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University of Houston - FINA 43 1)In Interactive Illustration 1: Channel Margins, Circuit Store sells the CollarPop pedometer sunglasses for $27

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University of Houston - FINA 43

1)In Interactive Illustration 1: Channel Margins, Circuit Store sells the CollarPop pedometer sunglasses for $27.95 at a 14% margin, while the wholesaler and the supplier each get a 20% margin. Circuit Store recommends that CollarPop lower its price to $22.95 to stimulate demand. If the channel intermediaries maintain their original margin percentages (Circuit Store at 14%, wholesaler at 20%), what is CollarPop’s new per-unit dollar margin?

a)

$3.05

b)

$2.09

c)

$1.45

d)

$0.85

e)

$0.41

 

QUESTION 2

The initial step in channel stewardship is mapping the channels of a given industry. It calls for analyzing four major forces that drive the evolution of distribution channels in that industry. Which is an example of one of the four forces affecting channel strategy?

a) Barriers to entry in the industry

b)         Intensity of competition among suppliers

c)         Channel capabilities and costs

d)         Availability of substitute products

 

QUESTION 3

            One of the four forces affecting channel strategy is channel power and influence. Which of the following is NOT a source of power or influence in a distribution channel?

a) The most advanced technology

b)         A unique, differentiated product

c)         Access to hard-to-reach niche markets

d)         Premium pricing

 

e)         Market intelligence

 

QUESTION 4

            In Interactive Illustration 1: Channel Margins, Circuit Store sells the CollarPop pedometer sunglasses for $27.95 at a 14% margin, while the wholesaler and the supplier each get a 20% margin. What is the wholesaler’s selling price to Circuit Store?

a)

$26.95

b)

$24.04

c)

$19.23

d)

$15.34

 

QUESTION 5

In deciding between an integrated versus an arm’s length approach to channel structure, trade-off considerations are important. Which trade-off below is NOT part of these considerations?

a) High control versus low control

b)         Higher costs versus lower cost

c)         Lower channel coverage versus higher channel coverage

d)         All of the answer choices are relevant considerations

 

QUESTION 6

Burger King’s restaurants are independently owned, yet their managers adhere strictly to the policies laid out by the brand owner. This channel structure is called a(n):

a) integrated distribution network.

b)         multichannel distribution network.

c)         arm’s length distribution network.

d)         monobrand distribution network.

e)         franchised distribution network.

 

QUESTION 7

            A channel steward uses power to influence, motivate, and manage channel partners. An example of a channel steward’s use of hard power is a:

a) manufacturer threatening to eliminate retailers who do not display its product.

b)         franchisor suing a franchisee for breaking their contract.

c)         supplier demanding that retailers use only the manufacturer’s suggested retail price.

d)         brand’s unique product design.

e)         All of the answers are correct.

 

QUESTION 8

            Which of the following is a reason that it is harder to program an arm’s length channel system and thus align the intermediaries with the producer’s vision of what roles each member must play?

a) The producer’s product is only a small portion of the intermediary’s portfolio.

b)         The producer’s product is highly specialized.

c)         The producer’s product offers high margins to channel members.

d)         The channel intermediary carries products that are complementary to the supplier’s.

 

QUESTION 9

            Which of the following distribution decisions is NOT part of channel coverage?

a) Allow for overlap in the coverage of customers

b)         Expand internationally

c)         Penetrate all retail outlets that carry the supplier’s type of product

d)         Use a wholesaler instead of a jobber

e)         e) All of the answers are correct.

QUESTION 10

            Which function below is NOT one of a channel intermediary’s functions?

a) Breaking bulk packs into smaller packs

b) Setting up product displays in stores

 c) Developing the brand’s national TV advertising campaign

d) Granting credit to customers