Question 1

Bulk-breaking means separating products into grades and qualities desired by different target markets.

Accepted Answer

A) True 
 B)False

Question 2

The terms "direct marketing" and "direct distribution" mean the same thing.

Accepted Answer

A) True 
 B)False

Question 3

Management contracting is a relatively low risk way of entering foreign markets, since no commitment is made to fixed facilities.

Accepted Answer

A) True 
 B)False

Question 4

A computer manufacturer runs training programs for its "cooperating" retailers' salespeople, as well as providing newspaper advertising layouts, point-of-purchase materials, and sales manuals. This is an example of:

Accepted Answer

A)  an administered channel system. 
B)  a contractual channel system. 
C)  a traditional channel system 
D)  a vertically integrated corporate channel system. 
E)  a franchising system.

Question 5

AsianArt4U.com brings together the art produced by many different Asian painters and sculptors -- and offers them for sale on its website. This is an example of

Accepted Answer

A)  accumulating 
B)  sorting 
C)  a franchise channel 
D)  a discrepancy intermediary 
E)  bulk-breaking

Question 6

InterContinental Hardware Co. buys carload quantities of bolts, screws, nuts, washers, and other hardware from a large producer in the Netherlands, breaks these shipments into smaller quantities, and sells them to other wholesalers and retail chains. This "regrouping activity" is called:

Accepted Answer

A)  assorting. 
B)  wholesaling. 
C)  accumulating. 
D)  bulk-breaking. 
E)  sorting.

Question 7

______________ means selling a product through only one wholesaler or retailer in a particular geographic area.

Accepted Answer

A)  Exclusive distribution 
B)  Direct distribution 
C)  Intensive distribution 
D)  Multichannel distribution 
E)  Selective distribution

Question 8

Which of the following is a function that an intermediary is likely to provide for customers?

Accepted Answer

A)  reduce inventory costs 
B)  regroup products 
C)  provide delivery 
D)  grant credit 
E)  All of these are functions provided for customers.

Question 9

A "channel captain" is a manager who helps direct the activities of a whole channel.

Accepted Answer

A) True 
 B)False

Question 10

Joint venturing gives a firm less control than if it owns a separate subsidiary.

Accepted Answer

A) True 
 B)False

Question 11

In international markets, a firm can sell its management and marketing know-how while letting locals own the production and distribution facilities by using

Accepted Answer

A)  licensing. 
B)  exporting. 
C)  joint venturing. 
D)  management contracting. 
E)  direct investment.

Question 12

Exclusive distribution is more likely to involve a more formal arrangement than is selective or intensive distribution.

Accepted Answer

A) True 
 B)False

Question 13

A firm that has a lot of "management know-how," but expects production problems in a foreign market, might be wise to use management contracting.

Accepted Answer

A) True 
 B)False

Question 14

A producer using several competing channels to distribute its products to its target market is using ______________ distribution.

Accepted Answer

A)  multichannel 
B)  intensive 
C)  administered 
D)  horizontal 
E)  selective

Question 15

To minimize its own risks, the Boomtown Petroleum Corp. of Houston, Texas, operates a South American oil refinery that is owned by residents of that country. Boomtown is engaged in an activity known as:

Accepted Answer

A)  management contracting. 
B)  a joint venture. 
C)  exporting. 
D)  licensing. 
E)  direct investment.

Question 16

Compared to intensive distribution, selective distribution gives a producer a greater opportunity for profit but usually makes it more difficult for intermediaries to make a profit.

Accepted Answer

A) True 
 B)False

Question 17

Horizontal agreements to limit sales by territory or customer are always illegal according to the Supreme Court.

Accepted Answer

A) True 
 B)False

Question 18

Strategy "Place" decisions would NOT include:

Accepted Answer

A)  geographic pricing policy. 
B)  type of channel of distribution. 
C)  type of intermediaries/collaborators. 
D)  type of physical distribution facilities. 
E)  degree of market exposure desired.

Question 19

A channel of distribution is a series of firms or individuals participating in the flow of products from the producer to the consumer.

Accepted Answer

A) True 
 B)False

Question 20

If a producer agrees to enter into a management contracting arrangement with a zinc mining operation in Chile,

Accepted Answer

A)  the company should be prepared to invest large amounts in mining facilities. 
B)  the company should be prepared to send people to Chile. 
C)  success will depend on how well the Chilean managers know what needs to be done. 
D)  the company must assume no political problems will arise, otherwise the risk is very high. 
E)  None of these alternatives is true.

Exam 10: Place and Development of Channel Systems

Bulk-breaking means separating products into grades and qualities desired by different target markets.

The terms "direct marketing" and "direct distribution" mean the same thing.

Management contracting is a relatively low risk way of entering foreign markets, since no commitment is made to fixed facilities.

A computer manufacturer runs training programs for its "cooperating" retailers' salespeople, as well as providing newspaper advertising layouts, point-of-purchase materials, and sales manuals. This is an example of:

AsianArt4U.com brings together the art produced by many different Asian painters and sculptors -- and offers them for sale on its website. This is an example of

InterContinental Hardware Co. buys carload quantities of bolts, screws, nuts, washers, and other hardware from a large producer in the Netherlands, breaks these shipments into smaller quantities, and sells them to other wholesalers and retail chains. This "regrouping activity" is called:

______________ means selling a product through only one wholesaler or retailer in a particular geographic area.

Which of the following is a function that an intermediary is likely to provide for customers?

A "channel captain" is a manager who helps direct the activities of a whole channel.

Joint venturing gives a firm less control than if it owns a separate subsidiary.

In international markets, a firm can sell its management and marketing know-how while letting locals own the production and distribution facilities by using

Exclusive distribution is more likely to involve a more formal arrangement than is selective or intensive distribution.

A firm that has a lot of "management know-how," but expects production problems in a foreign market, might be wise to use management contracting.

A producer using several competing channels to distribute its products to its target market is using ______________ distribution.

To minimize its own risks, the Boomtown Petroleum Corp. of Houston, Texas, operates a South American oil refinery that is owned by residents of that country. Boomtown is engaged in an activity known as:

Compared to intensive distribution, selective distribution gives a producer a greater opportunity for profit but usually makes it more difficult for intermediaries to make a profit.

Horizontal agreements to limit sales by territory or customer are always illegal according to the Supreme Court.

Strategy "Place" decisions would NOT include:

A channel of distribution is a series of firms or individuals participating in the flow of products from the producer to the consumer.

If a producer agrees to enter into a management contracting arrangement with a zinc mining operation in Chile,