Deck 13: Marketing Channels

Question 1

A marketing channel is a business structure composed of interdependent organizations that reach from the point of product origin to the final consumer.

Answer 1

True

Question 2

As products move through the marketing channel,channel members provide specialization and division of labor,overcome discrepancies,and provide contact efficiency.

Answer 2

True

Question 3

The three basic functions a channel intermediary provides are transactional,logistical,and facilitating functions.

Answer 3

True

Question 4

An international consumer products manufacturer requires all of its suppliers to provide the lowest possible cost and to adhere to a just-in-time inventory system.Wholesalers and manufacturers generally yield to the authority of this large manufacturer.This consumer products manufacturer exercises channel power.

Question 5

Shopping goods are usually distributed selectively.Consumers are willing to look around for them but may not be willing to search or travel extensively to acquire the product.

Question 6

Carl represents a manufacturer of floor coverings and gets paid a commission for finding buyers and linking them up with the manufacturer. Carl is an example of a merchant wholesaler

Question 7

Consider a scenario in which there are four manufacturers,no intermediaries,and three consumers.Twelve transactions would be required for each consumer to receive products from each manufacturer.The introduction of one intermediary reduces the required number of transactions to four and demonstrates the idea of contact efficiency.

Question 8

The direct channel is used more often in consumer markets than in business-to-business markets.

Question 9

At one end of the channel relationship continuum is the "Arm's Length" relationship.

Question 10

Metallurgical Designs makes gold and silver charms for necklaces and bracelets.It markets its charms to a few retailers in any one region and promotes them intensively to those retailers.This is an example of intensive distribution.

Question 11

A merchant wholesaler is an institution that buys goods from manufacturers and resells them to businesses,government agencies,and other wholesalers or retailers.

Question 12

Exclusive distribution is the most extensive form of market coverage.

Question 13

Residents of Sobarro,New Mexico,live in an isolated area of the state.Residents must travel two hours to receive medical treatment.Luckily,a physician has just opened a new practice in Sobarro.In this case,the physician has overcome service discrepancies by opening an office close to consumers.

Question 14

The logistical functions performed by intermediaries include physically distributing,storing,sorting,and financing.

Question 15

Reciprocal conflict occurs among channel members on the same level,such as two or more different wholesalers or two or more different retailers that handle the same manufacturer's brands.

Question 16

LoneStar Bar & Grill is a small chain of restaurants that feature marinated steaks.The marinade is so popular that LoneStar sells it at its restaurants and also sells it at Kroger supermarkets.This is an example of intensive distribution.

Question 17

Integrated channel relationships tend to be more flexible than cooperative relationships.

Question 18

Harriet Lowe makes children's clothing,which she sells at craft festivals to end users.Lowe does not use channel intermediaries,which means she uses a direct channel.

Question 19

Highly integrated channel relationships are the preferred relationship because there is no large outlay of assets required to keep the channel members all working toward the same results.

Question 20

A consumer stopped by the convenience store to buy a bag of charcoal briquettes.She only needs one bag,but the manufacturer produces millions of bags. For consumers,the convenience store overcomes a discrepancy of dimensions.

Question 21

Certified Grocers Midwest,Inc.,the Chicago-based grocery wholesale cooperative,provides all kinds of meats,cereals,canned and fresh fruits and vegetables,beauty aids,health care items,and pet products to the supermarkets in its channel.Certified Grocers is aiding consumers by overcoming:

A) spatial discrepancy
B) discrepancy of quantity
C) discrepancy of assortment
D) demand discrepancies
E) discrepancy of possession

Question 22

Because distribution creates the same problems whether it is in Ethiopia,Indonesia,or Canada,you will find that channel structures and types around the world are very similar to those in the United States.

Question 23

A _____ is a business structure of interdependent organizations that reaches from the point of product origin to the consumer.

A) facilitating agency or place member
B) marketing mix intermediary
C) selective distribution channel
D) marketing channel or channel of distribution
E) transportation channel or channel of movement

Question 24

Kraft Foods produces millions of packages of Chips Ahoy cookies each year,but consumers only want to purchase one package at a time. This difference between the amount Kraft produces and the amount a consumer wants to buy is refer to as a:

A) discrepancy of quantity
B) discrepancy of assortment
C) spatial discrepancy
D) temporal discrepancy
E) discrepancy of possession

Question 25

Distribution channels aid in overcoming barriers to exchange that are created in the production process by overcoming all of the following types of discrepancies EXCEPT:

A) possession
B) assortment
C) quantity
D) spatial
E) temporal

Question 26

YKK slide fasteners (zippers)are made in Macon,Georgia,yet manufactures all over the world use zippers to manufacture,clothes,luggage,shoes,and other items.Wholesalers around the world primarily help to overcome a(n)_____ discrepancy.

A) creation
B) temporal
C) assortment
D) spatial
E) ownership

Question 27

A(n)_____ discrepancy is created when a product is produced but a consumer is not ready to purchase it.

A) quantity
B) supply
C) possession
D) temporal
E) assortment

Question 28

Many regard vertical conflict as healthy competition.

Question 29

Unlike marketers of physical products,marketers of services do not have to address the question of logistics since services do not require a distribution strategy.

Question 30

Jones Soda is positioned as the anti-Coke.In the early years,few mainstream retailers sold Jones soda.Fans had to get their Jones fix in surf shops,tattoo parlors,and bookstores,adding to the brand's mystique.Jones Soda used its _____ to create a competitive advantage.

A) channel ascendancy
B) distribution channel
C) channel conflict
D) channel focus
E) vertical integration

Question 31

Vicobello is a major manufacturer of outdoor fountains that are currently popular in gardens.Even though fountains represent a product category that does not sell year round due to inclement weather,Vicobello's sales remain steady all year because it sells to wholesale distributors that stock the product.Its wholesale distributors are primarily helping to overcome a(n)_____ discrepancy.

A) assortment
B) spatial
C) possession
D) quantity
E) temporal

Question 32

When discussing the distribution of services,you will often hear channel members discussing the need to minimize wait times.

Question 33

Marketing channels can achieve economies of scale through:

A) overcoming spatial discrepancies
B) contact expertise
C) specialization and division of labor
D) overcoming temporal discrepancies
E) overcoming discrepancies of quantity

Question 34

McKesson Wholesalers provides health care products to pharmacies.It purchases bandages,gauze,antibacterial cream,and ointments from a variety of different manufacturers and resells them to pharmacies so that many of the items a customer might need for a cut will be available in the store.McKesson is aiding consumers by overcoming a:

A) spatial discrepancy
B) discrepancy of quantity
C) discrepancy of assortment
D) demand discrepancies
E) discrepancy of possession

Question 35

Cutter & Buck is a high-end fashion sportswear company.Even though swimwear is a product category that does not sell year round,its sales remain steady all year because Cutter & Buck sells to wholesale distributors that stock the product.Its wholesale distributors are helping to overcome a(n)_____ discrepancy.

A) assortment
B) spatial
C) possession
D) quantity
E) temporal

Question 36

Gray marketing channels assist brand name manufacturers in marketing their products more efficiently.

Question 37

The difference between the location of a producer and the location of widely scattered markets represents a(n)_____ discrepancy.

A) spatial
B) temporal
C) assortment
D) quantity
E) ownership

Question 38

Which of the following is the lack of all the items a customer needs to receive full satisfaction from a product or products?

A) discrepancy of assortment
B) discrepancy of quantity
C) spatial discrepancy
D) temporal discrepancy
E) discrepancy of possession

Question 39

Kayak.com is a company that allows customers to efficiently search databases to find the best airline and hotel deals all over the Web. Kayak does not make bookings,but rather provides recommendations for the best travel plans.Travel providers pay Kayak a commission when customers click through to their sites. Kayak.com,travelers,the airlines,and the hotels are all part of a:

A) facilitating agency
B) marketing mix intermediary
C) selective promotion channel
D) marketing channel or channel of distribution
E) transportation channel or channel of movement

Question 40

A discrepancy of _____ is the difference between the amount of product produced and the amount an end user wants to buy.

A) space
B) quantity
C) assortment
D) accumulation
E) possession

Question 41

Agents and brokers:

A) have a great deal of control and risk invested in the goods
B) only represent manufacturers in sales situations
C) have a great deal of input on the terms of the sale
D) generally are on salary with the manufacturer
E) do not take title to merchandise

Question 42

When an intermediary in the channel of distribution owns the merchandise and controls the terms of the sale,this is referred to as:

A) complete control
B) exclusive distribution
C) taking title
D) contact efficiency
E) economies of scale

Question 43

The three basic functions channel intermediaries perform are:

A) transactional, logistical, and facilitating
B) contacting, negotiating, and ownership
C) promoting, distributing, and bulk-breaking
D) assorting, accumulating, and allocating
E) financing, mediating, and storing

Question 44

Which of the following intermediaries sell mainly to consumers?

A) retailers
B) merchant wholesalers
C) agents
D) brokers
E) specialists

Question 45

Marketing channels perform all of the following logistical activities EXCEPT:

A) sorting
B) storing
C) physically distributing
D) risk taking
E) breaking bulk

Question 46

_____ are wholesaling intermediaries who facilitate the sales of a product from producer to end user by representing retailers,wholesalers,or manufacturers and providing little input as to the terms of the sale.

A) Marketing facilitators
B) Channel cooperatives
C) Agents and brokers
D) Merchant wholesalers
E) Channel functionaries

Question 47

Breaking bulk at the wholesale level is called:

A) allocating
B) accumulation
C) storing
D) downsizing
E) grading

Question 48

The major characteristic that is used to differentiate among types of intermediaries is whether they:

A) install exchange barriers such as location, time, and quantity
B) create specialization of labor
C) create economies of scale
D) take title to the products they sell
E) raise profit margins for independent middlemen

Question 49

Transactional channel functions include all of the following activities EXCEPT:

A) contacting buyers
B) promoting the products to be sold
C) taking the risks associated with product inventories
D) negotiating the sale
E) physical distribution and sorting

Question 50

With respect to the sorting logistical function,_____ is the combining of similar stocks into a larger homogeneous supply.

A) sorting out
B) accumulating
C) allocating
D) breaking bulk
E) assorting

Question 51

Generally,_____ determine what type of intermediary a manufacturer should use:

A) product characteristics, buyer consideration, and market characteristics
B) internal environmental characteristics only
C) competitive conditions and government regulations
D) all controllable marketing factors
E) only noncontrollable environmental factors

Question 52

Which of the following are examples of facilitating functions performed by wholesaling intermediaries?

A) sorting and storing
B) risk taking and promotion
C) assorting, accumulating, grading, and allocating
D) researching and financing
E) financial management and storing

Question 53

Which of the following is a logistical function performed by intermediaries?

A) sorting
B) negotiating
C) financing
D) risk taking
E) all of these choices

Question 54

Retailers and merchant wholesalers are examples of intermediaries that:

A) take title to a product
B) create temporal and spatial discrepancies
C) use consumer promotions
D) do not benefit from any economies of scale
E) are accurately described by all of these statements

Question 55

All of the following are sorting activities EXCEPT:

A) assorting
B) accumulation
C) sorting out
D) allocation
E) possession

Question 56

Which of the following is a transactional function performed by intermediaries?

A) sorting
B) researching
C) risk taking
D) physically distributing
E) storing

Question 57

W.W.Grainger,Inc.,is one of the world's largest business-to-business distributors of equipment,component parts,and supplies in the United States and Canada.It has ownership title to over 220,000 products,which are stocked in one national and nine regional warehouses to guarantee product availability and quick service to the many manufacturers who are its customers.W.W.Grainger is an example of a(n):

A) agent or broker
B) merchant wholesaler
C) retailer
D) consumer market
E) hypermarket intermediary

Question 58

A(n)_____ is an institution that buys goods from manufacturers,takes title to these goods,and resells them to businesses,government agencies,and/or other wholesalers or retailers.

A) merchant wholesaler
B) agent
C) drop shipper
D) channel cooperative
E) marketing cooperative

Question 59

Marketing channels make distribution simpler by reducing the number of transactions required to get products from manufacturers to consumers.This is called:

A) forward integration
B) contact efficiency
C) elimination of temporal discrepancies
D) sorting
E) reciprocity

Question 60

Long Island Lefty provides retailers and other businesses with the latest and the best products for left-handed consumers.It buys all types of products from a variety of manufacturers and stores the merchandise in its New York warehouse until purchased by buyers.Long Island Lefty does not sell to end users and is an example of a(n):

A) agent or broker
B) merchant wholesaler
C) retailer
D) consumer market
E) hypermarket intermediary

Question 61

_____ is the efficient and cost-effective forward and reverse flow and storage of goods,services,and related information,into,through,and out of channel member companies.

A) Disintermediation
B) Logistics
C) Materials handling
D) Intermodal transportation
E) Contract logistics

Question 62

Selfridges is the second-largest department store in Great Britain.It works with House of Frasier,one of its competitors,to reduce operating costs by sharing channels of distribution to ship goods from 1,500 plus suppliers.Selfridges and House of Frasier are engaged in:

A) vertical conflict
B) an integrated supply chain
C) a strategic channel alliance
D) an information-based distribution channel
E) a distribution cooperative

Question 63

Canesta Company has developed a virtual keyboard out of light to be used with cell phones and personal digital assistants (PDAs).The product beams an image of a keyboard on a desk,allowing the user to type on the image.The words are picked up by the user's digital device.When introduced to the market,the device will sell for less than $50.If,in choosing its channel,Canesta is most concerned about its lack of financial,managerial,and marketing resources to support the product's introduction,then its choice of channels will largely be influenced by:

A) factors of ownership
B) market factors
C) producer factors
D) product factors
E) internal environmental characteristics

Question 64

When Delphi-Grundig,a manufacturer of state-of-the-art car radios,decided to expand its marketing efforts into countries in which its products are not currently available,it did not have the time or resources to spend on developing new channels of distribution.Delphi-Grundig should consider a(n):

A) industrial distributor
B) franchising system
C) reverse channel
D) strategic channel alliance
E) channel cooperative

Question 65

Companies selling standardized items of moderate or low value to other businesses (not to consumers)often use:

A) retailers
B) industrial distributors
C) wholesalers
D) bulk breakers
E) industrial resellers

Question 66

Vutek manufactures printing machines used to print high resolution graphics for billboards,bus cards,banners,and posters.For distribution,you would expect Vutek to use a:

A) network of facilitating agents
B) horizontally integrated channel
C) reciprocal channel
D) direct channel
E) vertical marketing system

Question 67

Which of the following enables a company to use another manufacturer's already established channel?

A) strategic channel alliances
B) relationship channels
C) reverse channels
D) multiple distribution systems
E) nontraditional channelization

Question 68

One configuration of a marketing channel entails producers selling to consumers with no intermediaries involved.This is called a:

A) limited distribution system
B) conventional channel
C) vertical marketing system
D) reciprocal channel
E) direct channel

Question 69

Which of the following manufacturers most likely uses intensive distribution?

A) M&M's candies
B) Jen-Weld windows
C) Calloway golf clubs
D) Rollerblade inline skates
E) Smith & Wesson firearms

Question 70

Centigon is a manufacturer of customized armored vehicles for military,private,presidential,and commercial uses.Each armored vehicle is designed to deliver security on the road while also achieving optimum levels of performance and comfort.For distribution,you would expect Centigon to use a:

A) network of facilitating agents
B) horizontally integrated channel
C) reciprocal channel
D) direct channel
E) vertical marketing system

Question 71

Customers can purchase HP computers from retail stores like Best Buy and Office Depot,online directly from HP,and through various catalogs. HP is using a(n)_____ distribution arrangement.

A) intensive
B) multiple
C) exclusive
D) cumulative
E) aggregated

Question 72

_____ distribution occurs when a producer selects two or more different channels to distribute the same products to target markets.

A) Selective
B) Intensive
C) Dual
D) Contractual
E) Cumulative

Question 73

All of the following are typical channel members in marketing channels for consumer products EXCEPT:

A) retailer
B) agent/broker
C) industrial distributor
D) producer
E) wholesaler

Question 74

_____ describes the process of strategically managing the efficient flow and storage of raw materials,in-process inventory,and finished goods from point of origin to point of consumption.

A) Contract logistics
B) Logistics
C) Cross-docking
D) Disintermediation
E) Channel facilitation

Question 75

Which of the following statements concerning how market factors affect channel decisions is true?

A) Industrial customers tend to buy in larger quantities and require more customer service
B) Geographically concentrated target markets should be served with an indirect sales force
C) Widely dispersed markets require fewer intermediaries
D) New firms in extremely competitive markets will be more successful if they use indirect channels
E) A very large market requires fewer intermediaries

Question 76

Serenity is a manufacturer of outdoor fountains that are currently popular in gardens.Even though fountains represent a product category that does not sell year round due to inclement weather,Serenity's sales remain steady all year because it sells to wholesale distributors that stock the product.Serenity sells to wholesale distributors that perform _____ functions for the manufacturer.

A) financial
B) transactional
C) facilitating
D) logistical
E) promotional

Question 77

Chewing gum and soft drinks are sold in grocery stores,service stations,convenience stores,drugstores,discount stores,and motel vending machines.This is a example of a(n)_____ distribution strategy.

A) exclusive
B) reciprocal
C) selective
D) horizontal
E) intensive

Question 78

Canesta Company has developed a virtual keyboard out of light to be used with cell phones and personal digital assistants (PDAs).The product beams an image of a keyboard on a desk,allowing the user to type on the image.The words are picked up by the user's digital device.When introduced to the market,the device will sell for less than $50.If,in choosing its channel,Canesta is most concerned about the life cycle of the device,then its choice of channels will largely be influenced by:

A) factors of production
B) customer characteristics
C) ownership factors
D) product factors
E) market factors

Question 79

_____ is distribution aimed at maximum market coverage.It is used for many convenience goods and supplies that need to be available in every outlet where the potential customer might want to buy them.

A) Selective distribution
B) Channel franchising
C) Intensive distribution
D) Horizontal channeling
E) Exclusive distribution

Question 80

The only way Jim Keeler in New Mexico can get a box of Carolyn Popwell's Festive Holiday Truffles from Washington is to order it through the mail.Popwell,who makes the candy by hand,uses a(n)_____ exclusively.

A) exclusive distribution system
B) conventional channel
C) vertical marketing system
D) reciprocal channel
E) direct channel