1.Franchising benefits both the franchisee and the franchisor in that it:

a. offers franchisees an alternative to developing a company-owned outlet.

b. offers rapid market penetration at a high cost using intermediaries.

c.offers franchisors an alternative to developing a company-owned outlet and provides

them with an opportunity for rapid market expansion at relatively low cost.

d. provides the franchisee an easy entry into a saturated market.

e. all of the above.

2.Treating post-sales service as an afterthought is a shortcoming in:

a.Profit management.

b.Channel management.

c.Logistics management.

d.Customer service management.

e.Training management.

3.As a general rule, each channel participant wants a price that provides

a __________ sufficient to cover its __________ and provide a contribution

to __________.

a.net profit; costs; sales

b.gross margin; expenses; profit

c.sales level; net profits; costs

d.contribution; gross margin; sales

e.sales; gross profit margin; net profit

4.From the standpoint of the manufacturer, using trade shows as a promotional strategy

for motivating channel members is beneficial for all the following reasons except:

a.It is an effective way to gain government approval for new products.

b.Trade shows provide opportunities to sell to new channel members.

c.Trade shows make it possible to show new products.

d.Trade shows offer chances to socialize with channel members.

e.Trade shows make it possible for manufacturers to make a strong presence and

impact on channel members.

5. Suni has opened three successful dog grooming salons in the last three months.

She is considering franchising her grooming concept that she calls the "Suni-Doo."

How would a franchise benefit her more than simply opening a fourth salon?

a.Because she has the entrepreneurial spirit, she will be the one who worries about the

success or failure of the franchise operation.

b.The granting of a franchise would increase her debt more than setting up a fourth

salon would.

c.She would have to determine several ways to motivate the franchisee; she is self-motivating.

d.She would be providing the franchisee with a turn-key operation, which might not be ethical.

e.None of the above describes benefits she might gain from franchising.

6.Research shows that conducting surveys to uncover channel members' satisfaction with

the firm's logistics system can be opening a Pandora's box because:

a.Once channel members begin reproaching the manufacturer, it is very difficult to

get them to stop.

b.Channels members do not answer and return surveys.

c.Logistics systems are too complex to be delved into with surveys.

d.Channel member satisfaction decreases if the manufacturer takes no action to

remedy reported deficiencies.

e.The answers reported on surveys do not reflect actual satisfaction levels.

7.While on average alliances outperform more conventional business development approaches

like mergers and acquisitions, enormous investments in what type of resources are required?

a.time, capital, and human resources

b.time, promotion, and capital

c.human resources

d.capital and time

e.natural resources

8.How can a new franchisee easily prevent encroachment?

a.by stipulating in the contract how many units the franchisor can sell within its trade area

b.by forming a franchise protection group with other franchisees to "watch each other's

back door"

c.by requesting a protected trade area in the contract

d.by doing nothing because new federal legislation prohibits encroachment

e.there are no ways to prevent encroachment

9.When General Motors wanted to manufacture low- priced cars for the U.S. market,

it joined with Suzuki, the Japanese car manufacturer. From this relationship, GM

learned how to produce lower-priced cars, and Suzuki gained access to GM's dealer

network.Suzuki and GM had a(n) _____ relationship.

a.calculative exchange

b.functional dialogue

c.genuine

d.creative exchange

e.ideational exchange

10. The president of Stuckey's Family Favorites once said, "Franchising at its best is all

about cooperation and teamwork.The franchisor brings a lot to the table, as does the operator/franchisee.Both would be less effective without the input of the other."Which of the following terms commonly used in management does this statement best support?

a.equity

b.diversity

c.synergy

d.proactive planning

e.superordinate goals

11.Lois used to be the owner/operator of a Hickory Farm franchise. Last week after a

spot inspection by a franchise representative, she was notified that her franchise agreement was terminated because she was carrying a locally-made line of sausages that was not approved by the franchisor and under her contract, every product she sold in the store had to have franchisor approval.She feels that the company's action was arbitrary because she was not allowed to defend herself.Lois believes that the Hickory Farms franchisor used:

a.encroachment.

b.illegal termination.

c.a restrictive mandate.

d.lack of cooperation

e.capricious termination.

12.Which of the following is a false statement about Oxenfeldt's set of eight classic

guidelines for developing pricing strategies?

a.They help channel managers focus on the channel implications of their pricing decisions.

b.They offer some general prescriptions on how to formulate pricing policies to

foster cooperation and minimize conflict.

c.They guarantee results.

d.They set a framework for pricing decisions.

e.They sometimes are irrelevant

13. Joan is the owner of Rift in Time, a store that sells everything from watches to datebooks

to calendars--anything that has to do with time.Yesterday, she received a case of watches.She paid $15.00 for each watch.Before placing the watches in store inventory, she multiplied $15 by 120 percent and put a sticker price of $18 on each watch.Which algorithmic pricing method did Joan use?

a.break-even analysis

b.modified break-even pricing

c.market-oriented pricing

d.market-entry pricing

e.cost-plus pricing

14. Decorate! is an interior design company who specializes in convenient decorating.

Instead of clients traveling to the home office, Decorate! consultants travel to the client's home. In the past several years, many franchisees have taken on a Decorate! franchise to capitalize on what environmental factor?

a. booming economic trends

b. an affluent and aging demographic makeup

c. international decorating trends

d. Interior design industry trends

e. technological trends allow consultants to perform every task via a laptop and the Internet

15.With the growth and popularity of the Internet, many franchise companies see a

new opportunity to expand. However, a franchise company should not just force

new technologies on their franchisees. Before they arbitrarily implement new

technologies, franchisors should consider:

a.the current economy and the costs associated with new technology.

b.the practical, political, legal, and marketing issues associated with the

franchisor-franchisee relationship.

c.the practical, legal, and ethical issues associated with the franchisor-franchisee relationship.

d.current actions from competitors and evaluate the industry trends.

e.franchisors do not have to consider anything before implementing new technologies;

they should just do it.

16. A wholesaler of snow skiing equipment might offer a _____ allowance to a retail chain

that agreed to buy in July and perform the warehousing function for the wholesaler.

a.functional

b.trade

c.promotional

d.volume

e.quantity

17. The _____ is a composite measure of a firm's service capabilities, consisting of

on-time performance, transit

time, rates, and the costs of loss or damaged goods.

a.cost/revenue tradeoff

b.measurement rating index (MRI)

c.service quality index (SQI)

d.Product Price Index

e.None of the above

18.Hacktack is a new product that was invented to make the process of laying vinyl flooring

more efficient.It is a kind of stapler that can be used in narrow spaces like under the lip

of cabinets.Its inventor is a carpet and vinyl flooring installer.He thinks there is

a substantial market for the hacktack. To market the tool, he must develop a

marketing channel.His first action was to demonstrate the tool at the floor

covering industry's international trade show.He has recruited several prospective

distributors for his product.What should he do next?

a.design the hacktack packaging following the guidelines provided by

prospective channel members

b.develop different sizes of the hacktack to work in variously sized areas

c.give a trial test to each prospective channel member

d.provide some motivation for potential channel members to want to become

long-term hacktack distributors

e.screen his prospective channel members to discover which would be the best distributors

for the hacktack

19. The most common approach for choosing international channel structures is:

a.Competitive comparisons.

b.Distribution costing.

c.Judgmental-heuristic.

d.Exchange rate analysis.

e.Transaction cost analysis.

20.The principle that the channel should be designed to maximize the sale of a service

during its limited exposure to the target market is aimed at dealing with:

a.The intangibility of services.

b.The inseparability of services.

c.The high cost of services.

d.The perishability of services.

e.The limited involvement of the customer.

21. In multinational exchange relationships (MERs),

a.international relationships are approached from a regional perspective.

b.channel partners are unconcerned with issues of centralization and control.

c.each exchange partner is expected to make a specialized and autonomous contribution

to its strategic alignments.

d.channel members view the global market as segments and employ distinctive strategies

for each segment.

e.channel members view the world as one giant boundary-less marketplace.

22. The cost per seat per mile for United Airlines is 9.4 cents. Northwest charges 9.1 cents,

Delta charges 9.4 cents, and USAir charges 10.8 cents. When Southwest Airlines started flying, it charged just 7.0 cents.Southwest Airlines used _____ pricing, a market-oriented pricing method to enter the market.

a.penetration

b.volume

c.cost-plus

d.skimming-the-cream

e.competitive

23. A wholesaler of snow skiing equipment might offer a _____ allowance to a retail chain

that agreed to buy in July and perform the warehousing function for the wholesaler.

a.functional

b.trade

c.promotional

d.volume

e.quantity

24. Environments are always changing. When viewed as a whole, the environment may

appear too difficult to deal with efficiently or comfortably. Thus, successful

environmental scanning involves:

a.studying each component of the external environment individually as a

disaggregate perspective.

b.studying all of the components of the external environment as an aggregate perspective.

c.researching the internal environments in which the marketing channel is affected.

d.exploring new possibilities in each environmental setting.

e.all of the above

25. The globalization of new products and technologies force firms to expand market

coverage using the most cost-effective means of distribution due to the fact that many consumer goods today are not produced for local or regional markets. Taking this into consideration, ______ has/have contributed to the growing importance of logistics management.

a.growth

b.environmental trends

c.marketing trends

d.expansion

e.channel integration

26. Competitive pricing provides no assurance that "meet or beat" prices will increase

market share or sustain firm's profit objectives. What is a more likely outcome of competitive pricing?

a.price wars will occur and, in turn, benefit only one company

b.consumers will notice a decline in quality

c.price wars will occur and, in turn, the entire marketing channel is hurt

d.firms will stop focusing on their mission statement and begin focusing on agile competition

e.all of the above are possible outcomes

27. Information and logistics play an important role in marketing channels.

What three characteristics are essential in marketing channel logistics?

a.information flows, control from a distance, and an integrated system

b.information, direct control, and system management

c.updated information, control from a distance, and system management

d.information flows, direct control, and an integrated system

e.information, control, and systems

28. Stella has opened three successful dog grooming salons in the last three months.

She is considering franchising her grooming concept that she calls the "Groom Doggie"

How would a franchise benefit her more than simply opening a fourth salon?

a. Franchising would give her an opportunity for rapid market penetration at a relatively

low cost.

b. Franchising would require her to use cooperative advertising that she cannot use as

an independent businesswoman.

c. Franchising would not require the use of a lawyer as setting up an independent business does.

d. Franchising is not as ethical as owning an independent business because the concept

of franchising asks that someone shares the potential for failure with the franchisor.

e. None of the above describes benefits to be gained she might gain from franchising.

29. Suppose J. L. Lester & Sons, a wholesale grocer, uses volume pricing. Small

supermarkets, which cannot order 500 gallons of ice cream to get the discounted price, end up paying more for fewer products and as a result, tend to feel dissatisfied with their channel relationship.What can the wholesaler do to keep its smaller buyers satisfied?

a.offer everyone the same price

b.find a new pricing method

c.give promotional allowances in exchange for their agreement to provide

promotional coupons

d.enter into a negative option contract or offer cumulative volume discounts

e.there is no other option

30.Relationship-oriented pricing generally involves what three allowances?

a. volume, functional, and production

b. size, functional, and promotional

c availability, popularity, and volume

d functional, promotional, and legitimacy

e volume, functional, and promotional

31. The personal computer has become a commodity in the United States. PC companies

like Compaq and Hewlett-Packard, are experiencing a competitive, saturated market and look internationally to improve market conditions. Developing international channel relationships in this situation occurs due to:

a.the adaptation to current shifting market conditions in the U.S.

b.improved service performance abroad.

c.increased market share in Europe.

d.an introduction of new products via existing international channels.

e.facilitated market entry by each PC company.

32. Logistics management is integral in order for relationship marketing to run efficiently

and effectively. Of the following, which statement is a universal theme in logistics management?

a.Information drives the flow of goods and services.

b.Control over marketing channels can be achieved on the basis of efficiency and

cost containment in resource flows.

c.In marketing channels, resources are recast through an integrated system of

technology, information, and communication.

d.a and c

e.all of these statements are universal themes in logistics management

33.If a local campaign is planned, which of the following below does not apply?

a.The middlemen control promotion

b.There is no participation by the manufacturer

c.Reaches a lot of people in an impersonal way.

d.Appeals, slogans, ads, and information are specifically designed for the localmarket.

e.Each middleman conducts a separate campaign in his or her specific market, using

local media and his or her own sales force.

34. _____________ is defined as a coordinated system of data systems, tools, and techniques, along with software and hardware for environmental scanning.(1 point)