Use this information for questions that refer to the World Tennis Ball (WTB) Company case.World Tennis Ball Co. (WTB) makes tennis balls and sells them only in the United States. Raul Fernandez, the firm's marketing manager, is comparing his firm's distribution with two major competitors.1) WTB sells its products through four regional distributors, who then sell to 22 sporting goods wholesalers. The wholesalers sell to a total of 7,000 retail outlets. From its website, WTB also sells directly to any customer who will purchase a minimum quantity of 24 tennis balls. WTB cooperates with members of its channel but maintains some control through its economic power and leadership. It helps to direct the activities of the whole channel and tries to avoid or resolve channel conflicts.2)
American Tennis Ball (ATB) is a competitor that sells through two distributors-each with half the country. The distributors then sell through six sporting goods wholesalers, and they, in turn, sell to 1,000 retail outlets (split between two national sporting goods chains and two general merchandise stores). ATB and its channel make little effort to work together. However, because of a relatively low level of competition between the distributors, the wholesalers, or the retail stores, each member of the channel gives the product special attention.3) National Tennis Ball (NTB) sells its products through only three tennis specialty wholesalers that sell only to tennis clubs. NTB actually owns the wholesale firms that handle its products. NTB's balls are only available at certain tennis clubs and NTB limits coverage to only one club in a particular geographic area.If American Tennis Ball adds more wholesalers and more retail outlets, it is likely to
A. prompt both vertical and horizontal channel conflict.
B. create horizontal channel conflict.
C. require that the largest wholesaler take over the channel captain role.
D. lead to vertical channel conflict.
E. increase trust and cooperation in the channel.
Answer: A
You might also like to view...
When Hallmark designs its website so that a teenage girl can send a theme card to her boyfriend's cell phone, what is the primary segmenting dimension that Hallmark is using?
A. rate of use B. education C. family size D. age E. income
Which of the following statements is CORRECT?
A. The discounted cash flow method of estimating the cost of equity cannot be used unless the growth rate, g, is expected to be constant forever. B. If the calculated beta underestimates the firm's true investment risk-i.e., if the forward-looking beta that investors think exists exceeds the historical beta-then the CAPM method based on the historical beta will produce an estimate of rs and thus WACC that is too high. C. Beta measures market risk, which is, theoretically, the most relevant risk measure for a publicly-owned firm that seeks to maximize its intrinsic value. This is true even if not all of the firm's stockholders are well diversified. D. An advantage shared by both the DCF and CAPM methods when they are used to estimate the cost of equity is that they are both "objective" as opposed to "subjective," hence little or no judgment is required. E. The specific risk premium used in the CAPM is the same as the risk premium used in the bond-yield-plus-risk-premium approach.
Functional decomposition is a repetitive process of breaking the description or perspective of a system down into finer and finer detail
Indicate whether the statement is true or false
Which of the following would NOT be considered a cost of financial distress?
A. Bankruptcy costs B. Lack of interest tax shields C. Excessive risk-taking by shareholders D. Loss of customers or suppliers