Question 1

The sale of goods to a business purchasing the items for resale is a wholesale transaction.

Accepted Answer

A) True 
 B)False

Question 2

One drawback of kiosks is that their high overhead costs result in low profit margins.

Accepted Answer

A) True 
 B)False

Question 3

Drop shippers are limited function wholesalers that typically put together many small shipments to form a single larger shipment.

Accepted Answer

A) True 
 B)False

Question 4

In today's competitive market environment, traditional retailers will need to put more emphasis on providing form and place utility, and less emphasis on service utility.

Accepted Answer

A) True 
 B)False

Question 5

Although there have been some unethical firms involved in multilevel marketing, this form of retailing remains quite successful for some.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements about wholesaler-sponsored chains is most accurate?

Accepted Answer

A)  In a wholesaler-sponsored chain, all stores are independently owned, but cooperate as a unified system of stores. 
B)  In a wholesaler-sponsored chain, all stores act independently except for an agreement to share the costs associated with distribution. 
C)  In a wholesaler-sponsored chain, all stores are owned by a single wholesaler, but operate under separate management. 
D)  In a wholesaler-sponsored chain, all stores share profits and losses according to a contractual arrangement. 
A)  In a wholesaler-sponsored chain, all stores are independently owned, but cooperate as a unified system of stores. 
B)  In a wholesaler-sponsored chain, all stores act independently except for an agreement to share the costs associated with distribution. 
C)  In a wholesaler-sponsored chain, all stores are owned by a single wholesaler, but operate under separate management. 
D)  In a wholesaler-sponsored chain, all stores share profits and losses according to a contractual arrangement.

Question 7

Retail distribution strategies can take three different forms. Identify the three forms and give examples of products that would be marketed using each strategy.

Accepted Answer

The three categories of retail distribut

Question 8

Sherwin Williams owns its manufacturing sites as well as over 3,000 retail stores in North America. Sherwin Williams exemplifies a

Accepted Answer

A)  selective distribution system. 
B)  contractual distribution system. 
C)  administered distribution system. 
D)  corporate distribution system. 
A)  selective distribution system. 
B)  contractual distribution system. 
C)  administered distribution system. 
D)  corporate distribution system.

Question 9

Which of the following statements about marketing intermediaries is true?

Accepted Answer

A)  All channels of distribution must contain at least one marketing intermediary. 
B)  Marketing intermediaries and their functions can be eliminated. 
C)  Marketing intermediaries survive because they can perform marketing functions faster and more cheaply than producers and consumers. 
D)  The costs added to products by marketing intermediaries usually exceed the value they add to products. 
A)  All channels of distribution must contain at least one marketing intermediary. 
B)  Marketing intermediaries and their functions can be eliminated. 
C)  Marketing intermediaries survive because they can perform marketing functions faster and more cheaply than producers and consumers. 
D)  The costs added to products by marketing intermediaries usually exceed the value they add to products.

Question 10

An effective channel of distribution does more than simply ensure that goods are transported efficiently from producer to buyer.

Accepted Answer

A) True 
 B)False

Question 11

The primary difference between retailers and wholesalers is that

Accepted Answer

A)  retailers sell consumer goods, while wholesalers sell industrial goods. 
B)  retailers operate in local areas, while wholesalers operate over a wide geographic area. 
C)  retailers sell to final consumers, while wholesalers sell to other organizations, such as retailers or manufacturers. 
D)  retailers have sales of less than $100 million, while wholesalers have sales of $100 million or more. 
A)  retailers sell consumer goods, while wholesalers sell industrial goods. 
B)  retailers operate in local areas, while wholesalers operate over a wide geographic area. 
C)  retailers sell to final consumers, while wholesalers sell to other organizations, such as retailers or manufacturers. 
D)  retailers have sales of less than $100 million, while wholesalers have sales of $100 million or more.

Question 12

Marketing costs make up less than 25 percent of the total cost of the goods consumers buy.

Accepted Answer

A) True 
 B)False

Question 13

In the terminology of multilevel marketing, downliners

Accepted Answer

A)  are the intermediaries who are responsible for handling the shipping of goods down the channel of distribution from the producer to the retailer. 
B)  are salespeople who have been recruited by other salespeople known as upliners to market the product. 
C)  sell through a telemarketing arrangement, while upliners use direct selling. 
D)  are experienced salespeople who are allowed to sell in more than one franchise area by the distributor. 
A)  are the intermediaries who are responsible for handling the shipping of goods down the channel of distribution from the producer to the retailer. 
B)  are salespeople who have been recruited by other salespeople known as upliners to market the product. 
C)  sell through a telemarketing arrangement, while upliners use direct selling. 
D)  are experienced salespeople who are allowed to sell in more than one franchise area by the distributor.

Question 14

Marketing intermediaries

Accepted Answer

A)  add value that exceeds the cost of their services. 
B)  add cost that exceeds the value they provide. 
C)  increase the number of exchange relationships in the channel. 
D)  complicate the distribution process. 
A)  add value that exceeds the cost of their services. 
B)  add cost that exceeds the value they provide. 
C)  increase the number of exchange relationships in the channel. 
D)  complicate the distribution process.

Question 15

Cesar claims he found a definite way to save money, "Buy direct from the manufacturer. Any time intermediaries get involved, you'll pay a higher price. After all, every intermediary involved in the marketing process must charge enough to earn a profit." What do you make of Cesar's claim?

Accepted Answer

A)  It is entirely correct. Intermediaries must charge a high enough price for the activities they perform to earn a profit, so using intermediaries must result in a higher price. 
B)  It is impractical, because in most markets the distribution process is so complex that it is impossible to determine who the actual producer really is. 
C)  It is not valid in many cases. Intermediaries do add costs to products, but they also create value by performing marketing functions efficiently. In many cases the value they create more than offsets the costs they add. 
D)  It is never true. Markets that make use of intermediaries can always provide goods at lower cost than those that rely on direct distribution. 
A)  It is entirely correct. Intermediaries must charge a high enough price for the activities they perform to earn a profit, so using intermediaries must result in a higher price. 
B)  It is impractical, because in most markets the distribution process is so complex that it is impossible to determine who the actual producer really is. 
C)  It is not valid in many cases. Intermediaries do add costs to products, but they also create value by performing marketing functions efficiently. In many cases the value they create more than offsets the costs they add. 
D)  It is never true. Markets that make use of intermediaries can always provide goods at lower cost than those that rely on direct distribution.

Question 16

Book Binders is a nationwide chain of stores that offers such a huge selection of books at such competitive prices that small, local bookstores struggle to compete with them. Book Binders is best classified as a discount store.

Accepted Answer

A) True 
 B)False

Question 17

Marketers provide a total of four types of utility: primary, secondary, marginal, and total.

Accepted Answer

A) True 
 B)False

Question 18

The costs added by marketing intermediaries usually outweigh the value they create.

Accepted Answer

A) True 
 B)False

Question 19

Producers of snack foods (such as candy bars or potato chips) are most likely to use a(n) ________ distribution strategy for their products.

Accepted Answer

A)  intensive 
B)  exclusive 
C)  selective 
D)  restrictive 
A)  intensive 
B)  exclusive 
C)  selective 
D)  restrictive

Question 20

Miner's Coal Distributors does not mine coal itself, nor does it even store or handle the coal. Instead, Miner's solicits orders for low sulfur coal from other firms, then purchases the required amount from suppliers and directs them to ship the coal to its customers. What is Miner's?

Accepted Answer

A)  drop shipper 
B)  resource delivery facilitator 
C)  cash-and-carry wholesaler 
D)  limited distribution broker 
A)  drop shipper 
B)  resource delivery facilitator 
C)  cash-and-carry wholesaler 
D)  limited distribution broker

Exam 15: Distributing Products

The sale of goods to a business purchasing the items for resale is a wholesale transaction.

One drawback of kiosks is that their high overhead costs result in low profit margins.

Drop shippers are limited function wholesalers that typically put together many small shipments to form a single larger shipment.

In today's competitive market environment, traditional retailers will need to put more emphasis on providing form and place utility, and less emphasis on service utility.

Although there have been some unethical firms involved in multilevel marketing, this form of retailing remains quite successful for some.

Which of the following statements about wholesaler-sponsored chains is most accurate?

Retail distribution strategies can take three different forms. Identify the three forms and give examples of products that would be marketed using each strategy.

Sherwin Williams owns its manufacturing sites as well as over 3,000 retail stores in North America. Sherwin Williams exemplifies a

Which of the following statements about marketing intermediaries is true?

An effective channel of distribution does more than simply ensure that goods are transported efficiently from producer to buyer.

The primary difference between retailers and wholesalers is that

Marketing costs make up less than 25 percent of the total cost of the goods consumers buy.

In the terminology of multilevel marketing, downliners

Marketing intermediaries

Cesar claims he found a definite way to save money, "Buy direct from the manufacturer. Any time intermediaries get involved, you'll pay a higher price. After all, every intermediary involved in the marketing process must charge enough to earn a profit." What do you make of Cesar's claim?

Book Binders is a nationwide chain of stores that offers such a huge selection of books at such competitive prices that small, local bookstores struggle to compete with them. Book Binders is best classified as a discount store.

Marketers provide a total of four types of utility: primary, secondary, marginal, and total.

The costs added by marketing intermediaries usually outweigh the value they create.

Producers of snack foods (such as candy bars or potato chips) are most likely to use a(n) ________ distribution strategy for their products.

Miner's Coal Distributors does not mine coal itself, nor does it even store or handle the coal. Instead, Miner's solicits orders for low sulfur coal from other firms, then purchases the required amount from suppliers and directs them to ship the coal to its customers. What is Miner's?

Taking Risks and Making Profits Within the Dynamic Business Environment

Understanding Economics and How It Affects Business

Doing Business in Global Markets

Demanding Ethical and Socially Responsible Behavior

How to Form a Business

Entrepreneurship and Starting a Small Business

Management and Leadership

Structuring Organizations for Todays Challenges

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Employeemanagement Issues

Marketing: Helping Buyers Buy

Developing and Pricing Goods and Services

Using Effective Promotions

Understanding Accounting and Financial Information

Financial Management

Using Securities Markets for Financing and Investing Opportunities

Money, Financial Institutions, and the Federal Reserve

Working Within the Legal Environment

Using Technology to Manage Information

Managing Risk

Managing Personal Finances

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