Principles of Marketing, 17e, Global Edition (Kotler/Armstrong)
Chapter 12 Marketing Channels: Delivering Customer Value
1) Producing a product or service and making it available to buyers requires building
relationships not only with customers but also with key suppliers and resellers in the company’s
________.
A) upstream partnerships
B) marketing channels
C) inventory providers
D) supply chain
E) downstream partnerships
2) 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
3) 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
4) 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
5) 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
6) A view of the market that specifies that planning starts by identifying the needs of target
customers, to which the company responds by organizing a chain of resources and activities
with the goal of creating customer value is a(n) ________ view.
A) make-and-sell
B) identify-and-target
C) purchase-produce-and-consume
D) market-and-profit
E) sense-and-respond
7) A ________ is made up of the company, suppliers, distributors, and customers who partner
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
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) Which of the following questions is NOT of major concern regarding marketing channels?
A) What role do physical distribution and supply chain management plan in attracting and
satisfying customers?
B) What impact do marketing channels have on the profitability of the firm and its partners?
C) How do channel firms interact and organize to do the work of the channel?
D) What problems do companies face in designing and managing their channels?
E) What is the nature of marketing channels, and why are they important?
10) 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
11) 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) They increase the amount of effort a company puts in to distribute goods.
E) They are easily altered, replaced, or discarded.
12) Distribution channel decisions frequently require long-term commitments between firms. A
primary reason is that ________.
A) advertising is not easy to change
B) old products are difficult to discard and new products are difficult to introduce
C) when they set up distribution through franchisees, independent dealers, or large retailers,
they cannot readily replace these channels with company-owned stores or Internet sites if
conditions change
D) changing the manufacturing requirements is expensive and takes significant time
E) management does not want to be constantly changing the method of selling and distributing
its products
13) ________ play an important role in efficiently making products available to target markets
in the needed varieties and quantities.
A) Virtual banks
B) Intermediaries
C) Price consultants
D) Uniform-delivery networks
E) Upstream partners
14) 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
15) 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
16) 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
17) Which of the following companies uses a direct marketing channel?
A) Fishhooks, a factory that manufactures fishing equipment that it ships to hobby stores
worldwide
B) Germfight, a factory that 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 that sells Christmas ornaments to customers via its online click-to–
order catalogs
E) Showdown, a clothing store that stocks merchandise from different international brands
18) 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
19) A marketing channel that consists of one or more intermediaries is known as a(n) ________
marketing channel.
A) cyclic
B) upstream
C) looped
D) direct
E) indirect
20) 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
21) 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 baskets 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 to people for the day
22) Which of the following is a type of flow that connects all institutions in a marketing channel?
A) payment flow
B) ownership flow
C) physical flow
D) promotion flow
E) information flow
23) 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
24) 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
25) 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
Refer to the scenario below to answer the following question(s).
Giant Beanstalks is a company based in Maryland that processes and cans vegetables. It has
contracts with several large farms in Riverdale, 80 miles away from the factory, that agree to
sell their produce to Giant Beanstalks. The company’s products are available to the public only
through Greenleaf, a grocery chain with 38 stores in the country.
26) Which of the following is Giant Beanstalks’ upstream partner?
A) the management of Greenleaf
B) the farmers of Riverdale
C) the trucks that carry Giant Beanstalks’ products to Greenleaf
D) the end-consumers who buy the canned vegetables from Greenleaf
E) the logistics division of Giant Beanstalk
27) Downstream marketing channel partners, such as wholesalers and retailers, form a vital link
between the firm and its customers.
28) A company’s channel decisions directly affect the prices of its products.
29) Producers use intermediaries because they create greater efficiency in making goods
available to target markets.
30) The role of marketing intermediaries is to transform the assortments of products made by
retailers into the assortments wanted by producers.
31) Each layer of marketing intermediaries that performs some work in bringing the product
and its ownership closer to the final buyer is a channel level.
32) It is more efficient for a company to keep the marketing channel functions—such as
information gathering, promotion, contacting customers and matching their needs, negotiation,
and physical distribution—in-house as they are most skilled at those functions.
33) The number of products supplied indicates the length of a channel.
34) In a direct marketing channel, the producer sells directly to the intermediaries, who in turn
sell directly to the customers.
35) Provide an example of a company that has used an imaginative distribution system to gain a
competitive advantage.
36) Why is the term value delivery network a more relevant expression to use than the terms
supply chain or demand chain?
37) How do intermediaries add value to a marketing system?
38) What are the key functions that members of the marketing channel perform?
39) ________ are complex behavioral systems in which people and companies interact to
accomplish individual, company, and channel goals.
A) Customer relationship management systems
B) Distribution channels
C) Partner relationship systems
D) Consumer bases
E) Buying centers
40) Which of the following does NOT apply to channel systems?
A) Some channel systems consist of only informal interactions among loosely organized firms.
B) Channel systems do not stand still; they evolve.
C) Some channel systems are formal interactions guided by strong organizational structures.
D) Intermediaries play interchangeable roles in the system.
E) Different types of intermediaries develop and emerge.
41) 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.
42) Conflict that occurs among firms at the same level of the marketing channel is known as
________ conflict.
A) multitiered
B) horizontal
C) vertical
D) prolonged
E) financial
43) Conflict that occurs between different levels of the same marketing channel is known as
________ conflict.
A) horizontal
B) vertical
C) multitiered
D) equilateral
E) communal
44) 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
45) The management of two Panizza restaurants has 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
46) 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) horizontal
C) multitiered
D) communal
E) vertical
47) Conflict in the channel can be healthy because ________.
A) it can disrupt channel effectiveness
B) normal give-and-take simply is normal
C) the channel could become passive and non-innovative
D) it can cause harm to channel relationships
E) the respective rights of the channel partners take priority
48) 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
49) 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.
50) A(n) ________ marketing system consists of producers, wholesalers, and retailers acting as
a unified system.
A) horizontal
B) communal
C) multitiered
D) vertical
E) equilateral
51) 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.
52) Which of the following is a major type of vertical marketing system?
A) corporate
B) conventional
C) multilevel
D) intrinsic
E) extrinsic
53) A ________ VMS integrates successive stages of production and distribution under single
ownership.
A) contractual
B) contingency
C) corporate
D) conventional
E) communal
54) A ________ VMS 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
B) contingency
C) contractual
D) communal
E) conventional
55) The ________ organization is the most common type of contractual relationship.
A) franchise
B) horizontal
C) conventional
D) multi-national
E) entrepreneurial
56) 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
57) Fire Up makes fireproof clothing material and it 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
58) 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
59) ________ VMS 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
B) Aligned
C) Corporate
D) Contractual
E) Administered
60) 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
61) Which of the following is most likely a manufacturer-sponsored retailer franchise system?
A) international fast food chains like McDonald’s 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
62) 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