Chapter 10 – Value-Chain Strategy
Chapter 10
Value-Chain Strategy
1. Buying and selling activities by marketing intermediaries reduce the number of transactions
for producers and end-users.
2. A single product makes distribution by the manufacturer economically feasible, whereas
the cost of direct sales for a complete line may be prohibitive.
3. Relationships between the conventional channel participants are rather informal and the
members are not closely coordinated.
4. The conventional channel of distribution is a group of horizontally linked independent
organizations.
5. Relationships between the conventional distribution channel participants are rather informal
and the members are not closely coordinated.
6. A primary feature of a vertical marketing system is the management (or coordination) of
the distribution channel collectively by the organizations involved.
7. If one retailer or dealer in the trading area distributes the product, then management is
following a selective distribution strategy.
Chapter 10 – Value-Chain Strategy
8. Large producers with extensive capabilities and resources have a lot of flexibility in
choosing intermediaries.
9. A conventional distribution channel offers little opportunity for control by a member firm,
yet there is a lot of flexibility in entering and exiting from the channel.
10. Agile supply chains require long-term partnership with suppliers.
11. _____ is defined as the group of vertically aligned organizations that keep improving a
product in moving from basic supplies to finished products for consumer and organizational
end-users.
A. Value chain
B. Distribution strategy
C. Retail strategy
D. Digital channel
12. _____ is a network of value chain organizations performing functions that connect goods
and services with end-users.
A. Line extension
B. Retail chain
C. Channel of distribution
D. Digital channel
13. Which of the following value-added activities would most effectively reduce the number
of transactions for producers and end-users?
A. Assembly of products into inventory
B. Servicing and repairs
C. Processing and storage of goods
D. Buying and selling activities by marketing intermediaries
14. Which of the following value-added activities helps to meet buyers’ time-of-purchase and
variety preferences?
A. Assembly of products into inventory
B. Transportation
C. Processing and storage of goods
D. Advertising and sales promotion
15. Consumer-products manufacturers often direct advertising to _____to help pull products
through distribution channels.
A. middlemen
B. consumers
C. distributors
D. retailers
16. Which of the following factors favors direct distribution by the manufacturer?
A. Simple product/application
B. Large number of geographically concentrated buyers
C. Opportunity for competitive advantage
D. Small and frequent purchases
17. The _____ of distribution is a group of vertically linked independent organizations, each
trying to look out for itself, with limited concern for the total performance of the channel.
A. digital channel
B. vertical marketing system
C. direct channel
D. conventional channel
Chapter 10 – Value-Chain Strategy
18. In a _____, one organization coordinates the distribution channel and directs
programming of channel activities and functions.
A. vertical marketing system
B. conventional channel
C. direct channel
D. digital channel
19. _____ VMS includes various formal arrangements between channel participants including
franchising and voluntary chains of independent retailers.
A. Ownership
B. Contractual
C. Administered
D. Relationship
20. _____ VMS exists because one of the channel members has the capacity to influence
other channel members and exerts substantial control over them.
A. Ownership
B. Contractual
C. Administered
D. Relationship
21. In _____ VMS, a single firm does not exert substantial control over other channel
members but involves close collaboration and sharing of information.
A. ownership
B. contractual
C. administered
D. relationship
Chapter 10 – Value-Chain Strategy
22. _____ marketing system exists when two or more unrelated companies put together
resources or programs to exploit a marketing opportunity. Its characteristics are close to the
partnering, joint venture, and strategic alliance arrangements.
A. Horizontal
B. Digital
C. Administered
D. Relationship
23. The process of replacing distributors with direct manufacturer-owned channels is referred
to as _____.
A. e-procurement
B. channel invasion
C. channel audit
D. disintermediation
24. If a company decides to distribute its products in many of the retail outlets in a trading
area that might normally carry such a product, it is using a(n) _____ distribution approach.
A. exclusive
B. intensive
C. selective
D. moderate
25. If a company decides to distribute its products through one retailer or dealer in the trading
area, then the company is following a(n) _____ distribution strategy.
A. intensive
B. selective
C. exclusive
D. moderate
Chapter 10 – Value-Chain Strategy
26. Which of the following is the final step in selecting the distribution strategy?
A. Selecting the channel configuration
B. Determining the type of channel arrangement
C. Deciding the intensity of distribution
D. Identifying appropriate distribution strategy
27. Channel _____ refers to the strategic shift from one channel to another.
A. invasion
B. migration
C. innovation
D. audit
28. The _____ supply chain seeks to remove waste and manage volatility out of the supply
chain by leveling demand.
A. fluid
B. agile
C. lean
D. conventional
29. The _____ supply chain mandates fluid and market-based relationships to enhance
responsiveness to the market and capacity for rapid change.
A. fluid
B. conventional
C. lean
D. agile
30. Often customers shop for information in one channel, then defect from that channel to
make the purchase in another medium. This process is referred to as _____.
A. personal selling
B. channel surfing
C. direct distribution
D. channel mapping
Chapter 10 – Value-Chain Strategy
31. Discuss the factors that influence distribution decision.
32. Discuss the emerging issue of the digital distribution channel occurring in markets in
which the product can be converted to digital format.
Chapter 10 – Value-Chain Strategy
33. Discuss the major issues in deciding distribution intensity.
34. What is channel migration? List the issues to be considered when opting for migration.
35. Discuss the impact of e-procurement in business-to-business marketing.