Deck 14: Wholesaling, Retailing, and Physical Distribution

Question 1

D-Tree for Less
Joey and Allison (husband and wife) decided that they wanted to open their own retail stores. This was something that Allison had wanted to do since her father lost his business when she was young. Joey believed that Allison would be great at running a business, so he planned to start his own business to bring in additional money.
Allison first thought of opening a retail-store franchise, but felt it would be too restrictive. She finally decided to open something similar to her father's original smaller store, but to do it in a big way. She called it D-Tree for Less, and her slogan was "Dupree Back in Action." Her father's name was Dupree. The store would sell home furnishings, appliances, clothing for all, and other items in different parts of the store. Given the size of the store, Allison felt that she would need at least 30 employees just to run everything smoothly.
Once Allison's store was up and running, Joey started his own large specialty store selling only fishing equipment. Joey kept his prices significantly lower than the competition, since he was going after volume business. Joey opened his store in a major shopping center in the hopes that it would bring in more foot traffic.
Allison's store got so big over time that she had to build a separate warehouse to hold additional inventory and large appliances. Allison realized that this would require many new hires and a lot of training. She did not have time for it, so she delegated this responsibility to a manager. Allison knew that her business was going to thrive; she just wished her father were around to see it.
Refer to D-Tree for Less. What would Joey's store be considered?

A) Convenience store
B) Category killer
C) Department store
D) Catalog store
E) Franchise

Answer 1

B

Question 2

Identify and describe the major types of retailers.

Answer 2

Answer not provided.

Question 3

Compare and contrast intensive, selective, and exclusive distribution. Give an example of a product that normally would be distributed in this way for each type of market coverage.

Answer 3

Answer not provided.

Question 4

XYZ & ABC
XYZ Furniture is a manufacturer of contemporary furniture that sells its products through retail stores throughout the country. XYZ management wants to explore different channels of distribution and feels that the company should use all available outlets to sell its products. ABC Distributors has brought a proposal to the company to be its wholesaler. As a wholesaler, ABC represents many different companies and sells various products to many different retailers. ABC hopes that, with such a wide variety, the company will be able to keep profits high if one product or manufacturer should fail.
Refer to XYZ & ABC. ABC Distributor can be described as what type of wholesaler?

A) Full-service wholesaler
B) Limited-service wholesaler
C) Specialty-line wholesaler
D) Limited-line wholesaler
E) General-merchandise wholesaler

Question 5

How many retail outlets would you expect an independent retailer to own? Why? Would you expect a chain retailer to own more or fewer retail outlets than an independent retailer?

Question 6

D-Tree for Less
Joey and Allison (husband and wife) decided that they wanted to open their own retail stores. This was something that Allison had wanted to do since her father lost his business when she was young. Joey believed that Allison would be great at running a business, so he planned to start his own business to bring in additional money.
Allison first thought of opening a retail-store franchise, but felt it would be too restrictive. She finally decided to open something similar to her father's original smaller store, but to do it in a big way. She called it D-Tree for Less, and her slogan was "Dupree Back in Action." Her father's name was Dupree. The store would sell home furnishings, appliances, clothing for all, and other items in different parts of the store. Given the size of the store, Allison felt that she would need at least 30 employees just to run everything smoothly.
Once Allison's store was up and running, Joey started his own large specialty store selling only fishing equipment. Joey kept his prices significantly lower than the competition, since he was going after volume business. Joey opened his store in a major shopping center in the hopes that it would bring in more foot traffic.
Allison's store got so big over time that she had to build a separate warehouse to hold additional inventory and large appliances. Allison realized that this would require many new hires and a lot of training. She did not have time for it, so she delegated this responsibility to a manager. Allison knew that her business was going to thrive; she just wished her father were around to see it.
Refer to D-Tree for Less. Allison's business can be described as which of the following?

A) Chain retailer
B) Generic retailer
C) Convenience retailer
D) Promotion retailer
E) Independent retailer

Question 7

What is supply chain management, and what are its benefits?

Question 8

D-Tree for Less
Joey and Allison (husband and wife) decided that they wanted to open their own retail stores. This was something that Allison had wanted to do since her father lost his business when she was young. Joey believed that Allison would be great at running a business, so he planned to start his own business to bring in additional money.
Allison first thought of opening a retail-store franchise, but felt it would be too restrictive. She finally decided to open something similar to her father's original smaller store, but to do it in a big way. She called it D-Tree for Less, and her slogan was "Dupree Back in Action." Her father's name was Dupree. The store would sell home furnishings, appliances, clothing for all, and other items in different parts of the store. Given the size of the store, Allison felt that she would need at least 30 employees just to run everything smoothly.
Once Allison's store was up and running, Joey started his own large specialty store selling only fishing equipment. Joey kept his prices significantly lower than the competition, since he was going after volume business. Joey opened his store in a major shopping center in the hopes that it would bring in more foot traffic.
Allison's store got so big over time that she had to build a separate warehouse to hold additional inventory and large appliances. Allison realized that this would require many new hires and a lot of training. She did not have time for it, so she delegated this responsibility to a manager. Allison knew that her business was going to thrive; she just wished her father were around to see it.
Refer to D-Tree for Less. D-Tree for Less can be described as which of the following?

A) Discount store
B) Convenience store
C) Department store
D) Warehouse store
E) Chain store

Question 9

What is the fastest and most expensive means of transportation? What types of products would you most likely ship by this method?

Question 10

What services do wholesalers provide to retailers?

Question 11

What channels of distribution are used to sell business products? Why?

Question 12

When the warehouse is full of finished products, would you expect stock-out costs or holding costs to be higher? Why?

Question 13

XYZ & ABC
XYZ Furniture is a manufacturer of contemporary furniture that sells its products through retail stores throughout the country. XYZ management wants to explore different channels of distribution and feels that the company should use all available outlets to sell its products. ABC Distributors has brought a proposal to the company to be its wholesaler. As a wholesaler, ABC represents many different companies and sells various products to many different retailers. ABC hopes that, with such a wide variety, the company will be able to keep profits high if one product or manufacturer should fail.
Refer to XYZ & ABC. When the XYZ management feels that it should use all available outlets for its furniture, what type of distribution is the company interested in using?

A) Exclusive distribution
B) Intensive distribution
C) Internal distribution
D) Selective distribution
E) Inclusive distribution

Question 14

How do full-service wholesalers and limited-service wholesalers differ? How do general-merchandise wholesalers, limited-line wholesalers, and specialty-line wholesalers differ in the products they carry?

Question 15

XYZ & ABC
XYZ Furniture is a manufacturer of contemporary furniture that sells its products through retail stores throughout the country. XYZ management wants to explore different channels of distribution and feels that the company should use all available outlets to sell its products. ABC Distributors has brought a proposal to the company to be its wholesaler. As a wholesaler, ABC represents many different companies and sells various products to many different retailers. ABC hopes that, with such a wide variety, the company will be able to keep profits high if one product or manufacturer should fail.
Refer to XYZ & ABC. As a wholesaler, ABC would provide all of the following services for XYZ Furniture except

A) providing an instant sales force.
B) reducing inventory cost.
C) providing manufacturing labor.
D) assuming credit risk.
E) furnishing market information.

Question 16

Compare and contrast a neighborhood shopping center, a community shopping center, and a regional shopping center.

Question 17

What are the components of the direct marketing channel for consumer products?

Question 18

XYZ & ABC
XYZ Furniture is a manufacturer of contemporary furniture that sells its products through retail stores throughout the country. XYZ management wants to explore different channels of distribution and feels that the company should use all available outlets to sell its products. ABC Distributors has brought a proposal to the company to be its wholesaler. As a wholesaler, ABC represents many different companies and sells various products to many different retailers. ABC hopes that, with such a wide variety, the company will be able to keep profits high if one product or manufacturer should fail.
Refer to XYZ & ABC. Which of the following is not an option for channels of distribution for XYZ?

A) Producer―wholesaler―retailer―consumer
B) Producer―agent―wholesaler―retailer―consumer
C) Producer―consumer
D) Producer―retailer―consumer
E) Producer―wholesaler―consumer―agent

Question 19

XYZ & ABC
XYZ Furniture is a manufacturer of contemporary furniture that sells its products through retail stores throughout the country. XYZ management wants to explore different channels of distribution and feels that the company should use all available outlets to sell its products. ABC Distributors has brought a proposal to the company to be its wholesaler. As a wholesaler, ABC represents many different companies and sells various products to many different retailers. ABC hopes that, with such a wide variety, the company will be able to keep profits high if one product or manufacturer should fail.
Refer to XYZ & ABC. XYZ uses middlemen that take title to products; thus they would be referred to as

A) merchant middlemen.
B) transport middlemen.
C) selective middlemen.
D) functional middlemen.
E) direct middlemen.

Question 20

How does an administered vertical marketing system (VMS) provide direction and guidance for its members?

Question 21

Convenience goods such as candy, gum, and cigarettes are normally distributed using ____ distribution.

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

Question 22

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

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

Question 23

A general term for a middleman that actually takes title to products by buying them is a

A) functional middleman.
B) broker.
C) retailer.
D) sales agent.
E) merchant middleman.

Question 24

Zero Manufacturing produces somewhat typical, standard candy bars. The company would probably choose which of the following to reach its target market?

A) Variable marketing system
B) Exclusive distribution
C) Selective distribution
D) Intensive distribution
E) Selective agents

Question 25

A sequence of organizations that directs a product from the producer to the ultimate user is called a(n)

A) intermediary network.
B) catalog discount showroom.
C) transporter.
D) channel of distribution.
E) distributorship.

Question 26

A retailer is a middleman who

A) transfers products from the manufacturer to the consumer without taking ownership of the goods.
B) transfers products from the manufacturer to the consumer and takes ownership of the goods.
C) sells products to wholesalers, who then sell the goods to consumers.
D) works on consignment.
E) does not interact directly with the consumer.

Question 27

All of the following are basic factors in the selection of a channel of distribution except the

A) firm's production capability and marketing resources.
B) target market.
C) type of transportation to be used.
D) buying patterns of potential customers.
E) product itself.

Question 28

A middleman that helps in the transfer of ownership of products but does not take title to the products is called a

A) merchant middleman.
B) functional middleman.
C) merchant wholesaler.
D) manufacturer's sales branch.
E) specialty wholesaler.

Question 29

A middleman that buys from producers or other middlemen and sells to consumers is called a(n)

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

Question 30

D-Tree for Less
Joey and Allison (husband and wife) decided that they wanted to open their own retail stores. This was something that Allison had wanted to do since her father lost his business when she was young. Joey believed that Allison would be great at running a business, so he planned to start his own business to bring in additional money.
Allison first thought of opening a retail-store franchise, but felt it would be too restrictive. She finally decided to open something similar to her father's original smaller store, but to do it in a big way. She called it D-Tree for Less, and her slogan was "Dupree Back in Action." Her father's name was Dupree. The store would sell home furnishings, appliances, clothing for all, and other items in different parts of the store. Given the size of the store, Allison felt that she would need at least 30 employees just to run everything smoothly.
Once Allison's store was up and running, Joey started his own large specialty store selling only fishing equipment. Joey kept his prices significantly lower than the competition, since he was going after volume business. Joey opened his store in a major shopping center in the hopes that it would bring in more foot traffic.
Allison's store got so big over time that she had to build a separate warehouse to hold additional inventory and large appliances. Allison realized that this would require many new hires and a lot of training. She did not have time for it, so she delegated this responsibility to a manager. Allison knew that her business was going to thrive; she just wished her father were around to see it.
Refer to D-Tree for Less. Joey's store was probably located in which type of shopping center?

A) Neighborhood
B) Community
C) Regional
D) Warehouse showroom
E) Wholesale shopping center

Question 31

R. A. Grant Co. assists art supply manufacturers in transferring their products to retail outlets by matching up producers and retailers without actually taking title to the goods. R. A. Grant Co. would be classified as a

A) functional middleman.
B) merchant middleman.
C) retailer.
D) producer.
E) channel of distribution.

Question 32

The Spirit Connection buys team logo gear from manufacturers and then sells the gear directly to consumers. The Spirit Connection is a

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

Question 33

D-Tree for Less
Joey and Allison (husband and wife) decided that they wanted to open their own retail stores. This was something that Allison had wanted to do since her father lost his business when she was young. Joey believed that Allison would be great at running a business, so he planned to start his own business to bring in additional money.
Allison first thought of opening a retail-store franchise, but felt it would be too restrictive. She finally decided to open something similar to her father's original smaller store, but to do it in a big way. She called it D-Tree for Less, and her slogan was "Dupree Back in Action." Her father's name was Dupree. The store would sell home furnishings, appliances, clothing for all, and other items in different parts of the store. Given the size of the store, Allison felt that she would need at least 30 employees just to run everything smoothly.
Once Allison's store was up and running, Joey started his own large specialty store selling only fishing equipment. Joey kept his prices significantly lower than the competition, since he was going after volume business. Joey opened his store in a major shopping center in the hopes that it would bring in more foot traffic.
Allison's store got so big over time that she had to build a separate warehouse to hold additional inventory and large appliances. Allison realized that this would require many new hires and a lot of training. She did not have time for it, so she delegated this responsibility to a manager. Allison knew that her business was going to thrive; she just wished her father were around to see it.
Refer to D-Tree for Less. As Allison's business builds and utilizes warehousing, she will complete all of the following activities except

A) displaying items for sale.
B) dispatching goods.
C) holding goods.
D) identifying goods.
E) dispatching shipments.

Question 34

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

A) Producer to consumer
B) Producer to middleman to business user
C) Producer to retailer to consumer
D) Producer to wholesaler to retailer to consumer
E) Producer to middleman

Question 35

The use of all available outlets for a product to obtain the widest market exposure is called ____ distribution.

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

Question 36

Marketing organizations that link producer and consumer within a marketing channel are called

A) distributorships.
B) warehousing groups.
C) marketing intermediaries.
D) shopping centers.
E) supermarkets.

Question 37

The use of only a portion or percentage of the available outlets in each geographic area for market exposure is called ____ distribution.

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

Question 38

A middleman that takes title to products is called a

A) marketing channel.
B) functional middleman.
C) merchant middleman.
D) retailer.
E) wholesaler.

Question 39

The distribution channel most likely to be used for a new car is producer to

A) wholesaler to retailer to consumer.
B) consumer.
C) agent to wholesaler to retailer to consumer.
D) business user.
E) retailer to consumer.

Question 40

If Boeing manufactures and delivers a plane to the government to be used in defense, the distribution channel would be producer to

A) agent middleman to business user.
B) consumer.
C) business user.
D) wholesaler to retailer to consumer.
E) agent.

Question 41

Clothing manufacturers typically prefer ____ distribution.

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

Question 42

Products such as very expensive Patek Philippe wristwatches are distributed using ____ distribution.

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

Question 43

Which of the following is becoming common for mass merchandisers and involves asking a supplier in a particular area of specialty how to stock shelves?

A) Exclusive distribution
B) Selective distribution
C) Category management
D) Inventory management
E) Chain management

Question 44

Nine West manufactures leather goods such as shoes and handbags. Which form of distribution is this company most likely to use?

A) Exclusive
B) Intensive
C) Comprehensive
D) Agent-driven
E) Selective

Question 45

A large restaurant with locations throughout the United States has a long-term partnership with Tyson for its poultry and a produce distributor for its fruits and vegetables. These relationships reduce inefficiencies and costs and result in higher customer satisfaction. This restaurant is successfully using

A) exclusive distribution.
B) vertical channel integration.
C) supply-chain management.
D) intensive distribution.
E) wholesale intermediaries.

Question 46

Microsoft is able to dictate when, where, and at what price its products are to be sold because it is involved in a(n) ____ VMS with its intermediaries.

A) agency
B) corporate
C) contractual
D) administered
E) cooperative

Question 47

If the Levi denim manufacturer ships its goods to its own Levi outlet stores, Levi is actively involved in a(n)

A) contractual VMS.
B) administered VMS.
C) vertical management system.
D) retail VMS.
E) corporate VMS.

Question 48

Consumers who strongly feel that the distribution channel should be made as short as possible also assume that the fewer the intermediaries, the

A) less convenient the system.
B) lower the price.
C) higher the price.
D) more marginal the product.
E) more traditional the system.

Question 49

PepsiCo buys a can manufacturing company. This is an example of

A) intensive distribution.
B) vertical channel integration.
C) exclusive integration.
D) intensity of market coverage.
E) contractual distribution.

Question 50

In a(n) ____ VMS, one of the channel members dominates the other members, perhaps because of its large size.

A) cooperative
B) contractual
C) administered
D) corporate
E) agency

Question 51

Gap manufactures clothing and then sends it to its Gap, Old Navy, and Banana Republic stores. Gap is involved in

A) contractual VMS.
B) corporate VMS.
C) intensive distribution.
D) administered VMS.
E) business VMS.

Question 52

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

A) supply-chain management.
B) vertical marketing systems.
C) horizontal marketing systems.
D) contractual vertical marketing systems.
E) intensive distribution.

Question 53

Whirlpool Appliances would most likely use ____ distribution to sell its products.

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

Question 54

Anheuser-Busch Brewing purchases Lone Star Distribution, a beer distribution company in San Antonio, Texas. This is an example of a(n) ____ VMS.

A) agency
B) corporate
C) contractual
D) administered
E) cooperative

Question 55

The obligations and rights of Chuck's wholesale food business within his channel are clearly defined in legal agreements with other channel members. This represents a(n)

A) exclusive distribution arrangement.
B) cooperative VMS.
C) corporate VMS.
D) contractual VMS.
E) administered VMS.

Question 56

A VMS is a centrally managed distribution channel resulting from

A) exclusive distribution.
B) selective distribution.
C) intensive distribution.
D) intensity of market coverage.
E) vertical channel integration.

Question 57

Steinway, a manufacturer of custom-made, concert-quality grand pianos, would most likely choose ____ distribution for its products.

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

Question 58

Manufacturers of furniture, clothing, and major electrical appliances generally use ____ distribution.

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

Question 59

Which of the following statements is true about wholesalers?

A) Wholesalers and the functions they perform are unnecessary in the marketing channel.
B) While wholesalers can be avoided, the functions they provide are necessary.
C) Eliminating a wholesaler will always decrease distribution costs.
D) Wholesalers typically sell their products to end customers.
E) Most marketing channels have at least two wholesalers involved in the distribution of goods.

Question 60

The three types of vertical marketing systems are

A) contractual, corporate, and authoritative.
B) corporate, administered, and contractual.
C) administered, contractual, and combination.
D) administered, corporate, and legal.
E) legal, corporate, and consensual.

Question 61

Sandy is a specialist in crude oil. She represents buyers or sellers and is generally hired on a temporary basis. She is known for her expertise in crude oil. Sandy is a(n)

A) agent.
B) limited-line wholesaler.
C) broker.
D) commission merchant.
E) full-service wholesaler.

Question 62

Which of the following is not an example of how a wholesaler might provide financial aid to a retailer?

A) Wholesalers may delay billing for several months on seasonal products.
B) By making frequent deliveries of merchandise, wholesalers help reduce retailers' investments in inventory.
C) Payment may not be required by the wholesaler until 30 to 90 days after the merchandise has been delivered to the retailer.
D) Wholesalers may extend financial assistance through long-term loans.
E) Retailers often need less operating capital when they use wholesalers.

Question 63

Trask, Inc., sells luggage and other related equipment online. When it receives an order, the order automatically goes to Williams Distribution. Williams gets the merchandise from its warehouse and ships it to the customer. Trask is in charge of all other aspects of the purchase. Williams Distribution is a ____ wholesaler.

A) full-service
B) limited-service
C) specialty-line
D) limited-line
E) commission merchant

Question 64

Your neighborhood grocer buys fresh shrimp from one wholesaler who carries only shellfish. This type of supplier is a ____ wholesaler.

A) specialty-line
B) full-service
C) limited-service
D) general-merchandise
E) specialty-service

Question 65

Wholesalers that perform the entire range of wholesaler functions are ____ wholesalers.

A) full-service
B) general-merchandise
C) limited-line
D) limited-service
E) specialty-line

Question 66

Merchant wholesalers usually do not

A) operate one or more warehouses.
B) take title to goods.
C) store goods in warehouses.
D) purchase in large quantities.
E) sell to consumers.

Question 67

During certain special times, Douglas actually works at the retail outlet where his employer sells a variety of manufacturer's food products. Douglas is providing ____ in his role as a wholesaler.

A) financial aid
B) the assumption of credit risks
C) market information
D) promotion
E) intermediation

Question 68

The A-1 Computer Store buys computer parts from Ingram Micro, a wholesaler. All of the following are services that Ingram Micro is likely to provide to A-1 except

A) helping finance purchases.
B) keeping up-to-date computer component information.
C) manufacturing out-of-stock components.
D) arranging trade shows.
E) offering promotional incentives.

Question 69

Most manufacturers do not want to store large amounts of nuts, bolts, and screws, but they need to be able to get them out quickly when necessary for production. Regal Company is a wholesaler that will deliver most parts right to the factory within two hours of the order. Regal, like many other wholesalers, focuses on

A) providing unique parts.
B) service.
C) a high level of product knowledge.
D) productivity.
E) effectiveness.

Question 70

A sales agent provides all of the following advantages except

A) immediate entry into a territory.
B) selling experience.
C) a predetermined selling expense.
D) a warehouse.
E) regular calls on customers.

Question 71

A sales agent that is owned by a manufacturer is called a

A) manufacturer's sales office.
B) sales representative.
C) jobber.
D) distributor.
E) commission merchant.

Question 72

A ____ is in essence a merchant wholesaler that is owned by a manufacturer.

A) sales force
B) manufacturer's sales branch
C) jobber
D) distributor
E) commission merchant

Question 73

A functional middleman who does not take title to products and who is compensated by commissions paid by producers is called a(n)

A) retailer.
B) wholesaler.
C) jobber.
D) agent.
E) limited-line wholesaler.

Question 74

A middleman that purchases goods in large quantities and then sells them to retailers is called a

A) retailer.
B) merchant wholesaler.
C) commission merchant.
D) manufacturer's agent.
E) manufacturer's sales branch.

Question 75

A ____ wholesaler deals in a wide variety of products.

A) general-merchandise
B) limited-line
C) specialty-line
D) full-service
E) merchant

Question 76

Simpson Micro owns warehouses that stock computer software. It offers net terms to retail stores, offers specials and promotions, and provides customer service. Simpson Micro is a(n) ____ wholesaler.

A) general-specialty
B) general-merchandise
C) rare-service
D) specialty-line
E) agent

Question 77

All of the following are services provided by wholesalers to retailers except

A) buying in large quantities and selling in smaller quantities.
B) promoting the product.
C) supplying marketing information.
D) manufacturing a wide selection of products.
E) helping finance purchases.

Question 78

McLane Distributors, a wholesaler, buys large quantities of health and beauty care products, light bulbs, batteries, canned food, computer disks, and more and sells them to retailers. McLane is a(n) ____ wholesaler.

A) agent
B) limited-line
C) selected merchandise
D) specialty-line
E) general-merchandise

Question 79

A middleman that carries a select group of products within a single line is called a(n) ____ wholesaler.

A) full-service
B) limited-line
C) limited-service
D) specialty-line
E) agent

Question 80

Although he carries electronic merchandise, Nate does not actually take title to the goods but instead negotiates sales and sets the prices for manufacturers. Nate is a(n)

A) broker.
B) agent.
C) merchant wholesaler.
D) limited-service wholesaler.
E) commission merchant.