Deck 14: Managing Distribution and Pricing

Question 1

Mullin Inc. purchases supplies such as paper towels, soap, toilet paper, and toilet seat covers directly from manufacturers and then sells them to other firms. What is Mullin Inc.?

A) wholesaler
B) functional intermediary
C) agent
D) producer

Answer 1

A

Question 2

Roots is a popular Canadian company that sells clothing, handbags, and footwear. Most of its sales come from company-owned stores. What type of distribution channel is Roots using?

A) direct channel
B) wholesaler
C) agent to wholesaler to retailer channel
D) two-step distribution

Answer 2

A

Question 3

Which of the following is a sequence of organizations that directs a product from the producer to the ultimate user?

A) intermediary network
B) catalogue discount showroom
C) channel of distribution
D) distributorship

Answer 3

C

Question 4

The Kraft Heinz Company plans to introduce two new organic flavours after reviewing point of sale information from Walmart, which showed higher sales of the organic products than the non-organic juice drink. Which benefit of intermediaries is illustrated in this example?

A) breaking bulk
B) valuable marketing information
C) efficiency and assortment of goods
D) instant sales infrastructure

Question 5

Which of the following refers to a marketing intermediary that buys from producers or other intermediaries and sells to consumers?

A) retailer
B) wholesaler
C) broker
D) agent.

Question 6

In choosing the right retailer for its products, the manufacturer must consider all of the following EXCEPT which one?

A) the types of stores frequented by its target customers
B) the level of distribution intensity
C) whether the retail environment is a fit for the manufacturer's brand
D) the number of retail salespersons available to service customers

Question 7

The Spirit Connection buys team logo gear from various manufacturers and then sells the gear to consumers through its stores and website. What is the Spirit Connection?

A) wholesaler
B) agent
C) retailer
D) business user

Question 8

Everything Soccer is a "one-stop shop" for everything you need to play soccer, such as footwear, apparel, equipment, and coaching accessories. The retailer buys these products from various manufacturers and makes them all available to consumers in its physical stores or its online store. Which benefit of intermediaries is best illustrated in this example?

A) instant sales infrastructure
B) efficiency and assortment of goods
C) breaking bulk
D) providing valuable marketing information

Question 9

A company that is starting out depends on wholesalers to call on retail stores to promote their product. Which benefit of intermediaries is illustrated in this example?

A) efficiency and assortment of goods
B) instant sales infrastructure
C) assumption of credit risks
D) valuable marketing information

Question 10

While prepping for a zombie apocalypse, Caleb was glad the hardware store sold him 12 rolls of duct tape rather than making him buy all 200 rolls they had in stock. What benefit of intermediaries is illustrated in this example?

A) breaking bulk
B) assumption of credit risks
C) efficiency and assortment of goods
D) valuable marketing information

Question 11

Which of the following channels is known as the "consumer direct" channel?

A) producer to consumer
B) producer to intermediary to business user
C) producer to retailer to consumer
D) producer to wholesaler to retailer to consumer

Question 12

HVAC (heating, ventilation, air conditioning) producers such as Naz and Omer, whose products are shipped to many different retail stores and independent HVAC contractors, are likely to use which type of distribution?

A) agent to wholesaler to retailer
B) retail
C) two-step
D) three-step

Question 13

Which marketing intermediary is an independent sales professional who brings buyers and sellers together and earns a commission on the sale?

A) retailer
B) wholesaler
C) jobber
D) agent

Question 14

The distribution channel MOST likely to be used for a new car is producer to which of the following?

A) wholesaler to retailer to consumer
B) consumer
C) business user
D) retailer to consumer

Question 15

Which of the following statements is TRUE about marketing intermediaries?

A) Although intermediaries can be eliminated, the functions they provide cannot.
B) Eliminating a marketing intermediary will always decrease distribution costs.
C) Marketing intermediaries sell their products to end customers.
D) Most marketing channels have at least two marketing intermediaries involved in the distribution of goods.

Question 16

You agreed to take your little brother shopping for his back-to-school supplies. You could not believe the number of things he needed-everything from folders and pencils to hand sanitizer and zip-top baggies! You were happy that Walmart carried everything he needed. What benefit of intermediaries is illustrated in this example?

A) valuable marketing information
B) instant sales infrastructure
C) breaking bulk
D) efficiency and assortment of goods

Question 17

Suppose you have been making your own soaps and lotions and selling them to friends and family. You would really like to expand your company and be able to sell your items in retail stores across Canada. Which is the best distribution channel for you to pursue?

A) consumer direct
B) retail channel
C) agent to wholesaler to retailer channel
D) two-step distribution

Question 18

You decide to host a Super Bowl party for your friends. You go to the nearest supermarket, where you buy frozen pizza, chips, salsa, beer, wine, paper plates and napkins, and even plastic tableware, all in one place. What benefit of intermediaries is illustrated in this example?

A) breaking bulk
B) instant sales infrastructure
C) efficiency and assortment of goods
D) valuable marketing information

Question 19

Apple products are sold in Apple's retail stores and in other retail stores such as Best Buy and Walmart. Which types of distribution channels does Apple use?

A) consumer direct and retail distribution
B) retail and two-step distribution
C) two-step and agent to wholesaler to retailer distribution
D) consumer direct and two-step distribution

Question 20

A retailer is a marketing intermediary who does which of the following?

A) brings buyers and sellers together and earns a commission on the sale
B) purchases products from the manufacturer or intermediary and then sells them to consumers
C) sells products to wholesalers, who then sell the goods to consumers
D) works on consignment

Question 21

Jake owns and operates a small store that sells relatively few items. His store is open 24 hours a day, and most of his customers live very close to the store. What type of store does Jake own?

A) supermarket
B) specialty store
C) convenience store
D) single-line retail store

Question 22

What is the main differentiation between a superstore like Walmart and a grocery store like Safeway?

A) the number of product categories
B) distribution intensity
C) size and selection
D) advertising

Question 23

Lamps Plus is a retailer of lamps, chandeliers, ceiling fans, and outdoor lighting, with over 30 stores nationwide. Based on this description, Lamps Plus would likely be categorized as which type of retailer?

A) supermarket
B) department store
C) specialty store
D) warehouse club

Question 24

King Candy Manufacturing produces inexpensive candy bars. The company would probably choose which of the following to reach its target market?

A) exclusive distribution
B) selective distribution
C) intensive distribution
D) selective agents

Question 25

Which type of distribution involves the use of all available outlets for a product to obtain the widest market exposure?

A) intentional
B) selective
C) patterned
D) intensive

Question 26

A footwear wholesaler buys truckloads of athletic shoes from the manufacturer and sells smaller quantities to retailers throughout the Canadian Prairies, who then sell the athletic shoes to consumers in their stores. Which benefit of marketing intermediaries does this example illustrate?

A) efficiency and assortment of goods
B) instant sales infrastructure
C) breaking bulk
D) providing valuable marketing information

Question 27

Ravenscroft, a producer of elite, custom-made, concert-quality grand pianos, would most likely choose which type of distribution for its products?

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

Question 28

Convenience goods such as candy, gum, and cigarettes are normally distributed using which type of distribution?

A) intensive
B) patterned
C) intentional
D) selective

Question 29

Consumers who strongly feel that the distribution channel should be made as short as possible assume that fewer intermediaries has which of the following results?

A) lower prices for consumers
B) higher costs for manufacturers
C) more product selection
D) higher prices for consumers

Question 30

Which of the following are self-service, general-merchandise outlets that sell goods at lower than usual prices?

A) discount
B) department
C) specialty
D) shopping

Question 31

Which of the following is MOST likely to be considered a supermarket?

A) Hudson's Bay
B) Walmart
C) Circle K
D) Safeway

Question 32

Loblaws is a retailer that sells a wide variety of fresh, frozen, and canned grocery products, as well as pet food, kitchen and bath supplies, and some personal care products like toothpaste, shampoo, and cosmetics. Based on this information, Loblaws would be categorized as which type of retailer?

A) department store
B) category killer
C) supermarket
D) convenience store

Question 33

All of the following are services provided by marketing intermediaries EXCEPT which one?

A) buying in large quantities and selling in smaller quantities
B) supplying marketing information
C) producing a wide selection of products
D) facilitating efficiency and assortment of goods

Question 34

Doug is a sales representative who works for a wholesaler. He calls on retailers in his territory on a regular basis and gathers their reactions and experiences with the products Doug's firm distributes. He shares that information with the manufacturer of the products so that they can make necessary improvements in the quality or features of the products. What benefit of intermediaries is best illustrated in this example?

A) instant sales infrastructure
B) assumption of credit risks
C) valuable market information
D) efficiency and assortment of goods

Question 35

Which of the following is a large, self-service store that sells primarily food and household products?

A) specialty store
B) discount store
C) supermarket
D) convenience store

Question 36

What is the main differentiation between a category killer like Home Depot and a small, family-owned hardware store like Home Hardware?

A) pricing
B) distribution intensity
C) size and selection
D) advertising

Question 37

Products such as very expensive Rolex wristwatches are typically sold using which type of distribution?

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

Question 38

Whirlpool Appliances would most likely use which type of distribution to sell washers, dryers, refrigerators, and other major appliances to consumers?

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

Question 39

Moderately priced clothing manufacturers typically prefer which type of distribution?

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

Question 40

What is the largest retailer in Canada based on sales revenues?

A) Shoppers Drug Mart
B) Canadian Tire
C) Loblaws
D) Metro

Question 41

Suppose you are the marketing manager for a furniture company. The company is getting ready to release a new line of dining tables and china cabinets that feature hand carving. This requires approximately 10 hours of additional labour than tables and cabinets that do not have hand carving. As a result, you decide that your company must price these items higher. Your pricing decision is based on which of the following considerations?

A) the economy currently being in a recession, and customers having less disposable income
B) what competitors charge for similar items
C) the maximum price customers are willing to pay
D) increased manufacturing costs due to higher labour costs

Question 42

Which of the following is a goal of inventory management?

A) selection of the most effective mode of transportation
B) efficient handling and distribution of goods
C) maintaining low inventory while minimizing stock-outs
D) ensuring maximum inventory to avoid stock-outs

Question 43

What is the collective term for all the activities concerned with the efficient movement of products from the producer to the ultimate user?

A) inventory management
B) physical distribution
C) materials handling
D) distribution planning

Question 44

Which function of physical distribution involves receiving and storing goods and then preparing them for shipment?

A) procurement
B) transportation
C) warehousing
D) inventory management

Question 45

Uptown Foods is a membership-only retail chain offering bulk groceries, electronics, and other products in a no-frills format. Based on this information, Uptown Foods would likely be categorized as which type of retailer?

A) category killer
B) department store
C) warehouse club
D) specialty store

Question 46

When selecting an online retail partner, a producer needs to consider all of the following factors EXCEPT which one?

A) whether its target customers shop online
B) whether the retailer's pricing strategy is a fit for the brand
C) the retailer's shipping costs and return policies
D) whether the online shopping experience is a fit for the brand

Question 47

Which of the following involves managing inventories in such a way as to minimize inventory costs, including both holding costs and potential stock-out costs?

A) physical distribution
B) materials handling
C) warehousing
D) inventory management

Question 48

Samsung is exporting large-screen televisions from Asia to Canada using the most cost-effective method. Which type of transportation is the company most likely using?

A) railroad
B) truck
C) waterway
D) airline

Question 49

Which of the following is the term for the amount of money a seller is willing to accept in exchange for a product at a given time and under given circumstances?

A) revenue
B) income
C) discount
D) price

Question 50

Walmart and Hudson's Bay typically have large stores stocked with a wide range of consumer goods in different sections of the store, and as such are examples of which type of retailer?

A) specialty
B) department
C) supermarket
D) convenience

Question 51

Raina and James run a small running apparel company that is gaining steam with customers. They currently sell their items at a few specialty running stores in town and at two regional locations of SportChek, a large sporting goods chain. They have an opportunity to get their products sold in other SportChek locations, but they've encountered a few stock-outs. They've been told by SportChek that they won't secure a larger distribution deal until they've sorted out their stock-out problem. Where should Raina and James focus their attention?

A) They should look at a new option for transportation as their current use of trucks does not get the items to the retail stores quickly enough.
B) They should focus on their warehousing in order to efficiently distribute goods to their retail customers.
C) They should implement a new inventory management system to maintain low levels of inventory but also minimize running out.
D) They should look at maximizing their profits by producing the running apparel overseas, where labour costs are lower.

Question 52

Amazon anticipates that it will soon be able to deliver packages to customers using automated drones. This will allow Amazon to deliver a package to a customer within 30 minutes of the purchase. What is the key goal of focusing on this function of distribution?

A) to maintain low inventory levels while avoiding stock-outs
B) to find the best trade-off of speed and cost for the situation
C) to stockpile inventory to ensure there are never stock-outs
D) to choose the fastest delivery method in order to ensure customer satisfaction

Question 53

Hudson's Bay carries a wide variety of merchandise, including apparel, accessories, bedding, appliances, housewares, and home furnishings, all in different areas of the store. Based on this information, Hudson's Bay would be categorized as which type of retailer?

A) department store
B) convenience store
C) specialty store
D) warehouse club

Question 54

After a significant decline in earnings, Ralph Lauren announced that it will move its warehousing services from a distribution centre run by another company to one run by the fashion retailer. The decline in earnings and move to manage the warehouse itself signifies that Ralph Lauren is looking to do which of the following?

A) increase the efficiency of goods handling and distribution of goods to customers
B) maintain low inventory levels while avoiding stock-outs
C) find the best trade-off of speed and cost for transporting goods
D) raise prices of their products to increase earnings

Question 55

A cut-flower exporter in Holland needs to ship its fresh cut flowers to florist shops in Canada as fast as possible. Which type of transportation would be most appropriate for this exporter?

A) railroad
B) truck
C) waterway
D) airline

Question 56

What is the term used to describe the shipment of products through the distribution channel to the customer?

A) transportation
B) inventory management
C) warehousing
D) procurement

Question 57

Although carrying large inventories may minimize stock-out costs, it is likely to maximize which other type of costs?

A) processing
B) holding or storage
C) handling
D) shipping

Question 58

The first Blu-ray player released by Samsung in 2006 cost $1000. Why was Samsung, the only producer of Blu-ray players at the time, able to set the price high?

A) the economy was thriving and consumers could afford to spend $1000
B) the Blu-ray was in the beginning stages of the product life cycle
C) there was a lot of competition within the industry and Samsung had to price the Blu-ray accordingly
D) the economy was struggling and $1000 was a low price

Question 59

Best Buy is a retailer that is dominant in electronics. It offers an extensive selection of merchandise at its stores and online, with prices so low that smaller stores often cannot compete. Based on this information, Best Buy would be categorized as which type of retailer?

A) department store
B) supermarket
C) warehouse club
D) category killer

Question 60

Del Monte, a producer of canned vegetables, fruit, and tomato products, wants to ship its products internationally, using the most cost-effective transportation method. Because its products are canned, speed is not a factor. Which method of transportation would be most suitable for Del Monte?

A) railroads
B) trucks
C) waterways
D) airplanes

Question 61

What is the number of units that must be sold for the total revenue to equal the total cost called?

A) break-even quantity
B) stabilization quantity
C) intersect quantity
D) equalization quantity

Question 62

Which of the following best describes contribution margin?

A) the profit margin on a unit of sale
B) the number of units that must be sold for total revenue to equal total costs
C) the cost of producing or purchasing one unit
D) the sum of fixed and variable costs for a particular quantity of production

Question 63

Maya has a small cafe that specializes in gourmet hot dogs. Which of the following would be considered part of her variable costs?

A) hot dog buns
B) insurance
C) utilities
D) salaries

Question 64

You would like to start a food truck that sells gourmet frozen juice pops. If your fixed costs are $500, variable costs are $2.50, and you plan to sell each juice pop for $4, what is your break-even point?

A) 200 juice pops
B) 334 juice pops
C) 125 juice pops
D) 422 juice pops

Question 65

Contribution margin is calculated as _______ less _______.

A) sales revenue; variable costs
B) fixed costs; variable costs
C) sales revenue; fixed costs
D) break-even point; variable costs

Question 66

ABC Cupcakes is a small bakery specializing in gourmet cupcakes. Which of the following would be categorized as one of its fixed costs?

A) flour
B) cupcake decorations
C) eggs
D) rent

Question 67

Janna's Jewels are premium priced because the company wants to project an image of exclusivity, quality, and status. Its advertising states, "Not the least expensive-simply the best." Which pricing objective does the company pursue?

A) increasing market share
B) building loyal user base
C) communicating brand value
D) maintaining status quo

Question 68

Two competing gas stations in a small town almost always have the same price for gasoline. If one gas station raises or lowers the price of a litre of gas, the other station quickly follows suit. Which pricing objective does this illustrate?

A) increasing market share
B) maintaining status quo
C) communicating brand value
D) building loyal user base

Question 69

Your company produces digital activity trackers. What is the break-even point if fixed costs are $5000, variable costs are $50, and the activity trackers sell for $120?

A) 100 units
B) 72 units
C) 42 units
D) 127 units

Question 70

Apple uses premium pricing for their products and prices are rarely discounted. This suggests that Apple has which of the following pricing objectives?

A) to build a loyal user base
B) to communicate brand value
C) to maintain the status quo
D) to increase market share

Question 71

All of the following would be considered fixed costs for a producer EXCEPT which one?

A) raw materials
B) rent
C) insurance
D) property taxes

Question 72

While watching television, you see an advertisement for a microwave pasta cooker. You're interested but are sure it is going to be too expensive, and you wouldn't pay over $20 for it. To your surprise, the pasta cooker is being offered for the low price of $19.99. This is an example of what type of pricing strategy?

A) product-line pricing
B) new-product pricing
C) psychological pricing
D) promotional pricing

Question 73

You have been asked to calculate the break-even point for the televisions that your company produces. You know that fixed costs are equal to $6000 and variable costs are $20. The televisions sell for $120. What is the break-even point?

A) 70 units
B) 50 units
C) 40 units
D) 60 units

Question 74

For any product, what is the break-even quantity?

A) the number sold such that variable costs equal revenues
B) the total number produced to equal the total resources available to the producer
C) the number of products needed to be sold for total revenue to equal total costs
D) the dollar volume of total sales

Question 75

Hallmark cards develops a new line of cards that have a total cost of $200,000 and a price of $3 each. If 20,000 cards are sold the first month, what is the total revenue?

A) $60,000
B) $400,000
C) $140,000
D) $150,000

Question 76

Nia buys a hot dog from a food truck for $5. What does this amount represent for the food truck?

A) variable cost
B) fixed cost
C) break-even amount
D) revenue

Question 77

You are planning a trip to Disney World in Florida and notice that most of the hotels in the area are priced similarly. You know from class that these hotels have which of the following pricing objectives?

A) communicating brand value
B) building a loyal customer base
C) increasing market share
D) maintaining the status quo

Question 78

When companies offer discounted pricing or special offers on Canada Day and Labour Day, which pricing strategy are they using?

A) promotional pricing
B) psychological pricing
C) product-line pricing
D) reference pricing

Question 79

Which of the following pricing strategies would be most commonly used for new products?

A) price skimming
B) special event pricing
C) price lining
D) everyday low prices

Question 80

The recession has hit Dillon Products hard, and the company is willing to cut prices on its products in the short term to attract customers-even if it is not making much money on each sale-because it needs revenue to make payroll and pay its bills. Which pricing objective best describes this approach?

A) building loyal user base
B) increasing market share
C) survival
D) maintaining status quo