BUS2 130 Exam 3 Questions with Verified Solutions Latest Update 2025-2026
value delivery network - Answers made up of the company, suppliers, distributors, and ultimately,
customers who "partner" with each other to improve the performance of the entire system in
delivering customer value
Most large companies engaged with value delivery network
Ex: Pepsi makes great beverages but to make and market just one of its many lines- say its
classic cola
Upstream Supply Chain - Answers set of firms that supply the raw materials, components, parts,
information, finances, and expertise needed to create a product or service
Marketing channel (distribution channel) - Answers A set of interdependent organizations that
help make a product or service available for use or consumption by the consumer or business
user
A company's channel decisions directly affect every other marketing decision
Companies often pay too little attention to distribution channels- sometimes with damaging
results while many companies have used imaginative distribution systems to gain a competitive
advantage
Ex: Suppliers, Manufacturers, Retailers, Consumers
Distribution channel decisions often involve long-term commitments to other firms.
It is harder to change their advertising, pricing or promotion programs when they set up
distribution channels through franchises, independent dealers, or large retailers because they
can't readily replace these channels with company-owned stores or internet sites.
Why Channel Members Add Value? - Answers Producers use intermediaries because they
create greater efficiency in making goods available to target markets.
Experience, contacts, scale of operation and specialization of intermediaries offer firms more
than it can achieve on its own
Channel level - Answers A layer of intermediaries that performs some work in bringing the
product and its ownership closer to the final buyer
The number of intermediaries levels indicates the length of the channel
Direct marketing channel (Channel 1): - Answers a marketing channel that has no intermediary
levels
, A company sells their products directly to consumers
Indirect marketing channel - Answers a marketing channel that contains one or more
intermediary levels
Examples of indirect marketing channels - Answers Producer to Retailer to Consumer
Producer to Wholesaler to Retailer to Consumer
Wholesalers - Answers Sell for resale or business use
Retailers - Answers sell for personal or household consumption
How Distributors Reduce the Number of Channel Transactions - Answers Number of contacts
without a distributor: 9
Number of contacts with a distributor: 3
Channel Behavior and Organization - Answers A marketing channel consists of firms that have
partnered for their common good (depend on each other)
Each channel member plays a specialized role in the channel and the channel will be the most
successful when each member assumes the tasks it can do best
Although channel members depend on one another, they often act alone in their own short-term
best interests.
Channel conflict - Answers disagreements among marketing channel members on goals, roles,
and rewards- who should do what and for what rewards
Horizontal conflict - Answers occurs among firms at the same level of the channel
Ex: Some Ford dealers in Chicago might complain that other dealers in the city steal sales from
them by pricing too low or advertising outside their assigned territories
Vertical conflict - Answers conflict between different levels of the same channel
Ex: McDonald's has recently faced growing conflict with its corps of almost 3,000 independent
franchisees
value delivery network - Answers made up of the company, suppliers, distributors, and ultimately,
customers who "partner" with each other to improve the performance of the entire system in
delivering customer value
Most large companies engaged with value delivery network
Ex: Pepsi makes great beverages but to make and market just one of its many lines- say its
classic cola
Upstream Supply Chain - Answers set of firms that supply the raw materials, components, parts,
information, finances, and expertise needed to create a product or service
Marketing channel (distribution channel) - Answers A set of interdependent organizations that
help make a product or service available for use or consumption by the consumer or business
user
A company's channel decisions directly affect every other marketing decision
Companies often pay too little attention to distribution channels- sometimes with damaging
results while many companies have used imaginative distribution systems to gain a competitive
advantage
Ex: Suppliers, Manufacturers, Retailers, Consumers
Distribution channel decisions often involve long-term commitments to other firms.
It is harder to change their advertising, pricing or promotion programs when they set up
distribution channels through franchises, independent dealers, or large retailers because they
can't readily replace these channels with company-owned stores or internet sites.
Why Channel Members Add Value? - Answers Producers use intermediaries because they
create greater efficiency in making goods available to target markets.
Experience, contacts, scale of operation and specialization of intermediaries offer firms more
than it can achieve on its own
Channel level - Answers A layer of intermediaries that performs some work in bringing the
product and its ownership closer to the final buyer
The number of intermediaries levels indicates the length of the channel
Direct marketing channel (Channel 1): - Answers a marketing channel that has no intermediary
levels
, A company sells their products directly to consumers
Indirect marketing channel - Answers a marketing channel that contains one or more
intermediary levels
Examples of indirect marketing channels - Answers Producer to Retailer to Consumer
Producer to Wholesaler to Retailer to Consumer
Wholesalers - Answers Sell for resale or business use
Retailers - Answers sell for personal or household consumption
How Distributors Reduce the Number of Channel Transactions - Answers Number of contacts
without a distributor: 9
Number of contacts with a distributor: 3
Channel Behavior and Organization - Answers A marketing channel consists of firms that have
partnered for their common good (depend on each other)
Each channel member plays a specialized role in the channel and the channel will be the most
successful when each member assumes the tasks it can do best
Although channel members depend on one another, they often act alone in their own short-term
best interests.
Channel conflict - Answers disagreements among marketing channel members on goals, roles,
and rewards- who should do what and for what rewards
Horizontal conflict - Answers occurs among firms at the same level of the channel
Ex: Some Ford dealers in Chicago might complain that other dealers in the city steal sales from
them by pricing too low or advertising outside their assigned territories
Vertical conflict - Answers conflict between different levels of the same channel
Ex: McDonald's has recently faced growing conflict with its corps of almost 3,000 independent
franchisees
