Deck 12: Distribution and Supply Chain Management

Question 1

An intermediary offers producers the advantage of making goods and services available to target markets efficiently.

Answer 1

True

Question 2

Direct marketing channels such as the Internet, snail mail, and telephone are often considered as supplementary distribution channels for manufacturers.

Answer 2

True

Question 3

An indirect channel is one that bypasses traditional channel members to get products/services to market more quickly.

Answer 3

False

Question 4

Channel width refers to the number of intermediaries at any one level of the channel of distribution.

Question 5

Apple only uses indirect distribution channels.

Question 6

Convenience goods such as bread and milk have wide channels; specialty goods such as luxury European sports cars have a narrow channel.

Question 7

Channel length refers to the number of intermediaries at any one level of the channel of distribution.

Question 8

With the increasing adoption of electronic distribution technologies such as EDI and the Internet, the role of intermediaries is soon to be obsolete.

Question 9

A manufacturer like Procter & Gamble that produces and markets a wide variety of consumer goods for household use is likely to use direct channels of distribution.

Question 10

GM and Ford's increased usage of the Internet is an attempt to shorten traditionally long, indirect channels.

Question 11

Rolex is selective about which retail outlets sell its products. This is called exclusive distribution.

Question 12

It is never appropriate to employ the same channels as competitors.

Question 13

An intensive distribution strategy is used by a company that wants to reach as much of the market as possible.

Question 14

When a manufacturer like Sony opens up a Sony Store in a retail mall/district, it risks vertical conflict with independent retailers that sell Sony merchandise.

Question 15

Channel captains are critical in effective horizontal marketing systems.

Question 16

Since the manufacturer is the first link in the channel of distribution, it is always the one that controls the channel.

Question 17

Products sold to Loblaws and their various brands all pass through four wholesalers. In this instance the retailer has control.

Question 18

The objective of a vertical marketing system is channel control by one member of the channel of distribution.

Question 19

Home Hardware retailers organized themselves into a type of buying group to help provide them with leverage to reduce prices. Home Hardware is an example of a voluntary chain.

Question 20

The success of a franchise like KFC is based on the high degree of independence allowed by the franchiser.

Question 21

In an administered VMS the organization with the greatest economic influence has control.

Question 22

A group of independent retailers that join together to establish a wholesaling operation (e.g., large distribution centre) is an example of a retail cooperative.

Question 23

RFID technology enables supply chain members to monitor the flow of goods from raw materials through to finished product, and from manufacturer to consumer.

Question 24

Trucks are the most efficient mode of transporting bulky items over long distances.

Question 25

An air carrier would be the transportation mode of choice for emergency medical supplies.

Question 26

When a customer orders a product that is unavailable for shipment it is called a stockout.

Question 27

An auto manufacturer like Toyota will use just-in-time inventory management to maintain generous levels of stock of auto parts at all times.

Question 28

A manufacturer of heavy farm machinery is likely to use trucks to deliver to destinations across Canada.

Question 29

A truckload of new car parts placed on a rail flatcar is an example of piggybacking.

Question 30

The use of RFID at large retailers promises to improve efficiency of many logistics functions, including providing automated scanning at shipping and receiving points.

Question 31

An EDI represents the manual transfer of information or data using internal, hard-copy paperwork.

Question 32

The difference between a storage warehouse and a distribution warehouse is that the distribution warehouse typically stores items for a shorter period of time.

Question 33

"A systematic decision-making process regarding the physical movement and transfer of ownership of goods and services from producer to consumer"is called

A) distribution planning.
B) product/services planning.
C) transference planning.
D) channel planning.
E) systems planning.

Question 34

What is an advantage intermediaries provide to customers?

A) make available goods and services
B) sales promotions
C) pricing controls
D) channel control
E) intensive distribution

Question 35

Consumers are increasingly purchasing cars over the Internet via online intermediaries such as Autobytel.com, Cars4U.com, and AutoTrader.ca. What is the biggest benefit to consumers from this sales channel?

A) delivery of the car
B) convenience
C) locations
D) price shopping
E) eliminates the middle man

Question 36

Companies that sell online are examples of which type of distribution channel?

A) manufacturer to wholesaler to retailer to consumer
B) agency/broker
C) manufacturer to retailer to consumer
D) manufacturer to consumer
E) indirect

Question 37

Convenience goods such as food, household cleaning products, personal care products, and pharmaceuticals are traditionally sold in which of the following channels?

A) food chain distribution
B) manufacturer to consumer
C) manufacturer to wholesaler to retailer to consumer
D) direct channel
E) manufacturer to retailer to consumer

Question 38

A grocery store displays tomatoes for sale to the consumer. The farmer complains that she only earns 50 cents per kilogram from the broker, but the store is selling the tomatoes to the consumer for $2 per kilogram. This is in part a factor of

A) channel length.
B) channel width.
C) direct channel efficiencies.
D) multi-channelling.
E) channel speed.

Question 39

A(n) ________ channel is one in which goods are moved from producer to consumer without the use of intermediaries.

A) single
B) condensed
C) express
D) direct
E) narrow

Question 40

The addition of a(n) ________ is common in industries where products are sold through many types of retail outlets.

A) channel consultant
B) manufacturer's representative
C) wholesaler
D) agent
E) broker

Question 41

The number of intermediaries or levels in the channel of distribution is referred to as

A) channel length.
B) multi-channelling.
C) channel width.
D) channel depth.
E) vertical integration.

Question 42

The number of intermediaries at any one level in the channel of distribution is referred to as

A) channel width.
B) selective distribution.
C) vertical integration.
D) channel length.
E) multiple channels.

Question 43

A type of distribution that employs different kinds of intermediaries at the same level in the channel of distribution is called

A) indirect channelling.
B) intensive distribution.
C) multi-channelling.
D) horizontal marketing.
E) duplicate channelling.

Question 44

When a(n) ________ distribution strategy is used, the product is available in only a few outlets in a particular market.

A) minimized
B) selective
C) intensive
D) reduced
E) exclusive

Question 45

Software companies sell their products online. They use a(n) ________ channel of distribution.

A) indirect
B) complex
C) mixed
D) long
E) direct

Question 46

Xerox and IBM market their products to industrial, institutional, professional, and dealer network markets. Because of the variation in intermediaries at the same channel level, these firms use

A) long channels of distribution.
B) vertical integration marketing.
C) agents and brokers exclusively.
D) intensive distribution strategies.
E) multi-channelling.

Question 47

Which of the following represents the most direct distribution channel?

A) A consumer purchases Nike running shoes from the corporate-owned Nike retailer at the local outlet mall.
B) The manufacturer sells to an online intermediary who sells to consumers via the Internet.
C) An agent who represents many manufacturers sells products to a retailer for sale to consumers.
D) An importer purchases from a manufacturer, sells to a wholesaler, who sells to a retailer.
E) A final user purchases from a retailer.

Question 48

Which of the following is a true statement about the channel of distribution selection process?

A) Geographically dispersed customers are served better by short channels.
B) Agents are experts in selling, so they should always be consulted before a decision is made.
C) Products that require a lot of maintenance are better suited to long channels.
D) Large companies have the capability to employ their own sales force.
E) Having a product available in a non-traditional environment is a waste of time and money.

Question 49

Intensive distribution is most likely to be used by a manufacturer of

A) household cleaning products.
B) jet skis.
C) diamond rings.
D) automobiles.
E) expensive silverware.

Question 50

In the marketing of convenience goods, most manufacturers will use ________ distribution

A) multiple channel
B) exclusive
C) selective
D) direct
E) intensive

Question 51

Selective distribution is suitable for which of the following?

A) Ferrari
B) photocopiers for large companies
C) a seller of rare antiques
D) life insurance
E) laundry detergent

Question 52

The manufacturer of a high-priced specialty good like a baby grand piano that offers the purchaser a unique value is likely to use ________ distribution system.

A) an intensive
B) a selective
C) an exclusive
D) an administered
E) a multiple

Question 53

In Calgary, Alberta, there is only one retailer that sells a certain brand of French perfume. In this town, the manufacturer is using ________ distribution.

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

Question 54

At one time, Kingston, Ontario, had only three Tim Hortons outlets to serve the 115,000 people of the community. Now there are 15 outlets strategically located to serve the same population. This is a good example of

A) intensive distribution.
B) channel length.
C) selective distribution.
D) vertical conflict.
E) personal relationship selling.

Question 55

Which of the following products is likely to be marketed through the shortest distribution channel?

A) prescription medication
B) patio furniture
C) an industrial carpet loom
D) an MP3 file of an album
E) a car

Question 56

What gives retailers the balance of power in channel relationships?

A) when only a few retailers control the vast majority of sales
B) when there are too many distributors
C) retailers are the biggest companies
D) retailers are too growth oriented
E) manufacturers are conservative and slow to change

Question 57

Conflict that stems from competition between similar organizations at the same level in the channel of distribution is called

A) basic conflict.
B) administered conflict.
C) vertical conflict.
D) horizontal conflict.
E) intertype conflict.

Question 58

________ occurs when a channel member feels that another member at a different level of the channel is engaging in inappropriate conduct.

A) Administered conflict
B) Vertical conflict
C) Horizontal conflict
D) Dual conflict
E) Intertype conflict

Question 59

The Bay and Sears are selling the same make of kitchen knives. If The Bay constantly has the lower price, Sears may begin to question whether or not The Bay is getting a cost break from the manufacturer. This is an example of

A) price conflict.
B) operational conflict.
C) horizontal conflict.
D) vertical conflict.
E) supply conflict.

Question 60

Which of the following is an example of horizontal conflict in distribution channels?

A) Two department stores carry the same product, but only one gets a promotional allowance from the manufacturer.
B) A retailer refuses to list a manufacturer's product.
C) A department store objects to the profit margin by a wholesaler.
D) A price disagreement exists between a hardware wholesaler and a tool manufacturer.
E) A small retailer continually receives only a partial shipment of required goods from its wholesaler.

Question 61

A manufacturer is forced to outsource production to a country with lower labour costs because of pressure from the retailer to keep prices down or lose this business. This is referred to as

A) vertical conflict.
B) rationalization.
C) retailer power syndrome.
D) selective distribution.
E) horizontal conflict.

Question 62

When a direct distribution channel is employed, which channel member usually has control?

A) the agent
B) the customer
C) the retailer
D) the manufacturer
E) the wholesaler

Question 63

Manufacturers who supply the Canadian grocery industry are under constant pressure to provide deep discounts to retain distribution and secure shelf space in stores. Which channel member is exerting control in this industry?

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

Question 64

Robert wants to sell his brand of pickles in Loblaws stores. He approached each of the local store managers, but was referred to Loblaws' East Distribution's buyer. Who has control in this type of channel?

A) agent
B) manufacturer
C) buyer
D) wholesaler
E) restrictive channel

Question 65

The channel captain or leader of a distribution channel should be the

A) wholesaler.
B) channel member that integrates and coordinates the objectives of all members.
C) retailer.
D) agent or broker.
E) manufacturer.

Question 66

Ford and General Motors are examples of companies that achieve cooperation in the channel through

A) cooperative control.
B) manufacturer control.
C) retailer control.
D) consumer control.
E) wholesaler control.

Question 67

Which of the following has the role of integrating and coordinating the objectives and policies of the members of the supply channel?

A) agent
B) wholesaler
C) category manager
D) channel captain
E) broker

Question 68

Independent retailers that join together to buy from an agreed upon wholesaler is known as a

A) retail cooperative.
B) voluntary chain.
C) partnership.
D) franchise.
E) wholesale cooperative.

Question 69

A vertical marketing system in which the organization with the greatest economic influence has control is called a(n)

A) monopoly.
B) administered VMS.
C) corporate VMS.
D) contractual VMS.
E) economic VMS.

Question 70

Co-op stores in Western Canada are an example of a(n)

A) horizontal marketing system.
B) administered VMS.
C) contractual VMS.
D) corporate VMS.
E) integrated VMS.

Question 71

An organization like Loblaw Companies Limited, with divisions including Shoppers Drug Mart, Real Canadian Superstore, and Joe Fresh, has significant control at the retail level and consequently purchases a large portion of many of its suppliers' output. This is an example of ________ vertical marketing system.

A) an exclusive
B) an administered
C) a retail cooperative
D) a contractual
E) a corporate

Question 72

A manufacturer owns and operates its own retail outlets (e.g., Imperial Oil owns Esso retailers). This is an example of

A) a retail cooperative.
B) horizontal integration.
C) a contractual vertical marketing system.
D) a corporate vertical marketing system.
E) voluntary chain operation.

Question 73

In Canada, Choice Hotels owns Comfort Inn, Comfort Suites, Quality Inn, Sleep Inn, Clarion, Rodeway Inn, and Econo Lodge End. This is an example of

A) a manufacturer-sponsored retailing operation.
B) an administered vertical marketing system.
C) a joint marketing system.
D) a horizontal marketing system.
E) a producer-retailer controlled channel.

Question 74

When consumers physically review a product in a retail store and then search online for the best deal, this is known as

A) showboating.
B) comparison shopping.
C) showrooming.
D) consumer control.
E) retail spillover.

Question 75

Facilitating efficient production and delivery of goods to customers is the goal of

A) the diffusion of innovation.
B) regional marketing management systems.
C) multi-channelling.
D) horizontal conflict.
E) supply chain management.

Question 76

A sequence of companies that performs activities related to the creation and delivery of a good or service to consumers or business customers is called a

A) business chain.
B) corporate chain.
C) transaction chain.
D) supply chain.
E) commerce chain.

Question 77

A manufacturer in Toronto would solve the problem of the high costs of shipping small orders to individual customers in Calgary or Edmonton by using

A) a distribution warehouse system.
B) a piggybacking system.
C) a containerization system.
D) a just-in-time inventory system.
E) a storage warehousing system.

Question 78

The planning, implementing, and controlling of the physical flow of materials, finished goods, and related information from points of origin to points of consumption to meet customer requirements at a profit is referred to as

A) horizontal marketing management.
B) customization.
C) contract marketing.
D) vertical marketing management.
E) logistics marketing.

Question 79

"The grouping of individual items into an economical shipping quantity that is sealed in a protective container for intermodal transportation"is called

A) economic order quantity.
B) modularization.
C) transportation coordination.
D) piggybacking.
E) containerization.

Question 80

A marketing manager who wants fast and frequent deliveries to nearby markets should use

A) airways.
B) pipelines.
C) trucks.
D) inland waterways.
E) railroads.