Use This Information for Questions That Refer to the World

question 116

Multiple Choice

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.
Which of the following describes WTB's channel arrangements?

• A)intensive distribution
• B)corporate channel system
• C)exclusive distribution
• D)traditional channel system
• E)reverse channels

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Definitions:

Common Resource

A resource like air or water that is not owned by anyone, cannot be easily limited to specific users, and is available for everyone to use, which might lead to overuse and depletion.

Public Park

A space that can be natural, semi-natural, or landscaped, designated for the enjoyment and recreation of people, or to safeguard wildlife or natural ecosystems.

Tragedy of the Commons

A situation in an economic system where individuals, acting independently and rationally according to their self-interest, behave contrary to the best interests of the whole group by depleting or spoiling shared resources.

Club Good

A type of good that is excludable and non-rivalrous, meaning access can be controlled and one person's use does not substantially reduce availability to others.