Deck 27: Marketing Channels and Retailing

Question 1

Jennifer owns a greeting card store where she also sells women's purses,Crocs shoes for the whole family,Jibbitz charms,cell phone skins,Sandy Lion stickers,Yankee candles,Godiva chocolates,Precious Memories figurines,beaded jewelry,and stuffed animals.Jennifer uses multibrand merchandising.

Answer 1

False
This would be an example of scrambled merchandising because it involves offering nontraditional goods.There is no such thing as a multibrand.

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

Specialty discount stores differ from other discount stores.While most other discounters offer a predictable assortment of merchandise,the styles and brands offered at specialty discount stores change frequently and cost 25 percent or more below traditional department store prices.

Answer 3

False
Off-price retailers are being described here,not specialty discount stores.

Question 4

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 5

Supercenters are more than just larger versions of traditional "markets." In addition to foodstuffs,supercenters have pharmacies,dry cleaners,portrait studies,photo finishing,hair salons,and restaurants.

Question 6

Transactional functions include contacting potential customers and assuming the risk of owning inventory.

Question 7

Exclusive distribution increases direct competition among a great number of retailers.

Question 8

Many regard vertical conflict as healthy competition.

Question 9

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 10

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 11

Consider a scenario in which there are five manufacturers,no intermediaries,and four consumers.Twenty 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 12

A retailing establishment that sells a wide variety of shopping and specialty goods under one roof would be classified as a department store.

Question 13

Emily has just opened a health food store that sells organic foods,herbal supplements,and environmentally friendly products.Because it will be a specialty store,she should have a broad product assortment with moderately low prices.

Question 14

A marketing channel is a set of interdependent organizations that ease the transfer of ownership as products move from producer to business user or consumer.

Question 15

When discussing customer-oriented service industries,you will often hear channel members discussing the need to minimize wait times.

Question 16

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

Question 17

The direct channel is used more often in consumer markets than in business and industrial markets.

Question 18

Highly integrated channel relationships are loosely bonded relationships characterized by informal arrangements that explicitly define the relationships of the channel members.

Question 19

Marketers who use nonstore retailing no longer have to worry about the "place" element of the four Ps.

Question 20

The person who called Alisa last night and tried to sell her double-paned windows for her home was using outbound telemarketing.

Question 21

_____ considerations affecting the wholesaler choice include how often a product is purchased and how long a customer is willing to wait to receive the product.

A) Market
B) Transactional
C) Product
D) Buyer
E) Logistic

Question 22

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 23

The six Ps of the retailing mix are product,place,price,promotion,personnel,and planning.

Question 24

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 25

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 26

A _____ is a set of interdependent organizations that eases the transfer of ownership as products move from producer to business user or 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 27

_____ are 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 28

Every October through December,Hickory Farms opens a temporary store in many malls to sell products during the Christmas season without the long-term commitment of a more expensive retail lease.This is an example of a pop-up shop.

Question 29

The only way that 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

Question 30

Dillard's,Target,and Walmart use data mining to determine which products to stock at what price,how to manage markdowns,and how to advertise to draw target customers.

Question 31

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 32

The two types of franchising are target market franchising and geographic franchising.

Question 33

Serenity is a manufacturer of outdoor fountains that are 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 34

M-commerce is a type of managed commerce in which both buyer and seller end the transaction with a win-win feeling.

Question 35

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 36

Transactional channel functions include all of the following activities EXCEPT:

A) explaining product benefits
B) making buyers aware of existing products
C) explaining product features, advantages, and benefits
D) contacting and communicating with prospective buyers
E) physically distributing and sorting products

Question 37

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 38

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 39

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 40

Color can be used by retailers to create a mood or focus customer attention on a particular product.

Question 41

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

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

Question 42

Caterpillar,the manufacturer of tractors and other earthmoving equipment,has an extremely high market share,which means customers seek the dealers out regardless of where they are.There are approximately 50 Caterpillar dealers in the United States--one in each state.From this information,you can surmise that Caterpillar uses _____ distribution.

A) selective
B) premium
C) intensive
D) exclusive
E) inclusive

Question 43

Canesta Company has developed a virtual keyboard out of light to be used with cell phones and 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 44

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 45

With the _____ channel relationship,both parties retain their independence and pursue their own interests while attempting to benefit from the goods or services provided by the other.

A) Arm's-length
B) functional
C) cooperative
D) hierarchical
E) integrated

Question 46

One of the earliest,largest,and most famous examples of vertical integration was the Carnegie Steel Company.The company controlled not only the mills where the steel was manufactured but also the mines where the iron ore was extracted,the coal mines that supplied the coal,the ships that transported the iron ore,and the railroads that transported the coal to the factory.Carnegie Steel had a(n)_____ channel relationship.

A) Arm's-length
B) functional
C) cooperative
D) hierarchical
E) integrated

Question 47

Which level of distribution intensity is the most restrictive and entails establishing only one or a few dealers within a given geographic area?

A) Selective
B) Intensive
C) Exclusive
D) Dual
E) Premium

Question 48

A _____ channel is commonly used for low-cost consumer items that are frequently purchased,such as candy,cigarettes,and magazines.

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

Question 49

Customers can purchase Hewlett-Packard 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 50

_____ distribution is achieved by screening dealers to eliminate all but a few in any single geographic area.Shopping goods and some specialty products that consumers are willing to search for are sold this way.

A) Intensive
B) Selective
C) Exclusive
D) Dual
E) Controlled

Question 51

A situation that occurs when one marketing channel member intentionally affects another member's behavior is called:

A) channel power.
B) channel control.
C) channel conflict.
D) channel dominance.
E) channel inversion.

Question 52

The capacity of a particular marketing channel member to control or influence the behavior of other channel members is known as:

A) channel power.
B) channel conflict.
C) channel control.
D) channel dominance.
E) channel inversion.

Question 53

Canesta Company has developed a virtual keyboard out of light to be used with cell phones and 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.What level of distribution intensity should the company use?

A) Exclusive
B) Controlled
C) Extensive
D) Reciprocal
E) Selective

Question 54

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 55

DeBeers sells most of the diamonds it produces to industry.The company controls over 90 percent of the market and has great power over its distributors.In its marketing channel,DeBeers would be considered a:

A) channel authority.
B) channel member.
C) channel captain.
D) channel gatekeeper.
E) power broker.

Question 56

This summer,college student Pat is planning on selling kites at Panama City Beach.He has found some suppliers and has preordered all of the kites he thinks he can sell this summer.What type of a distribution channel relationship does Pat have with his suppliers?

A) Arm's-length
B) Functional
C) Cooperative
D) Hierarchical
E) Integrated

Question 57

Honda uses just-in-time manufacturing to build its Odyssey minivans.Five companies that make component parts for the Honda Odyssey relocated to Alabama and states bordering Alabama when Honda announced plans to build a new Odyssey manufacturing plant in Alabama.This relocation in order to provide efficient delivery of goods indicates that Honda is a:

A) channel captain
B) horizontal integrator
C) distribution champion
D) distribution ombudsman
E) demand maverick

Question 58

Which channel relationship is less ambiguous than an Arm's-length relationship but without the longer-term and/or capital investment required to achieve full integration?

A) Ersatz
B) Cooperative
C) Functional
D) Integrated
E) Supplemental

Question 59

Channel conflict:

A) always has an adverse effect on the members of the channel
B) is not caused by ideological differences, because such differences would prevent the members from ever operating as a channel
C) is often caused by an inability of some channel members to keep up with the changing times
D) can appear as either internal or external
E) does not occur when multiple distribution channels are used

Question 60

Nontraditional channel arrangements:

A) tend to make a firm's product seem the same as the competition.
B) usually broaden a brand's coverage.
C) can give a producer serving a niche market a way to gain market access without having to establish channel intermediaries.
D) are not usually useful for larger firms.
E) All of the above are true.

Question 61

Which type of retail ownership is owned and operated by an individual but is licensed by a larger supporting organization?

A) Independent retailer
B) Chain store
C) Franchise
D) Cooperative
E) Secondary retailer

Question 62

Around the world,most retailers are _____,operating one or a few stores in their community,owned by a single person or partnership and not operated as part of a larger retail institution.

A) independent
B) chain stores
C) franchise outlets
D) specialty clubs
E) product assortment stores

Question 63

_____ is the joint effort of all channel members to create a channel that serves customers and creates a competitive advantage.

A) Selective partnering
B) Direct distribution
C) Channel partnering
D) Intensive integration
E) Closed channel distribution

Question 64

Paul operates Kayak.com,a company that allows customers to efficiently search company databases and 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 for most customers who click through to their sites.Paul wants his users to have as short and sweet an experience on Kayak as possible.Time is of the essence in responding to any customer question,especially in this day where airfare can increase dramatically in just a couple of hours.Paul is devoted to:

A) improving service delivery.
B) maximizing queues.
C) reducing discrepancies of assortment.
D) reducing wait time.
E) managing service capacity.

Question 65

Which of the following intermediaries sell mainly to consumers?

A) Retailers
B) Merchant wholesalers
C) Agents
D) Brokers
E) Specialists

Question 66

Each department in a department store is usually treated as a different _____ center and central management sets broad policies about the types of merchandise carried and prices.

A) franchise
B) financial
C) comptroller
D) human resources
E) buying

Question 67

Which of the following statements about specialty stores is true?

A) Specialty stores find it easy to compete on price with big-box stores.
B) Customers at specialty stores are not concerned with the distinctiveness of the merchandise or the store's physical appearance.
C) Customers of specialty stores usually consider price to be secondary.
D) Specialty stores are ineffective test markets.
E) A typical specialty store carries a wider assortment of specialty merchandise than department stores.

Question 68

Horizontal channel conflict occurs most often when manufacturers practice:

A) dual or multiple distribution
B) trade loading
C) promotional pricing
D) direct distribution
E) channel distribution

Question 69

_____ is defined as all activities directly related to the sale of goods and services to the ultimate consumer for personal,nonbusiness use or consumption.

A) Wholesaling
B) Retailing
C) Business
D) Franchising
E) Distribution

Question 70

James wants to open a small store that caters to the model railroad hobbyist.The store would sell model trains,scenery,accessories,and books on the subject of model railroading.Which of the following types of stores would most likely support an effective launch of his business idea?

A) An off-price retailer
B) A specialty store
C) A full-discount store
D) A general store
E) A warehouse club

Question 71

Housing several departments under one roof,a _____ carries a wide variety of shopping and specialty goods,including apparel,cosmetics,housewares,electronics,and sometimes furniture.

A) supermarket
B) specialty store
C) convenience store
D) super club
E) department store

Question 72

Channel conflict that occurs between different levels in a marketing channel is referred to as:

A) horizontal conflict
B) primary conflict
C) vertical conflict
D) secondary conflict
E) parallel conflict

Question 73

The number of different varieties of fishing lures carried by the Angler's Store refers to the store's:

A) supply standard.
B) complete retail offering.
C) retail mix.
D) volume.
E) assortment depth.

Question 74

You are responsible for physical distribution of your company's service and should focus on:

A) ensuring the intangibility of the service so that physical distribution becomes a less important factor.
B) minimizing wait times, managing service capacity, improving service delivery, and establishing channel-wide network coherence.
C) making sure production and consumption are simultaneous.
D) setting quality standards, choosing faster transportation modes, and using safety stock.
E) customer-oriented order processing and inventory control.

Question 75

Jim's Bike Shop sells bicycles for the serious racer to the casual cyclist.Jim's also sells biking gear and clothing. Jim is the sole owner of the store,so in terms of ownership,his store would be classified as a(n):

A) independent retailer.
B) freestanding store.
C) franchise.
D) chain store.
E) common retailer.

Question 76

_____ shows how much the retailer makes as a percentage of sales after the cost of goods sold is subtracted.

A) Net income
B) Retained earnings
C) Profitability
D) Net equity
E) Gross margin

Question 77

Retail establishments are generally classified according to all of the following EXCEPT:

A) ownership
B) level of sales
C) level of service
D) price
E) product assortment

Question 78

Fairway is a chain of retail outlets in Iowa,Minnesota,Nebraska,and Illinois that are described as large,departmentalized,self-service stores that specialize in food and limited nonfood items.Fairway stores are:

A) off-price retailers
B) discount stores
C) wholesale clubs
D) convenience stores
E) supermarkets

Question 79

Which type of retail store specializes in a given type of merchandise?

A) An independent store
B) A department store
C) A discount store
D) A specialty store
E) A first-level store

Question 80

A Target store is an example of a(n):

A) merchant wholesaler
B) retailer
C) broker
D) agent
E) exporter