Franchising and Direct Marketing PDF

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UGRD-MKTG351-2013T Franchising and Direct Marketing PQ 1 Business format franchising involves Select one: a. Product modifications to be carried out in the format of the products by the franchisees b. The franchisor permits the franchisee gets to use the products, services, trade name, trademark and the complete or entire method to operate the business itself or the, prescribed business format, including the detailed marketing plan and operations manuals c. Designing a format by the franchisee, which is approved later on by the franchisor d. All types of business where the franchisor sells the products to the franchisee who in turn, sell to the final consumer

The legal written contract between the franchisor and franchisee which tells each party what each is supposed to do Select one: a. Franchise Agreement b. Royalty c. Disclosure Statement d. Business Format

UFOC stands for Uniform Franchise Offering Circula

____________________ is a contractual arrangement of franchisor, a parent company and an individual, it allows the franchisee to run the business under the firms banner.

Select one: a. Retailer owned cooperatives b. Wholesaler sponsored group retailers c. Franchises

d. None of the choices

The franchisor’s identifying marks, brand names, and a logo that are licensed to the franchisee.

Select one: a. None of the choices b. Royalty c. Disclosure Statement d. Trademark

Some important changes in the business environment that cause retailers to become multi-format retailers include

Select one: a. Changing buying habits of the shoppers and willingness to shop through an alternative channel b. Shoppers preference to shop for most of the things under a single roof c. Advancement in technology and competitive pressure to adopt new format d. All of the choices

According to International Franchise Association, franchising defined as; Select one: a. Continuing relationship in which the franchisor offers a running business to the franchisee for a fee and also provides assistance in organizing, training, merchandising and, management, if the franchisee is interested b. Continuing relationship in which the franchisor provides a licensed privilege to do business, plus assistance in organizing, training, merchandising and, management, in return for a consideration from the franchisee c. None of the choices d. A contractual agreement in which the franchisor provides a licensed privilege to do business, plus assistance in organizing, training in return for a consideration from the franchisee

A franchisee is a one

Select one: a. Who owns the business concept, brand and grants franchises to the third parties b. Who deals with retailing of a single brand c. Who has been granted the rights to conduct business using franchisor's knowhow, franchisor's brand, and under the system of the franchisor d. Who has exclusive rights to distribute branded products of a company

Product development known as Format Development strategy adopted by the retailers as a strategy to grow involves

Select one: a. None of the choices b. Creating another format to retailer different merchandise to the same shoppers by extending store brand c. Creating another format to retailer either the same or different merchandise to the existing customers by expanding product basket and by extending the store brand d. Creating another format to retail either the same or different merchandise to the same or different shoppers

Some of the modes of international franchising include

Select one: a. Direct franchising b. All of the choices c. Master franchise agreement d. Area development agreement

_________________ the regular payment made by the franchisee to the franchisor, usually based on a percentage of the franchisee’s gross sales Select one: a. UFOC b. Disclosure statement c. Trademark d. Royalty

________________________under this agreement, the franchisor grants the franchisee the right to operate several or multiple franchised businesses within the geographical area. Select one: a. Master franchise agreement b. Area development agreement c. Direct franchising d. All of the choices

________________________retailers come together to organize a wholesaling business also known as retailer cooperative owned and organized by members and offer variety of services to the members (retailers) to help them compete with corporate chain of stores by harnessing competitiveness through scale economies

Select one: a. Retailer owned cooperatives b. Wholesaler sponsored group retailers c. None of the choices d. Franchises

A fully integrated vertical marketing system develops when

Select one: a. A retailer integrates backward and gets access to a supply chain that improves its ability and efficiency to serve the customers b. Both A and B c. A manufacturer integrates forward and attempts to reach the consumers or retailers directly by a process d. None of the choices

A franchisor is a one Select one: a. Who has been granted rights to conduct business using a franchisor's knowhow, the franchsior's brand and under the system of the franchsior b. Who owns business concept, brand and grants the franchisee the right to do business under their trademark or trade name. c. Who deals with retailing of a single brand d. Who offers exclusive distributorship to the retailers

Master franchising is typically employed by foreign franchisors so that a resident of the territory can expand the system in areas which the franchisor may not be familiar with.

Select one: True False

Direct Franchising the franchisor grants the franchisee the right to open one franchised business at one location with a specified geographic range that will be protected from other franchised businesses of the same system Select one: True False

The franchisee is not completely independent. Franchisees are required to operate their businesses according to the procedures and restrictions set forth by the franchisor in the franchise agreement.

Select one: True False

Product distribution franchise, franchisee simply sells the franchisor’s products without using the franchisor’s method of conducting business. Select one: True False

________________under this arrangement, a chain of retailers organized by wholesaler unite into a voluntary chain of stores, who together would offer a well orchestrated programme of merchandising and retailing to achieve an efficiency.

Select one: a. Franchises b. None of the choices c. Retailer owned cooperatives d. Wholesaler sponsored group retailers

PQ 2 Traditional or product format franchising is all about

Select one: a. distributing or retailing products that are traditionally manufactured by the franchisor. b. accepting a business model for doing a business in a traditional manner c. distributing or retailing products that are manufactured by the franchisor d. accepting a franchise for dealing with the traditional products

A franchisor is a one Select one: a. Who owns business concept, brand and grants franchisees to the third parties b. Who is an international retailer and enters others countries’ market to expand its operations c. Who offers exclusive distributorship to the retailers d. Who has been granted rights to conduct business using a franchisor’s knownhow, the franchisors brand and under the system of the franchisor.

Product development – also known as format development – adopted by the retailers as a strategy to grow involves Select one: a. Creating another format to retail different merchandise to the same shoppers by extending ‘store brand’. b. Creating another format to retail different merchandise to different shoppers by extending ‘store brand’ c. Creating another format to retail either the same or different merchandise to the same or different shoppers d. Creating another format to retail either the same or different merchandise to the existing customers by expanding product basket and by expanding the ‘store brand’

Starbucks penetrated market for coffee beverages in the US using a concept called Select one: a. Store clustering b. None of the above c. Coffee on wheels d. Rapid penetration

Which of the following statements is true in a situation when a retailer attempts to pursue a format development strategy? Select one: a. It is a strategy of expanding the product basket in order to claim more share of the wallet of the shoppers. b. Not all the retailers who adopt new format become successful c. Category specialist follow this strategy to order to ultimately grow as a category killer d. All of the above

Some of the specific approaches to market development strategy are Select one: a. Launching products in to additional geographic markets b. Target existing products to other market segments c. none of the above d. both (A) & (B)

A fully integrated vertical marketing system develops when Select one: a. both (A) or (B) results into development of fully integrated vertical marketing system b. none of the above c. a manufacturer integrates forward and attempts to reach the consumers of retailers directly d. a retailer integrates backward and gets access to a supply chain that improves its ability and efficiency to serve the customers

Which of the following is true in case of franchising? Select one: a. All of the above.

b. Franchising generates employment, earnings and entrepreneurship at the same time. c. Franchising allows business to grow faster than any other method. d. Franchising disseminates ownership rights and decision-making power to thousands of small-unit operators.

Which of the following is true about related-area diversification followed by retailers? Select one: a. Retailers harness competitive advantage through transfer of existing skills and knowledge and thus by lowering the cost of operation b. Retailers usually achieve a consolidated performance that is more than the arithmetic summation of multiple business would have generated individually. c. All of the above d. It helps the retailers preserve strategic unity over multiple business

A recent development in the system of franchising known as conversion involves Select one: a. Conversion of the manufacturers into franchisors b. Conversion of product-format franchising to business format franchising c. Conversion of franchisors into franchisees. d. Independent business operator to convert to the form of an existing franchise system

Which of the following is true in case of franchising? Select one: a. Allows franchisors gain competitive advantage over rivals by synergistically blending their management expertise with the franchisees’ knowledge about local market b. Allows better control over their franchisees in the conduct of the business c. All of the above d. Allows a franchisor to expand in to different geographical market in a cost effective way

The key attractions for a franchisor to grow through franchising are Select one: a. Lower capital required to develop a franchise system b. Availability of a huge untapped market c. All of the above.

d. Ease of circumventing entry barriers

PRELIM Franchise system allows better control over their franchisees in the conduct of the business Select one: True False

Franchise system allows franchisors to perform only the critical value chain activities and that improve their overall performance Select one: True False

A master franchisee Select one: a. is granted the rights to a substantial territory-usually a country which in turn, grants franchise rights of unit franchisees b. Is one who owns more than 10 franchises. c. is one who has exclusive distribution right usually of a whole country. d. is a franchise and hence cannot grant franchise to any other party

Pizza Hut requires all of its franchisees to own at least three franchised units within a span of three years of a franchisee’s entry into the system. This strstegy is known as Select one: a. Growth franchising b. Multiple-unit franchising c. Penetration franchising d. Triple franchising

Business format franchising involves Select one: a. Product modifications to be carried out in the format of the products by the franchisees. b. All types of business where the franchisor provides the way of doing business to its franchisees, with the franchisees usually responsible for the production of the final consumer product c. Designing a format by the franchisee, which is approved later on by the franchisor. d. All types of business where the franchisor sells the products of the franchisees, who in return, sell to the final consumer

Franchising, if viewed from the perspective of vertical marketing system Select one: a. is not at all a part of vertical marketing system b. is a strategy under fully independent vertical marketing system as franchisees are independent business owners c. is a contractual arrangement of a partially integrated vertical marketing system d. Is a strategy under fully integrated vertical marketing system

under the direct franchising, the franchisor grants franchisees to individual franchisees in the foreign country through the execution of an international contract Select one: True False

Franchise system allows an easy entry in to a business with established products services having a widespread brand reputation and a proven business model Select one: True False

Advantage of of the franchise system to the franchsors; allows retailer to expand into different geographical market in a cost effective way. Select one: True False

Product development is an option that retailers may adopt in order to claim more share of wallet of their shoppers. Select one: True False

Multiple-unit franchising refers to Select one: a. An organizational arrangement in which franchisors grant multiple franchisees the right to own and operate only one unit b. An organizational arrangement in which franchisors grant franchisees the right to own and operate more than one unit in the different franchise system. c. An organizational arrangement in which franchisors grant franchisees the right to own and operate the same store again and again multiple times d. An organizational arrangement in which franchisors grant franchisees the right to own and operate more than one unit in the same franchise system

Franchisee is granted by the franchisor the right to carry on business using the franchisors know how under the franchisors brand. Select one: True False

Some retailers prefer to achieve growth with the help of existing products offerings in the existing market. This strategy is known as Select one: a. Market development b. Organic growth strategy c. None of the above d. Market penetration

Some of the specific approaches to market development strategy are Select one: a. launching products in to additional geographic markets b. target existing products to other market segments c. All of the above

Market penetration is a strategy of achieving growth with the help of existing products in the existing market Select one: True False Under joint ventures, foreign franchisor forms a joint venture with the local partner and creates a separate legal entity in that country Select one:

True False Westside – one of the largest and fastest growing chains of retails stores of trent Ltd. – a Tata group of company, pursues a growth strategy called Select one: a. format development b. both (A) & (B) c. none of the above d. market development

According to international Franchise Association, franchising is defined as

Select one: a. a continuing relationship in which the franchisor provides a licensed privilege to do business, plus assistance in organising, training, merchandising and management, in return for a consideration from the franchisee b. a continuing relationship in which the franchisor provides a licensed privilege to do business, in return for a consideration from the franchisee c. A contractual agreement in which the franchisor provides a licensed privilege management, in return for a consideration from the franchisee d. a continuing relationship in which the franchisor offers a running business to the franchisee for a fee and also provides assistance in organizing, training, merchandising and management, if the franchisee is interested.

Sometimes franchisee's are not sufficiently motivated to perform up to mark and thus do not allow the franchisor's to achieved desired results. Select one: True

False Wholesalers may also be referred to as distribution distributors or dealers Select one: True False

Franchising through a subsidiary or a branch office are two different methdos. Select one: True False

Market development as a strategic option involves Select one: a. The least cost and the least risk compared to all the strategic options available to a retailer to grow b. Offering the existing product – with or without minor modifications – to customers in related market area by adding channels of distribution c. Achieving growth through geographical expansion d. All of the above

It is difficult to manage relationship with the franchisee's Select one: True False

Retail format components are; the range of merchandise, pricing, location of the store, communication, customer service, design and display Select one: True False

A master franchisee is granted the rights to a substantial territory usually a whole country. It will then grant unit franchises to unit franchisees throughout the territory.

Select one: True False

Under area development agreement, a franchisor gives the developer the right to open a multiple number of outlets according to a predetermined schedule and within a given geographical area Select one: True False Technological changes significantly affect the way people buy products Select one: True False

Business format franchising involves Select one: a. Product modifications to be carried out in the format of the products by the franchisees b. Designing a format by the franchisee, which is approved later on by the franchisor c. The franchisor permits the franchisee gets to use the products, services, trade name, trademark and the complete or entire method to operate the business itself or the, prescribed business format, including the detailed marketing plan and operations manuals d. All types of business where the franchisor sells the products to the franchisee who in turn, sell to the final consumer

MQ 1 A franchisor should determine whether the kind of investment the franchise system requires shall be fulfilled by the potential franchisee Select one: True False

A franchisor should not consider the impact of investments, cash flows and profits will have on the franchisor and the franchisees

Select one: True False

A franchise should have a long-term profit orientation

grow th orientation

rather than a short-term

A franchisor should anticipate probable source of conflicts between the franchisor and the franchisees and devise strategies to resolve them Select one: True False

A franchisor should not have a well-defined marketing strategy that includes market segmentation approach, targeting strategies, positioning approach, qualifications of a franchisee, franchisee profile, franchisee selection criteria, franchisee relation management approach, sales procedures, etc Select one: True False

It is essential to design a prototype of the ,business that is to be franchised because Select one: a. none of the above b. it is required by law c. it is the first step to franchise the business d. it provides the replica of real business and its ...