Marketing Management chapter 17 practice test

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Chapter 17 Designing and Managing Integrated Marketing Channels
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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

D) Sales territories

E) Marketing terrains

A

2

2) A merchant is a(n) ________ in the marketing channel.

A) wholesaler

B) broker

C) sales agent

D) warehouse

E) advertising agency

A

3

3) A manufacturer uses the company's sales force and trade promotions to carry, promote, and sell products to end users. Which of the following strategies is this manufacturer using?

A) personalization strategy

B) tailoring strategy

C) push strategy

D) pull strategy

E) consumer promotion strategy

C

4

4) Total Beverages, a maker of fruit juices and health drinks, recently launched a new brand of packaged drinking water called AquaPure. In order to induce distributors to carry the product, Total offers all its intermediaries a free refrigerator to store bottles of AquaPure. This is an example of a ________. A) consumer promotion B) push strategy C) backward flow D) reverse flow E) pull strategy

B

5

5) Spike Inc. is a sportswear manufacturer that recently launched its new line of customizable running shoes. The shoes come with a digital component that allows them to adapt to the runner's biomechanics. To promote this new product, Spike launches an advertising campaign and entices a famous athlete to endorse the product. This is an example of a ________. A) trade promotion B) reverse flow C) push strategy D) pull strategy E) backward flow

D

6

6) When is a pull strategy appropriate? A) when there is low brand loyalty B) when consumers are able to perceive differences between brands C) when brand choice is made in the store D) when it is a low involvement purchase E) when the product is an impulse item

B

7

7) Using the push strategy is most appropriate when ________. A) consumers are able to perceive differences between brands B) the product being sold is an impulse item C) there is high brand loyalty for the product D) the product is a high involvement purchase E) consumers choose the brand before they go to the store

B

8

8) A firm uses its sales force to sell to large accounts and outbound telemarketing to sell to medium-sized accounts. The firm is using ________ marketing. A) hybrid B) pull C) personalized D) vertical E) internal

A

9

9) A computer manufacturing company allows customers to place orders online, which they can later pick up from a convenient retail location. Which of the following terms best represents this practice? A) channel integration B) mass customization C) online personalization D) push strategy E) internal marketing

A

10

10) Which of the following is the most accurate description of a value network? A) a system of partnerships and alliances that a firm creates to source, augment, and deliver its offerings B) a system of organizations and resources involved in moving a product from supplier to customer C) an arrangement whereby an organization transforms inputs into finished goods D) a network that allows an organization take the finished products to the end-users E) a communication network that allows an organization to transfer information to end-customers

A

11

11) Companies should first think about the target market and then design the supply chain backward from that point. This strategy is called ________ planning. A) demand chain B) resource C) external channel D) materials E) strategic business

A

12

12) Marketing channels are the set of pathways a product or service follows after production, culminating in purchase and consumption by the final end user.

TRUE

13

13) Sales agents and brokers are called facilitators in a marketing channel.

FALSE

14

14) A pull strategy is particularly appropriate when there is low brand loyalty in a category, brand choice is made in the store, the product is an impulse item, and product benefits are well understood.

FALSE

15

15) Companies should first think of the target market and then design the supply chain backward from that point. This strategy is called demand chain planning.

TRUE

16

22) Which of the following channel functions constitute only a backward flow? A) movement of physical goods B) placing orders with manufacturers C) persuasive communication D) storage of physical goods E) overseeing actual transfer of ownership

B

17

23) Identify the channel function that constitutes both backward and forward flow. A) obtaining funds for financing B) storage of physical goods C) persuasive communication D) movement of physical goods E) overseeing actual transfer of ownership

A

18

24) Producers often shift some functions to intermediaries. Which of the following is the most significant benefit of doing this? A) It increases customer loyalty. B) It provides the producer with greater control over operations. C) It reduces the amount of direct customer interaction. D) It lowers the producer's costs and prices. E) It ensures greater information security.

D

19

25) Which of the following is an example of a zero-level channel? A) A company 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 company sells its products through wholesalers and retailers. D) A company sells its products through chains of supermarkets and other large sellers. E) A large company forms alliances with smaller companies to increase sales coverage.

A

20

26) Which of the following entities is present in a zero-level marketing channel? A) consumers B) retailers C) brokers D) jobbers E) wholesalers

A

21

27) A direct marketing channel is a ________ channel. A) one-level B) two-level C) zero-level D) three-level E) reverse-flow

C

22

28) A jobber in a three-level marketing channel is a(n) ________. A) small-scale wholesaler B) external broker C) advertising agent D) independent evaluator E) communication channel

A

23

29) Door-to-door sales, home parties, mail order, telemarketing, TV selling, Internet selling, and manufacturer-owned stores are examples of ________. A) zero-level channels B) jobbers C) wholesalers D) manufacturer's representatives E) consumers

A

24

30) Which of the following activities is a reverse-flow channel of marketing? A) raw materials movement B) product recycling C) materials ordering D) finished goods storage E) customer order placement

B

25

31) A marketing channel overcomes the time, place, and possession gaps that separate goods and services from those who need or want them.

TRUE

26

32) Marketing channel functions such as storage and movement and communications constitute a backward flow of activities.

FALSE

27

33) All functions in a marketing channel use up scarce resources and can be shifted among channel members.

TRUE

28

34) A zero-level marketing channel typically uses a wholesaler and a retailer.

FALSE

29

35) The flow of materials to refurbish products for resale constitutes a reverse flow.

TRUE

30

41) Toyota has an advantage over Lexus due to the fact that there are more Toyota dealers, which helps customers save on transportation and search costs in buying and repairing an automobile. Which of the following service outputs relates to this competitive advantage? A) spatial convenience B) service backup C) lot size D) waiting time E) delivery time

A

31

42) As a service output produced by marketing channels, product variety refers to the ________. A) units the channel permits a customer to purchase at once B) assortment provided by the marketing channel C) add-on services provided by the channel D) ability of a product to provide incremental value E) degree to which the channel makes it easy for customers to purchase a product

B

32

43) Which of the following terms refers to add-on services such as credit, delivery, installation, and repairs, and is provided by a marketing channel? A) service backup B) product accessories C) external products D) product variety E) service extensions

A

33

44) Atburex is a furniture manufacturing company in the United States. The company provides a 60-day credit period and also offers on-site delivery and installation. These special benefits refer to which of the following service outputs? A) service backup B) large product variety C) spatial convenience D) large lot size E) short waiting time

A

34

45) Which of the following types of distribution involves severely limiting the number of channel intermediaries? A) exclusive B) selective C) intensive D) aggressive E) retail

A

35

46) Which of the following allows a firm to maintain control over service level and obtain more dedicated and knowledgeable selling? A) selective distribution B) intensive distribution C) push strategy D) exclusive distribution E) pull strategy

D

36

47) Which of the following channel alternatives is most suited to handle complex products and transactions?

A) sales forces

B) the Internet

C) dealers

D) telemarketers

E) direct mails

A

37

48) Which of the following is a major disadvantage of using the Internet as a marketing channel?

A) It is less effective for complex products.

B) It lacks convenience and practicality.

C) It cannot be used to reach a wide audience.

D) It is considered expensive.

E) It causes the company to lose direct contact with customers.

A

38

49) Armon Apparels designs, manufactures, and distributes athletic apparel and accessories for men and women. The company has only nine distributors across the United States. These distributors control a nationwide network of 600 retailers. The company does not sell its products through other channels. This is an example of ________ distribution.

A) selective

B) intensive

C) exclusive

D) internal

E) passive

A

39

50) Exclusive dealing arrangements are mainly used by companies looking for an edge in markets increasingly driven by ________.

A) price

B) efficiency

C) product variety

D) add-on services

E) spatial convenience

A

40

51) An intensive distribution strategy serves well for ________.

A) premium cars

B) commercial trucks

C) private label products

D) industrial equipment

E) newspapers

E

41

52) Which of the following products is most likely to be sold using an exclusive distribution strategy? A) designer luggage B) cigarettes C) alcoholic beverages D) car fuel E) medicine

A

42

53) Which of the following covers payment terms and producer guarantees?

A) conditions of sale

B) pricing policies

C) exclusive dealings

D) mutual services

E) territorial rights

A

43

54) ________ call(s) for the producer to establish a schedule of discounts and allowances that intermediaries see as equitable and sufficient. A) Exclusive dealings B) Mutual services C) Territorial rights D) Price policy E) Tying agreements

D

44

55) Electrobar, a European manufacturer of industrial kitchenware, sells to industrial canteens, restaurants, hotels, and so forth. The company provides a one-year warranty on all products and also allows customers to pay in installments — they pay 50 percent on delivery and the rest as equal installments. This refers to which element in the "trade-relations mix"? A) price policy B) conditions of sale C) distributors' territorial rights D) exclusive dealings E) mutual services and responsibilities

B

45

56) Which of the following channels is associated with the lowest cost per transaction? A) Internet B) telemarketing C) retail stores D) distributor E) sales force

A

46

57) Which marketing channel is associated with the highest value added per sale? A) retail stores B) sales force C) distributors D) Internet E) telemarketing

B

47

58) Which of the following problems is most likely when a company chooses to use a sales agency instead of company salespeople? A) The company will find it difficult to control the sales process. B) They do not take title to goods or negotiate purchases or sales. C) The value-added per sale is the lowest for sales agencies. D) Agencies will pay less attention to customers who buy the most or in large volumes. E) Sales agencies are often difficult to access due to strict contractual obligations.

A

48

; Interpersonal relations and teamwork 59) Lot size refers to the total number of units a channel can transmit from the manufacturer's place to the service outlet.

FALSE

49

60) Add-on services such as credit, delivery, installation, and repairs provided by the marketing channel are referred to as service backup.

TRUE

50

61) Products such as heating and cooling systems are usually sold and maintained by the company or by franchised dealers.

TRUE

51

62) When economic conditions are depressed, producers want to move goods to market using longer channels.

FALSE

52

63) STIHL, which manufactures handheld outdoor power equipment sold to six independent US distributors and six STIHL-owned marketing and distribution centers who sell to a nationwide network of more than 8,000 servicing retail detailers, is a good example of intensive distribution.

FALSE

53

64) Intensive distribution relies on only some of the intermediaries willing to carry a particular product.

FALSE

54

65) Intensive distribution is becoming a mainstay for specialists looking for an edge in markets increasingly driven by price.

FALSE

55

66) An intensive distribution strategy serves well for products such as snack foods and soft drinks.

TRUE

56

67) Selective distribution severely limits the number of intermediaries and is appropriate when the producer wants to maintain control over the service level and outputs offered by the resellers.

FALSE

57

68) Distributors' territorial rights define the terms under which the producer will enfranchise other distributors.

TRUE

58

69) Manufacturers can obtain greater control over the selling process by using a sales agency.

FALSE

59

70) Briefly explain the various service outputs that marketing channels produce.

Channels produce five service outputs: 1. Lot size: The number of units the channel permits a typical customer to purchase on one occasion. 2. Waiting and delivery time: The average time customers wait for receipt of goods. Customers increasingly prefer faster delivery channels. 3. Spatial convenience: The degree to which the marketing channel makes it easy for customers to purchase the product. 4. Product variety: The assortment provided by the marketing channel. Normally, customers prefer a greater assortment because more choices increase the chance of finding what they need, although too many choices can sometimes create a negative effect. 5. Service backup: Add-on services (credit, delivery, installation, repairs) provided by the channel. The greater the service backup, the greater the work provided by the channel.

60

71) Explain the three distribution strategies based on the number of intermediaries.

• Exclusive distribution: This strategy focuses on severely limiting the number of intermediaries. It's appropriate when the producer wants to maintain control over the service level and outputs offered by the resellers, and it often includes exclusive dealing arrangements. By granting exclusive distribution, the producer hopes to obtain more dedicated and knowledgeable selling. It requires a closer partnership between seller and reseller and is used in the distribution of new automobiles, some major appliances, and some women's apparel brands. • Selective distribution: This distribution strategy relies on only some of the intermediaries willing to carry a particular product. Whether established or new, the company does not need to worry about having too many outlets; it can gain adequate market coverage with more control and less cost than intensive distribution. • Intensive distribution: This strategy places the goods or services in as many outlets as possible. This strategy serves well for snack foods, soft drinks, newspapers, candies, and gum — products consumers buy frequently or in a variety of locations.

61

72) Orion Airlines is an American airline that provides domestic and international air transport services. Explain the five service outputs provided by marketing channels with reference to Orion.

• Lot size — Customers may be allowed to book as many tickets as they want, subject to availability. • Waiting and delivery time — This would refer to the average time customers take to book their tickets. • Spatial convenience — This refers to the ease of booking tickets. The location of Orion's retail ticketing outlets and whether the company offers online ticket booking services would be classified under spatial convenience. • Product variety — This refers to the assortment provided by the marketing channel in terms of travel destinations, holiday packages, hotel bookings, car rental services, and the like. • Service backup — This refers to the add-on services provided by the channel such as credit, discounts, delivery, refunds, and so on.

62

Use of Power (Scenario) Broomer manufactures fashion apparel for women, men, and children. Its products are in high demand and apparel stores are more than willing to carry and sell Broomer's garments. The company recently introduced a new clothing line named "Inducer," targeted at youth. However, the new line is not well received by the market, and sales fail to take off even three months after its launch. 75) In an effort to boost sales, Broomer offers its retailers a higher margin for promoting and selling products from the "Inducer" line to customers. This is an example of ________ power. A) coercive B) reward C) passive D) expert E) referent

B

63

76) Because of the acceptance that the other Broomer products have in the market, retailers are willing to stock items from the new "Inducer" line of clothing. This is an example of ________ power. A) referent B) passive C) legitimate D) coercive E) reward

A

64

77) Broomer threatens to withdraw all its other products from the retailers' stores if they are unwilling to push products from the "Inducer" line. This is an example of ________ power. A) reward B) coercive C) legitimate D) expert E) referent

B

65

78) ________ power can be effective, but its exercise produces resentment and can lead the intermediaries to organize countervailing power. A) Coercive B) Reward C) Legitimate D) Expert E) Referent

A

66

79) A manufacturer offers its intermediaries an extra benefit for performing a promotional activity. This is an example of the use of ________ power. A) reward B) coercive C) functional D) expert E) referent

A

67

80) A manufacturer is using legitimate power when it ________. A) requests a behavior that is warranted under the selling contract B) threatens to withdraw a resource or terminate a relationship C) offers intermediaries an extra benefit for performing specific acts or functions D) makes the intermediaries sell more of a particular product by offering rewards E) sells more products by making use of its reputation in the market

A

68

81) Hewlett-Packard is a highly respected brand. Many retailers want to be associated with the brand because of this reputation. What kind of power does Hewlett-Packard obtain due to this reputation? A) referent B) functional C) legitimate D) coercive E) reward

A

69

82) Which of the following types of power is objectively observable? A) coercive power B) legitimate power C) group power D) expert power E) referent power

A

70

83) A new firm typically starts as a local operation selling in a fairly circumscribed market by ________. A) finding and developing new intermediaries B) using a few existing intermediaries C) forming partnerships with the market leader D) creating a special channel E) forming partnerships with other firms

B

71

84) Who will most likely be willing to pay for high-value-added channels? A) early buyers of a product B) internal customers of a company C) small and matured buyers of an industry D) consumers of low involvement products E) repeat customers of a product

A

72

85) A producer must modify its channel design and arrangements if ________. A) consumer buying patterns change B) the competition in the market stabilizes C) the product is in the growth stage of its life cycle D) the market size remains unchanged for a particular period E) the firm's profits stabilize

A

73

86) After a company has chosen a channel system, it must select, train, motivate, and evaluate individual intermediaries for each channel.

TRUE

74

87) Channel power is the ability to alter channel members' behavior so that they take actions they would not have taken otherwise.

TRUE

75

88) A manufacturer is using reward power when it offers intermediaries an extra benefit for performing specific acts or functions.

TRUE

76

89) When a manufacturer requests a behavior that is warranted under the contract, the manufacturer is using coercive power.

FALSE

77

90) A manufacturer obtains referent power when it has special knowledge that intermediaries value.

FALSE

78

91) Coercive and referent power are subjective and depend on the ability and willingness of parties to recognize them.

FALSE

79

92) In competitive markets with low entry barriers, the optimal channel structure will inevitably change over time.

TRUE

80

93) Early buyers might be willing to pay for high-value-added channels, but later buyers will switch to lower-cost channels.

TRUE

81

99) What is the major difference between a conventional marketing channel and a vertical marketing system (VMS)? A) Elements in a conventional marketing channel act as separate businesses whereas the elements in a VMS act as a unified system. B) A VMS has many intermediaries whereas a conventional marketing channel has a limited number of intermediaries. C) A VMS is characterized by an independent producer whereas a conventional marketing channel is characterized by multiple producers. D) A conventional marketing channel has elements such as retailers and wholesalers whereas these elements are not present in a VMS. E) Producers have complete control over the other members in a conventional marketing channel whereas this control is minimal in a VMS.

A

82

100) A(n) ________ includes the producer, wholesaler(s), and retailer(s) acting as a unified system. A) parallel marketing channel B) vertical marketing system C) extensive marketing channel D) internal marketing system E) conventional marketing channel

B

83

101) A(n) ________ vertical marketing system combines successive stages of production and distribution under single ownership. A) corporate B) administered C) contractual D) regulatory E) controlled

A

84

102) The most advanced supply-distributor arrangements for ________ vertical marketing systems rely on distribution programming. A) corporate B) administered C) contractual D) regulatory E) controlled

B

85

103) Rotter Garder Inc. is a large-scale paint manufacturer and is known for its wide range of decorative paint products and industrial coatings. In addition to making paints, the company also owns and operates the retail stores that sell its products. This is an example of a(n) ________ vertical marketing system. A) administered B) contractual C) referent D) corporate E) regulated

D

86

104) An administered VMS coordinates successive stages of production and distribution through ________. A) an automated central control unit B) single ownership C) the combined efforts of all its members D) the establishment of contractual obligations E) the size and power of one of the members

E

87

105) A(n) ________ VMS consists of independent firms at different levels of production and distribution, integrating their programs on a contractual basis to obtain more economies or sales impact than they could achieve alone. A) administered B) contractual C) corporate D) regulated E) referent

B

88

106) A group of small sellers takes the initiative and organizes a new business entity to carry on wholesaling and possibly some production. This entity is called a(n) ________. A) retailer cooperative B) franchise organization C) area-based cartel D) sponsored voluntary chain E) alternate selling channel

A

89

107) In a retailer cooperative, ________. A) profits are equally divided among members B) members plan their advertising jointly C) nonmembers cannot buy through the co-op D) members rely on distribution programming E) members standardize their selling practices

B

90

108) A group of small grocery shops forms a new business entity to buy products directly from manufacturers. The group buys products in bulk that are then distributed among members. This helps the shops obtain better profit margins. Which of the following types of vertical marketing systems can be observed here? A) contractual B) corporate C) administered D) controlled E) regulatory

A

91

109) A franchise organization is an example of a(n) ________ vertical marketing system. A) corporate B) administered C) contractual D) regulatory E) controlled

C

92

110) In a ________ marketing system, two or more unrelated companies put together resources or programs to exploit an emerging marketing opportunity. A) reverse flow B) vertical C) horizontal D) lateral E) forward flow

C

93

111) Which of the following is a major advantage of adding more channels for selling? A) It helps the company increase its market coverage. B) It helps the company reduce its fixed costs. C) It reduces the likelihood of channel conflict. D) It is the best strategy for selling low-involvement consumer products. E) It results in economies of scale.

A

94

112) Vertical marketing systems achieve economies through size, bargaining power, and elimination of duplicated services.

TRUE

95

113) A corporate vertical marketing system combines successive stages of production and distribution under single ownership.

TRUE

96

114) Advanced supply-distributor arrangements for administered vertical marketing systems do not rely on distribution programming.

FALSE

97

115) Retailer cooperatives allow nonmember retailers to buy through them and share the profits.

FALSE

98

116) Adding more marketing channels increases the channel cost of selling.

FALSE

99

124) Which of the following is the most complete and accurate description of a pure-click company? A) These are companies that launch a Web site without any previous existence as a firm. B) These firms' business models are based on advertising revenue. C) These are established companies that have an online site for selling products. D) These companies get paid every time a user visits their Web site. E) These companies sell online space to other Web sites and are paid for the service.

A

100

125) A large retail chain in the United States decides to expand its operations by adding an online site for e-commerce. This is called a(n) ________ company. A) B2B B) brick-and-mortar C) m-commerce D) pure-click E) brick-and-click

E

101

126) An Internet service provider (ISP) is a(n) ________ company. A) pure-click B) brick and click C) brick-and-mortar D) m-commerce E) one-level

A

102

127) JSE Securities Exchange is the largest stock exchange in Africa. The JSE provides a market where securities can be traded freely under a regulated procedure. The company acts as an intermediary between the traders. JSE is an example of a(n) ________. A) internal broker B) infomediary C) customer community D) market maker E) third party arbitrator

D

103

128) Exxon Consulting works as an agent on behalf of business consumers to collect information on various industrial products. When faced with buying decisions, businesses can approach Exxon to obtain detailed information on the various options available to them. The company earns revenue by selling such information to various customers. Exxon Consulting can be called a(n) ________. A) infomediary B) market maker C) customer community D) third party arbitrator E) informant

A

104

129) Consumer surveys suggest that one of the most significant inhibitors of online shopping is the absence of ________. A) pleasurable experiences B) competitive prices C) adequate technical information D) after-sales service E) facilities to compare offerings

A

105

130) Which of the following is an example of a brick-and-click company? A) IFB Industries, a company that sells products using various channels such as Internet, retailers, direct outlets, and franchisees. B) Opera, a Web browser and Internet suite developed by Opera Software, performs common tasks such as displaying Web sites and sending and receiving e-mail messages. C) Atrutron, a company that offers its customers access to the Internet using data transmission technology. D) eBay Inc., an American company, facilitates online auctions and shopping to people and businesses across the globe to buy and sell a broad variety of goods and services. E) Yahoo! Inc., an American corporation, provides services via the Internet such as directories, e-mail, news, advertising, online mapping, and so on.

A

106

131) Brick-and-click companies are those that have launched a Web site without any previous existence as a firm.

FALSE

107

132) Price pressure will increase for undifferentiated products than differentiated products.

TRUE

108

134) 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 D) the use of a specific medium to communicate with prospects E) using the Internet as a medium for doing business

A

109

135) When Japanese teenagers carry DOCOMO phones from NTT and use them to order goods, they are engaged in ________. A) B2B e-commerce B) brick-and-click commerce C) infomediation D) dilution E) m-commerce

E

110

136) Consumers are more engaged and attentive with their smart phones than when they are online.

TRUE

111

137) The redemption rate for paper coupons (10 percent) far exceeds that of mobile coupons (1 percent).

FALSE

112

140) ________ channel conflict occurs between channel members at the same level. A) Horizontal B) Vertical C) Multichannel D) Administrative E) Contractual

A

113

141) Alcart Solutions is a large distributor of Aldor phones in Canada. The company distributes products to various retailers in the New Brunswick province. Recently Aldor received several complaints from its retailers that their orders are not delivered on time. They also complain that Alcart offers preferential treatment to some of the other retailers in the region. This is an example of ________ conflict. A) multichannel B) horizontal C) vertical D) intermediate E) parallel

C

114

142) When Goodyear began selling its popular tire brands through Sears, Walmart, and Discount Tire, independent dealers that sold the same tires at higher prices were angry. This is an example of a(n) ________ conflict. A) horizontal B) vertical C) intermediate D) multichannel E) parallel

D

115

143) A manufacturer wants to achieve rapid market penetration through a low-price policy. However, the manufacturer's dealers prefer to work with high margins and pursue short-run profitability. The major reason for this conflict is ________. A) goal incompatibility B) unclear roles C) ambiguous rights D) differences in perception E) dependence on the manufacturer

A

116

144) When Estee Lauder set up a Web site to sell its Clinique and Bobbi Brown brands, Dayton Hudson reduced space for Estee Lauder products in its department stores in response to the ________ conflict. A) horizontal channel B) multichannel C) vertical channel D) grid channel E) end-customer

C

117

145) General Motors' executives work for a short time in some dealerships, and some dealership owners work in GM's dealer policy department. This strategy helps the company avoid conflicts with its dealers. This is an example of the ________ strategy. A) employee exchange B) dual compensation C) joint membership D) co-optation E) diplomacy

A

118

146) RX Corp. is a large manufacturer of electronic goods and sells its products through distributors and retailers. In order to keep pace with the growing use of the Internet, the company decides to start selling online. The company faces stiff opposition from its retailers as they believe that this will significantly reduce their profits. The company attempts to eliminate this resistance by offering its retailers commissions for processing and delivering orders received via the Web. This is an example of which of the following conflict resolution strategies? A) dual compensation B) joint membership C) arbitration D) co-optation E) strategic pricing

A

119

147) Co-optation is an effort by one organization to win the support of the leaders of another by ________. A) including them in advisory councils B) engaging in mediation and arbitration C) encouraging joint memberships in trade associations D) encouraging employee exchanges E) offering strategic justifications

A

120

148) Winstar is a large-scale manufacturer with more than a hundred partners across the globe. When making decisions concerning distribution and channel optimization, the company invites members from its channel partners to be part of its advisory committee. This helps the company maintain harmony with its partners. Which of the following conflict resolution techniques is Winstar using? A) diplomatic counselling B) mediation C) arbitration D) co-optation E) joint membership

D

121

149) Which of the following channel conflict resolution techniques is used only if everything else proves ineffective? A) legal recourse B) mediation C) arbitration D) co-optation E) superordinate goals

A

122

150) What is the trade-off in return for the benefits associated with an integrated multichannel marketing system? A) increased market coverage B) customers who buy in one channel are more profitable than customers who buy across different channels C) lower channel costs D) two or more channels may end up competing for the same customer E) customized selling

D

123

151) If a producer wants to achieve rapid market penetration through a low-price policy, while a dealer wants to work with high margins to pursue short-run profitability, the source of the channel conflict is ________. A) unclear roles and rights B) goal incompatibility C) differences in perception D) intermediaries' dependence on the manufacturer E) strategic justification

B

124

152) Jaycee was using ________ when his organization tried to win the support of the leaders of one of his distributors by including them in advisory councils, boards of directors, and the like. A) dual compensation B) employee exchange C) co-optation D) joint membership E) strategic justification

C

125

153) Conflicts between various franchisees of a company are an example of vertical channel conflict.

FALSE

126

154) Multichannel conflicts are common when the members of one channel obtain a lower price based on larger-volume purchases.

TRUE

127

155) Dual compensation pays existing channels for sales made through new channels.

TRUE

128

156) Exclusive dealings and tying agreements are illegal and prohibited by law.

FALSE