49) ________ refers to companies handing over most or all of their supply chain activities to
third-party organizations that are experts in those areas.
A) Creating assortments
B) Outsourcing
C) Channel integration
D) Disintermediation
E) Breaking bulk
50) Nadia works for a major soda distributor. The company decides to buy a transportation
company to move its product from its own manufacturing facility to the consumer. This is an
example of a(n) ________ vertical marketing system.
A) private
B) intermediated
C) corporate
D) contractual
E) administered
51) Local Farmers of Tampa Bay sell their produce in the market every day. They band together
to gain cost and operating economies of scale in the market for selling their produce. This is an
example of a ________.
A) retailer cooperative
B) disintermediation
C) pull strategy
D) vertical integration
E) customer community
52) A vertical ________ system consists of vertically aligned networks behaving and performing
as a unified system.
A) insourcing
B) marketing
C) assortment
D) allowance
E) inventory
53) In a(n) ________ vertical marketing system, a channel member invests in backward or
forward vertical integration by buying a controlling interest in other intermediaries.
A) private
B) distributive
C) corporate
D) contractual
E) administered
54) A(n) ________ vertical marketing system creates a powerful competitive advantage in the
marketplace due to cost and process efficiencies realized when a channel is strictly controlled by
one entity.
A) distributive
B) disintermediated
C) corporate
D) contractual
E) administered
55) An example of a contractual vertical marketing system is ________.
A) e-tailing
B) stocking
C) wholesaling
D) franchising
E) retailing
56) It is possible that a(n) ________ vertical marketing system can be more formally structured
through strategic alliances and partnership agreements among channel members that agree to
work in mutual cooperation. An example of this is the relationship between Walmart and Procter
& Gamble.
A) distributive
B) private
C) corporate
D) contractual
E) administered
57) A ________ is the highest-potential start-up and growth mechanism for small-business
owners, and it is an effective way to expand a distribution channel quickly and efficiently.
A) franchise operation
B) retailer cooperative
C) wholesaler cooperative
D) channel captain
E) partner relationship management (PRM) strategy
58) Core Inc., a dealer of electronic items, enjoys economies of scale due to its large buying and
selling operations and controls many aspects of the channel’s operations. As a consequence of
this, the company enjoys tremendous power in the market. In the context of administered vertical
marketing systems, Core Inc. is a(n) ________.
A) franchise organization
B) retailer cooperative
C) channel captain
D) wholesaler cooperative
E) agent intermediary
59) In an administered vertical marketing system, the sheer size and power of one of the
intermediaries places it in a position of control. The lead player in such situations may be
referred to as the ________.
A) virtual organization
B) retailer cooperative
C) wholesaler cooperative
D) channel captain
E) network organization
60) The goal of ________ is to share resources, especially knowledge-based resources, to effect
optimally profitable relationships between two channel members.
A) pull strategies
B) push strategies
C) materials requirement planning (MRP)
D) enterprise resource planning (ERP)
E) partner relationship management (PRM) strategies
61) ________ is the degree to which any member of a marketing channel can exercise influence
over the other members of the channel.
A) Channel power
B) Distribution intensity
C) Disintermediation
D) Assortment
E) Exclusive power
62) ________ occurs when channel members experience disagreements and their relationship
becomes strained.
A) Disintermediation
B) Channel conflict
C) Stock-out
D) Vertical integration
E) Outsourcing
63) Unresolved channel conflict can result not only in an uncooperative and inefficient channel,
but it can also ultimately impact end-user consumers through ________.
A) intensive distribution
B) selective distribution
C) increased supply
D) increased demand
E) higher prices
64) ________ power involves an explicit or implicit threat that a channel captain will invoke
negative consequences on a channel member if it does not comply with the leader’s request or
expectations.
A) Coercive
B) Reward
C) Expert
D) Referent
E) Legitimate
65) ________ power is NOT a source of channel power.
A) Reward
B) Referent
C) Legitimate
D) Consumer
E) Expert
66) The motivating force for suppliers to work with large chain stores is that the stores can offer
huge ________ power in the form of writing big orders.
A) coercive
B) reward
C) expert
D) referent
E) legitimate
67) ________ power can take the form of sharing important product knowledge.
A) Coercive
B) Reward
C) Expert
D) Referent
E) Legitimate
68) When a channel member is respected, admired, or revered based on one or more attributes,
that member enjoys ________ power within the channel.
A) coercive
B) reward
C) expert
D) referent
E) legitimate
69) ________ power results from contracts such as franchise agreements or other formal
agreements.
A) Coercive
B) Reward
C) Expert
D) Referent
E) Legitimate
70) When the objective is to obtain maximum product exposure throughout the channel, a(n)
________ strategy is designed to saturate every possible intermediary.
A) selective distribution
B) intensive distribution
C) exclusive distribution
D) partnership relationship management
E) materials requirement planning
71) In a(n) ________ vertical marketing system, one channel member may be placed in a
position of channel control.
A) referent
B) organic
C) corporate
D) contractual
E) administered
72) Intensive distribution is typically associated with low-cost ________.
A) industrial goods
B) heavy equipment
C) convenience goods
D) machine tools
E) manufacturing tools
73) ________ goods are appropriate for intensive distribution, as their sales rely on the consumer
seeing the product, feeling an immediate want, and being able to purchase now.
A) High-technology
B) Durable
C) Convenience
D) Impulse
E) Shopping
74) Consumers engage in limited search for items like midrange fashion apparel, home
furnishings, and appliances. These are examples of ________ goods, which are candidates for
selection distribution.
A) technology
B) durable
C) convenience
D) impulse
E) shopping
75) ________ distribution is often part of an overall positioning strategy built on prestige,
scarcity, and premium pricing.
A) Selective
B) Exclusive
C) Widespread
D) Convenience
E) Intensive
76) ________ strategies can be intensive, selective, or exclusive.
A) Assortment
B) Disintermediation
C) Virtual
D) Referent
E) Distribution
77) In deciding on the right balance between control and flexibility in a channel, marketing
managers must consider ________.
A) utilizing software applications
B) the type of channel power to be used
C) the right pull strategy
D) employing enterprise resource planning systems
E) the type of products involved
78) Grape Inc. sells high-end wines to liquor, wine, and spirits wholesalers who have built
relationships among select restaurants and hotels. Grape Inc. employs a(n) ________ strategy.
A) selective distribution
B) exclusive distribution
C) push
D) pull
E) intensive distribution