Deck 15: Distributing Products

Question 1

Marketing costs make up less than 25 percent of the total cost of the goods consumers buy.

Answer 1

False

Question 2

Some manufacturers sell directly to consumers or businesses rather than relying on marketing intermediaries.

Answer 2

True

Question 3

Retailers are marketing intermediaries who sell to ultimate consumers.

Answer 3

True

Question 4

The activities performed by most marketing intermediaries are not essential to the marketing process.

Question 5

An effective channel of distribution does more than simply ensure that goods are transported efficiently from producer to buyer.

Question 6

The costs added by marketing intermediaries usually outweigh the value they create.

Question 7

Brokers are marketing intermediaries that do not take title to the goods they help distribute.

Question 8

Organizations that assist in moving goods and services from producers to business and consumer users are called supply-side transition specialists.

Question 9

Agents are marketing intermediaries who take title to the goods they distribute and provide credit to customers who need it.

Question 10

Some economists would say that intermediaries add costs to the channel of distribution and need to be eliminated.

Question 11

The best way to reduce the cost of goods is to eliminate marketing intermediaries from the distribution channel.

Question 12

Marketers claim that intermediaries add value to the channel of distribution that outweighs the cost.

Question 13

Agents and brokers and wholesalers are types of marketing intermediaries.

Question 14

Manufacturers are usually able to perform marketing functions, such as transporting, advertising, and storing, faster and more cheaply than marketing intermediaries.

Question 15

Wholesalers are marketing intermediaries who sell goods or services to ultimate consumers.

Question 16

Most marketing intermediaries have survived in the past because consumers were unaware of how much these companies add to the cost of distributing goods.

Question 17

Marketing intermediaries have survived because they have been able to perform marketing functions more efficiently and effectively than a manufacturer or consumer could perform these functions.

Question 18

A channel of distribution consists of the marketing intermediaries who join together to transport and store goods in their path from producers to consumers.

Question 19

One way marketing intermediaries improve marketing efficiency is by reducing the number of exchange relationships necessary to move goods through the channel of distribution.

Question 20

Marketing intermediaries must charge a price for the functions they perform. Thus, a surefire way to reduce distribution costs is to eliminate marketing intermediaries from the channel of distribution.

Question 21

A key way for traditional retailers to compete with direct marketing is by providing outstanding service utility.

Question 22

To marketers, the term utility refers to the value added to goods or services by organizations when they make the product more useful or accessible to consumers.

Question 23

Producers normally provide form utility, but retailers sometimes also provide this type of utility.

Question 24

Once the final customer has taken title to a good, marketing intermediaries no longer are involved in providing utility to the customer.

Question 25

Marketing intermediaries concentrate on providing mainly form, time and place utility, while producers focus on the provision of possession, information, and service utility.

Question 26

Currently, Halperin Electrical sells directly to thousands of industrial customers. Halperin could reduce the number of exchange relationships by including wholesalers in its channel of distribution.

Question 27

Jack Deck is a computer salesperson for a major retail electronics chain. When he advises customers to help them select a computer that will meet their needs, Jack is providing information utility.

Question 28

Salespeople can be important providers of information utility.

Question 29

Providing buyers with credit terms such as "90 days same as cash" is a way marketing intermediaries can provide time utility to customers.

Question 30

One way that marketers can provide utility is by making sure the good is available at a location that is convenient for consumers.

Question 31

Marketers provide a total of four types of utility: primary, secondary, marginal, and total.

Question 32

Sav-U-More Grocery Store sells a wide range of foods and household supplies to households in Miller's Creek, a suburb of a large city. The store advertises that its prices are much lower than the prices charged by larger supermarket chains in the area. This low-price approach means that Sav-U-More is a classic example of a merchant wholesaler.

Question 33

Although HelpUSell brings together buyers and sellers and helps negotiate exchanges, it does not actually take title to any of the goods being traded. HelpUSell would be classified as an agent or broker.

Question 34

In today's competitive market environment, traditional retailers will need to put more emphasis on providing form and place utility, and less emphasis on service utility.

Question 35

According to the Seeking Sustainability box, IKEA found that even though paper pallets can only be used once, they can help reduce shipping costs and are easier to recycle.

Question 36

Marketers normally provide form, time, place, information and service utility, but they are seldom involved in providing possession utility.

Question 37

Delivery, installation, and follow-up services are the most common ways that marketing intermediaries provide information utility.

Question 38

Hartselle Home Products, Inc., manufactures a variety of inexpensive household gadgets. The company has decided to cut costs by eliminating all of the marketing intermediaries who help distribute its products. Hartselle will be able to reduce its total marketing costs by eliminating the marketing functions these intermediaries perform.

Question 39

Form utility has become the most important utility provided by retailers.

Question 40

Jessica Talmadge is a real estate agent who brings together the buyers and sellers of houses and commercial property. Jessica helps the parties negotiate the terms and conditions of real estate sales, but she does not take title to the property, provide credit, or assume any risks associated with the exchanges she helps negotiate. Because Jessica provides only limited services, she is not a true marketing intermediary.

Question 41

The main difference between agents and brokers is that agents perform a wide array of marketing functions while brokers only negotiate exchanges between buyers and sellers.

Question 42

Rack jobbers furnish racks or shelves full of merchandise to retailers and keep title to these goods until they are sold.

Question 43

A retail sale is a sale to a consumer of products for his or her own use.

Question 44

Merchant wholesalers do not take title to the goods they handle.

Question 45

Drop shippers are limited function wholesalers that typically put together many small shipments to form a single larger shipment.

Question 46

Limited-function wholesalers are a type of merchant wholesaler.

Question 47

The two main types of merchant wholesalers are storage wholesalers and distribution wholesalers.

Question 48

The sale of goods to a business purchasing the items for resale is a wholesale transaction.

Question 49

Rack jobbers sell goods on consignment, splitting the profits from their sales with a retailer.

Question 50

Some marketing intermediaries make both wholesale and retail sales.

Question 51

A firm that makes wholesale sales cannot also legally make retail sales.

Question 52

Drop shippers are wholesalers that stock heavy or bulky items and transport them to retail stores.

Question 53

Although drop shippers own merchandise they have shipped to buyers, they do not actually handle, stock, or deliver this merchandise themselves.

Question 54

As long as they do not represent competing products, manufacturer's agents can represent more than one manufacturer in a given sales territory.

Question 55

Cash-and-carry wholesalers and drop shippers are both classified as limited-function wholesalers.

Question 56

About 80 percent of all wholesalers are classified as merchant wholesalers.

Question 57

A key distinction between agents and brokers is that agents tend to maintain long-term relationships with the people they represent whereas brokers are hired on a temporary basis.

Question 58

Cash-and-carry wholesalers are limited-function wholesalers that serve mostly smaller retailers with a limited assortment of products.

Question 59

Frank Crimmins was driving on Interstate 85 in eastern Alabama when he noticed he was running low on gas. Frank was relieved when he found a gas station open at the next exit just 2 miles ahead. This is an example of the value place utility provides to a consumer.

Question 60

A sales agent is an agent who represents the interests of the consumer in a particular territory when negotiating terms of purchases made directly from a producer.

Question 61

Discount stores, department stores, supermarkets, and specialty stores are all among the major types of retail stores.

Question 62

Department stores offer a wide variety of products that are sold in separate departments.

Question 63

Barbara Dixon operates a small business out of her home. She makes a trip to a local Riteprice Office Supply about once a month to buy computer and office supplies for her business. The prices at the Riteprice are very low, but it does not offer credit or delivery services. Riteprice is a cash-and-carry wholesaler.

Question 64

Merrill helps growers of fresh fruits and vegetables negotiate sales to food processing companies. However, once he has helped negotiate the transaction, he does not maintain a long-term relationship with the growers. Merrill is an example of a sales agent in this market.

Question 65

Discount stores and department stores sell different brands of products that are usually priced about the same.

Question 66

A full-service wholesaler will provide suppliers with market information they can't afford or can't obtain themselves.

Question 67

A category killer is an extremely successful product that kills the sales of other products in its category in a retail store.

Question 68

Exclusive distribution is the use of only one retail outlet in a given geographic area.

Question 69

Specialty stores use a wide variety of products in one product category as their key competitive tool.

Question 70

Warehouse clubs are usually smaller than supermarkets.

Question 71

Discount stores compete in the retail market mainly on the basis of price.

Question 72

A distribution strategy that puts the product into as many retail outlets as possible is known as an intensive distributive strategy.

Question 73

Retail organizations employ more than 5 million people in the U.S.

Question 74

Henry Hart supplies shelves of inexpensive plastic toys to grocery stores, supermarkets, and drug stores. He keeps title to the goods until they are sold and then splits the profits with the retailer. Henry works as a drop shipper.

Question 75

A broker can expect to earn a fixed amount of profit for her efforts regardless of the dollar value of the contract she negotiated.

Question 76

Candy, gum, cigarettes, and popular magazines are usually distributed using a selective distribution strategy.

Question 77

Warehouse clubs compete with enhanced service to customers and seldom try to compete on price.

Question 78

Category killer stores tend to compete mainly on the basis of carrying a wide array of products, superior service, and low prices.

Question 79

Wholesalers may provide market information and business consulting services.

Question 80

Larry and Dale Ingram solicit orders for lumber from area wholesalers and retailers specializing in building supplies and arrange to have the orders shipped directly from nearby logging companies. Larry and Dale operate as drop shippers.