Chapter 3 The Environment of Marketing Channels

Question 1

What are the 5 environments of marketing channels?

Answer 1

1. Economic environment
2. Competitive environment
3. Sociocultural environment
4. Technological environment
5. Legal environment

Question 2

The most obvious and pervasive category of environmental variables affecting all members of the marketing channel?

Answer 2

• The Economic Environment

Question 3

Is two consecutive quarters of decline in the Gross Domestic Product (GDP)

Answer 3

• Recession

Question 4

Any period in which the GDP is stagnant or increasing very slowly?

Answer 4

• Recessionary

Question 5

Economic environment variables?

Answer 5

• Recession
• Inflation
• Deflation

Question 6

Is the market space within which companies compete against each other to gain market share?

Answer 6

• Competitive Environment

Question 7

4 Types Of Competition?

Answer 7

• Horizontal Competition - Same types of firms at the same channel level
• Intertype Competition - Different types of firms at the same channel level
• Vertical Competition - Channel members at different levels in the channel
• Channel System Competition - Compete w/ each other as units

Question 8

Channels competing as a single or complete Units. Such channels have been referred to as vertical marketing systems and are classified into three types?

Answer 8

• Corporate - production and marketing facilities are owned by the same company
• Contractual - independent channel members (producers or manufacturers, wholesalers, and retailers) are linked by a formal
  contractual agreement
• Administered - result from strong domination by one of the channel members, frequently a manufacturer, over the other members.

Question 9

Pervades virtually all aspects of a society?

Answer 9

• SocioCultural Environment

Question 10

Most of the very small retail intermediaries, often referred to as?

Answer 10

• mammy traders

Question 11

This term is most commonly used to describe the interconnectedness and interdependencies of countries around the world?

Answer 11

• Globalization

Question 12

This ability to constantly be on the move while still being able to stay in constant contact has not been lost on consumers.

Answer 12

• Mobility and Connectedness

Question 13

This term refers to interaction in networks comprised of individuals or organizations that are linked together based on some type of common interest, such as friendship, beliefs, hobbies, professional pursuits, special knowledge and many others.

Answer 13

• Social Networking

Question 14

Technology is the most continuously and rapidly changing aspect of the environment?

Answer 14

• Technological Environment

Question 15

Refers to the linking together of channel member Information systems to provide real-time responses to communication between channel members?

Answer 15

• Electronic Data Interchange

Question 16

This is a relatively new technology that uses a device called an RFID tag attached to a person or object, such as a product, that enables that person or product to be identified and tracked using radio waves?

Answer 16

• Radio frequency identification

Question 17

Internet-based technology that enables both large and small businesses and organizations to utilize highly sophisticated computer applications without
having to have their own hardware, software, office computing space and staff?

Answer 17

• Cloud computing

Question 18

Refers to the set of laws that impact marketing channels. The legal structure resulting from these laws is not a static code.

Answer 18

• Legal Environment

Question 19

Passed in 1890, is the fundamental antimonopoly law of the United States. The philosophy underlying this piece of legislation is that public welfare is served best through competition?

Answer 19

• The Sherman Anti-trust Act

Question 20

Supplements the Sherman Act by specifically prohibiting such practices as price discrimination, tying clauses, exclusive dealing, intercorporate stockholding and interlocking corporate directories among competing firms?

Answer 20

• The Clayton Act

Question 21

Was granted the power to investigate and enforce, through the use of injunctions, unfair methods of competition in interstate commerce?

Answer 21

• Federal Trade Commission Act (FTC)

Question 22

Was aimed at prohibiting a variety of forms of price discrimination that tended to lessen competition but which was inadequately covered by the Clayton Act?

Answer 22

• Robinson-Patman Act

Question 23

Was an amendment to Section 7 of the clayton Antitrust Act, which prohibited acquisitions or mergers that tended to lessen competition or create monopolies?

Answer 23

• Celler-Kefauver Act

Question 24

Refers to the practice whereby a producer or manufacturer uses two or more different channel structures for distributing the same product to his target market?

Answer 24

• Dual Distribution

Question 25

When a supplier requires its channel members to sell only its products or to refrain from selling products from directly competitive suppliers?

Answer 25

• Exclusive Dealing

Question 26

If a supplier requires channel members to carry a broad group of products (full line) in order to sell any particular products in the supplier’s line?

Answer 26

• Full-Line Forcing

Question 27

Which is covered specifically under the Robinson-Patman Act, refers to the practice whereby a supplier, either directly or indirectly, sells at different prices to the same class of channel members to the extent that such price differentials tend to lessen competition?

Answer 27

• Price Discrimination

Question 28

A supplier’s attempt to control the prices charged by its channel members for the supplier’s products?

Answer 28

• Price maintenance or Fair Trade

Question 29

In general suppliers may select whomever they want as channel members and refuse to deal with whomever they want. This right is based on the precedent established in a classic Supreme Court Case of 1919 (United States v. Colgate and Company) and is often referred to as the “Colgate doctrine.”?

Answer 29

• Refusal to Deal

Question 30

When a manufacturer attempts to stipulate to whom channel members may resell the manufacturer’s products and in what specific geographical market areas they may be sold?

Answer 30

• Resale restrictions

Question 31

Agreements whereby a supplier sells a product to a channel member on condition that the channel member also purchase another product as well or at least agrees not to purchase that product from any other supplier?

Answer 31

• Tying Agreements

Question 32

Firms that own and operates organizations at other levels of the distribution channel (for example, a manufacturer owning and operating its own wholesaling facilities and retail stores)?

Answer 32

• Vertical Integration