Chapter 14Evaluating Channel Member Performance

MULTIPLE CHOICE
1. Which of the following is a false statement about the Deere & Company and its independent
dealers?
a. John has nearly 3000 independent dealers.
b. John Deere's new CEO, Robert Lane, says its dealers are part of the Deere family
and can never be replaced.
c. Dealers need to achieve targeted levels of sales.
d. John Deere dealers are needed to proved technical service to their customers.
e. The Dealers are part of the logistical programs to provide parts to John Deere
customers.
ANS: B (p. 394)
2. According to the text, the evaluation of channel member performance is:
a. Of less importance than employee evaluation.
b. More important than employee evaluation.
c. Of equal importance to employee evaluation.
d. Easier to do than employee evaluation.
e. Done far more frequently than employee evaluation.
ANS: C (p. 395)
3. Which of the following is not a factor affecting the scope and frequency of channel member
evaluations?
a. The level of expertise of the channel managers
b. Relative importance of channel members
c. Degree of manufacturers control over the channel members
d. Nature of the product
e. Number of channel members
ANS: A (p. 395)
4. The degree of control the manufacturer has over its channel members plays __________ in
determining the scope and frequency of its evaluation of channel members.
a. a major role
b. a very little role
c. no role at all
d. the most important role
e. the least important role
ANS: A (p. 395)

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5. Manufacturers can obtain detailed sales data from channel members more readily if they have:
a. A weak market position.
b. A contractual agreement.
c. EDI.
d. A computer network linking all channel members.
e. A manager with a referent power base.
ANS: B (p. 395)
6. Generally, the greater the degree of control the manufacturer has over the channel member:
a. The more difficult it is to obtain performance data.
b. The easier it is to obtain performance data.
c. The less accurate are the performance data.
d. The less complete are the performance data.
e. The more comprehensive the data and analysis.
ANS: B (p. 395)
7. Retailers can be unwilling to voluntarily provide manufacturers with data on sales to their
customers because:
a. They may not view the manufacturer's brand of products as of great importance to
them.
b. Withholding information increases their power in the channel.
c. They fear competitive exposure.
d. The information is proprietary.
e. The data may reveal a companys trade secrets.
ANS: A (p. 395)
8. For the manufacturer who sells all of its output through intermediaries, the evaluation of its
channel members is likely to be __________ than for those manufacturers who rely less on
intermediaries.
a. much more comprehensive
b. much less comprehensive
c. much quicker
d. of much less importance
e. less of a strategic issue
ANS: A (p. 395-396)

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9. Generally, the more complex the product, the __________ the scope of channel member
evaluations.
a. narrower
b. broader
c. less important
d. more limited
e. more technical
ANS: B (p. 396)
10. Manufacturers are more likely to scrutinize channel member performance if their products:
a. Require a high degree of post-sale service.
b. Have a low unit value.
c. Have a high market share.
d. Low after sales servicing.
e. High volume.
ANS: A (p. 394
11. When a manufacturer thoroughly evaluates only those channel members whose sales figures
are unusually out of line, it is using:
a. Marginal evaluation.
b. Evaluation by exception.
c. Comparative evaluation procedures.
d. Outlier evaluation.
e. High variance evaluation.
ANS: B (p. 396)
12. Generally, the less intense is distribution at the various channel levels:
a. The more thorough are channel member evaluations.
b. The less thorough are channel member evaluations.
c. The more difficult are channel member evaluations.
d. The more routine are channel member evaluations.
e. The less informative are channel member evaluations.
ANS: A (p. 396)
13. The channel member audit that is primarily based on sales criteria is called:
a. Focused monitoring.
b. A performance audit.
c. Day-to-day monitoring.
d. A sales audit.
e. Specific audit.
ANS: C (p. 396)

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14. Channel member performance audits:

a. Should be conducted for all channel members at all levels at the same time.
b. Should be conducted for all channel members at one level at the same time.
c. Should be done for all wholesalers or retailers of the same type at the same time.
d. Should be conducted for only one channel member at a time.
e. Should be periodic and comprehensive.
ANS: E (p. 397)
15. A channel member performance audit may be described as:
a. A careful day-to-day monitoring of channel member performance.
b. A regular and thorough evaluation of the channel members financial status.
c. A periodic and in-depth analysis of a channel members sales data.
d. A periodic and comprehensive review of channel member performance.
e. A basic phase of channel design.
ANS: D (p. 395)
16. According to Spriggs, which of the following is not a criterion for measuring channel member
performance?
a. Selling capabilities
b. Sales performance
c. Attitudes
d. Inventory maintained
e. Number of customer complaints
ANS: E (p. 397)
17. According to a study by Spriggs, the two categories of performance measures to audit channel
members are:
a. Financially based and sales based.
b. Psychologically based and numbers based.
c. Logically based and analytically based.
d. Outcome based and behavior based.
e. Volume based and service based.
ANS: D (p. 398)
18. What type of appraisal does a channel manager conduct to assist in maintaining current
operating control of channel members efforts to sell the manufacturers products?
a. Sales analysis accounting
b. Day-to-day monitoring
c. Channel member performance audit
d. Comprehensive evaluation
e. Standard output assessment

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ANS: B (p. 396)

19. The channel manager should evaluate channel member sales data in terms of all of the
following except:
a. The channel members current sales to historical sales.
b. Cross comparisons of a channel members sales with other channel members
sales.
c. The channel members sales with predetermined quotas (if quotas were assigned).
d. The volume of product each salesperson is selling.
e. This years sales with last years sales.
ANS: D (p. 399)
20. A channel members sales performance usually is compared to all of the following except:
a. That channel members prior sales.
b. Industry sales.
c. The manufacturers assigned sales quota.
d. Other channel members sales.
e. Other channel members quota attainments.
ANS: B (p. 399)
21. One frequently cited ratio is that about __________ percent of the channel members account
for about __________ percent of sales.
a. 80; 20
b. 30; 70
c. 70; 30
d. 40; 60
e. 20; 80
ANS: E (p. 399)
22. If the quota attainment ratio is low for the majority of channel members, the problem is likely
to be:
a. Poor selection of channel members.
b. A low level of selling effort by the channel members.
c. Too many channel members.
d. Unrealistically high quotas.
e. A poorly designed channel.
ANS: D (p. 399)

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23. A manufacturer dealing with a small number of channel members at the wholesale level likely
uses _________ to check its channel members inventory levels.
a. A.C. Nielsen Company
b. its own sales force
c. Information Resources, Inc.
d. its inventory control team
e. channel manager
ANS: B (p. 401)
24. A manufacturer should ask questions about all of the following topics in evaluating a channel
members inventory performance except:
a. How effective is the channel members inventory control manager.
b. Shelf or floor space dedicated to competitors products.
c. The adequacy of the channel members inventory control and recordkeeping
system.
d. Shelf or floor space dedicated to the manufacturers products.
e. The condition of the inventory.
ANS: A (p. 401)
25. A channel members inventory should be evaluated based on all of the following except:
a. The condition of the inventory.
b. The display method used for the inventory.
c. The units of inventory.
d. The dollar value of the inventory.
e. The age of the inventory.
ANS: B (p. 401)
26. A channel manager evaluates a wholesalers sales force to assess the wholesalers:
a. Personnel policies.
b. Selling capacity.
c. Veracity.
d. Sales performance.
e. Incentive policies.
ANS: B (p. 401)
27. All of the following are good means for the manufacturer to evaluate a wholesalers sales
force except:
a. Attendance at manufacturer sponsored training programs.
b. Reports from the channel member's customers.
c. The number of sales made by each sales rep.
d. Opinions of the manufacturer's field sales force.

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e. The number of sales reps.

ANS: C (p. 401-402)
28. In order to spot negative channel member attitudes before they affect performance, attitudes
should be:
a. Evaluated when poor channel member sales are found.
b. Evaluated independently of sales data.
c. Given more weight than basic sales data.
d. Made the most important criterion of channel member performance.
e. Always evaluated whenever sales data are evaluated.
ANS: B (p. 403)
29. Which of the following should not be used to assess channel member attitudes?
a. Research studies by the manufacturer
b. Outside research agencies
c. Channel audits
d. Distributor advisory councils
e. Surveys of company CEOs
ANS: E (p. 403)
30. All of the following are appropriate methods to evaluate channel member performance in the
context of the channel members competition except:
a. Existing intermediaries in the same trade area.
b. Expected growth rates of the industry.
c. New intermediaries in the same trading area.
d. Other product lines carried by the channel member.
e. The support of the channel member for the manufacturers products.
ANS: B (p. 403)
31. Which of the following is not a usual question for evaluating channel member growth
prospects?
a. Has the channel members performance been in keeping with the general level of
business activity in his territory?
b. Does the channel member have the adaptability and the overall capacity to meet
market expansions that may occur in his territory?
c. Does the channel members past performance indicate that his sales of the
manufacturers products are likely to keep pace with those projected for his region,
district, or trade area?
d. What is the total level of the channel members current inventory?
e. Is the channel members firm growing or improving in areas of inventory
maintenance and quality of lines represented?
ANS: D (p. 404)

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32. All of the following are times when a channel manager may want to evaluate a channel
members reputation except:
a. When there is new ownership of the channel member.
b. When the channel member has had major developments that might affect its sales.
c. Before channel members are selected.
d. When there is a change in the channel members location.
e. When there are changes in operating policies.
ANS: D (p. 403)
33. Separate performance evaluations measure channel member performance against one or more
criteria when:
a. The number of channel members is very large.
b. Selective distribution is used.
c. Exclusive distribution is used.
d. The number of channel members is very small.
e. An overall picture of channel member performance is easy to obtain.
ANS: A (p. 406)
34. Evaluating channel members using separate performance evaluations:
a. Is simple and fast.
b. Is most disliked by the channel members themselves.
c. Offers little insight into overall performance.
d. All of the above.
e. Only a and c above.
ANS: E (p. 406)
35. A new criterion being considered useful in evaluating channel members is:
a. Channel member satisfaction.
b. Channel member economic satisfaction.
c. Channel member behavior.
d. Channel member psychological capability.
e. Channel member dedication.
ANS: A (p. 405)
36. Issues associated with a social satisfaction evaluation of channel members include all of the
following except:
a. The working relationship between my firm and the supplier is hostile.
b. The supplier will not explain the reasons for its policies.
c. The supplier provides my firm with marketing and selling support of high quality.
d. The supplier expresses criticism tactfully.
e. The relationship between my firm and the supplier is respectful.
ANS: C (p. 405)

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37. A major disadvantage of a separate performance evaluation is that:

a. It is the most complex to perform.
b. It takes a long time to perform.
c. It offers little insight into overall channel member performance.
d. It is difficult to analyze.
e. Is useful when channel members are small.
ANS: C (p. 406)
38. When multiple criteria are combined informally to evaluate channel member performance:
a. Overall performance ratings are always accurate.
b. Cross comparisons among channel members are not valid.
c. A quantitative index of overall performance is produced.
d. It is difficult to administer and evaluate.
e. It is not possible to assign weights to criteria.
ANS: B (p. 407)
39. When multiple criteria are combined formally:
a. Weights are not assigned to each criterion to reflect its relative importance.
b. Criteria and associated operational measures are made explicit.
c. A qualitative index of overall performance is produced.
d. It is easy to make performance comparisons among channel members.
e. It increases the complexity of the evaluation.
ANS: B (p. 408)
40. If a channel member fails to meet minimum performance standards, the channel manager
should:
a. Terminate the channel member.
b. Analyze the channel members needs and problems.
c. Put the channel member on probationary status with a specific deadline for
improved performance.
d. Reduce the channel members available discounts.
e. Increase the channel members available discounts and other motivational
programs.
ANS: B (p. 409)

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41. If a channel member is not meeting performance standards, the channel manager should:
a. Fire the channel member immediately.
b. Evaluate the evaluation process and criteria.
c. Make an effort to learn about the needs and problems of the channel member.
d. Put the channel member on probation.
e. Demand the channel member make immediate changes in order to improve.
ANS: C (p. 409)

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