Principles of Marketing, 15e (Kotler/Armstrong)
Chapter 12 Marketing Channels: Delivering Customer Value
1) The sets of firms that supply companies with the raw materials, components, parts,
information, finances, and expertise needed to create products or services are known as
________.
A) retailers
B) upstream partners
C) distributors
D) downstream partners
E) distribution channels
2) Which of the following terms refers to the wholesalers and retailers that form a vital link
between the firm and its customers?
A) factory-supply networks
B) downstream partners
C) resource banks
D) upstream partners
E) supply channels
3) The term “supply chain” is considered limited because it ________.
A) ignores the make-and-sell aspect of the market
B) suggests that planning begins with raw materials and factory capacity
C) takes a step-by-step, linear view of purchase-production-consumption activities
D) takes a sense-and-respond view of the market
E) suggests that planning starts with identifying the needs of target customers
4) The term “demand chain” is considered limited because it ________.
A) advocates a make-and-sell view of the market that relies on a responsive supply network
B) suggests that planning starts with raw materials, productive inputs, and factory capacity
C) takes a step-by-step, linear view of purchase-production-consumption activities
D) ignores the evolution of the global marketplace
E) overlooks the needs of target customers
5) A ________ is made up of the company, suppliers, distributors, and customers who partner
with each other to improve the performance of the entire system.
A) value delivery network
B) horizontal channel
C) consumer base
D) product delivery network
E) product line
6) A ________ is a set of interdependent organizations that help make a product or service
available for use or consumption by the consumer or business user.
A) product line
B) product delivery network
C) marketing channel
D) consumer base
E) resource bank
7) Which of the following is most likely true of marketing channel decisions?
A) They often involve long-term commitments to other firms.
B) They have minimal influence on the prices of products offered to customers.
C) They increase the amount of time a company spends connecting with customers.
D) The increase the amount of effort a company puts in to distribute goods.
E) They are easily altered, replaced, or discarded.
8) ________ play an important role in matching supply and demand by providing consumers
with a broad assortment of products in small quantities.
A) Virtual banks
B) Intermediaries
C) Price consultants
D) Uniform-delivery networks
E) Upstream partners
9) From the economic system’s point of view, the role of ________ is to transform the
assortments of products made by producers into the assortments wanted by consumers.
A) upstream partners
B) marketing intermediaries
C) third-party logistics
D) price consultants
E) factory supervisors
10) A ________ is a layer of intermediaries that performs some work in bringing the product and
its ownership closer to the final buyer.
A) product platform
B) channel level
C) resource bank
D) contact center
E) customer franchise
11) In a(n) ________ channel, the same member both produces and distributes a product or
service to consumers.
A) tiered
B) direct
C) platform
D) vertical
E) exclusive
12) Which of the following companies uses a direct marketing channel?
A) Fishhooks, a factory which manufactures fishing equipment that it ships to hobby stores
worldwide
B) Germfight, a factory which manufactures dental products that it distributes only to select
department stores
C) Apple Blossoms, a company that sells its cosmetics exclusively through Ray’s Retail Store
D) Holly Wreaths, a store which sells Christmas ornaments to customers via its online click-to–
order catalogs
E) Showdown, a clothing store that stocks merchandise from different international brands
13) Lifebelt Insurance sells insurance only through its door-to-door salespeople. What type of
marketing channel does Lifebelt use?
A) inclusive
B) multitiered
C) indirect
D) direct
E) selective
14) At its most basic form, a marketing channel consists of the producer and the ________.
A) retailer
B) sales agent
C) competitor
D) processor
E) consumer
15) A marketing channel which consists of one or more intermediaries is known as a(n)
________ marketing channel.
A) cyclic
B) upstream
C) looped
D) direct
E) indirect
16) Plasticine Palace supplies its products exclusively to Arts & Crafts, a chain of stationery
stores across the country. The chain then makes the plasticine available to end-consumers. This
is an example of ________.
A) a direct marketing channel
B) intensive distribution
C) an indirect marketing channel
D) disintermediation
E) extensive distribution
17) Which of the following is an example of an indirect marketing channel?
A) June Bride, which sells bridal gowns via its click-to-order online catalogs
B) Farmer Brown, who delivers fresh milk from his dairy to customers every morning
C) Wine & Dine, which sells its picnic hampers to select novelty stores across the country
D) Lifebelt Insurance, which sells life insurance through its door–to-door salespeople
E) Rhonda’s Rental, which rents cars out to people for the day
18) The greater the number of channel levels in a marketing channel, the ________.
A) less distance between producer and end-consumer
B) greater the channel complexity
C) less time it takes for products to reach end-consumers
D) greater the control producers have over the distribution of their products
E) greater the control producers have over the demand of their products
19) Which of the following is a conventional consumer marketing channel?
A) producer to business distributor to end-consumer
B) producer to wholesaler to retailer to end-consumer
C) producer to end-consumer to business customer
D) producer to retailer
E) producer to business distributor to business customer
20) Which of the following is an indirect business marketing channel?
A) producer to retailer to business distributor
B) producer to wholesaler to retailer to end-consumer
C) producer to end-consumer to business distributor
D) producer to retailer
E) producer to business distributor to business customer
21) Which of the following is a type of flow that connects all institutions in a marketing channel?
A) payment flow
B) intrinsic flow
C) customized flow
D) reverse flow
E) divergent flow
22) ________ are complex behavioral systems in which people and companies interact to
accomplish individual, company, and channel goals.
A) Business matrices
B) Distribution channels
C) Resource banks
D) Consumer bases
E) Product platforms
23) Which of the following is true of channel members?
A) They act independent of each other.
B) They play specialized roles in the channel.
C) They are not accountable to other channel members.
D) They play generalized and interchangeable roles in the distribution process.
E) Their competence and cooperation don’t affect the company’s image or profits.
24) Conflict which occurs among firms at the same level of the marketing channel is known as
________ conflict.
A) multitiered
B) horizontal
C) vertical
D) equilateral
E) exterior
25) Conflict which occurs between different levels of the same marketing channel is known as
________ conflict.
A) horizontal
B) vertical
C) multitiered
D) equilateral
E) communal
26) Managers at the Imperial Hotel-Chicago complained that the chain’s overall image was hurt
because Imperial Hotel-Dallas was overcharging guests and providing poor service. The Imperial
Hotel was experiencing ________ conflict.
A) equilateral
B) vertical
C) multitiered
D) communal
E) horizontal
27) The management of two Panizza restaurants have an ongoing disagreement over the discount
rate given to students from the local high school. This is an example of ________ conflict.
A) intensive
B) selective
C) exclusive
D) horizontal
E) vertical
28) When KFC came into conflict with its franchisees over the brand’s “Unthink KFC”
repositioning, which emphasized grilled chicken over its traditional Kentucky fried chicken,
KFC experienced ________ conflict.
A) equilateral
B) vertical
C) multitiered
D) communal
E) horizontal
29) Stylize, Inc. opened an online store that triggered disagreements between headquarters and
the firm’s exclusive dealers. This type of a disagreement is known as a(n) ________ conflict.
A) vertical
B) indirect
C) horizontal
D) selective
E) multitiered
30) A(n) ________ consists of one or more independent producers, wholesalers, and retailers,
each seeking to maximize its own profits, sometimes even at the expense of the system as a
whole.
A) multitiered supply chain
B) conventional distribution channel
C) intrinsic market matrix
D) resource bank
E) product platform
31) Which of the following is true of conventional distribution channels?
A) Channel members have complete control over each other.
B) Channel members seek to maximize their own profits.
C) Channel conflict is governed by formal mechanisms.
D) Channel members are assigned roles according to a clearly defined framework.
E) Channel members work exclusively for the good of the organization.
32) A(n) ________ marketing system consists of producers, wholesalers, and retailers acting as a
unified system.
A) horizontal
B) vertical
C) multitiered
D) communal
E) equilateral
33) Which of the following is true of vertical marketing systems?
A) Producers, wholesalers, and retailers act as a unified system.
B) Channel members have no control over each other.
C) Channel conflict is governed by informal mechanisms.
D) The system is dominated by the consumer.
E) Channel members work independently with no cooperation from other members.
34) Which of the following is a major type of vertical marketing system (VMS)?
A) corporate
B) conventional
C) multilevel
D) intrinsic
E) extrinsic
35) A ________ integrates successive stages of production and distribution under single
ownership.
A) contractual VMS
B) corporate VMS
C) contingency VMS
D) conventional VMS
E) communal VMS
36) A ________ consists of independent firms at different levels of production and distribution
who join together through formal agreements to obtain more economies or sales impact than
each could achieve alone.
A) corporate VMS
B) contingency VMS
C) contractual VMS
D) communal VMS
E) conventional VMS
37) The ________ organization is the most common type of contractual relationship.
A) franchise
B) horizontal
C) conventional
D) multi-national
E) entrepreneurial
38) Ford and its network of independent franchised dealers is an example of a ________.
A) manufacturer-sponsored retailer franchise system
B) manufacturer-sponsored wholesaler franchise system
C) service-firm-sponsored retailer franchise system
D) service-firm-sponsored equity strategic alliance
E) manufacturer-and-service-sponsored joint venture
39) Fire Up makes fireproof clothing material and licenses select stores around the world to use
its material to make finished products with the Fire Up logo. Which of the following types of
franchising is evident here?
A) manufacturer-sponsored retailer franchise system
B) manufacturer-sponsored wholesaler franchise system
C) service-firm-sponsored retailer franchise system
D) service-firm-sponsored equity strategic alliance
E) manufacturer-and-service-sponsored joint venture
40) In a(n) ________, leadership is assumed not through common ownership or contractual ties
but through the size and power of one or a few dominant channel members.
A) horizontal marketing system
B) administered VMS
C) corporate VMS
D) contractual VMS
E) conventional VMS
41) ________ is a vertical marketing system that coordinates successive stages of production and
distribution through the size and power of one of the parties.
A) Contingent VMS
B) Administered VMS
C) Corporate VMS
D) Contractual VMS
E) Aligned VMS
42) In a(n) ________, two or more companies at one level join together to follow a new
marketing opportunity.
A) administered vertical marketing system
B) horizontal marketing system
C) corporate vertical marketing system
D) hybrid distribution system
E) conventional marketing system
43) Which of the following is most likely a manufacturer-sponsored retailer franchise system?
A) international fast food chains like McDonalds and Pizza Hut
B) Starbucks outlets operating within Target stores
C) Toyota and its network of independent franchised dealers
D) licensed bottlers that bottle and sell soft drinks to retailers
E) hotel chains like the Ritz Carlton and Shangri-La
44) When McDonald’s offers its products inside of a Walmart store, it is using a(n) ________.
A) conventional marketing system
B) corporate VMS
C) contractual VMS
D) administered VMS
E) horizontal marketing system
45) A(n) ________ system involves a single firm setting up two or more marketing channels to
reach one or more customer segments.
A) conventional distribution
B) corporate vertical marketing
C) horizontal marketing
D) administered vertical marketing
E) multichannel distribution
46) Atlas Imports and Exports sells products directly to consumers via the Atlas Web site, and
through local retailers as well. Which of the following is evident here?
A) corporate vertical marketing system
B) horizontal marketing system
C) multichannel distribution system
D) administered vertical marketing system
E) conventional distribution channel
47) Movie Giants offers DVD rentals through its Web site. It also offers DVD rentals via Star
City stores. This is an example of a(n)________ distribution system.
A) conventional
B) inclusive
C) intensive
D) extensive
E) multichannel
48) Which of the following is an advantage of adding new channels in a multichannel
distribution system?
A) limiting market complexity
B) reducing control over the system
C) expanding sales and market coverage
D) decreasing marketing needs and costs
E) minimizing mass customization of products
49) Which of the following is a disadvantage of adding new channels in a multichannel
distribution system?
A) decreasing complexity of markets
B) decreasing control over the system
C) 8reducing opportunities for franchising
D) lowering sales and market coverage
E) minimizing publicity needs
50) ________ occurs when product or service producers cut out intermediaries and go directly to
final buyers or when radically new types of channel intermediaries displace traditional ones.
A) Extensive distribution
B) Multichannelization
C) Disintermediation
D) Inclusive distribution
E) Cross merchandising
51) The Bookworm began delivering books directly to customers through mail instead of selling
through “brick-and-mortar” companies. This is an example of ________.
A) indirect marketing
B) disintermediation
C) franchising
D) exclusive distribution
E) intensive distribution
52) Which of the following is true of changes in the organization of distribution channels?
A) Developing new channels seldom causes conflict with a company’s established channels.
B) To remain competitive, product and service producers must use fewer marketing channels.
C) The growth of the Internet threatens many “brick-and-mortar” companies with
disintermediation.
D) Companies have fewer channel-options today than they did in the past due to economic
problems.
E) Advances in technology have decreased the number of channels available to entrepreneurial
firms.
53) Which of the following should be a manufacturer’s first step when designing an effective
marketing channel?
A) set channel objectives
B) analyze consumer needs
C) identify channel alternatives
D) evaluate channel alternatives
E) establish strategic alliances
54) Which of the following is an environmental factor that affects channel objectives and design?
A) economic conditions
B) factory staffing
C) organizational objectives
D) interpersonal influences
E) individual motives
55) ________ distribution is a strategy in which producers of convenience products and raw
materials stock their products in as many outlets as possible.
A) Direct
B) Intensive
C) Inclusive
D) Exclusive
E) Selective
56) For which of the following products would the intensive distribution strategy most likely be
used?
A) high-end cameras
B) luxury cars
C) lawn mowers
D) soft drinks
E) furniture
57) Whitelight stocks its toothpastes in all convenience stores across the country. This is an
example of ________ distribution.
A) exclusive
B) selective
C) hybrid
D) intensive
E) normal
58) With which of the following strategies would a company give only a limited number of
dealers the right to distribute its products in their territories?
A) exclusive distribution
B) extensive distribution
C) moderate distribution
D) primary distribution
E) intensive distribution
59) For which of the following would a company use an exclusive distribution strategy?
A) luxury cars
B) newspapers
C) chewing gum
D) dairy products
E) soft drinks
60) Ocean Spray sells its air fresheners only through Ray’s Retail Chain. This is an example of
________ distribution.
A) exclusive
B) selective
C) intensive
D) indirect
E) corporate
61) ________ distribution involves the use of more than one but fewer than all of the
intermediaries who are willing to carry a company’s products.
A) Exclusive
B) Selective
C) Intensive
D) Indirect
E) Corporate