Deck 15: Distribution Channels and Supply Chain Management

Question 1

Rising prices for raw materials, the increasing availability of recycling facilities, and a move toward increased environmental sustainability have all diminished the importance of reverse channels.

Answer 1

False

Question 2

A marketing intermediary is an organization that operates between producers and consumers or business users.

Answer 2

True

Question 3

Selective distribution helps marketers reduce total marketing costs while establishing strong working relationships within the channel.

Answer 3

True

Question 4

The simplest and shortest marketing channel is a direct channel.

Question 5

High sales volume spreads selling costs over a large number of items, generating adequate returns from direct sales.

Question 6

Service firms market primarily through long distribution channels.

Question 7

Activities specifically related to the physical movement and management of raw materials or products are called logistics.

Question 8

NikSnak, a popular potato wafers brand, is most likely to use an exclusive distribution strategy.

Question 9

Relatively standardized items that are also nonperishable and products with low unit costs pass through comparatively long channels of distribution.

Question 10

Product recalls and repairs are handled through reverse channels.

Question 11

An agent, who connects small companies with the consumers, always takes possession of the goods as well as the title.

Question 12

Lands' End products are sold through catalogs, the Internet, and Sears retail stores. The Lands' End brand practices dual distribution.

Question 13

Direct selling is an important option for goods requiring extensive demonstrations in persuading customers to buy.

Question 14

The first thing to do in selecting a marketing channel is to determine which type of channel will best meet both the seller's objectives and the distribution needs of customers.

Question 15

When a producer grants exclusive rights to a wholesaler or retailer to sell its products in a specific geographic region it practices intensive distribution.

Question 16

The strategy of selective distribution involves distributing a product through a limited number of retailers.

Question 17

Marketers usually adopt a dual distribution strategy either to maximize their firm's coverage in the marketplace or to increase the cost effectiveness of the firm's marketing effort.

Question 18

Exclusive distribution allows greater market coverage than any other distribution strategy.

Question 19

A wholesaler is an intermediary that takes title to the goods it handles and then distributes these goods to retailers, other distributors, or sometimes end consumers.

Question 20

Dual distribution is the movement of products through more than one channel to reach the firm's target market.

Question 21

A meat packing unit's downstream management would oversee storage and warehousing of meat as well as the transportation of the meat to its plant where it is processed and packed.

Question 22

A storage warehouse assembles and redistributes goods, keeping them moving as much as possible.

Question 23

An enterprise resource planning (ERP) system is a software system that consolidates data from among a firm's various business units.

Question 24

Railroads control the largest share of the freight business in the United States as measured by ton-miles.

Question 25

Simple Foods, a breakfast cereal brand, has two wholesalers supplying to almost 100 retailers in California. Conflicts arising between the retailers and wholesalers within California will be referred to as horizontal conflicts.

Question 26

A distribution warehouse holds goods for moderate to long periods in an attempt to balance supply and demand for producers and purchasers.

Question 27

Horizontal conflict results from disagreements among channel members at the same level.

Question 28

Peach, a cosmetic company, sells its products only through some independent representatives. To buy a Peach product, customers will have to contact a representative and place an order for the products they need. This information indicates that Peach:

A) uses a direct selling strategy.
B) relies on channel captains to sell its products.
C) employs category managers to sell its products.
D) uses truck jobbers to sell its products.

Question 29

The supply chain begins with the movement of finished products through the marketing channel to customers.

Question 30

ABC Corp., a mining equipment manufacturer, provides loaders and feeder breakers for Ground Works, a mining company. ABC Corp. regularly sends information on new products as well as on upgrades for old products to the management in Ground Works. ABC Corp relies on _____ to sell its products.

A) direct channels
B) industrial distributors
C) manufacturer's representatives
D) franchisers

Question 31

Shippers that transport goods via water carriers incur very low costs compared with the rates for other transportation modes.

Question 32

When a producer decides to advertise products on its website and sell them online, while continuing to distribute products to its current retailer customer base, the decision is likely to result in horizontal channel conflict.

Question 33

The complete sequence of suppliers and activities that contribute to the creation and delivery of goods and services is known as the supply chain.

Question 34

In exclusive distribution, producers and retailers cooperate closely in decisions concerning advertising and promotion, inventory carried by the retailers, and prices.

Question 35

An example of vertical conflict within the clothing industry would be when a firm such as Jones, New York decides to sell its line of women's blazers directly to consumers via their website, as opposed to distributing them via its usual wholesale channels.

Question 36

Pipelines can accommodate shipments of a large number of products.

Question 37

Direct selling is a marketing channel that moves goods directly from producer to the:

A) retail storage warehouse.
B) channel captain.
C) marketing intermediary.
D) ultimate consumer or business purchaser.

Question 38

Large facilities offer economies of scale in facilities and materials handling systems; per-unit costs for these systems decrease as volume increases.

Question 39

Unitizing combines as many packages as possible into each load that moves within or outside a facility.

Question 40

In piggyback operations, highway trailers and containers ride on railroad flatcars, thus combining the long-haul capacity of the train with the door-to-door flexibility of the truck.

Question 41

Alva, a fashion house specializing in designer bags, sells its products only through a limited number of boutiques worldwide. This is an example of:

A) intensive distribution.
B) associative distribution.
C) selective distribution.
D) discriminative distribution.

Question 42

A(n) _____ is an intermediary that takes title to the goods it handles and then distributes these goods to retailers, other distributors, or sometimes end consumers.

A) agent
B) wholesaler
C) broker
D) drop shipper

Question 43

Which of the following distribution strategies seeks to distribute a product through a single wholesaler or retailer in a specific geographic region?

A) Exclusive distribution
B) Associative distribution
C) Selective distribution
D) Intensive distribution

Question 44

Which of the following factors is most likely to be associated with a short marketing channel?

A) The products require little or no technical knowledge and servicing.
B) Manufacturer lacks adequate resources to perform channel functions.
C) The products are perishable.
D) Manufacturer serves a geographically dispersed potential trade area.

Question 45

Which of the following is a marketing intermediary who may or may not take possession of the goods but never takes title?

A) Sales agent
B) Wholesaler
C) Retailer
D) Industrial distributor

Question 46

KitchenAid has established an electronic storefront so that its customers can purchase mixers and accessories from its website. This establishment of electronic storefront is likely to result in a _____ conflict between KitchenAid and its retailers.

A) vertical
B) horizontal
C) exclusive
D) tangential

Question 47

Which of the following distribution strategies seeks to distribute a product through a limited number of retailers?

A) Discriminative distribution
B) Associative distribution
C) Selective distribution
D) Intensive distribution

Question 48

Lush, a cosmetics company that makes handmade beauty products, gives its customers a free item when they return used Lush containers. This offer is aimed at promoting recycling of the containers. The channel used by the consumers to return used containers is referred to as a:​

A) ​primary channel.
B) ​reverse channel.
C) ​rudimentary channel.
D) ​reserve channel.

Question 49

Controlling part of the supply chain that involves raw materials, inbound logistics, and warehouse and storage facilities constitutes _____.

A) horizontal integration
B) upstream management
C) forward integration
D) reverse management

Question 50

In addition to traditional drug stores, Dr Scholl's foot care company sells its products through convenience stores as well as through telemarketing to podiatrists. Which of the following is being employed by Dr Scholl's foot care company to sell its products?

A) A reverse channel
B) Exclusive distribution
C) A direct channel
D) Dual distribution

Question 51

Controlling part of the supply chain that involves finished product storage, outbound logistics, marketing and sales, and customer service constitutes _____.

A) reverse management
B) horizontal integration
C) downstream management
D) backward integration

Question 52

Channels designed to return goods to their producers are called _____ channels.

A) reserve
B) direct
C) primary
D) reverse

Question 53

Bubble, a company that manufactures gums and candies, distributes its products through all possible channels. One can pick up a Bubble's product from just about anywhere-department stores, general stores, convenience stores, and even local pharmacies. Which of the following distribution strategy is being employed by Bubble?

A) Exclusive distribution
B) Associative distribution
C) Selective distribution
D) Intensive distribution

Question 54

The number of intermediaries through which a manufacturer distributes its goods in a particular market is referred to as _____.

A) distribution probability
B) distribution inertia
C) distribution intensity
D) distribution utility

Question 55

The supply chain begins with:

A) the manufacturing or production activities.
B) the manufacturer seeking new markets for their products.
C) the movement of finished products through the marketing channel to customers.
D) the raw material inputs for the manufacturing process.

Question 56

_____ refers to the movement of products through more than one channel to reach the firm's target market.

A) Direct channeling
B) Dual distribution
C) Selective channeling
D) Exclusive distribution

Question 57

Which of the following best represents the complete sequence of suppliers and activities that contribute to creating and delivery of merchandise?

A) Supply chain
B) Warehousing
C) Direct channeling
D) Materials handling system

Question 58

Which of the following distribution strategies seeks to distribute a product through all available retailers in a trade area?

A) Exclusive distribution
B) Associative distribution
C) Selective distribution
D) Intensive distribution

Question 59

Conflicts resulting from disagreements among channel members at the same level, such as two or more wholesalers or two or more retailers, or among marketing intermediaries of the same type are called _____ conflicts.

A) exclusive
B) vertical
C) horizontal
D) cross-channel

Question 60

When the same branded product is carried in competing retail pharmacies, discount houses, department stores, and convenience stores, the marketing channel conflict that can result is referred to as:

A) cross-channel conflict.
B) vertical conflict.
C) exclusive conflict.
D) horizontal conflict.

Question 61

Which of the following types of services involves an intermodal coordination system between air carriers and water carriers?

A) Birdyback service
B) Piggyback service
C) Fishyback service
D) Horseback service

Question 62

Describe the factors that influence a firm's choice of a marketing channel strategy.

Question 63

Define direct channel and direct selling. Describe the party plan as a direct selling strategy. Give an example of a firm that sells its products using the party plan.

Question 64

Define dual distribution. Why do marketers usually adopt a dual strategy? Give some examples of firms that employ dual distribution.

Question 65

Define reverse channels. List some factors that have contributed to the increasing importance of reverse channels. How do firms operate reverse channels?

Question 66

Which of the following modes of transportation offers the most flexibility in handling?

A) Pipelines
B) Air freight
C) Water freight
D) Motor carriers

Question 67

Which of the following modes of transportation is the costliest?

A) Railroads
B) Air freight
C) Water freight
D) Pipelines

Question 68

Which of the following offers the fastest mode of transportation?

A) Water freight
B) Pipelines
C) Air freight
D) Railroads

Question 69

When a logistics manager combines several unitized loads into a single, well-protected load for shipment, it is called:

A) suboptimization.
B) consolidation.
C) containerization.
D) palletization.

Question 70

Which of the following is true of pipelines as a transportation alternative?

A) They provide the most efficient way for moving bulky commodities over long distances.
B) They control the largest share of the freight business as measured by ton-miles.
C) They can accommodate shipments of only a small number of products.
D) They represent the fastest method of transportation of products especially crude oil.

Question 71

Which of the following modes of transportation controls the largest share of the freight business as measured by ton-miles?

A) Railroads
B) Water carriers
C) Motor carriers
D) Pipelines

Question 72

Define marketing intermediaries. Give two examples.

Question 73

Which of the following modes of transportation has the lowest transport cost?

A) Railroads
B) Water carriers
C) Air freight
D) Trucks

Question 74

Tim works for an ice-cream manufacturer. Tim's department handles the supplies of dairy, nuts, and sweeteners that go into the daily production. In addition, they make sure that the suppliers give them good quality products at an optimal price as the freshness of these products ensures the quality of the company's ice cream. Tim is most likely involved with:

A) horizontal integration.
B) upstream management.
C) forward integration.
D) reverse management.

Question 75

Which of the following best represents a set of activities that move products within factories, warehouses, and transportation terminals?

A) Materials handling system
B) Order processing system
C) Vendor-managed inventory system
D) Package tracking system

Question 76

Which of the following modes of transportation provides the most efficient way for moving bulky commodities over long distances?

A) Railroads
B) Motor carriers
C) Water carriers
D) Pipelines

Question 77

Which of the following modes of transportation ranks highest in terms of availability in different locations?

A) Motor carriers
B) Railroads
C) Water freight
D) Pipelines

Question 78

Compare and contrast wholesalers and agents.

Question 79

Which of the following modes of transportation is typically associated with high frequency of shipment?

A) Pipelines
B) Railroads
C) Water freight
D) Air freight

Question 80

John works for an ice-cream manufacturer. His department focuses on keeping the finished products fresh as well as ensuring that they reach the retailers on time as the products are highly perishable. In addition, his department decides on which flavors of ice cream should be sent to which retailers in various trade areas. John is most likely involved with:

A) reverse management.
B) horizontal integration.
C) downstream management.
D) backward integration.