Marketing Management, 14e (Kotler/Keller)
Chapter 15 Designing and Managing Integrated Marketing Channels
1) ________ are sets of interdependent organizations participating in the process of making a
product or service available for use or consumption.
A) Marketing channels
B) Interstitials
C) Communication channels
D) Sales territories
E) Marketing terrains
2) Which of the following entities in the marketing channel is a merchant?
A) wholesalers
B) brokers
C) sales agents
D) warehouses
E) advertising agencies
3) A(n) ________ is a facilitator who assists in the distribution process.
A) advertising agency
B) sales agent
C) manufacturer’s representative
D) broker
E) wholesaler
4) A manufacturer uses the company’s sales force and trade promotions to carry, promote, and
sell products to end users. Which of the following strategies is this manufacturer using?
A) personalization strategy
B) tailoring strategy
C) push strategy
D) pull strategy
E) consumer promotion strategy
5) Total Beverages, a maker of fruit juices and health drinks, recently launched a new brand of
packaged drinking water called AquaPure. In order to induce distributors to carry the product,
Total offers all its intermediaries a free refrigerator to store bottles of AquaPure. This is an
example of a ________.
A) consumer promotion
B) push strategy
C) backward flow
D) reverse flow
E) pull strategy
6) Spike Inc. is a sportswear manufacturer that recently launched its new line of customizable
running shoes. The shoes come with a digital component that allows them to adapt to the runner’s
biomechanics. To promote this new product, Spike launches an advertising campaign and also
ropes in a famous athlete to endorse the product. This is an example of a ________.
A) trade promotion
B) reverse flow
C) push strategy
D) pull strategy
E) backward flow
7) When is a pull strategy appropriate?
A) when there is low brand loyalty
B) when consumers are able to perceive differences between brands
C) when brand choice is made in the store
D) when it is a low involvement purchase
E) when the product is an impulse item
8) Using the push strategy is most appropriate when ________.
A) consumers are able to perceive differences between brands
B) the product being sold is an impulse item
C) there is high brand loyalty for the product
D) the product is a high involvement purchase
E) consumers choose the brand before they go to the store
9) A firm uses its sales force to sell to large accounts and outbound telemarketing to sell to
medium-sized accounts. The firm is using ________ marketing.
A) hybrid
B) pull
C) personalized
D) vertical
E) internal
10) A computer manufacturing company allows customers to place orders online, which they can
later pick up from a convenient retail location. Which of the following terms best represents this
practice?
A) channel integration
B) mass customization
C) online personalization
D) push strategy
E) internal marketing
11) Which of the following is the most accurate description of a value network?
A) A system of partnerships and alliances that a firm creates to source, augment, and deliver its
offerings.
B) A system of organizations and resources involved in moving a product from supplier to
customer.
C) An arrangement whereby an organization transforms inputs into finished goods.
D) A network that allows an organization take the finished products to the end-users.
E) A communication network that allows an organization to transfer information to end-
customers.
12) Companies should first think of the target market and then design the supply chain backward
from that point. This strategy is called ________.
A) demand chain planning
B) resource planning
C) external channel planning
D) materials planning
E) strategic business planning
13) Which of the following channel functions constitute only a backward flow?
A) movement of physical goods
B) placing orders with manufacturers
C) persuasive communication
D) storage of physical goods
E) overseeing actual transfer of ownership
14) Identify the channel function that constitutes both backward and forward flow.
A) obtaining funds for financing
B) storage of physical goods
C) persuasive communication
D) movement of physical goods
E) overseeing actual transfer of ownership
15) Producers often shift some functions to intermediaries. Which of the following is the most
significant benefit of doing this?
A) It increases customer loyalty.
B) It provides the producer with greater control over operations.
C) It reduces the amount of direct customer interaction.
D) It lowers the producer’s costs and prices.
E) It ensures greater information security.
16) Which of the following is an example of a zero-level channel?
A) A company takes online orders from customers and ships the products to them.
B) An organization uses a combination of direct salespeople and sales agencies to increase sales.
C) A company sells its products through wholesalers and retailers.
D) A company sells its products through chains of supermarkets and other large sellers.
E) A large company forms alliances with smaller companies to increase sales coverage.
17) Which of the following entities is present in a zero-level marketing channel?
A) consumers
B) retailers
C) brokers
D) jobbers
E) wholesalers
18) A direct marketing channel is a ________.
A) one-level channel
B) two-level channel
C) zero-level channel
D) three-level channel
E) reverse-flow channel
19) A jobber in a three-level marketing channel is a(n) ________.
A) small-scale wholesaler
B) external broker
C) advertising agent
D) independent evaluator
E) communication channel
20) Which of the following activities is a reverse-flow channel of marketing?
A) raw materials movement
B) product recycling
C) materials ordering
D) finished goods storage
E) customer order placement
21) Toyota has an advantage over Lexus due to the fact that there are more Toyota dealers,
which helps customers save on transportation and search costs in buying and repairing an
automobile. Which of the following service outputs relates to this competitive advantage?
A) spatial convenience
B) service backup
C) lot size
D) waiting time
E) delivery time
22) As a service output produced by marketing channels, product variety refers to the ________.
A) units the channel permits a customer to purchase at once
B) assortment provided by the marketing channel
C) add-on services provided by the channel
D) ability of a product to provide incremental value
E) degree to which the channel makes it easy for customers to purchase a product
23) Which of the following terms refers to the add-on services, such as credit, delivery,
installation, and repairs, provided by a marketing channel?
A) service backup
B) product accessories
C) external products
D) product variety
E) service extensions
24) Atburex is a furniture manufacturing company in the United States. The company provides a
sixty day credit period and EMI options to customers and also offers on-site delivery and
installation. These special benefits refer to which of the following service outputs?
A) good service backup
B) large product variety
C) spatial convenience
D) large lot size
E) short waiting time
25) Which of the following types of distribution involves severely limiting the number of
channel intermediaries?
A) exclusive
B) selective
C) intensive
D) aggressive
E) retail
26) Which of the following allows a firm to maintain control over the service level and obtain
more dedicated and knowledgeable selling?
A) selective distribution
B) intensive distribution
C) push strategy
D) exclusive distribution
E) pull strategy
27) Which of the following channel alternatives is most suited to handle complex products and
transactions?
A) sales forces
B) the Internet
C) dealers
D) telemarketers
E) direct mails
28) Which of the following is a major disadvantage of using the Internet as a marketing channel?
A) It is less effective for complex products.
B) It lacks convenience and practicality.
C) It cannot be used to reach a wide audience.
D) It is considered expensive.
E) It causes the company to lose direct contact with customers.
29) Armon Apparels designs, manufactures, and distributes athletic apparel and accessories for
men and women. The company has only nine distributors across the United States. These
distributors control a nationwide network of 600 retailers. The company does not sell its products
through other channels. This is an example of ________ distribution.
A) selective
B) intensive
C) exclusive
D) internal
E) passive
30) Exclusive dealing arrangements are mainly used by companies looking for an edge in
markets increasingly driven by ________.
A) price
B) efficiency
C) product variety
D) add-on services
E) spatial convenience
31) An intensive distribution strategy serves well for ________.
A) premium cars
B) commercial trucks
C) private label products
D) industrial equipment
E) newspapers
32) Which of the following products is most likely to be sold using an exclusive distribution
strategy?
A) designer luggage
B) cigarettes
C) alcoholic beverages
D) car fuel
E) medicine
33) Which of the following covers payment terms and producer guarantees?
A) conditions of sale
B) pricing policies
C) exclusive dealings
D) mutual services
E) territorial rights
34) ________ call(s) for the producer to establish a schedule of discounts and allowances that
intermediaries see as equitable and sufficient.
A) Exclusive dealings
B) Mutual services
C) Territorial rights
D) Price policy
E) Tying agreements
35) Electrobar, a European manufacturer of industrial kitchenware, sells to industrial canteens,
restaurants, hotels, and so forth. The company provides a one-year warranty on all products and
also allows customers to pay in installments–they pay fifty percent on delivery and the rest as
equal installments. This refers to which element in the “trade-relations mix”?
A) price policy
B) conditions of sale
C) distributors’ territorial rights
D) exclusive dealings
E) mutual services and responsibilities
36) Which of the following channels is associated with the lowest cost per transaction?
A) Internet
B) telemarketing
C) retail stores
D) distributor
E) sales force
37) Which marketing channel is associated with the highest value added per sale?
A) retail stores
B) sales force
C) distributors
D) Internet
E) telemarketing
38) Which of the following problems is most likely when a sales agency is used instead of
company salespeople?
A) The company will find it difficult to control the sales process.
B) They do not take title to goods or negotiate purchases or sales.
C) The value-added per sale is the lowest for sales agencies.
D) Agencies will pay less attention to customers who buy the most or in large volumes.
E) Sales agencies are often difficult to access due to strict contractual obligations.
39) In an effort to boost sales, Broomer offers its retailers a higher margin for promoting and
selling products from the “Inducer” line to customers. This is an example of ________ power.
A) coercive
B) reward
C) passive
D) expert
E) referent
40) Because of the acceptance that the other Broomer products have in the market, retailers are
willing to stock items from the new “Inducer” line of clothing. This is an example of ________
power.
A) referent
B) passive
C) legitimate
D) coercive
E) reward
41) Broomer threatens to withdraw all its other products from the retailers’ stores if they are
unwilling to push products from the “Inducer” line. This is an example of ________ power.
A) reward
B) coercive
C) legitimate
D) expert
E) referent
42) ________ power can be effective, but its exercise produces resentment and can lead the
intermediaries to organize countervailing power.
A) Coercive
B) Reward
C) Legitimate
D) Expert
E) Referent
43) A manufacturer offers its intermediaries an extra benefit for performing a promotional
activity. This is an example of the use of ________ power.
A) reward
B) coercive
C) functional
D) expert
E) referent
44) A manufacturer is using legitimate power when it ________.
A) requests a behavior that is warranted under the selling contract
B) threatens to withdraw a resource or terminate a relationship
C) offers intermediaries an extra benefit for performing specific acts or functions
D) makes the intermediaries sell more of a particular product by offering rewards
E) sells more products by making use of its reputation in the market
45) Hewlett-Packard is a highly respected brand. Many retailers want to be associated with the
brand because of this reputation. What kind of power does Hewlett-Packard obtain due to this
reputation?
A) referent
B) functional
C) legitimate
D) coercive
E) reward
46) Which of the following types of power is objectively observable?
A) coercive power
B) legitimate power
C) group power
D) expert power
E) referent power
47) A new firm typically starts as a local operation selling in a fairly circumscribed market by
________.
A) finding and developing new intermediaries
B) using a few existing intermediaries
C) forming partnerships with the market leader
D) creating a special channel
E) forming partnerships with other firms
48) Who will most likely be willing to pay for high-value-added channels?
A) early buyers of a product
B) internal customers of a company
C) small and matured buyers of an industry
D) consumers of low involvement products
E) repeat customers of a product
49) A producer must modify its channel design and arrangements if ________.
A) consumer buying patterns change
B) the competition in the market stabilizes
C) the product is in the growth stage of its life cycle
D) the market size remains unchanged for a particular period
E) the firm’s profits stabilize
50) What is the major difference between a conventional marketing channel and a vertical
marketing system (VMS)?
A) Elements in a conventional marketing channel act as separate businesses whereas the
elements in a VMS act as a unified system.
B) A VMS has many intermediaries whereas a conventional marketing channel has a limited
number of intermediaries.
C) A VMS is characterized by an independent producer whereas a conventional marketing
channel is characterized by multiple producers.
D) A conventional marketing channel has elements such as retailers and wholesalers whereas
these elements are not present in a VMS.
E) Producers have complete control over the other members in a conventional marketing channel
whereas this control is minimal in a VMS.
51) A(n) ________ includes the producer, wholesaler(s), and retailer(s) acting as a unified
system.
A) parallel marketing channel
B) vertical marketing system
C) extensive marketing channel
D) internal marketing system
E) conventional marketing channel
52) A(n) ________ vertical marketing system combines successive stages of production and
distribution under single ownership.
A) corporate
B) administered
C) contractual
D) regulatory
E) controlled
53) The most advanced supply-distributor arrangements for ________ vertical marketing
systems rely on distribution programming.
A) corporate
B) administered
C) contractual
D) regulatory
E) controlled
54) Rotter Garder Inc. is a large-scale paint manufacturer and is known for its wide range of
decorative paint products and industrial coatings. In addition to making paints, the company also
owns and operates the retail stores which sell its products. This is an example of a(n) ________
vertical marketing system.
A) administered
B) contractual
C) referent
D) corporate
E) regulated
55) An administered VMS coordinates successive stages of production and distribution through
________.
A) an automated central control unit
B) single ownership
C) the combined efforts of all its members
D) the establishment of contractual obligations
E) the size and power of one of the members
56) A(n) ________ VMS consists of independent firms at different levels of production and
distribution, integrating their programs on a contractual basis to obtain more economies or sales
impact than they could achieve alone.
A) administered
B) contractual
C) corporate
D) regulated
E) referent
57) A group of small sellers take the initiative and organize a new business entity to carry on
wholesaling and possibly some production. This initiative is called a(n) ________.
A) retailer cooperative
B) franchise organization
C) area-based cartel
D) sponsored voluntary chain
E) alternate selling channel
58) In a retailer cooperative, ________.
A) profits are equally divided among members
B) members plan their advertising jointly
C) nonmembers cannot buy through the co-op
D) members rely on distribution programming
E) members standardize their selling practices
59) A group of small grocery shops forms a new business entity to buy products directly from
manufacturers. The group buys products in bulk which are then distributed among members.
This helps the shops obtain better profit margins. Which of the following types of vertical
marketing system can be observed here?
A) contractual
B) corporate
C) administered
D) controlled
E) regulatory
60) A franchise organization is an example of a(n) ________ vertical marketing system.
A) corporate
B) administered
C) contractual
D) regulatory
E) controlled
61) In a ________ marketing system, two or more unrelated companies put together resources or
programs to exploit an emerging marketing opportunity.
A) reverse flow
B) vertical
C) horizontal
D) lateral
E) forward flow
62) Which of the following is a major advantage of adding more channels for selling?
A) It helps the company increase its market coverage.
B) It helps the company reduce its fixed costs.
C) It reduces the likelihood of channel conflict.
D) It is the best strategy for selling low-involvement consumer products.
E) It results in economies of scale.
63) ________ channel conflict occurs between channel members at the same level.
A) Horizontal
B) Vertical
C) Multichannel
D) Administrative
E) Contractual
64) Alcart Solutions is a large distributor of Aldor phones in Canada. The company distributes
products to various retailers in the New Brunswick province. Recently Aldor received several
complaints from its retailers that their orders are not delivered on time. They also complain that
Alcart offers preferential treatment to some of the other retailers in the region. This is an
example of ________ conflict.
A) multichannel
B) horizontal
C) vertical
D) intermediate
E) parallel
65) A franchisee owner is unsatisfied because the manufacturer provides more benefits to a
wholesaler. This conflict is an example of a(n) ________ conflict.
A) horizontal
B) vertical
C) intermediate
D) multichannel
E) parallel
66) A manufacturer wants to achieve rapid market penetration through a low-price policy.
However, its dealers prefer to work with high margins and pursue short-run profitability. The
major reason for this conflict is ________.
A) goal incompatibility
B) unclear roles
C) ambiguous rights
D) differences in perception
E) dependence on the manufacturer
67) General Motors’ executives work for a short time in some dealerships, and some dealership
owners work in GM’s dealer policy department. This strategy helps the company avoid conflicts
with its dealers. This is an example of the ________ strategy.
A) employee exchange
B) dual compensation
C) joint membership
D) co-optation
E) diplomacy