A Major Firm Recently Converted from a Fully Integrated Vertical

question 102

Multiple Choice

A major firm recently converted from a fully integrated vertical marketing system to business format franchising.In setting price,store hours,and personnel policies,it is important that the franchisor recognize that ________.

• A) it can control franchisees through constrained decision making to receive higher profits from the sale of all goods and services
• B) it can control franchises through threatening franchise termination due to fair practice laws
• C) franchisees have total freedom to set and implement all retail strategies as they see fit
• D) in general, franchisees should be treated as owners and not as employees

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Definitions:

Ordinal Data

Refers to a type of data in statistics that represents categories with a meaningful order, but the differences between the categories cannot be quantified.

Interval Data

A type of numerical data in which the intervals between each value are equally split, but there is no true zero point.

Spearman's Rank-Correlation

A nonparametric measure of rank correlation that assesses the strength and direction of association between two ranked variables.

Correlation Coefficient

A measure that determines the degree to which two variables' movements are associated, ranging from -1 to 1.