Deck 13: Marketing Channels and Supply-Chain Management

Question 1

What advantages do industrial distributors offer? What are some of the disadvantages of using industrial distributors?

Answer 1

An industrial distributor is an independent business that takes title to products and carries inventories. Industrial distributors offer sellers several advantages. They can perform the needed selling activities in local markets at a relatively low cost to a manufacturer and reduce a producer's financial burden by providing customers with credit services. Also, because industrial distributors usually maintain close relationships with their customers, they are aware of local needs and can pass on market information to producers. By holding adequate inventories in local markets, industrial distributors reduce producers' capital requirements. Using industrial distributors has several disadvantages. They may be difficult to control because they are independent firms. Industrial distributors usually sell standardized items, such as maintenance supplies, production tools, and small operating equipment. Industrial distributors may be difficult to control because they are independent firms. They often stock competing brands, so a producer cannot depend on them to promote its brand aggressively. Furthermore, industrial distributors incur expenses from maintaining inventories and are less likely to handle bulky or slow-selling items, or items that need specialized facilities or extra selling efforts.

Question 2

What is supply chain management? List the activities involved in it.

Answer 2

Supply-chain management is the set of approaches used to integrate the functions of operations management, logistics management, supply management, and marketing channel management so products are produced and distributed in the right quantities, to the right locations, and at the right time. It includes activities like manufacturing, research, sales, advertising, and shipping. Supply-chain management involves all entities that facilitate product distribution and benefit from cooperative efforts, including suppliers of raw materials and other components to make goods and services, logistics and transportation firms, communication firms, and other firms that indirectly take part in marketing exchanges.

Question 3

A set of approaches used to integrate the functions of operations management, logistics management, supply management, and marketing channel management so products are produced and distributed in the right quantities, to the right locations, and at the right time is called

A) supply chain management.
B) vertical channel integration.
C) industrial management.
D) industrial distribution.
E) marketing management.

Answer 3

A

Question 4

How do marketing channel decisions influence the rest of the marketing mix?

Question 5

Why is the choice of warehouse facilities an important strategic consideration?

Question 6

Wholesalers are often criticized for being inefficient and for causing consumers to pay higher prices than they would if there were no wholesalers. Discuss.

Question 7

What are the key tasks in supply chain management? How does each of these facilitate supply chain management?

Question 8

What is a marketing intermediary, and what are the activities that marketing intermediaries perform?

Question 9

Name and define the four types of utility created by marketing channels.

Question 10

Under what circumstances is selective distribution a desirable level of market coverage?

Question 11

Rovio, the parent company of the popular Angry Birds app, made several marketing mix decisions that were considered to be part of its distribution. Which of the following was not a decision that relates to distribution?

A) downloads of the game Angry Birds
B) the sale of t-shirts and stuffed birds and pigs through its website
C) the sale of Halloween costumes through Amazon
D) the opening of retail stores in Finland and China
E) the licensing of the Angry Birds to producers of t-shirts and costumes

Question 12

Discuss channel cooperation and conflict. How might each one affect distribution channel functions?

Question 13

Explain how electronic data interchange (EDI) and just-in-time (JIT) inventory management might be used in combination to improve physical distribution effectiveness and efficiency.

Question 14

Compare and contrast horizontal and vertical channel integration.

Question 15

Describe the three forms of vertical marketing systems.

Question 16

How do marketing channels increase efficiency in exchange situations?

Question 17

Discuss the importance of order processing in the physical distribution system.

Question 18

List the three major levels of market coverage and define each of them.

Question 19

Identify the various transportation modes and describe in detail two modes of transportation.

Question 20

Explain the legal ramifications of attempts to control distribution functions.

Question 21

Supply chains for durable goods typically begin at _____ and end at _____.

A) Raw materials; the retailer
B) Suppliers; the retailer
C) Raw materials; the customer
D) Suppliers; the customer
E) Retailers; the customer

Question 22

The driving force behind marketing channel decisions should be

A) convenience.
B) cost reduction.
C) environmental concerns.
D) customer satisfaction.
E) quality.

Question 23

If Nokia decides to make changes in its marketing channels, the strategic significance is that channel decisions are

A) long-term commitments.
B) short-term commitments.
C) easier to change than prices.
D) easier to change than promotion.
E) impossible to change.

Question 24

Possession utility is best described as

A) products being available in places where the customers wish to purchase them.
B) the customer having access to the product to use now or store and use later.
C) having a company's products available when a customer needs them.
D) being able to legally own a product despite restrictions on trade.
E) getting the products to the consumers in as short of time as possible for ownership.

Question 25

Select Comfort, a producer of adjustable air mattresses, sells most of its products through direct mail sales and on its website . This channel would be classified as

A) direct distribution.
B) producer, retailer, consumer.
C) telemarketing.
D) direct-marketing.
E) indirect marketing.

Question 26

When three buyers purchase the products of three producers, nine transactions are required. If one intermediary serves both producers and buyers, the number of possible transactions is

A) fifteen.
B) five.
C) eighteen.
D) six.
E) twenty.

Question 27

Eliminating a wholesaler from a marketing channel will

A) cut costs and lower prices.
B) not eliminate the functions performed by that wholesaler.
C) eliminate the functions performed by that wholesaler.
D) lead to lower costs but higher prices.
E) reduce channel conflict.

Question 28

Without wholesalers and other intermediaries,

A) most products would be much less expensive because fewer companies would be handling the product.
B) products would be cheaper because the functions of intermediaries would be eliminated.
C) products would likely be more expensive due to the use of less efficient channel members.
D) products would never be able to make it to the ultimate consumer at any price without passing through intermediaries.
E) many products would be more expensive because retailers would expect more profit.

Question 29

The supply chain includes

A) producers, wholesalers, and retailers.
B) suppliers, producers, intermediaries, and customers.
C) suppliers and suppliers' suppliers.
D) all entities that facilitate product distribution.
E) buyers, seller, marketing intermediaries, and agents.

Question 30

Josh is a vice-president for 20th Century Fox, a movie production company. He has the responsibility for managing the firm's marketing channels and its relationships with its marketing intermediaries. As a manager of its marketing intermediaries, part of Josh's role is to

A) link movie wholesalers to other wholesalers.
B) link film producers to other middlemen.
C) always oversee the sale of movies to retailers.
D) maintain quality of the movie product.
E) engage in short-term commitments to the least expensive channel member.

Question 31

Channel decisions are important to marketers mostly because

A) they are relatively flexible to change quickly.
B) consumers value reasonable prices delivered through marketing channels.
C) they dictate what promotional strategies companies should use.
D) many businesses are marketing intermediaries.
E) they involve long-term commitments and affect customer accessibility.

Question 32

In a simple economy of five producers and five consumers, there would be ____ transactions possible without an intermediary and ____ transactions possible with one intermediary.

A) ten; twenty-five
B) thirty; ten
C) twenty-five; fifteen
D) sixteen; eight
E) twenty-five; ten

Question 33

Cassie and Julian both are buying new iPhones this week. Cassie goes to the Apple store because she wants to actually see the phone before she makes a final decision. Julian knows that he does not need to see the phone, because he just wants to update from his older version. Cassie is purchasing her phone through_____, while Julian is purchasing his through ___.

A) an indirect-marketing channel; the most efficient channel of distribution.
B) the most common type of marketing channel; an indirect channel.
C) a retailer; a direct-marketing channel.
D) a business-to-business channel; a direct-marketing channel.
E) a retail channel; an indirect-marketing channel

Question 34

Walmart is working with its suppliers, using tools such as electronic billing, purchase order verification, and bar code technology, to integrate data used to improve overall performance. This is an example of

A) supply chain management.
B) a vertical marketing system.
C) a horizontal marketing system.
D) channel conflict.
E) dual distribution.

Question 35

What links producers to consumers through the purchase and reselling of products or contractual agreements?

A) Marketing intermediaries
B) Distributors
C) Suppliers
D) Middle marketers
E) Marketing channels

Question 36

Consumers receive the benefits of place utility when

A) they have to travel excessively to obtain products they want.
B) retailers remain open 24 hours a day.
C) they can stock up on products they need but not use them right away.
D) they make purchases with credit and debit cards.
E) products are available in locations where consumers want to buy them.

Question 37

Marketing channels create four types of utility for consumers including

A) place, time, possession, and form.
B) location, form, availability, and suitability.
C) form, time, location, and promotion.
D) marketer, retailer, wholesaler, and producer.
E) position, price, possession, and place.

Question 38

All members of the supply chain should determine their position in the chain, identify their partners and their roles, and establish partnerships whose focus is

A) shifting costs to suppliers.
B) maximizing costs.
C) maximizing technology implementation.
D) cooperation with competitors.
E) customer relationships.

Question 39

Revlon, a maker of cosmetics and skin-care products, is effectively involved in the management of its supply chain. It coordinates activities with both its suppliers and its distributors in order to produce and deliver products that its customers demand. Which of the following statements is most likely to be true about the impact of Revlon's supply-chain management?

A) Revlon demonstrates a product firm orientation which increases its competitiveness.
B) Revlon demonstrates a market firm orientation which increases its competitiveness.
C) Revlon demonstrates a sales firm orientation which increases its competitiveness.
D) Revlon's supply-chain management overlaps with all of the firm's marketing functions but not its financial functions.
E) Revlon's primary objective is to maximize efficiency in its supply-chain.

Question 40

A marketing channel is defined as a group of individuals and organizations that

A) consumes about one-half of every dollar spent on products in the United States.
B) directs the flow of products from producers to customers.
C) links producers to other marketing intermediaries.
D) takes title to products and resells them.
E) manages transportation and warehousing functions.

Question 41

The marketing channel of producer-retailer-consumer is most likely to be used by producers of which of the following products?

A) KitchenAid appliances
B) Tobacco
C) Automobiles
D) Apples and oranges
E) Wedding photographs

Question 42

Jeff Wood's company buys machine tools from large producers and sells them to several Midwestern manufacturing companies. The company Jeff works for carries inventories of the tools, which reduces capital requirements for the producers. Jeff's company is an example of a(n) ____ in a distribution channel.

A) direct distributor
B) manufacturers' agent
C) industrial distributor
D) producers' agent
E) wholesalers' agent

Question 43

Which of the following is the most commonly used channel for distributing business products?

A) Producer, agents, industrial distributors, organizational buyers
B) Producer, industrial distributors, organizational buyers
C) Producer, agents, organizational buyers
D) Producer, organizational buyers
E) Industrial distributors, organizational buyers

Question 44

Large retailers such as J.C. Penney's and Target are most likely to participate in which of the following channels?

A) Producer, industrial distributors, retailers, consumers
B) Producer, consumers
C) Producer, wholesalers, retailers, consumers
D) Producer, retailers, consumers
E) Producer, agents, wholesalers, retailers, consumers

Question 45

Which of the following is most likely to be a product stocked solely by an industrial distributor?

A) Tires
B) Wind turbines
C) Roofing nails
D) Kitchen countertops
E) Office supplies

Question 46

Rob Stevens is the head of a company that produces computer software for production scheduling. The firm is small and presently does not generate enough volume to justify hiring a sales force. The firm is probably using ____ to maintain contact with the firms using its products.

A) wholesalers
B) brokers
C) agents
D) merchants
E) retailers

Question 47

Which of the following is an advantage of using an industrial distributor?

A) These firms are easy to control because they work directly for the producers.
B) Inventory holding costs are minimized because they can store inventory very cheaply.
C) They are closer geographically to all of the producers' customers.
D) They possess a high level of technical knowledge about their products.
E) They help reduce a producer's financial burdens by extending credit to customers.

Question 48

Steelcase, Inc. markets furniture directly to businesses. This is an example of a(n) ____ channel.

A) producer-to-business buyer
B) producer-to-industrial-distributor-to-business buyer
C) producer-to-agent-to-business buyer
D) equipment
E) consumer

Question 49

After direct-marketing, the next slightly longer marketing channel adds a(n)

A) retailer.
B) producer.
C) wholesaler.
D) agent.
E) consumer.

Question 50

A producer is not likely to receive ____ from an industrial distributor.

A) selling activities in local markets
B) market information about consumers
C) aggressive promotion of its brand
D) reduced capital requirements
E) a reduced financial burden from customers

Question 51

Caruthers Paint Manufacturing Company buys the chemicals it needs for producing its products from a chemical producer, Roth Chemicals. In this instance, the chemicals are being distributed to Caruthers through which of the following types of channels?

A) Industrial distributor
B) Direct distribution
C) Retail
D) Wholesaler-sponsored
E) Producer

Question 52

An independent businessperson who is paid a commission to sell complementary products of different producers in an assigned territory without actually taking title of the merchandise is a(n)

A) sole intermediary.
B) manufacturers' agent.
C) producers' broker.
D) industrial distributor.
E) channel facilitator.

Question 53

Organizational buyers are especially partial to direct marketing channels when

A) they buy cheap materials in large quantities.
B) they try a new product for the first time.
C) they are filling an order for a very important customer.
D) a modified rebuy type of decision is involved.
E) expensive and/or complex equipment is involved.

Question 54

All of the following products are likely to use the producer-retailer-consumer marketing channel except for _____

A) Pharmaceutical drugs
B) U-Pick farm produce
C) Amazon Kindle Fire
D) Designer wedding gowns
E) Microbrew beers

Question 55

When Sophie buys organic produce for her household using a channel with only one intermediary, that intermediary is classified as a

A) retailer.
B) wholesaler.
C) broker.
D) functional middleman.
E) producer.

Question 56

Which of the following describes a disadvantage of using industrial distributors?

A) Industrial distributors possess considerable market information.
B) Their marketing exchange relationships are very focused.
C) They are unlikely to handle bulky items or items that are slow sellers.
D) Industrial distributors sell specific brands aggressively.
E) Industrial distributors acquire title to the products and take possession.

Question 57

A channel that includes both a manufacturers' agent and an industrial distributor is appropriate under which of the following circumstances?

A) When the firm wants specialized personnel to follow up the work of the sales force
B) When the marketer wishes to enter a new geographic market but does not wish to expand the existing sales force
C) When only one or two channels of distribution are available for products
D) When the sales force is large and the marketer is thinking of cutting it down
E) When customers are highly concentrated in one geographic area

Question 58

Netflix sells its movie services using its website while Red Box sells its movie services using vending machines. From a customer's point of view, Netflix is using ____ and Red Box is using ___.

A) a direct marketing channel; a slightly shorter channel.
B) a direct-marketing channel; an agent.
C) an Internet wholesalers; a retailers.
D) an Internet wholesaler; a slightly longer channel.
E) a direct-marketing channel; a type of retailer.

Question 59

Manufacturers of convenience products such as chewing gum reach customers through thousands of retailers. What marketing channel are these manufacturers most likely to use?

A) Producer, consumer
B) Producer, wholesaler, retailer, consumer
C) Producer, wholesaler, agent, retailer, consumer
D) Producer, retailer, consumer
E) Retailer, consumer

Question 60

River City, Inc. is an independent business that takes title to products and carries inventories. River City, Inc. is most likely a(n)

A) industrial distributor.
B) intermediary.
C) agency.
D) wholesaler.
E) producer.

Question 61

Fragile products that require special handling are more likely to be distributed through

A) longer channels.
B) shorter channels.
C) direct channels.
D) strategic alliances.
E) exclusive outlets.

Question 62

Paper towels and trash-can bags are most likely to be distributed through ____ and ____.

A) selective distribution; multiple channels
B) intensive; dual distribution
C) strategic channel alliances; intensive
D) exclusive; a single channel
E) dual distribution; convenience channels

Question 63

When Busch Light Beer was introduced as part of the Anheuser-Busch product line, the company most likely used ____ distribution.

A) horizontal
B) intensive
C) selective
D) agent
E) exclusive

Question 64

When considering the best channel to use, all of the following are true with regard to larger firms except they

A) can use an extensive product mix as a competitive tool.
B) may be better able to negotiate better deals with vendors or other channel members.
C) may have more distribution centers.
D) may have the resources to develop their own sales force.
E) may be better suited to serve customers in a particular region.

Question 65

Using only some of the available outlets to distribute a product is called

A) selective distribution.
B) intensive distribution.
C) channel conflict.
D) vertical channel integration.
E) exclusive distribution.

Question 66

For which of the following products would exclusive distribution be most appropriate?

A) Gasoline
B) Rolls Royce automobile
C) Ray-Ban sunglasses
D) Louis Vitton luggage
E) Harley-Davidson motorcycle

Question 67

Expensive, high-quality products that are purchased infrequently often reach consumers through

A) selective distribution.
B) highly-selective distribution.
C) sole-source retailers.
D) complex marketing channels.
E) exclusive distribution.

Question 68

Many companies use more than one marketing channel to distribute their products to the same target market, a tactic called

A) multiple channeling.
B) strategic channel alliance.
C) intensive distribution.
D) dual distribution.
E) market splitting.

Question 69

Which of the following is least likely to be a factor affecting the selection of marketing channels?

A) Customer characteristics
B) Product attributes
C) Product packaging
D) Competition
E) Environmental forces

Question 70

When Amazon.com introduced its Kindle FireHD, it was available through Amazon.com, Staples office supplies store, and a few other retailers. The Kindle FireHD was most likely distributed through the _____ of distribution.

A) selective level
B) extensive level
C) intensive level
D) exclusive level
E) agent form

Question 71

Honey Farms is a maker of fine chocolates. The company's latest product, Fudge-Dipped Strawberries, is the premier product in its Fudge-Dipped line. The product is very expensive and targeted to upscale consumers. Which form of distribution would Honey Farms be likely to use for its new product?

A) Intensive
B) Selective
C) Targeted
D) Exclusive
E) Premier

Question 72

The major levels of intensity at which a company can choose to distribute its products are ____ distribution.

A) vertical and horizontal
B) cooperative, conflicting, and integrated
C) intensive, extensive, and exclusive
D) selective, cooperative, and conflicting
E) exclusive, selective, and intensive

Question 73

The Fisher-Price company produces toys and baby-related products. For the introduction of its line of nursery furniture for infants and small children, the Fisher Company will most likely use ____ distribution for the products.

A) intensive
B) exclusive
C) horizontal
D) priority
E) selective

Question 74

Del Monte markets ketchup for household use to supermarkets through grocery wholesalers. It markets ketchup for institutional use through industrial distributors and food brokers. Del Monte is using

A) dual distribution.
B) industrial distribution.
C) strategic channel alliance.
D) supply chain management.
E) an unethical marketing channel.

Question 75

What is a primary difference between an industrial distributor and a manufacturers' agent?

A) A manufacturers' agent does not acquire title nor usually take possession of the products whereas an industrial distributor does.
B) A manufacturers' agent is employed by the manufacturers while an industrial distributor is independent.
C) An industrial distributor is employed by the manufacturers while a manufacturers' agent is independent.
D) A manufacturers' agent rarely adds any value to the marketing channel while an industrial distributor reduces costs significantly.
E) An industrial distributor does not form relationships with customers for repeat business whereas a key asset of a manufacturers' agent is his knowledge of his customers.

Question 76

Durable goods such as television sets and appliances generally reach their target markets through ____; goods such as car batteries and tires generally reach their target markets through _____.

A) intensive distribution; intensive distribution
B) exclusive distribution; intensive distribution
C) selective distribution; exclusive distribution
D) selective distribution; intensive distribution
E) selective distribution; selective distribution

Question 77

Sales are most likely to have a direct relationship to product availability for products that use ____ distribution.

A) selective
B) dual
C) intensive
D) extensive
E) exclusive

Question 78

Starbucks has an agreement with Pepsi Co. through which Pepsi distributes Starbucks' coffee drink, Frappucino, to grocery stores and other retail outlets. This is an example of

A) a strategic channel alliance.
B) exclusive distribution.
C) dual distribution.
D) horizontal channel integration.
E) channel leadership.

Question 79

Product and target market characteristics usually determine the type of coverage a product receives. For which of the following products is selective distribution most appropriate?

A) Gasoline
B) Jaguar automobiles
C) Skippy peanut butter
D) Laundry detergent
E) Organic foods

Question 80

Apple makes its computers available through its own stores, its website, and some major retailers. This is an example of

A) dual distribution.
B) vertical integration.
C) horizontal integration.
D) tying agreements.
E) exclusive dealing.