Question 1

Which of the following is true of direct distribution?

Accepted Answer

A)  It requires a significant investment in facilities. 
B)  It reduces a producer's need for working capital. 
C)  Direct distribution always serves customer needs better and at a lower cost. 
D)  Most firms selling consumer products rely on direct distribution. 
E)  It is easy to change customer buying patterns from indirect distribution to direct distribution. 
A)  It requires a significant investment in facilities. 
B)  It reduces a producer's need for working capital. 
C)  Direct distribution always serves customer needs better and at a lower cost. 
D)  Most firms selling consumer products rely on direct distribution. 
E)  It is easy to change customer buying patterns from indirect distribution to direct distribution.

Question 2

Channels of distribution:

Accepted Answer

A)  that include intermediaries result in higher distribution costs than channels without intermediaries. 
B)  should be designed to increase discrepancies of quantity between producers and consumers. 
C)  usually do not involve conflicts as long as each channel member has profit as a goal. 
D)  usually require longer-term planning than other market mix elements because channel decisions are more difficult to change quickly. 
E)  are always characterized by conflict among channel members. 
A)  that include intermediaries result in higher distribution costs than channels without intermediaries. 
B)  should be designed to increase discrepancies of quantity between producers and consumers. 
C)  usually do not involve conflicts as long as each channel member has profit as a goal. 
D)  usually require longer-term planning than other market mix elements because channel decisions are more difficult to change quickly. 
E)  are always characterized by conflict among channel members.

Question 3

Many firms prefer to distribute directly to the final customer or consumer because they

Accepted Answer

A)  want to control the whole marketing job. 
B)  believe they can serve target customers at a lower cost. 
C)  think they can do the work more effectively than intermediaries. 
D)  can use the Internet to make direct distribution easier. 
E)  All of these are reasons why firms prefer direct distribution. 
A)  want to control the whole marketing job. 
B)  believe they can serve target customers at a lower cost. 
C)  think they can do the work more effectively than intermediaries. 
D)  can use the Internet to make direct distribution easier. 
E)  All of these are reasons why firms prefer direct distribution.

Question 4

World Tennis Ball Co. (WTB) makes tennis balls and sells them only in the U.S. 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 6 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 these companies uses a corporate channel of distribution?

Accepted Answer

A)  World Tennis Ball. 
B)  American Tennis Ball. 
C)  National Tennis Ball. 
D)  Both World Tennis Ball and National Tennis Ball use a corporate channel. 
E)  There is not enough information to tell which company uses a corporate channel of distribution. 
A)  World Tennis Ball. 
B)  American Tennis Ball. 
C)  National Tennis Ball. 
D)  Both World Tennis Ball and National Tennis Ball use a corporate channel. 
E)  There is not enough information to tell which company uses a corporate channel of distribution.

Question 5

If Penn Hills Mfg. Corp. gives the Johnstown Distributing Co. the exclusive right to distribute Penn Hills' products in Ohio-with the understanding that Johnstown can't sell Penn Hills' products outside Ohio or to other wholesalers in Ohio, this arrangement:

Accepted Answer

A)  WOULD DEFINITELY BE ILLEGAL because the courts have ruled that all vertical arrangements between producers and intermediaries are illegal. 
B)  MAY OR MAY NOT BE LEGAL-the courts would weigh the possible good effects of this vertical arrangement against possible restrictions on competition. 
C)  WOULD DEFINITELY BE LEGAL because the courts have ruled that all vertical arrangements between producers and intermediaries are legal. 
D)  WOULD DEFINITELY BE ILLEGAL because the courts have ruled that all horizontal arrangements between competitors are illegal. 
E)  WOULD DEFINITELY BE LEGAL because the courts have ruled that all horizontal arrangements between competitors are legal. 
A)  WOULD DEFINITELY BE ILLEGAL because the courts have ruled that all vertical arrangements between producers and intermediaries are illegal. 
B)  MAY OR MAY NOT BE LEGAL-the courts would weigh the possible good effects of this vertical arrangement against possible restrictions on competition. 
C)  WOULD DEFINITELY BE LEGAL because the courts have ruled that all vertical arrangements between producers and intermediaries are legal. 
D)  WOULD DEFINITELY BE ILLEGAL because the courts have ruled that all horizontal arrangements between competitors are illegal. 
E)  WOULD DEFINITELY BE LEGAL because the courts have ruled that all horizontal arrangements between competitors are legal.

Question 6

The Internet is making it possible for firms to reach customers that were impossible to reach before.

Accepted Answer

A) True 
 B)False

Question 7

World Tennis Ball Co. (WTB) makes tennis balls and sells them only in the U.S. 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 6 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.
A wholesaler for American Tennis Ball is likely to perform which of the following regrouping activities:

Accepted Answer

A)  Accumulating. 
B)  Bulk-breaking. 
C)  Assorting. 
D)  All of these alternatives are correct. 
A)  Accumulating. 
B)  Bulk-breaking. 
C)  Assorting. 
D)  All of these alternatives are correct.

Question 8

In Europe, auto manufacturers are required by law to allow owners of their brands to give the cars back to the manufacturers at the end of their useful life. The manufacturers must then recycle and reuse at least 85 percent of any vehicle made after 2004. This is an example of a(n):

Accepted Answer

A)  Integration law. 
B)  Horizontal law. 
C)  Contractual law. 
D)  Vertical law. 
E)  Take back law. 
A)  Integration law. 
B)  Horizontal law. 
C)  Contractual law. 
D)  Vertical law. 
E)  Take back law.

Question 9

"Place" decisions:

Accepted Answer

A)  may focus on the location of retail stores and wholesale facilities. 
B)  may focus on the selection and use of intermediaries and collaborators. 
C)  can be aided by knowing about the product classes. 
D)  are harder to change than Product, Promotion, or Price decisions. 
E)  All of these choices are correct. 
A)  may focus on the location of retail stores and wholesale facilities. 
B)  may focus on the selection and use of intermediaries and collaborators. 
C)  can be aided by knowing about the product classes. 
D)  are harder to change than Product, Promotion, or Price decisions. 
E)  All of these choices are correct.

Question 10

Selling products manufactured in the United States to foreign customers-often without any product changes-is called:

Accepted Answer

A)  joint ventures. 
B)  licensing. 
C)  importing. 
D)  contract manufacturing. 
E)  exporting. 
A)  joint ventures. 
B)  licensing. 
C)  importing. 
D)  contract manufacturing. 
E)  exporting.

Question 11

In a licensing agreement, the licensee takes most of the risk because it must invest some capital to use the right granted by the licensor.

Accepted Answer

A) True 
 B)False

Question 12

Selective distribution is growing in popularity because it provides 100 percent coverage of the market.

Accepted Answer

A) True 
 B)False

Question 13

Firms that use direct marketing promotion may or may not use direct distribution.

Accepted Answer

A) True 
 B)False

Question 14

A producer who wants to reach certain customers may have no choice about which wholesaler to use.

Accepted Answer

A) True 
 B)False

Question 15

Selling direct-to-customer is more common with business products than consumer products.

Accepted Answer

A) True 
 B)False

Question 16

Exclusive distribution is selling through only one intermediary in each geographic area.

Accepted Answer

A) True 
 B)False

Question 17

Lacey Springs Apple Co. buys fresh apples in truckload quantities, regroups the heterogeneous commodities into homogeneous lots according to grade and quality, and then sells them to retailers. This "regrouping activity" is called:

Accepted Answer

A)  accumulating. 
B)  bulk-breaking. 
C)  sorting. 
D)  wholesaling. 
E)  assorting. 
A)  accumulating. 
B)  bulk-breaking. 
C)  sorting. 
D)  wholesaling. 
E)  assorting.

Question 18

Yakima Valley Produce, Inc. buys artichokes from many small farmers, assembles them into larger quantities, and ships in carload quantities to a central market where they are sold to large food processors. This "regrouping activity" is called:

Accepted Answer

A)  bulk-breaking. 
B)  assorting. 
C)  sorting. 
D)  wholesaling. 
E)  accumulating. 
A)  bulk-breaking. 
B)  assorting. 
C)  sorting. 
D)  wholesaling. 
E)  accumulating.

Question 19

Exclusive distribution

Accepted Answer

A)  should generally be used only if it is not possible to generate intermediary interest in intensive distribution. 
B)  is legal as long as it does not involve vertical channel arrangements. 
C)  arrangements between a producer and intermediary are illegal for most types of products, and thus they are not very common in the U.S. 
D)  usually involves intermediaries who are willing to take over all responsibility for promoting the producer's product. 
E)  None of these alternatives are correct. 
A)  should generally be used only if it is not possible to generate intermediary interest in intensive distribution. 
B)  is legal as long as it does not involve vertical channel arrangements. 
C)  arrangements between a producer and intermediary are illegal for most types of products, and thus they are not very common in the U.S. 
D)  usually involves intermediaries who are willing to take over all responsibility for promoting the producer's product. 
E)  None of these alternatives are correct.

Question 20

The vertical marketing system in which control is maintained via informal cooperation among the channel members is a(n):

Accepted Answer

A)  Administered channel system. 
B)  Corporate channel system. 
C)  Contractual channel system. 
D)  Franchise channel system. 
E)  Channel captain system. 
A)  Administered channel system. 
B)  Corporate channel system. 
C)  Contractual channel system. 
D)  Franchise channel system. 
E)  Channel captain system.

Which of the following is true of direct distribution?

Channels of distribution:

Many firms prefer to distribute directly to the final customer or consumer because they

If Penn Hills Mfg. Corp. gives the Johnstown Distributing Co. the exclusive right to distribute Penn Hills' products in Ohio-with the understanding that Johnstown can't sell Penn Hills' products outside Ohio or to other wholesalers in Ohio, this arrangement:

The Internet is making it possible for firms to reach customers that were impossible to reach before.

In Europe, auto manufacturers are required by law to allow owners of their brands to give the cars back to the manufacturers at the end of their useful life. The manufacturers must then recycle and reuse at least 85 percent of any vehicle made after 2004. This is an example of a(n):

"Place" decisions:

Selling products manufactured in the United States to foreign customers-often without any product changes-is called:

In a licensing agreement, the licensee takes most of the risk because it must invest some capital to use the right granted by the licensor.

Selective distribution is growing in popularity because it provides 100 percent coverage of the market.

Firms that use direct marketing promotion may or may not use direct distribution.

A producer who wants to reach certain customers may have no choice about which wholesaler to use.

Selling direct-to-customer is more common with business products than consumer products.

Exclusive distribution is selling through only one intermediary in each geographic area.

Lacey Springs Apple Co. buys fresh apples in truckload quantities, regroups the heterogeneous commodities into homogeneous lots according to grade and quality, and then sells them to retailers. This "regrouping activity" is called:

Yakima Valley Produce, Inc. buys artichokes from many small farmers, assembles them into larger quantities, and ships in carload quantities to a central market where they are sold to large food processors. This "regrouping activity" is called:

Exclusive distribution

The vertical marketing system in which control is maintained via informal cooperation among the channel members is a(n):

Marketings Value to Consumers, Firms, and Society

Marketing Strategy Planning

Evaluating Opportunities in the Changing Marketing Environment

Focusing Marketing Strategy With Segmentation and Positioning

Final Consumers and Their Buying Behavior

Business and Organizational Customers and Their Buying Behavior

Improving Decisions With Marketing Information

Elements of Product Planning for Goods and Services

Product Management and New-Product Development

Distribution Customer Service and Logistics

Retailers, Wholesalers, and Their Strategy Planning

Promotionintroduction to Integrated Marketing Communications

Personal Selling and Customer Service

Advertising, Publicity, and Sales Promotion

Pricing Objectives and Policies

Price Setting in the Business World

Implementing and Controlling Marketing Plans: Evolution and Revolution

Managing Marketings Link With Other Functional Areas

Ethical Marketing in a Consumer-Oriented World

Filters

Exam 10: Place and Development of Channel Systems

Which of the following is true of direct distribution?

Channels of distribution:

Many firms prefer to distribute directly to the final customer or consumer because they

If Penn Hills Mfg. Corp. gives the Johnstown Distributing Co. the exclusive right to distribute Penn Hills' products in Ohio-with the understanding that Johnstown can't sell Penn Hills' products outside Ohio or to other wholesalers in Ohio, this arrangement:

The Internet is making it possible for firms to reach customers that were impossible to reach before.

In Europe, auto manufacturers are required by law to allow owners of their brands to give the cars back to the manufacturers at the end of their useful life. The manufacturers must then recycle and reuse at least 85 percent of any vehicle made after 2004. This is an example of a(n):

"Place" decisions:

Selling products manufactured in the United States to foreign customers-often without any product changes-is called:

In a licensing agreement, the licensee takes most of the risk because it must invest some capital to use the right granted by the licensor.

Selective distribution is growing in popularity because it provides 100 percent coverage of the market.

Firms that use direct marketing promotion may or may not use direct distribution.

A producer who wants to reach certain customers may have no choice about which wholesaler to use.

Selling direct-to-customer is more common with business products than consumer products.

Exclusive distribution is selling through only one intermediary in each geographic area.

Lacey Springs Apple Co. buys fresh apples in truckload quantities, regroups the heterogeneous commodities into homogeneous lots according to grade and quality, and then sells them to retailers. This "regrouping activity" is called:

Yakima Valley Produce, Inc. buys artichokes from many small farmers, assembles them into larger quantities, and ships in carload quantities to a central market where they are sold to large food processors. This "regrouping activity" is called:

Exclusive distribution

The vertical marketing system in which control is maintained via informal cooperation among the channel members is a(n):

Marketings Value to Consumers, Firms, and Society

Marketing Strategy Planning

Evaluating Opportunities in the Changing Marketing Environment

Focusing Marketing Strategy With Segmentation and Positioning

Final Consumers and Their Buying Behavior

Business and Organizational Customers and Their Buying Behavior

Improving Decisions With Marketing Information

Elements of Product Planning for Goods and Services

Product Management and New-Product Development

Distribution Customer Service and Logistics

Retailers, Wholesalers, and Their Strategy Planning

Promotionintroduction to Integrated Marketing Communications

Personal Selling and Customer Service

Advertising, Publicity, and Sales Promotion

Pricing Objectives and Policies

Price Setting in the Business World

Implementing and Controlling Marketing Plans: Evolution and Revolution

Managing Marketings Link With Other Functional Areas

Ethical Marketing in a Consumer-Oriented World

Filters