Deck 10: Distribution Strategy

Question 1

A computer manufacturer sells computers through a variety of methods which include telemarketing,catalog selling,cable selling,and online selling.Which of the following channels is the manufacturer using?

A) Horizontal channel
B) Direct channel
C) Peer-to-peer marketing
D) Administered marketing

Answer 1

B
Explanation:Some manufacturers use direct channels, selling directly to a market without the use of other intermediaries. The use of a direct channel, called direct marketing, increased in popularity as marketers found that products could be sold directly using a variety of methods. These include direct mail, telemarketing, direct-action advertising, catalog selling, cable selling, online selling, and direct selling through demonstrations at home or place of work.

Question 2

As in the consumer markets,_____ are used in organizational markets when manufacturers do not wish to have their own sales force.

A) wholesalers
B) distributors
C) agents
D) retailers

Answer 2

C
Explanation:As in the consumer market, agents are used in organizational markets in cases where manufacturers do not wish to have their own sales forces.

Question 3

Which of the following products is most likely to require a direct channel of distribution?

A) Coal
B) Lighting fixtures
C) Tropical flowers
D) Wooden picture frames

Answer 3

C
Explanation:Highly perishable products generally require a direct channel of distribution.

Question 4

A _____ is the combination of institutions through which a seller markets products to the user.

A) marketing node
B) distribution channel
C) sales consortium
D) logistics organization

Question 5

If a product has low unit value and high frequency of purchase with customer expectation of convenience,it is most likely to require a(n)_____ form of distribution.

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

Question 6

The primary role of all marketing intermediaries is to:

A) bring supply and demand together in an efficient and orderly fashion.
B) gather information from consumers in order to help manufactures design products better.
C) produce goods and services efficiently to meet the demands of customers.
D) prevent customers from making poor buying decisions.

Question 7

Which among the following requires a direct channel of distribution?

A) Cream dessert
B) Beer cans
C) Laundry detergent
D) Designer footwear

Question 8

Under which of the following conditions may a manufacturer wish to have its own sales force?

A) The manufacturer is a small player in its category.
B) The market for its products is geographically concentrated.
C) The products require minimal presale and postsale services.
D) The market consists of many small customers.

Question 9

Most convenience goods require _____ form of distribution.

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

Question 10

In contrast to consumer products,organizational goods are often distributed through _____.

A) the direct channel
B) the horizontal channel
C) peer-to-peer marketing
D) administered marketing

Question 11

Channels with one or more intermediaries are referred to as _____.

A) administered channels
B) customer-centric channels
C) indirect channels
D) centralized channels

Question 12

During the channel selection process,a manufacturer should consider all of the following EXCEPT:

A) distribution coverage required by its product.
B) preferences of the intermediaries.
C) degree of control the manufacturer wants to have over the channel.
D) total distribution cost.

Question 13

Which of the following is most likely to be distributed through the indirect channel?

A) Smartphones
B) Complex medical equipments
C) Tropical flowers
D) Computer systems

Question 14

A shoe manufacturer sells high-end designer shoes to wholesalers who,in turn,sell a variety of shoes and other leather accessories to various retail outlets.Which of the following channels of distribution is the shoe manufacturer using?

A) Matrix channel
B) Indirect channel
C) Peer-to-peer channel
D) Maker to user channel

Question 15

In which of the following forms of distribution coverage does the manufacturer limit the use of intermediaries to the ones believed to be the best available in the geographic area?

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

Question 16

In which of the following forms of distribution coverage does the manufacturer attempt to gain exposure through as many wholesalers and retailers as possible?

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

Question 17

In contrast to organizational goods,consumer products are often distributed through the _____ channel.

A) matrix
B) indirect
C) peer-to-peer
D) maker to user

Question 18

Which of the following is most likely to be distributed through the direct channel?

A) Smartphones
B) Staplers
C) Hair dryers
D) Computer systems

Question 19

Which of the following is a reason for organizations to use the direct channel for distributing organizational goods?

A) Structure of most organizational markets often have relatively few and small customers.
B) Manufacturers' lack of economic power for hiring intermediaries.
C) Their markets are geographically dispersed.
D) Many organizational products need a great deal of presale and postsale services.

Question 20

A manufacturer decides to utilize intensive distribution for his products.Which of the following parameters of channel selection decision does this choice illustrate?

A) Total distribution cost
B) Degree of control desired
C) Channel flexibility
D) Distribution coverage required

Question 21

Why would a manufacturer of health and beauty products share promotional expenditures with its intermediaries as well as provide them with the computer software needed for an inventory system?

A) To shorten its channel of distribution
B) To avoid having to perform risk-taking activities
C) To avoid having to perform any sorting activity
D) To maintain a degree of control over its intermediaries

Question 22

A manufacturer utilizing an exclusive form of distribution coverage:

A) gains the maximum degree of control over wholesalers and retailers.
B) attempts to gain exposure through as many wholesalers and retailers as possible.
C) severely limits distribution; intermediaries are provided exclusive rights within a territory.
D) limits the use of intermediaries to the ones believed to be the best available in the geographic area.

Question 23

A contractual vertical marketing system is exemplified by:

A) a florist shop that buys from a wholesale plant nursery.
B) a coffee producer who owns a chain of coffee shops.
C) the relationship of Walmart with its suppliers.
D) the Subway sandwich shop franchise system.

Question 24

Designer Mossimo Giannulli sells his collection of denim-based sportswear for men and women at specialty stores and select departmental stores nationwide.It would be possible to find at least three stores in a mall carrying the designer's clothing.Which of the following methods of distribution does the designer use?

A) Selective
B) Restrictive
C) Exclusive
D) Extensive

Question 25

A manufacturer utilizing an intensive form of distribution coverage:

A) gains the maximum degree of control over wholesalers and retailers.
B) attempts to gain exposure through as many wholesalers and retailers as possible.
C) severely limits distribution; intermediaries are provided exclusive rights within a territory.
D) limits the use of intermediaries to the ones believed to be the best available in the geographic area.

Question 26

Which of the following parameters is an inventory carrying cost?

A) Transportation
B) Order processing
C) Obsolescence and deterioration
D) Materials handling

Question 27

The manufacturer of which of the following products is most likely to use intensive distribution?

A) Personal computer
B) Laser printer
C) Gourmet food
D) Can of soda

Question 28

Which of the following forms of distribution coverage will provide minimum flexibility to a manufacturer?

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

Question 29

Which of the following perspectives views a channel of distribution as more than a series of markets or participants extending from production to consumption?

A) Behavioral
B) Psychological
C) Systems
D) Geodemographic

Question 30

A sporting goods store that was granted the right to sell Tasco rifle scopes was the only store that carried Tasco products in the geographical area.This is an example of _____ distribution.

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

Question 31

The manufacturer of which of the following products is most likely to use selective distribution?

A) Paper clips
B) Microwave oven
C) Nail clippers
D) Aerated drinks

Question 32

Appliances,home furnishings,and better clothing are usually distributed _____.

A) geodemographically
B) intensively
C) exclusively
D) selectively

Question 33

In which of the following forms of distribution coverage does the manufacturer severely limit distribution and provide sole rights within a territory to intermediaries?

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

Question 34

Inventory carrying costs are one of the major distribution costs that need to be minimized when framing the channel selection decision.Which of the following is an inventory carrying cost?

A) Cost of lost business
B) Insurance
C) Packaging
D) Materials handling

Question 35

A manufacturer utilizing a selective form of distribution coverage:

A) gains the maximum degree of control over wholesalers and retailers.
B) attempts to gain exposure through as many wholesalers and retailers as possible.
C) severely limits distribution; intermediaries are provided exclusive rights within a territory.
D) limits the use of intermediaries to the ones believed to be the best available in the geographic area.

Question 36

In terms of distribution costs,a distributor of petroleum products might be able to optimize total system performance if it could minimize:

A) its inventory carrying costs.
B) the number of products it sells.
C) the number of products in the introductory stage of the product life cycle.
D) its service costs.

Question 37

In the concept of total distribution cost,which of the following is NOT an inventory carrying cost?

A) Taxes
B) Insurance
C) Obsolescence and deterioration
D) Materials handling

Question 38

If a product requires certain specialized selling effort or investment in unique facilities or large inventories,the _____ distribution arrangement is usually selected.

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

Question 39

Which of the following views of distribution channels recognizes that much can be gained by developing long-term commitments and harmony among channel members?

A) Channel integration
B) Vertical marketing
C) Relationship marketing
D) Conflict resolution

Question 40

In terms of distribution costs,the total system should be designed to minimize costs for a given level of service.Which of the following is a major distribution cost that needs to be minimized?

A) Product mix cost
B) Depreciation cost
C) Packaging cost
D) New customer cost

Question 41

Which of the following vertical marketing systems are most similar to conventional channels?

A) Administered systems
B) Contractual systems
C) Structured systems
D) Corporate systems

Question 42

Which of the following is true about a corporate vertical marketing system?

A) It unites independent retailers for the purposes of pool buying to improve their competitive position.
B) It has a strong channel leader at or near the end of the channel.
C) It is exemplified by the Dunkin' donuts franchise system.
D) It involves single ownership of two or more levels of a channel.

Question 43

_____ involves wholesalers purchasing channel members above them.

A) Backward integration
B) Contractual marketing systems
C) A manufacturer-sponsored voluntary chain
D) A franchising program

Question 44

Coca-Cola licenses wholesalers in various markets that buy its syrup concentrate and then carbonate,bottle and sell Coke products to retailers in their local markets.Coca-Cola participates in a(n)_____ vertical marketing system.

A) selective
B) administered
C) corporate
D) contractual

Question 45

Sears obtains over 50 percent of the goods it sells in its retail stores from companies that it partially or wholly owns.Sears participates in a _____ vertical marketing system.

A) retail cooperative
B) contractual
C) selective
D) corporate

Question 46

Which of the following marketing systems is characterized by the presence of a channel leader?

A) Administered systems
B) Contractual systems
C) Structured systems
D) Corporate systems

Question 47

_____ vertical marketing systems involve single ownership of two or more levels of a channel.

A) Administered
B) Contractual
C) Structured
D) Corporate

Question 48

Which of the following is true of franchises?

A) They involve a parent company and an independent firm entering into a contractual relationship to set up and operate a business in a particular way.
B) They involve a group of independent retailers uniting and agreeing to pool buying and managerial resources to improve competitive position.
C) They involve a wholesaler contracting with a number of retailers performing channel functions for it.
D) They involve a high degree of interorganizational planning and management and depend on the presence of a channel leader.

Question 49

An administered vertical marketing system is exemplified by:

A) a florist shop that buys from a wholesale plant nursery.
B) a coffee producer who owns a chain of coffee shops.
C) the relationship of Walmart with its suppliers.
D) the Subway sandwich shop franchise system.

Question 50

Which of the following is NOT a type of vertical marketing system?

A) Structured system
B) Administered system
C) Corporate system
D) Contractual system

Question 51

Which of the following is true about a contractual vertical marketing system?

A) It unites independent retailers for the purposes of pool buying to improve their competitive position.
B) It has a strong channel leader at or near the end of the channel.
C) It is exemplified by the Dunkin' donuts franchise system.
D) It involves single ownership of two or more levels of a channel.

Question 52

_____ involve(s)a manufacturer purchasing wholesalers or retailers.

A) Forward integration
B) Contractual marketing systems
C) A manufacturer-sponsored voluntary chain
D) A franchising program

Question 53

Which of the following is true of wholesaler-sponsored voluntary chains?

A) They involve a parent company and an independent firm entering into a contractual relationship to set up and operate a business in a particular way.
B) They involve a group of independent retailers uniting and agreeing to pool buying and managerial resources to improve competitive position.
C) They involve a wholesaler contracting with a number of retailers performing channel functions for it.
D) They involve a high degree of interorganizational planning and management and depend on the presence of a channel leader.

Question 54

In which of the following types of contractual vertical marketing systems do a group of independent retailers unite and agree to pool buying and managerial resources to improve competitive position?

A) Retail cooperative organization
B) Wholesaler-sponsored voluntary chain
C) Retail franchising programs
D) Retail organizational programs

Question 55

A corporate vertical marketing system is exemplified by:

A) a florist shop that buys from a wholesale plant nursery.
B) a coffee producer who owns a chain of coffee shops.
C) the relationship of Walmart with its suppliers.
D) the Subway sandwich shop franchise system.

Question 56

Which of the following is true of retail cooperative organizations?

A) They involve a parent company and an independent firm entering into a contractual relationship to set up and operate a business in a particular way.
B) They involve a group of independent retailers uniting and agreeing to pool buying and managerial resources to improve competitive position.
C) They involve a wholesaler contracting with a number of retailers performing channel functions for it.
D) They involve a high degree of interorganizational planning and management and depend on the presence of a channel leader.

Question 57

Which of the following is true of administered vertical marketing systems?

A) They involve a parent company and an independent firm entering into a contractual relationship to set up and operate a business in a particular way.
B) They involve a group of independent retailers uniting and agreeing to pool buying and managerial resources to improve competitive position.
C) They involve a wholesaler contracting with a number of retailers performing channel functions for it.
D) They involve a high degree of interorganizational planning and management and depend on the presence of a channel leader.

Question 58

The dependence in administered vertical marketing systems can result from the existence of a strong:

A) buyer preference.
B) corporate system.
C) channel leader.
D) distributor network.

Question 59

Channels in which members are more dependent on one another and develop long-term working relationships in order to improve the efficiency and effectiveness of the system are called _____ marketing systems.

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

Question 60

The retail cooperative organization,wholesaler-sponsored voluntary chain,and various franchising programs are the three major types of _____ vertical marketing systems.

A) administered
B) contractual
C) structured
D) corporate

Question 61

_____ carry broad product assortments and compete on the basis of offering a good selection in a number of different product categories and offering lower prices on products in their large assortments.

A) Specialty stores
B) Mass merchandisers
C) Convenience stores
D) Category killers

Question 62

Which of the following observations about wholesaling is true?

A) Owing to the distribution functions they perform, wholesalers do not need to actively seek out producers.
B) Agents, brokers, and manufacturers' representatives are types of wholesalers that take title to the merchandise they sell.
C) Wholesalers create value for retailers, producers, and users of goods by performing all or some of the distribution functions efficiently and effectively.
D) Wholesalers do not typically engage in relationship marketing.

Question 63

In which of the following stores would you expect to find a narrow but very deep assortment?

A) A hypermarket like Carrefour in France.
B) A category killer like Office Depot.
C) A mass merchandiser like Target.
D) A convenience store like 7-Eleven.

Question 64

Which of the following is an example of forward integration?

A) A chain of coffee shops acquiring a coffee producer.
B) A car manufacturer acquiring an automobile spare parts manufacturer.
C) A cigarette manufacturer buying a convenience store.
D) A laptop manufacturer buying a computer chip maker.

Question 65

_____ compete with other retailers on the basis of offering a good selection in a number of different categories.

A) Warehouse clubs
B) Convenience stores
C) Department stores
D) Supercenters

Question 66

Which of the following types of retail operations does the longstanding Sears' motto,"Sears has everything," exemplify?

A) Specialty stores
B) Convenience stores
C) Department stores
D) Internet stores

Question 67

Which of the following is an example of backward integration?

A) A coffee producer acquiring a chain of coffee shops.
B) A car manufacturer acquiring an automobile spare parts manufacturer.
C) A cigarette manufacturer buying a convenience store.
D) A fleece fabric manufacturer buying a maker of winter clothing.

Question 68

_____ are large,low-priced limited-line retail chains that attempt to dominate a particular product category.

A) Discount stores
B) Mass merchandisers
C) Convenience stores
D) Category killers

Question 69

Firms may choose to develop corporate vertical marketing systems in order to:

A) obtain scale economies.
B) acquire location convenience.
C) concentrate sales in category killer chains.
D) decrease diversification costs.

Question 70

Which of the following is a nonstore method of retailing?

A) Warehousing
B) Mass merchandising
C) Electronic exchanges
D) Category killers

Question 71

Which of the following is true about convenience stores?

A) They handle deep assortments in a limited number of product categories.
B) They compete on the basis of offering a good selection in a number of different product categories and offering lower prices on products in their large assortments.
C) They are retailers whose primary advantages to consumers are suitable location, close-in parking, and easy entry and exit.
D) They are large, low-priced limited-line retail chains that attempt to dominate a particular product category.

Question 72

_____ handle deep assortments in a limited number of product categories.

A) Specialty stores
B) Mass merchandisers
C) Convenience stores
D) Catalogs and direct mails

Question 73

Mass merchandisers compete with other retailers on the basis of:

A) where they are located as they have a wide geographical reach.
B) the sales promotion done by them, which are substantially better than other retailers.
C) offering a good selection in a number of different product categories.
D) how much personal selling is done by their retail sales forces.

Question 74

Which of the following is an example of forward integration?

A) A manufacturer purchasing wholesalers.
B) A wholesaler purchasing manufacturers.
C) A retailer purchasing wholesalers.
D) A retailer purchasing manufacturers.

Question 75

Merchants that are primarily engaged in buying,taking title to,usually storing and physically handling goods in large quantities,and reselling the goods to retailers or to industrial or business users are called _____.

A) agents
B) logistics companies
C) wholesalers
D) vendors

Question 76

_____ compete with other retailers on the basis of offering lower prices on products in their large assortments.

A) Warehouse clubs
B) Convenience stores
C) Department stores
D) Supermarkets

Question 77

_____ are retailers whose primary advantages to consumers are suitable location,close-in parking,and easy entry and exit.

A) Specialty stores
B) Mass merchandisers
C) Convenience stores
D) Category killers

Question 78

Which of the following is an example of backward integration?

A) A manufacturer purchasing wholesalers.
B) A wholesaler purchasing channel members above it.
C) A wholesaler purchasing retailers.
D) A manufacturer purchasing retailers.

Question 79

Which of the following is true about mass merchandisers?

A) They handle deep assortments in a limited number of product categories.
B) They compete on the basis of offering a good selection in a number of different product categories and offering lower prices on products in their large assortments.
C) They are retailers whose primary advantages to consumers are suitable location, close-in parking, and easy entry and exit.
D) They are large, low-priced limited-line retail chains that attempt to dominate a particular product category.

Question 80

Which of the following is a store-based method of retailing?

A) Television home shopping
B) Vending machines
C) Electronic exchanges
D) Category killers