Channel strategy and management
1)
Power is best described as a(n) ________.
A) cooperative arrangement
B) potential for influence
C) index of profitability
D) tough strategic tactic
E) act of free will
2)
Which term refers to the ability to alter another organization’s behavior?
A) channel dependence
B) legitimate power
C) coercive power
D) channel strategy
E) channel power
3)
All of the following were results of HP using its power to push assembly activities down the
channel EXCEPT ________.
A) fewer stockouts
B) market expansion
C) mass customization
D) higher inventory levels
E) increased customer satisfaction
4)
Which term refers to an overestimation of a channel member’s ability to exert influence and
make change happen?
A) false positive
B) reward power
C) false negative
D) value neutrality
E) double marginalization
5)
Managers at SMX Clothing Manufacturer have decided to increase their wholesale prices to gain
more revenue from Taylor’s Tog Shop, an exclusive retailer for SMX clothing. To preserve the store’s
margins, the owner of Taylor’s Tog Shop increases retail prices on SMX clothes, which leads to
reduced demand. Which term best describes this situation?
A) coercion
B) dependence
C) false negative
D) value neutrality
E) double marginalization
6)
Most firms have added services to their current product offerings for the purpose of ________.
A) altering channel structures
B) improving competitiveness
C) meeting customer demands
D) expanding into foreign markets
E) improving value and supply chains
7)
Emerson Electric most likely shifted to a service-based business model for the purpose of
________.
A) communicating more efficiently with key customers
B) adding new channel intermediaries to lower costs
C) competing better with overseas manufacturers
D) revising the vertical integration structure
E) supporting lifetime product warranties
8)
Madison Manufacturing makes small appliances and faces tough competition from overseas
firms that make similar products less expensively. Madison managers have decided to offer more
services to customers, such as maintenance agreements and warranty contracts. Madison now deals
directly with end-users instead of relying on intermediate channel partners. What is the most likely
result of Madison’s shift to services?
A) horizontal integration
B) channel free-riding
C) upstream integration
D) service acquisition
E) disintermediation
9)
Which term refers to the degree to which a firm’s sales come from services?
A) capacity
B) service ratio
C) service output
D) channel power
E) return on investment
10)
Channel conflict is best described as ________.
A) an unwanted state of opposition among organizations in a marketing channel
B) costly actions that should be viewed negatively in a marketing channel system
C) antagonistic situations that weaken relationships between marketing channel members
D) a situation that involves a struggle against obstacles in the marketing channel environment
E) behavior by a channel member that is in opposition to the wishes of its channel counterpart
11)
Which type of channel conflict typically exists at a very low level in most marketing channels?
A) functional
B) latent
C) affective
D) manifest
E) perceived
12)
What action would most likely cause latent conflicts to disappear in a marketing channel?
A) restructuring the channel
B) engaging in differential pricing
C) ignoring other channel members
D) blocking channel member’s initiatives
E) working more closely with manufacturers
13)
Which type of channel conflict most likely arises as soon as a channel member recognizes any
type of opposition?
A) functional
B) latent
C) affective
D) manifest
E) perceived
14)
________ conflict takes place when negative emotions first arise, and organizational members
begin to personalize their differences with other channel members.
A) Functional
B) Latent
C) Affective
D) Manifest
E) Perceived
15)
A marketing channel is most likely experiencing manifest conflict when channel members
________.
A) express personal outrage at their partners
B) experience minimal frustration
C) fail to recognize any problems
D) block each other’s initiatives
E)
feel unfairly treated
16)
All of the following are factors necessary to determine an index of manifest conflict EXCEPT
the ________.
A) number of issues
B) intensity of disagreements
C) importance of each issue
D) frequency of disagreements
E) validity of disagreements
17)
A manufacturer that performs all functions in a channel is most likely engaged in ________
A) outsourcing
B) relationalism
C) target marketing
D) vertical integration
E) classical market contracting
18)
Which of the following best describes classical market contracting?
A) distributing benefits to channel members
B) delegating channel functions to third parties
C) taking responsibility for all channel functions
D) sharing channel function risks with third parties
E) merging with a third party to meet channel demands
19)
A marketing channel system in which the channels have some properties of both owned and
independent channels is most likely engaged in ________.
A) offshoring
B) vertical integration
C) horizontal integration
D) quasi-vertical integration
E) classical market contracting
20)
Which of the following would most likely lead to relational governance in a channel system?
A) maintaining strong links with channel members
B) promoting channel member services and products
C) basing most channel functions on the equity principle
D) outsourcing costly, time-consuming channel functions
E) creating a significant distance between channel members
21)
ElectroInc, an electronics manufacturer, is considering the idea forward vertical integration.
ElectroInc employees would make sales and fulfill orders in addition to manufacturing products.
What is the primary risk that ElectroInc faces with vertical integration?
A) increasing performance ambiguity
B) reducing its return on investment
C) engaging in product speculation efforts
D) performing redundant channel functions
E) establishing environmental and managerial bounds
22)
What is the LEAST likely risk associated with forward vertical integration?
A) reduced ability to meet service output demands
B) fewer employees focused on core activities
C) limited control over value-chain operations
D) insufficient managerial resources
E) lower profits and market share
23)
Which statement about franchising is most likely true?
A) Franchisees provide downstream marketing channel functions for a manufacturer.
B) Franchisees are company subsidiaries of a vertically integrated manufacturer.
C) Franchisors assume the identity of franchisees to convey vertical integration.
D) Franchisors provide downstream marketing channel functions for franchisees.
E) Franchising first developed in the U.S. after WWII in the soft drink industry.
24)
What is a key characteristic of franchising?
A) The franchisor assumes the identity of the franchisee.
B) Franchisees manufacture the products sold by franchisors.
C) The franchisee appears to be a subsidiary of the franchisor.
D) The franchisee sells competing brands in the product category.
E) Franchisors and franchisees share downstream channel functions.
25)
Brad has decided to purchase a fast-food franchise, Taste Buds. Which of the following will
Brad, the franchisee, LEAST likely receive from the Taste Buds franchisor?
A) information about how to make Taste Buds menu items
B) the financial capital needed for Brad to hire employees
C) proven strategies for marketing Taste Buds restaurants
D) permission to use the Taste Buds logo and trademark
E) a business format to use in Brad’s market area