-ship stores where the customer can mail a card on the spur of the moment, and in racks in car washes where customers who are waiting for their cars can browse and purchase cards. This is an example of which type of marketing channel strategy?

Accepted Answer

A) a strategic channel alliance 
B) multichannel distribution 
C) parallel distribution 
D) dual distribution 
E) direct distribution

Question 16

One consideration in choosing a marketing channel is profitability, which is determined by the margins earned for each channel member and for the channel as a whole. Based on this information, which of the following statements would be most accurate?

Accepted Answer

A) The more responsibilities a channel member takes in terms of distribution, advertising, and selling expenses, the greater the potential for manufacturer profitability. 
B) The more responsibilities the manufacturer assumes relative to its channel members, the greater the potential for profitability. 
C) The extent to which channel members share costs determines the margins received by each member and by the channel as a whole. 
D) While channel members can increase profitability by taking on distribution and selling expenses, advertising expenses should always remain with the manufacturer if a firm is looking for the greatest profitability. 
E) Profitability is not related to the length or nature of the distribution chain but determined by the manufacturer.

Question 17

In choosing the appropriate marketing channel, a firm should consider the interests that buyers might want fulfilled. These interests fall into four broad categories: (1) __________, (2) convenience, (3) variety, and (4) pre- or postsale services.

Accepted Answer

A) profitability 
B) information 
C) quality 
D) brand name recognition 
E) availability

Question 18

Exclusive distribution refers to

Accepted Answer

A) the distribution of products or services in markets where there are currently no other competitors. 
B) the distribution of products or services where the producer owns the entire channel of distribution. 
C) the density of distribution whereby a firm tries to place its products or services with only one retail outlet in a specified geographical area. 
D) the density of distribution whereby a firm tries to place its products or services in as many outlets as possible. 
E) the density of distribution whereby a firm tries to place its products or services in a few retail outlets in a specific area.

Question 19

Logistical function activities include __________ products and services.

Accepted Answer

A) buying and selling 
B) assorting, storing, sorting, and transporting 
C) financing and grading 
D) risk-taking 
E) marketing information and research

Question 20

Which type of distribution lies between the two distribution extremes and means that a firm selects a few retail outlets in a specific geographical area to carry its products?

Accepted Answer

A) intensive distribution 
B) extensive distribution 
C) exclusive distribution 
D) selective distribution 
E) concentrated distribution

Exam 15: Managing Marketing Channels and Supply Chains