118. Almost a million fans are willing to buy subscriptions to watch Major League Baseball (MLB) games
online at MLB.com. That business is worth more than $100 million to MLB. But this online broadcast
takes those fans away from the broadcasters that pay MLB hundreds of millions of dollars for the right
to carry the games. Which of the following is likely to occur between MLB and broadcast television?
a.
horizontal market share
b.
lateral channel takeover
c.
niche market conflict
d.
channel conflict
e.
market share conflict
119. Channel conflict that occurs among channel members on the same level is known as:
a.
primary conflict
b.
organic conflict
c.
internal conflict
d.
horizontal conflict
e.
vertical conflict
120. Horizontal channel conflict occurs most often when manufacturers practice:
a.
dual or multiple distribution
b.
trade loading
c.
promotional pricing
d.
direct distribution
e.
channel distribution
121. Goodyear tire dealers were hurt financially when Goodyear made the decision to distribute its tires
through retailers such as Sears and Wal-Mart in addition to the exclusive dealerships it had
established. The conflict that occurred at the retail level is an example of:
a.
horizontal conflict
b.
trade loading
c.
value-added pricing
d.
exclusive distribution
e.
channel partnering
122. Channel conflict that occurs between different levels in a marketing channel is referred to as:
a.
horizontal conflict
b.
primary conflict
c.
vertical conflict
d.
secondary conflict
e.
parallel conflict
123. Polo brand apparel can be purchased through fine department stores nationwide. However, Polo
apparel can also be purchased through Polo stores, which creates the potential for _____ conflict in the
channel of distribution.
a.
primary
b.
secondary
c.
horizontal
d.
vertical
e.
parallel
124. _____ is the joint effort of all channel members to create a supply chain that serves customers and
creates a competitive advantage.
a.
Selective partnering
b.
Direct distribution
c.
Channel partnering
d.
Intensive integration
e.
Closed channel distribution
125. _____ occurs when products are distributed through unauthorized marketing channels.
a.
Black marketing
b.
Countertrading
c.
Channel malfeasance
d.
Gray marketing
e.
Reverse channeling
126. Many large champagne sellers do their own importing and desire to maintain independent price points
in different markets. Thus, a bottle of champagne might cost $45 in the United States while the same
bottle might be only 20 euros (about $30) in France. It is often profitable to buy the wine in Europe,
typically from an unauthorized distributor, and resell it in the United States. U.S. wine merchants who
do so would be engaging in:
a.
black marketing
b.
channel malfeasance
c.
countertrading
d.
reverse channeling
e.
gray marketing
127. It seems counterintuitive, but Jon Jordan, CEO of Southern Audio Services (SAS) in Baton Rouge,
wants to curb the number of dealers who are selling his car speakers. Jordan understands that he can’t
handpick all his vendors, but he never expected the rise in unauthorized dealers that came with the e-
commerce boom. When Jordan decided to look for the SAS name on eBay, he came up thousands of
sellers. These eBay sellers are engaging in:
a.
black marketing
b.
channel malfeasance
c.
countertrading
d.
reverse channeling
e.
gray marketing
128. One thing that sets service distribution apart from traditional manufacturing distribution is that in a
service environment:
a.
production and consumption are simultaneous
b.
production setbacks can be remedied by using safety stock
c.
faster modes of transportation can offset service production problems
d.
service distribution benefits are more tangible
e.
service distribution has a narrower focus
129. Which of the following businesses is most likely to have a problem with distribution because
production and consumption of the product occurs simultaneously?
a.
a company that manufacturers bicycles
b.
a hair salon
c.
a retailer that sells mattresses
d.
a soft-drink bottler
e.
a wholesaler that specializes in athletic equipment
130. You are responsible for physical distribution of your company’s service and should focus on:
a.
ensuring the intangibility of the service so that physical distribution becomes a less
important factor
b.
minimizing wait times, managing service capacity, and providing delivery through
distribution channels
c.
making sure production and consumption are simultaneous
d.
setting quality standards, choosing faster transportation modes, and using safety stock
e.
customer-oriented order processing and inventory control
131. Which of the following is a main area of concern for service distribution?
a.
minimizing wait times
b.
maximizing sales
c.
creating a one-to–one relationship with customers
d.
providing easy to use Internet help
e.
reducing risk
132. Paul operates Kayak.com a company that allows customers to efficiently search company databases
and find the best airline and hotel deals all over the Web. Kayak does not make bookings, but rather
provides recommendations for the best travel plans. Travel providers pay Kayak a commission for
most customers who click through. English wants his users to have as short and sweet an experience
on Kayak as possible. Time is of the essence in responding to any customer question, especially in this
day where air fare can increase dramatically in just a couple of hours. Paul is devoted to:
a.
improving delivery service
b.
maximizing queues
c.
reducing discrepancies of assortment
d.
reducing wait time
e.
managing service capacity
NARRBEGIN: R.H. Kurt & Son
R. H. Kurt & Son
R. H. Kurt & Son, Inc., distributes rifles for both hunting and target shooting, rifle barrels, triggers,
cleaning equipment, and reloading equipment to sporting equipment retailers and many large discount
stores. It carries products from 41 different manufacturers. The manufacturers whose products it
carries are known for producing superior products and are leaders in their industries. In addition, Kurt
is able to repair damaged rifles through its gunsmith service, which is available to all of its retailers.
NARREND
133. Refer to R.H. Kurt. Its marketing channel is composed of:
a.
the distribution, objectives, strategies, and tactics used to move products from the
manufacturer to the retailer
b.
any organization that had a part in moving the product from the distributor to the retailer
c.
the functions of transportation, storage, inventory control, materials-handling, and order
processing
d.
the 41 different manufacturers, R.H. Kurt, the retailers it serves, and their customers
e.
all organizations in the industry that make it possible for a consumer to buy his or her
desired product
134. Refer to R.H. Kurt. Customers at retail stores only want one rifle or one scope. They do not want to
buy in the quantities the manufacturers need to sell. This _____ is overcome by the marketing
channels.
a.
discrepancy of quantity
b.
spatial discrepancy
c.
discrepancy of assortment
d.
discrepancy of facilitation
e.
discrepancy of possession
135. Refer to R.H. Kurt. When Kurt solicits an order from a sporting goods store, it engages in a _____
function.
a.
logistical
b.
functional
c.
facilitating
d.
customerized
e.
transactional
136. Refer to R.H. Kurt. Given the nature of the products carried by Kurt, what level of distribution
intensity would be most appropriate?
a.
extensive
b.
intensive
c.
reflexive
d.
unitary
e.
selective
137. Refer to R.H. Kurt. If Kurt wished to make sure its gunsmith service was profitable, it must consider:
a.
how it can minimize the time a customer must wait for his or her rifle to be repaired
b.
how the opening of hunting season will affect demand for its services
c.
how to maintain an adequate staff
d.
whether to ship the repaired rifle to the customer or the retailer
all of these options
NARRBEGIN: Redbox
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 Wal-Mart, 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.
NARREND
138. Refer to Redbox. Warner Bros., Blockbuster, Redbox, Wal-Mart, and third-party DVD distributors are
part of a:
a.
distribution cooperative
b.
marketing mix
c.
transportation channel
d.
marketing channel
e.
logistics system
139. Refer to Redbox. Redbox offers DVDs from several production studios, such as Disney, Sony, and
Paramount. Consumers just have to rent from Redbox instead of obtaining the DVD from the various
production studios if they want a children’s movie from Disney and an action movie from Paramount.
Thus, one kiosk provides _____ for both consumers and the production studios.
a.
contact efficiency
b.
integration
c.
synergy
d.
distribution efficiency
e.
distribution intensity
140. 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?
a.
logistical functions
b.
transactional functions
c.
facilitating functions
d.
purchasing functions
e.
secondary functions
141. Refer to Redbox. Production studios distribute DVDs in grocery stores, drug stores, discount stores,
entertainment stores, and vending machines like Redbox. Which level of distribution intensity does
this represent?
a.
intensive
b.
extensive
c.
product-focused
d.
market-focused
e.
exclusive
142. Refer to Redbox. Production studios are potentially producing _____ among its existing distributors
by allowing Redbox to rent their DVDs for $1.00.
a.
vertical conflict
b.
cognitive dissonance
c.
supply management divergence
d.
horizontal conflict
e.
disintermediation
NARRBEGIN: Fishy Business
Fishy Business
DNA testing has revealed that sushi bar customers are not always getting what they pay for. Scientists
at the American Museum of Natural History tested fish from 31 sushi bars and found that the tuna
coveted by many diners is often a cheaper substitute, a banned fish, or an endangered species. This
could be the result of an honest mistake in the supply chain, or it could be a deliberate attempt to
deceive buyers. However, researchers have uncovered a DNA ‘barcode’ that can accurately identify
the type of fish. While still a ways off, the scientist who developed the tuna DNA barcode envisions a
small device that can provide instantaneous species identification, which will result in restaurants
ultimately providing what their customers are demanding and paying for.
NARREND
143. Refer to Fishy Business. The way a restaurant coordinates and integrates the activities performed by its
supply chain members into a collection of seamless end-to-end processes is an example of:
a.
yield management
b.
channel power
c.
materials handling
d.
supply chain management
e.
physical distribution
144. Refer to Fishy Business. In the future, suppliers of fresh fish will be able to use electronic bar codes to
verify the fish species for members of the supply chain. This information can be incorporated into the
information technology used in the inventory management and control business process. This
information technology is called:
a.
activity-based costing (ABC)
b.
electronic data interchange (EDI)
c.
benchmarking
d.
materials-handling system
e.
procurement
ESSAY
1. What is a marketing channel? What type of business make up a marketing channel?
2. One important reason channel members are included between producers and users is the concept of
specialization and division of labor. Define these concepts and explain their roles in channels of
distribution.
3. One important reason channel members are included between producers and end users is to overcome
discrepancies. Name and briefly describe four discrepancies channel members overcome.
4. Channel members such as wholesalers and retailers are often included between producers and business
users or consumers for three important reasons. Name and briefly describe these reasons.
5. One important reason channel members are included between producers and users is to increase
contact efficiency. How do channel members increase contact efficiency? Use the following two
scenarios to illustrate your answer: (1) Assume there are 2,000 business students who need to buy
textbooks from eight textbook publishers. How many transactions must take place? (2) Assume the
first scenario, but now one campus bookstore is acting as an intermediary. Now how many transactions
must take place?
6. Intermediaries must perform three basic functions. Name these functions, and describe the activities
involved in each function.
7. Compare and contrast the channels for consumer products with the channels for business and industrial
products.
8. Name and briefly discuss two alternative channel arrangements that can be used to move products.
9. How has the use of supply channel management resulted in a radical reformulation of traditional
marketing, production, and distribution functions?
10. What are the three factors affecting channel choice? Briefly discuss how each factor might influence a
company to implement a direct channel of distribution.
11. Name and briefly describe the three levels of distribution intensity. Give examples of two products that
logically would be distributed at each level of intensity.
12. A retail clothing store in a small northwest Georgia community is the sole distributor of Spanx brand
hosiery in the region. How does this form of market coverage benefit the retailer? How does it benefit
the manufacturer?
13. List and briefly define the three basic types of channel relationships. Explain why they are described
as a continuum.
14. List the components of the logistics function in the supply chain.
15. What is an inventory control system? Discuss the objective of inventory management and describe
materials requirement planning (MRP) and distribution resource planning (DRP).
16. Distribution managers select different transportation modes based on several distinct criteria. List and
briefly define these criteria, and name the best and worst transportation mode for each criterion.
17. Describe contract logistics. How does contract logistics affect the efficient deployment of supply chain
management?
18. Define channel power, channel control, channel leadership, and channel partnering and explain how
these four terms are related.
19. Imagine a European manufacturer wants to introduce its digital thermostats to the U.S. market. The
thermostats are designed to reduce power usage and save energy. What are the two basic channel
structures it can use? Briefly describe the advantages and disadvantages of each method.
20. Discuss the three main areas of importance in service distribution.
