Designing and Managing Distribution Channels: Philip Kotler’s Marketing Management |

Designing and Managing Distribution Channels: Philip Kotler’s Marketing Management

The main function of a distribution channel is:
a) To bridge the gap between producers and consumers
b) To create brand awareness
c) To manufacture products
d) To manage pricing
Answer: a) To bridge the gap between producers and consumers

A distribution channel adds value by:
a) Reducing the number of contacts needed for exchange
b) Increasing product price
c) Limiting availability
d) Reducing competition
Answer: a) Reducing the number of contacts needed for exchange

Intermediaries in a channel perform all of the following functions EXCEPT:
a) Information gathering
b) Promotion
c) Production
d) Risk-taking
Answer: c) Production

The term “channel level” refers to:
a) A layer of intermediaries performing distribution functions
b) The depth of product assortment
c) The price tier of a product
d) The geographic reach of marketing
Answer: a) A layer of intermediaries performing distribution functions

A direct marketing channel involves:
a) No intermediaries between producer and consumer
b) Two or more intermediaries
c) Exclusive wholesalers
d) Multiple distribution chains
Answer: a) No intermediaries between producer and consumer

Indirect distribution is most suitable for:
a) Widely distributed convenience goods
b) Industrial machinery
c) Customized solutions
d) Perishable goods only
Answer: a) Widely distributed convenience goods

A vertical marketing system (VMS) is designed to:
a) Coordinate activities among channel members
b) Increase competition within channels
c) Separate channel functions
d) Eliminate all intermediaries
Answer: a) Coordinate activities among channel members

In a corporate VMS, control is achieved through:
a) Common ownership
b) Contractual agreements
c) Shared profits
d) Franchise systems
Answer: a) Common ownership

A franchise is an example of which type of system?
a) Contractual VMS
b) Corporate VMS
c) Conventional system
d) Horizontal system
Answer: a) Contractual VMS

When firms at the same level of the channel join forces, it’s known as:
a) Horizontal marketing system
b) Vertical integration
c) Dual distribution
d) Reverse logistics
Answer: a) Horizontal marketing system

Channel conflict arises when:
a) Channel members disagree over goals or roles
b) Sales are stable
c) Customers are satisfied
d) Products are standardized
Answer: a) Channel members disagree over goals or roles

Which of the following is a type of channel conflict?
a) Horizontal conflict
b) Vertical conflict
c) Multichannel conflict
d) All of the above
Answer: d) All of the above

Multichannel distribution refers to:
a) Using more than one channel to reach customers
b) Selling only through retail
c) Focusing on one exclusive intermediary
d) Reducing sales outlets
Answer: a) Using more than one channel to reach customers

Dual distribution systems can lead to:
a) Channel conflict
b) Higher logistics cost
c) Reduced efficiency
d) Lower customer satisfaction
Answer: a) Channel conflict

Disintermediation means:
a) Eliminating intermediaries in distribution
b) Adding more middlemen
c) Outsourcing logistics
d) Enhancing service support
Answer: a) Eliminating intermediaries in distribution

Reintermediation involves:
a) Adding new types of intermediaries like online platforms
b) Removing existing intermediaries
c) Outsourcing all distribution
d) Eliminating wholesalers
Answer: a) Adding new types of intermediaries like online platforms

Exclusive distribution is appropriate for:
a) Luxury or specialty goods
b) Low-priced goods
c) Commodity products
d) Mass-market items
Answer: a) Luxury or specialty goods

Intensive distribution aims to:
a) Maximize product availability
b) Limit distribution to few outlets
c) Build selective partnerships
d) Reduce supply chain cost
Answer: a) Maximize product availability

Selective distribution involves:
a) Using a limited number of intermediaries
b) Selling directly to consumers only
c) Selling through all available outlets
d) Franchising globally
Answer: a) Using a limited number of intermediaries

The primary role of logistics in distribution is to:
a) Deliver the right product to the right place at the right time
b) Create advertising
c) Manage product innovation
d) Determine pricing
Answer: a) Deliver the right product to the right place at the right time

A multichannel marketing system increases:
a) Market coverage and customer convenience
b) Channel conflicts only
c) Sales cost
d) Production volume
Answer: a) Market coverage and customer convenience

Channel power refers to:
a) The ability of one channel member to influence another
b) Physical distribution strength
c) Brand recognition
d) Cost advantage
Answer: a) The ability of one channel member to influence another

Coercive power in channels comes from:
a) The ability to punish or reward partners
b) Shared leadership
c) Technical expertise
d) Mutual trust
Answer: a) The ability to punish or reward partners

Legitimate power arises from:
a) Contractual or formal authority
b) Personal influence
c) Financial support
d) Channel coordination
Answer: a) Contractual or formal authority

Expert power is derived from:
a) Specialized knowledge or skills
b) Ownership of assets
c) Legal authority
d) Price control
Answer: a) Specialized knowledge or skills

Cooperative relationships in channels can reduce:
a) Transaction costs and conflicts
b) Market reach
c) Innovation
d) Service quality
Answer: a) Transaction costs and conflicts

Backward integration occurs when:
a) A retailer acquires or merges with a wholesaler or manufacturer
b) A producer opens new retail outlets
c) A distributor outsources logistics
d) A firm moves to e-commerce
Answer: a) A retailer acquires or merges with a wholesaler or manufacturer

Forward integration occurs when:
a) A manufacturer takes control of retail distribution
b) Retailers merge together
c) Wholesalers acquire suppliers
d) Producers outsource production
Answer: a) A manufacturer takes control of retail distribution

Logistics efficiency focuses on:
a) Cost reduction and customer satisfaction
b) Advertising efficiency
c) Brand consistency
d) Supplier expansion
Answer: a) Cost reduction and customer satisfaction

A channel design begins with:
a) Analyzing customer needs
b) Selecting partners
c) Choosing logistics systems
d) Pricing decisions
Answer: a) Analyzing customer needs

The length of a channel refers to:
a) The number of intermediary levels
b) Physical distance between members
c) Geographic reach
d) Market size
Answer: a) The number of intermediary levels

Hybrid channels can improve:
a) Market coverage and flexibility
b) Production efficiency
c) Product pricing
d) Cost uniformity
Answer: a) Market coverage and flexibility

A channel captain is:
a) A dominant member who coordinates channel activities
b) A third-party logistics provider
c) A distribution warehouse
d) A marketing research team
Answer: a) A dominant member who coordinates channel activities

Channel differentiation can be achieved through:
a) Customer service, expertise, and delivery speed
b) High product prices
c) Advertising only
d) Random partnerships
Answer: a) Customer service, expertise, and delivery speed

Distribution intensity decisions are made at which stage?
a) Channel design
b) Promotion planning
c) Production scheduling
d) Financial analysis
Answer: a) Channel design

Reverse logistics deals with:
a) Managing product returns and recycling
b) Distributing new products
c) Expanding inventory
d) Reducing forward channels
Answer: a) Managing product returns and recycling

Channel innovation is driven by:
a) Technology and changing consumer behavior
b) Price wars
c) Advertising spend
d) Regulation
Answer: a) Technology and changing consumer behavior

A zero-level channel means:
a) Direct marketing with no intermediaries
b) Multiple intermediaries involved
c) Exclusive wholesalers
d) Online-only selling
Answer: a) Direct marketing with no intermediaries

A one-level channel typically includes:
a) One intermediary such as a retailer
b) Two intermediaries
c) Three intermediaries
d) None
Answer: a) One intermediary such as a retailer

Channel evaluation should focus on:
a) Sales, profitability, and service performance
b) Advertising cost
c) Employee satisfaction
d) Media reach
Answer: a) Sales, profitability, and service performance

The most common form of retail intermediary is:
a) Retailer
b) Wholesaler
c) Broker
d) Agent
Answer: a) Retailer

The main disadvantage of long channels is:
a) Less control and higher costs
b) Improved margins
c) Higher customer satisfaction
d) Reduced variety
Answer: a) Less control and higher costs

Wholesalers primarily serve:
a) Retailers and industrial buyers
b) End consumers
c) Distributors
d) Brand managers
Answer: a) Retailers and industrial buyers

Channel coordination improves:
a) Efficiency and customer value delivery
b) Advertising outcomes
c) Price elasticity
d) Employee turnover
Answer: a) Efficiency and customer value delivery

The term “omnichannel distribution” refers to:
a) Seamless integration of multiple sales channels
b) Exclusive in-store selling
c) Franchise-only marketing
d) Direct mail only
Answer: a) Seamless integration of multiple sales channels

In logistics, cross-docking means:
a) Transferring goods directly from inbound to outbound trucks
b) Storing products long-term
c) Outsourcing warehousing
d) Centralizing procurement
Answer: a) Transferring goods directly from inbound to outbound trucks

Channel adaptability ensures:
a) Long-term relevance in changing markets
b) Short-term cost cutting
c) Elimination of intermediaries
d) Price competition
Answer: a) Long-term relevance in changing markets

Distribution channels are critical because they:
a) Affect customer satisfaction and brand perception
b) Replace product quality
c) Eliminate promotion needs
d) Reduce marketing research
Answer: a) Affect customer satisfaction and brand perception

The major objective of supply chain management is:
a) Deliver superior customer value at the lowest possible cost
b) Increase advertisement frequency
c) Reduce product innovation
d) Expand distribution length
Answer: a) Deliver superior customer value at the lowest possible cost

According to Kotler, effective distribution management focuses on:
a) Integration, coordination, and customer orientation
b) Reducing product variety
c) Limiting sales promotion
d) Isolating logistics from marketing
Answer: a) Integration, coordination, and customer orientation