Deck 12: Distribution Channels

Question 1

Firms that sell products directly to consumers are called:

A)promoters.
B)retailers.
C)wholesalers.
D)producers.
E)suppliers.

Answer 1

B

Question 2

Which of the following is an example of a facilitating function that intermediaries perform?

A)Transporting goods to customers
B)Purchasing goods for resale
C)Maintaining inventory
D)Extending credit to customers
E)Transacting with potential customers

Answer 2

D

Question 3

Firms that buy products from manufacturers and resell them to firms that sell products directly to consumers are called:

A)producers.
B)promoters.
C)manufacturers.
D)retailers.
E)wholesalers.

Answer 3

E

Question 4

Which of the following is an example of a logistical function that intermediaries perform?

A)Promoting products to attract consumers
B)Purchasing goods for resale
C)Maintaining inventory
D)Extending credit to customers
E)Sharing competitive intelligence about customers

Question 5

A retail store that sells multiple brands helps brands obtain competitive intelligence about the customers.Which of the following intermediary functions does this relate to?

A)Physical distribution
B)Financing
C)Promotion
D)Risk taking
E)Gathering information

Question 6

Which of the following is NOT an example of a transactional function that intermediaries perform?

A)Promote products to attract consumers
B)Purchasing goods for resale
C)Transact with potential customers
D)Own inventory that can become outdated
E)Sharing competitive intelligence about customers

Question 7

Logistics was traditionally the responsibility of:

A)procurements
B)suppliers
C)operations
D)marketing departments
E)administrations

Question 8

Novelty Stores is a small firm that sells its products directly to consumers.The company stores many brands of consumer goods and other low-value items.Novelty Stores is a(n):

A)organizer.
B)retailer.
C)producer.
D)supplier.
E)wholesaler.

Question 9

A retailer displays a huge billboard of the products of a manufacturer to attract consumers.This is an example of the retailer's:

A)facilitating function.
B)logistical function.
C)transactional function.
D)informational function.
E)distributive function.

Question 10

The integration of two or more activities to plan, implement, and control the efficient flow of raw materials, in-process inventory, and finished goods from the point of origin to the point of consumption is called:

A)marketing management.
B)resource management.
C)logistics management.
D)total quality management.
E)production management.

Question 11

Prime Stores is located in Prince Albert, Saskatchewan.The store displays different types of home furniture, and most of the store's business comes from individual consumers.The firm displays products of many manufacturers.Prime Stores is a(n):

A)organizer.
B)producer.
C)retailer.
D)supplier.
E)wholesaler.

Question 12

AK Associates is a firm that buys products from various manufacturing companies and resells the goods to other businesses.AK Associates is an example of a:

A)wholesaler.
B)promoter.
C)manufacturer.
D)retailer.
E)producer.

Question 13

Most U.S.companies pay listing fees to get shelf space in retail outlets.Which of the following factors has contributed the most to the advent of listing fees?

A)Retail business is negatively influenced by the economic slowdown.
B)The Internet has emerged as a strong distribution channel.
C)The number of retail chains have increased drastically.
D)Many new products are being introduced each day.
E)The importance given to product quality has strengthened.

Question 14

Costco purchase products from suppliers from all over the world in bulk and sell them to consumers.Costco is a:

A)Wholesaler
B)Supplier
C)Producer
D)Retailer
E)Warehouse

Question 15

The set of institutions that transfer the ownership of and move goods from the point of production to the point of consumption is called the:

A)distribution channel.
B)operational structure.
C)production structure.
D)marketing channel.
E)procurement channel.

Question 16

Value Inc.is a manufacturer of high-definition televisions.The firm sells its products through external resellers.The resellers transport the products to the buyers' location and take care of the installation.The functions performed by the reseller exemplify which function performed by intermediaries?

A)Facilitating
B)Logistical
C)Transactional
D)Financing
E)Promotional

Question 17

Which one of the following statements is NOT true about distribution channels:

A)Distribution channel is part of the overall supply chain.
B)Wholesalers and retailers are potential intermediaries in distribution channels.
C)Ownership transfer of goods are required in a distribution channel.
D)Distribution channels add value for customers
E)Distribution strategy is independent of other marketing elements.

Question 18

Distribution channels add value for customers because they:

A)are the most important component of product promotions
B)conduct multiple quality reviews for a product
C)do not include external entities or vendors
D)get products to buyers quickly and at low cost
E)are crucial only for technical offerings of products

Question 19

Wills Cycles is the largest seller of Rober Bicycles in Manitoba.The firm ships products directly from Rober's manufacturing plant and sells the products to smaller firms across Manitoba.Wills Cycles is a:

A)promoter.
B)supplier.
C)retailer.
D)manufacturer.
E)wholesaler.

Question 20

Furntech Inc.sells office furniture.The firm procures merchandise from different manufacturers in Canada and sells it to smaller sellers in Lethbridge.Furntech is an example of a:

A)producer.
B)promoter.
C)manufacturer.
D)retailer.
E)wholesaler.

Question 21

Bentley is a luxury automobile car.The price range is between $200,000 and $400,00 CAN.What distribution intensity Bentley is likely to use?

A)Intensive distribution
B)Selective distribution
C)Exclusive distribution
D)Extensive distribution
E)Geographical distribution

Question 22

Which of the following will strengthen the chances of direct distribution?

A)Low listing fees in the industry
B)Scattered target consumers
C)Low value of the products
D)Fewer consumers
E)Reduced shelf space in outlets

Question 23

Which of the following tools is commonly used in a pull strategy?

A)Product bundling
B)Green marketing
C)Vertical marketing
D)Print advertising
E)Personal selling

Question 24

The number of channel members to use at each level of the supply chain is called:

A)procurement intensity.
B)channel structure.
C)distribution intensity.
D)distribution frequency.
E)procurement frequency.

Question 25

Fine Computers Inc.is a manufacturer of personal computers and computer parts.The company sells all its products by allowing customers to select specific products they want and place orders online.This distribution system is an example of which type of distribution?

A)Circular
B)Direct
C)Parallel
D)Multiple
E)Multichannel

Question 26

Which of the following distribution strategies grants rights to sell to one or very few retail customers so that no other store can sell a particular brand?

A)Intensive distribution
B)Selective distribution
C)Exclusive distribution
D)Extensive distribution
E)Geographical distribution

Question 27

Which of the following entities is a marketing intermediary?

A)Wholesaler
B)Retailer
C)Manufacturer
D)Distributor
E)Franchisee

Question 28

Which of the following is an example of using a pull strategy?

A)A company increases the number of intermediaries to sell its products.
B)A retail shop announces a stock clearance sale.
C)An insurer hires more agents to sell more.
D)A firm appoints more salespeople to increase sales.
E)A company uses mass media advertisements for its products.

Question 29

Sodo Cola is a leading manufacturer of soda.The firm believes in making the products visible and continually attempts to place its products in as many outlets as possible.In the context of distribution intensity, what type of distribution strategy is the firm using?

A)Exclusive
B)Territorial
C)Selective
D)Intensive
E)Expansive

Question 30

Which of the following actions of a manufacturer is most likely to increase distribution intensity?

A)Storing lesser inventory in warehouses
B)Introducing more products
C)Increasing the number of outlets
D)Introducing a new product line
E)Reducing the number of intermediaries

Question 31

Mystic Gifts is a manufacturer of gift articles.The company sells its products to businesses and individual consumers.The company sells directly to most of its industrial buyers by using company salespeople and sells to individual consumers through third-party retail outlets.The company also has an Internet shop to sell gifts.What type of distribution strategy has Mystic Gifts adapted?

A)Indirect distribution
B)Circular distribution
C)Direct distribution
D)Personal distribution
E)Multichannel distribution

Question 32

Direct distribution channels allow manufacturers to:

A)create more inventory in distribution.
B)deal directly with consumers.
C)purchase goods for resale.
D)transfer the risk of ownership.
E)secure shelf space in retail outlets.

Question 33

With a push strategy, a manufacturer focuses its promotional efforts on:

A)channel members to convince them to carry its product.
B)customers to create more demand for specific brands.
C)reducing the number of its intermediaries.
D)creating demand for the company's products as a whole.
E)selling products by using new channels such as the Internet.

Question 34

Shopping product manufacturers are more likely to adopt which distribution intensity?

A)Exclusive
B)Selective
C)Intensive
D)Geographical
E)Direct

Question 35

Delight Supermarkets is a retail company that sells the products of IFS Appliances in Canada.IFS Appliances do not have any other retail partners in Canada.What type of distribution strategy is this?

A)Extensive
B)Selective
C)Intensive
D)Exclusive
E)Geographical

Question 36

Which of the following strategies is designed to get products into as many outlets as possible?

A)Territorial distribution
B)Exclusive distribution
C)Intensive distribution
D)Expansive distribution
E)Selective distribution

Question 37

With a pull strategy, a manufacturer focuses its promotional efforts on:

A)channel members to convince them to carry its product.
B)forcing channel members to stock less inventory.
C)reducing the number of its intermediaries.
D)selling products by using new channels such as the Internet.
E)building demand for products by focusing on consumers.

Question 38

Electrode is a manufacturer of commercial washing machines.The firm uses personal selling to sell its products to various channel members who then distribute the product to consumers.What type of strategy is the firm using?

A)Promotion-based
B)Push distribution
C)Indirect marketing
D)Direct distribution
E)Demand distribution

Question 39

Which of the following tools is commonly used in a push strategy?

A)Social advertising
B)Print advertising
C)Personal selling
D)TV commercials
E)Direct mail campaigns

Question 40

The logistical function performed by intermediaries that involves maintaining inventory and protecting goods of manufacturers is called:

A)promotion.
B)financing.
C)risk taking.
D)physical distribution.
E)selling.

Question 41

A facility for the receipt, storage, and redistribution of goods to company stores or customers that may be operated by retailers, manufacturers, or distribution specialists is called a:

A)procurement centre.
B)supply network.
C)warehouse.
D)processing centre.
E)distribution centre.

Question 42

An electronic document that a supplier sends a retailer before a shipment to tell the retailer exactly what to expect in the shipment is called a(n):

A)supplier dispatch file.
B)quick shipment response.
C)advanced shipping notice.
D)lead-time script.
E)purchase document.

Question 43

A supply chain system in which there is no common ownership and no contractual relationships, but the dominant channel member controls the channel relationship is referred to as a(n)_____ vertical marketing system.

A)administered
B)independent
C)franchised
D)corporate
E)contractual

Question 44

Canmart is the largest retailer in Canada.The firm, because of its large scale of operation, has absolute control over the elements in its supply chain, including distributors and retailers.This is an example of a(n)_____ marketing system.

A)corporate vertical
B)contractual vertical
C)administered vertical
D)contractual parallel
E)administered parallel

Question 45

Which of the following combines the entrepreneurial advantages of owning a business with the efficiencies of vertical marketing systems that function under single ownership?

A)A franchise system
B)A partnership
C)A strategic alliance
D)A joint venture
E)A proprietorship

Question 46

In a conventional distribution channel, relationships between members often are based on the argument over the:

A)operational orientation of products.
B)needs of consumers.
C)quality of products.
D)split of the profit pie.
E)service orientation of offerings.

Question 47

The black and white bar code found on most merchandise is called a(n):

A)universal product code.
B)point-of-sale record.
C)RFID tag.
D)process card.
E)proof of purchase.

Question 48

The computer-to-computer transfer of business documents from a retailer to a vendor and back is called a(n):

A)quick-response system.
B)electronic data interchange.
C)data warehouse.
D)just-in-time transfer.
E)enterprise resource system.

Question 49

A contractual agreement between two firms that allows one of the firms to operate a retail outlet, using a name and format developed and supported by the other firm, is called:

A)outsourcing.
B)franchising.
C)patenting.
D)consulting.
E)cross-licensing.

Question 50

A supply chain relationship in which members are committed to maintaining long-term interactions and investing in mutually beneficial opportunities is referred to as a(n)_____ relationship.

A)informational
B)strategic
C)logistical
D)functional
E)operational

Question 51

Which of the following statements about strategic relationships is true?

A)Strategic relationships are also called entrepreneurial relationships.
B)Supply chain members are committed to maintaining short-term relationships.
C)In a conventional supply chain, there are no significant incentives to establishing a strategic relationship.
D)Strategic relationships are created explicitly to uncover and exploit joint opportunities.
E)Supply chain members need not have common goals for a successful relationship to develop.

Question 52

Conflicts in a distribution channel are generally more pronounced when:

A)the industry in which the channel exists is a monopoly.
B)a company relies on other channel members.
C)the channel members are independent entities.
D)a company is using a direct distribution strategy.
E)the channel members share common goals.

Question 53

Green Constructions is a leading name in the construction business and is the major client for a new steel manufacturing unit, Mansion Steels.However, Green Constructions, being the dominant channel member, has total control over the relationship.This is an example of a(n)_____ vertical marketing system.

A)independent
B)corporate
C)franchised
D)contractual
E)administered

Question 54

A system in which independent firms at different levels of the supply chain join together through agreements to obtain economies of scale and co-ordination and to reduce conflict is referred to as a(n)_____ vertical marketing system.

A)administered
B)corporate
C)parental
D)contractual
E)member control

Question 55

RFX Cycles is a manufacturer of bicycles.The firm is the only manufacturer of cycles in the country and controls and imposes terms on all its supply chain partners although it has no legal obligations.This is an example of a(n)_____ vertical marketing system.

A)independent
B)contractual
C)franchised
D)corporate
E)administered

Question 56

DX Motors has established legal relationships with its suppliers and distributors in such a way as to establish overall economies of scale and to reduce conflict.This is an example of a(n)_____ vertical marketing system.

A)administered
B)corporate
C)parental
D)contractual
E)member control

Question 57

A company with a corporate vertical marketing system is most likely to:

A)join with other firms through contracts to obtain economies of scale and co-ordination.
B)satisfy its own objectives and maximize its own profits, often at the expense of the others.
C)have less control and cannot dictate the priorities and objectives of the supply chain.
D)own facilities such as manufacturing plants, warehouse facilities, and retail outlets.
E)allow another firm to operate a retail outlet, using the format developed by the company.

Question 58

A system in which the parent company has complete control and can dictate the priorities and objectives of the supply chain is referred to as a(n)_____ vertical marketing system.

A)administered
B)corporate
C)co-ordinative
D)contractual
E)member control

Question 59

Which of the following is one of the important factors for successful strategic relationships?

A)Mutual trust
B)Closed communication
C)Varied goals
D)Intangible investments
E)Exclusive distribution

Question 60

Successful strategic relationships require all the followings, EXCEPT:

A)Open communication
B)Common goals
C)Mutual trust
D)Mutual contract
E)Credible commitments

Question 61

Which of the following is a type of distribution centre to which vendors ship merchandise prepackaged in the quantity required for each store?

A)Traditional
B)Combinations
C)Cross-docking
D)Vertical
E)Corporate

Question 62

The process of going through the goods upon receipt to ensure they arrived undamaged and that the merchandise ordered was the merchandise received is referred to as:

A)receiving.
B)checking.
C)dispatching.
D)shipping.
E)merchandising.

Question 63

The need for the supply chain members to constantly monitor and check up on each other's actions is reduced by:

A)sharing common goals.
B)avoiding risk taking.
C)maintaining confidentiality.
D)developing mutual trust.
E)using closed communication.

Question 64

Lead time is the amount of time between:

A)the recognition that an order needs to be placed and the arrival of the needed merchandise.
B)manufacturing a product and taking the product to the warehouse.
C)the conception of a product idea and the manufacture of a product.
D)the conception of a product idea and the procurement of raw materials.
E)procuring the necessary raw materials and assembling the raw materials to a finished product.

Question 65

The person who co-ordinates deliveries to distribution centres is called a:

A)wholesaler.
B)retailer.
C)dealer.
D)distributor.
E)dispatcher.

Question 66

Josfer stores finished goods at resellers' storehouses rather than at the company's warehouse.This is an example of which function that intermediaries perform?

A)Transactional
B)Supportive
C)Logistical
D)Facilitating
E)Collaborating

Question 67

Zenith Stores is experiencing unexpectedly large sales of refrigerators for the month.The company plans to place orders for more refrigerators and places an order after three weeks.It receives the order after two weeks of placing the order.What is the lead time in this case?

A)One week
B)Two weeks
C)Three weeks
D)Four weeks
E)Five weeks

Question 68

Which of the following is an advantage of just-in-time systems?

A)Improved brand value
B)Increased market share
C)Restricted distribution intensity
D)Intensified distribution
E)Decreased inventory investment

Question 69

The process of recording the receipt of merchandise as it arrives at a distribution centre or store is referred to as:

A)receiving.
B)checking.
C)dispatching.
D)shipping.
E)merchandising.

Question 70

Josfer requires its intermediaries to sell goods to other intermediaries, whenever possible.The intermediaries, in this case, are performing which function?

A)Transactional
B)Supportive
C)Logistical
D)Facilitating
E)Collaborating

Question 71

Successful strategic relationships develop because both parties:

A)only make intangible investments in the relationship.
B)make credible commitments to the relationship.
C)have dissimilar goals and varied interests.
D)share only limited information with one another.
E)focus on maintaining the relationship for a short period.

Question 72

Which of the following is an example of a facilitating function that Josfer's supply chain partners might perform?

A)They maintain inventory and protect goods.
B)They purchase goods from Josfer.
C)They own the finished goods of Josfer.
D)They transact with potential customers.
E)They extend credit to Josfer's customers.

Question 73

Vendor-Managed Inventory is:

A)An approach in which the wholesale is responsible for replacing inventory to meet retailers' needs.
B)An approach in which the manufacturer is responsible for replacing inventory to meet retailers' needs.
C)An approach in which the manufacturer train retailers' salespeople to sell more.
D)An approach in which the wholesalers train retailers' salespeople to sell more.
E)An approach in which all marketing intermediaries share their inventory information.

Question 74

A key advantage of a radio frequency identification tag is that it:

A)helps deliver less merchandise on a more frequent basis.
B)co-ordinates deliveries to distribution centres.
C)eliminates the need to handle items individually.
D)prevents distribution centres from receiving whole truckloads of merchandise.
E)enables manufacturers and distributors to increase overall inventory.

Question 75

Which of the following gives both members of a strategic relationship an incentive to pool their strengths and abilities and exploit potential opportunities together?

A)Extrinsic rewards
B)Intrinsic rewards
C)Channel conflicts
D)Intangible investments
E)Shared goals

Question 76

Radio frequency identification tags are:

A)networking systems.
B)tiny computer chips.
C)inventory systems.
D)recognition systems.
E)bar codes on merchandise.

Question 77

_____ inventory management system is designed to deliver less merchandise on a more frequent basis.

A)Lead-time
B)Radio
C)Vertical
D)Just-in-time
E)Administered

Question 78

Which of the following is key to developing successful strategic relationships?

A)Being unwilling to take risks
B)Focusing on maintaining a short-term relationship
C)Maintaining open and honest communication
D)Making intangible investments in the relationship
E)Concealing confidential information

Question 79

Ryan, who works in a distribution centre, co-ordinates its activities.He assigns time slots for the shipments that arrive at the distribution centre.Ryan is working as a:

A)wholesaler.
B)retailer.
C)dispatcher.
D)dealer.
E)distributor.

Question 80

What is an inventory management system used in retailing in which merchandise is received just in time for sale when the customer wants?

A)Electronic data interchange system
B)Universal product system
C)Franchising system
D)Quick response system
E)Radio frequency identification system