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
Answer: A
Page Ref: 415
Objective: 1
Difficulty: Easy
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
Answer: A
Page Ref: 416
Objective: 1
Difficulty: Easy
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
Answer: A
Page Ref: 416

Objective: 1
Difficulty: Easy

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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
Answer: C
Page Ref: 416
Objective: 1
Difficulty: Easy
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
Answer: B
Page Ref: 416
Objective: 1

AACSB: Analytic skills
Difficulty: Moderate
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
Answer: D
Page Ref: 416
Objective: 1
AACSB: Analytic skills
Difficulty: Moderate

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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
Answer: B
Page Ref: 416
Objective: 1

Difficulty: Easy
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
Answer: B
Page Ref: 416
Objective: 1
Difficulty: Moderate
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
Answer: A
Page Ref: 416
Objective: 1
Difficulty: Easy
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

Answer: A
Page Ref: 417
Objective: 1
Difficulty: Easy
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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 endcustomers.
Answer: A
Page Ref: 417
Objective: 1
Difficulty: Moderate
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
Answer: A
Page Ref: 417
Objective: 1

Difficulty: Easy
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
Answer: B
Page Ref: 418
Objective: 2
Difficulty: Moderate
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
Answer: A
Page Ref: 418
Objective: 2
Difficulty: Moderate
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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.
Answer: D
Page Ref: 419
Objective: 2
Difficulty: Easy
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.
Answer: A
Page Ref: 420
Objective: 2
AACSB: Analytic skills
Difficulty: Moderate
17) Which of the following entities is present in a zero-level marketing channel?
A) consumers
B) retailers
C) brokers
D) jobbers
E) wholesalers
Answer: A
Page Ref: 420
Objective: 2
Difficulty: Easy
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
Answer: C
Page Ref: 420
Objective: 2
Difficulty: Easy

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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
Answer: A
Page Ref: 421
Objective: 2
Difficulty: Easy
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
Answer: B
Page Ref: 421

Objective: 2
Difficulty: Moderate
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
Answer: A
Page Ref: 422
Objective: 3
Difficulty: Easy
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
Answer: B
Page Ref: 423
Objective: 3
Difficulty: Moderate

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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
Answer: A
Page Ref: 423
Objective: 3
Difficulty: Easy
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
Answer: A
Page Ref: 423
Objective: 3
AACSB: Analytic skills
Difficulty: Moderate
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

Answer: A
Page Ref: 424
Objective: 3
Difficulty: Easy

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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
Answer: D
Page Ref: 424
Objective: 3
Difficulty: Moderate
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
Answer: A
Page Ref: 424
Objective: 3

Difficulty: Easy
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.
Answer: A
Page Ref: 424
Objective: 3
Difficulty: Moderate

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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
Answer: A
Page Ref: 425
Objective: 3
AACSB: Analytic skills
Difficulty: Moderate

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
Answer: A
Page Ref: 425
Objective: 3
Difficulty: Easy
31) An intensive distribution strategy serves well for ________.
A) premium cars
B) commercial trucks
C) private label products
D) industrial equipment
E) newspapers
Answer: E
Page Ref: 425
Objective: 3
Difficulty: Easy

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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
Answer: A
Page Ref: 425
Objective: 3
AACSB: Analytic skills
Difficulty: Moderate
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
Answer: A
Page Ref: 426
Objective: 3
Difficulty: Easy
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
Answer: D
Page Ref: 426
Objective: 3
Difficulty: Easy


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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
Answer: B
Page Ref: 426
Objective: 3
AACSB: Analytic skills
Difficulty: Moderate
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
Answer: A
Page Ref: 426
Objective: 3
Difficulty: Easy
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
Answer: B
Page Ref: 426
Objective: 3
Difficulty: Easy

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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.
Answer: A
Page Ref: 427
Objective: 3
Difficulty: Moderate
Use of Power (Scenario)
Broomer manufactures fashion apparel for women, men, and children. Its products are in high
demand and apparel stores are more than willing to carry and sell Broomer's garments. The
company recently introduced a new clothing line named "Inducer", targeted at the youth.
However, the new line is not well-received by the market, and sales fail to take off even three
months after its launch.

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
Answer: B
Page Ref: 428
Objective: 4
AACSB: Analytic skills
Difficulty: Moderate
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
Answer: A
Page Ref: 428
Objective: 4
AACSB: Analytic skills
Difficulty: Moderate

12
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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
Answer: B
Page Ref: 428
Objective: 4
AACSB: Analytic skills
Difficulty: Moderate
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
Answer: A
Page Ref: 428
Objective: 4
Difficulty: Easy
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

Answer: A
Page Ref: 428
Objective: 4
Difficulty: Easy
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
Answer: A
Page Ref: 428
Objective: 4
Difficulty: Moderate
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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
Answer: A
Page Ref: 428
Objective: 4
Difficulty: Easy

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
Answer: A
Page Ref: 428
Objective: 4
Difficulty: Easy
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
Answer: B
Page Ref: 429
Objective: 4
Difficulty: Moderate
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
Answer: A
Page Ref: 429
Objective: 4

Difficulty: Easy
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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
Answer: A
Page Ref: 429
Objective: 4
Difficulty: Easy
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.
Answer: A
Page Ref: 431
Objective: 5

Difficulty: Moderate
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
Answer: B
Page Ref: 431
Objective: 5
Difficulty: Easy

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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
Answer: A
Page Ref: 432
Objective: 5
Difficulty: Easy
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
Answer: B
Page Ref: 432
Objective: 5
Difficulty: Easy
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
Answer: D
Page Ref: 432
Objective: 5
AACSB: Analytic skills
Difficulty: Moderate

16
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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
Answer: E
Page Ref: 432
Objective: 5
Difficulty: Moderate
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
Answer: B
Page Ref: 433
Objective: 5
Difficulty: Easy
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
Answer: A
Page Ref: 433

Objective: 5
Difficulty: Easy
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
Answer: B
Page Ref: 433
Objective: 5
Difficulty: Moderate
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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
Answer: A
Page Ref: 433
Objective: 5
AACSB: Analytic skills
Difficulty: Moderate

60) A franchise organization is an example of a(n) ________ vertical marketing system.
A) corporate
B) administered
C) contractual
D) regulatory
E) controlled
Answer: C
Page Ref: 433
Objective: 5
Difficulty: Easy
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
Answer: C
Page Ref: 433
Objective: 5
Difficulty: Easy

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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.
Answer: A
Page Ref: 434
Objective: 5
Difficulty: Moderate
63) ________ channel conflict occurs between channel members at the same level.
A) Horizontal
B) Vertical
C) Multichannel
D) Administrative
E) Contractual
Answer: A
Page Ref: 435
Objective: 5
Difficulty: Easy
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
Answer: C
Page Ref: 436
Objective: 5
AACSB: Analytic skills

Difficulty: Moderate

19
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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
Answer: D
Page Ref: 436
Objective: 5
Difficulty: Easy
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
Answer: A
Page Ref: 436
Objective: 5
Difficulty: Easy
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
Answer: A
Page Ref: 437
Objective: 5
Difficulty: Moderate

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68) RX Corp. is a large manufacturer of electronic goods and sells its products through
distributors and retailers. In order to keep pace with the growing use of the Internet, the company
decides to start selling online. The company faces stiff opposition from its retailers as they
believe that this will significantly reduce their profits. The company attempts to eliminate this
resistance by offering its retailers commissions for processing and delivering orders received via
the Web. This is an example of which of the following conflict resolution strategies?
A) dual compensation
B) joint membership
C) arbitration
D) co-option
E) strategic pricing
Answer: A
Page Ref: 437
Objective: 5

AACSB: Analytic skills
Difficulty: Moderate
69) Co-optation is an effort by one organization to win the support of the leaders of another by
________.
A) including them in advisory councils
B) engaging in mediation and arbitration
C) encouraging joint memberships in trade associations
D) encouraging employee exchanges
E) offering strategic justifications
Answer: A
Page Ref: 437
Objective: 5
Difficulty: Moderate
70) Winstar is a large scale manufacturer which has more than a hundred partners across the
globe. When making decisions concerning distribution and channel optimization, the company
invites members from its channel partners to be part of its advisory committee. This helps the
company maintain harmony with its partners. Which of the following conflict resolution
techniques is Winstar using?
A) diplomatic counselling
B) mediation
C) arbitration
D) co-option
E) joint membership
Answer: D
Page Ref: 437
Objective: 5
AACSB: Analytic skills
Difficulty: Moderate

21

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71) Which of the following channel conflict resolution techniques is used only if everything else
proves ineffective?
A) legal recourse
B) mediation
C) arbitration
D) co-option
E) superordinate goals
Answer: A
Page Ref: 438
Objective: 5
Difficulty: Easy
72) Which of the following is the most complete and accurate description of a pure-click
company?
A) These are companies that launch a Web site without any previous existence as a firm.
B) These firms' business models are based on advertising revenue.
C) These are established companies that have an online site for selling products.
D) These companies get paid every time a user visits their Web site.
E) These companies sell online space to other Web sites and are paid for the service.
Answer: A
Page Ref: 439
Objective: 6
AACSB: Use of IT
Difficulty: Moderate
73) A large retail chain in the United States decides to expand its operations by adding an online
site for e-commerce. This is called a(n) ________ company.
A) B2B
B) brick-and-mortar

C) m-commerce
D) pure-click
E) brick-and-click
Answer: E
Page Ref: 439
Objective: 6
AACSB: Use of IT
Difficulty: Easy

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74) An Internet service provider (ISP) is a(n) ________ company.
A) pure-click
B) brick and click
C) brick-and-mortar
D) m-commerce
E) one-level
Answer: A
Page Ref: 439
Objective: 6
AACSB: Use of IT
Difficulty: Easy
75) JSE Securities Exchange is the largest stock exchange in Africa. The JSE provides a market
where securities can be traded freely under a regulated procedure. The company acts as an
intermediary between the traders. JSE is an example of a(n) ________.
A) internal broker
B) infomediary
C) customer community

D) market maker
E) third party arbitrator
Answer: D
Page Ref: 439
Objective: 6
AACSB: Analytic skills
Difficulty: Moderate
76) Exxon Consulting, works as an agent on behalf of business consumers to collect information
on various industrial products. When faced with buying decisions, businesses can approach
Exxon to obtain detailed information on the various options available to them. The company
earns revenue by selling such information to various customers. Marten Consulting can be called
a(n) ________.
A) infomediary
B) market maker
C) customer community
D) third party arbitrator
E) informant
Answer: A
Page Ref: 439
Objective: 6
AACSB: Analytic skills
Difficulty: Moderate

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77) Consumer surveys suggest that one of the most significant inhibitors of online shopping is
the absence of ________.
A) pleasurable experiences

B) competitive prices
C) adequate technical information
D) after-sales service
E) facilities to compare offerings
Answer: A
Page Ref: 439
Objective: 6
AACSB: Use of IT
Difficulty: Easy
78) Which of the following is a major threat facing the brick-and-mortar manufacturers when
they add an e-commerce channel?
A) It creates the possibility of a backlash from the existing intermediaries.
B) It increases the likelihood of product cannibalization.
C) Successful implementation leads to a significant increase in operational costs.
D) It significantly increases the resource requirements of the organization.
E) E-commerce channels often have low potential for attracting customers.
Answer: A
Page Ref: 440
Objective: 6
AACSB: Use of IT
Difficulty: Moderate
79) Which of the following is an example of a brick-and-click company?
A) IFB Industries, a company that sells products using various channels such as Internet,
retailers, direct outlets, and franchisees.
B) Opera, a Web browser and Internet suite developed by Opera Software, performs common
tasks such as displaying Web sites and sending and receiving e-mail messages.
C) Atrutron, a company that offers its customers access to the Internet using data transmission
technology.
D) eBay Inc., an American company, facilitates online auctions and shopping to people and
businesses across the globe to buy and sell a broad variety of goods and services.

E) Yahoo! Inc., an American corporation, provides services via the Internet such as directories, email, news, advertising, online mapping, and so on.
Answer: A
Page Ref: 440
Objective: 6
AACSB: Analytic skills
Difficulty: Moderate

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80) M-commerce refers to ________.
A) conducting business using mobile channels
B) the use of mass media communications to attract customers
C) providing mobile and on-site services to customers
D) the use of a specific medium to communicate with prospects
E) using the Internet as a medium for doing business
Answer: A
Page Ref: 441
Objective: 6
Difficulty: Easy
81) Marketing channels are the set of pathways a product or service follows after production,
culminating in purchase and consumption by the final end user.
Answer: TRUE
Page Ref: 415
Objective: 1
Difficulty: Easy
82) Sales agents and brokers are called facilitators in a marketing channel.
Answer: FALSE
Page Ref: 416

Objective: 1
Difficulty: Easy
83) A pull strategy is particularly appropriate when there is low brand loyalty in a category,
brand choice is made in the store, the product is an impulse item, and product benefits are well
understood.
Answer: FALSE
Page Ref: 416
Objective: 1
Difficulty: Easy
84) Companies should first think of the target market and then design the supply chain backward
from that point. This strategy is called demand chain planning.
Answer: TRUE
Page Ref: 417
Objective: 1
Difficulty: Easy
85) A marketing channel overcomes the time, place, and possession gaps that separate goods and
services from those who need or want them.
Answer: TRUE
Page Ref: 418
Objective: 2
Difficulty: Easy

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