MK Chapter 14

Question 1

Marketing Intermediary

Answer 1

A middleman linking producers to other middlemen or to ultimate consumers through contractual arrangements or through the purchase and resale of products

Producer –> Intermediary –> Customer

Question 2

Activities performed by middlemen

Answer 2

• Marketing Information
• Marketing Management
• Facilitating Exchanges
• Promotion
• Price
• Physical Distribution

Question 3

Typical Marketing Channels for Consumer Products

Answer 3

A. Producer–>Consumer
B. Producer–>Retailers->Consumer
C. Producer–>Wholesalers->Retailers->Consumers
D. Producer–>Agents or brokers->Wholesalers->Retailers->Consumers

Question 4

Typical Marketing Channels for Business Products

Answer 4

E. Producer–>Organizational buyers
F. Producer–>Industrial distributors->Organizational buyers
G. Producer->Agents—>Organizational buyers
H. Producer->Agents->Industrial distributors->Organizational buyers

Question 5

Supply Chain Management

Answer 5

• Long-term partnerships among marketing channel members that reduce inefficiencies, costs, and redundancies and develop innovative approaches to satisfy customers
• Optimizes costs throughout the whole channel for efficiency and service
• Includes all entities that facilitate product distribution and benefit from cooperative efforts
• Arises from the need to achieve a more competitive position

Question 6

Intensity of Market Coverage

Answer 6

• Intensive Distribution
• Selective Distribution
• Exclusive Distribution

Question 7

Intensive Distribution

Answer 7

-Using all available outlets to distribute a product.
Convenience products with high replacement rates

• Provides availability and reduces search time
• Availability is more important than outlet type

Question 8

Selective Distribution

Answer 8

-Using only some available outlets to distribute a product
Shopping products and durable goods with low replacement rates

-High qualification requirements for intermediaries to distribute, sell, service, and support products

Question 9

Exclusive Distribution

Answer 9

-Using a single outlet in a fairly large geographic area to distribute a product
Expensive, high-quality products purchased infrequently

• Exclusive outlets provide an incentive to sellers in limited markets
• Dealers carry complete inventory and have trained staff for sales and service

Question 10

Selecting Marketing Channels

Answer 10

• Customer Characteristics
• Product Attributes
• Type of Organization
• Competition
• Environmental forces
• Characteristics of Intermediaries

Question 11

Channel Captain

Answer 11

The dominant member (producer, wholesaler, or retailer) of a marketing channel or supply chain
- Establishes channel policies and coordinates development of the marketing mix

Question 12

Channel Power

Answer 12

The ability of one channel member to influence another member’s goal achievement

Question 13

Benefits of Cooperation

Answer 13

• Speeds up inventory replacement
• Improves customer service
• Reduces distribution costs

Question 14

Sources of Channel Conflict

Answer 14

• Disagreements arising among channel members
• Communication difficulties jeopardizing coordination
• Increased use of multiple distribution channels by manufacturers creating conflicts with distributors and retailers
• Intermediaries diversifying into and offering competing products
• Producers attempting to circumvent intermediaries and dealing directly with retailers

Question 15

Vertical Channel Integration

Answer 15

• Two or more stages of the marketing channel are under one management
• Channel members coordinate their efforts to reach a target market

Question 16

Legal Issues in Channel Management

Answer 16

• Dual Distribution
• Restricted Sales Territories
• Tying Arrangements
• Full-Line Forcing
• Exclusive Dealing