Deck 12: Marketing Channels and Supply Chain Management

Question 1

How does direct selling as a marketing channel carry goods?

A) directly from producer to retail storage warehouse
B) directly from producer to channel captain
C) directly from producer to intermediary that will take title and possession
D) directly from producer to ultimate consumer or business purchaser

Answer 1

D

Question 2

Lush, a handmade cosmetics company, gives its customers a free product when they return used Lush containers. This offer is aimed at promoting recycling of the containers. What do we call the channel used by the consumers to return used containers?

A) complimentary channel
B) complementary channel
C) reverse channel
D) dual channel

Answer 2

D

Question 3

Which marketplace generally has the longest distribution channels?

A) business-to-business
B) consumer
C) not-for-profit
D) service firms

Answer 3

B

Question 4

What results from business customers being more geographically concentrated and fewer in number than individual consumers?

A) shorter business channels compared to consumer goods channels
B) moving products effectively through wholesale and retail markets simultaneously
C) reduction in price from producer to user
D) more middlemen and unique channel structures than consumer channels

Question 5

What is an organized system of marketing institutions and relationships called that promotes the physical flow and ownership of goods and services from producer to consumer or business user?

A) intermediary institution
B) marketing fulfillment organization
C) retail marketing
D) marketing channel

Question 6

ABC Corp., a mining equipment manufacturer, provides loaders and feeder breakers for Ground Works, a mining company. ABC Corp. regularly sends information on new products as well as on upgrades for old products to the management in Ground Works. What does ABC Corp rely on to sell its products?

A) direct channels
B) industrial distributors
C) manufacturer's representatives
D) franchisors

Question 7

What is the term industrial distributor essentially synonymous with?

A) franchiser
B) middle user
C) wholesaler
D) retailer

Question 8

In the context of marketing channels, who do business purchasers usually prefer to buy from?

A) manufacturers
B) retailers
C) wholesalers
D) agents

Question 9

Why do marketing channels play a key role in marketing strategy?

A) They provide criteria for promotional expenditures.
B) They provide the means by which products move from producer to ultimate user.
C) They allow more participants to contribute to the economy.
D) They extend the amount of time it takes between the between producer and consumer.

Question 10

How does the traditional marketing channel proceed?

A) from producer to business user
B) from producer to wholesaler to retailer to consumer
C) from producer to agent to business user
D) from producer to agent to wholesaler to retailer to customer

Question 11

Who are marketing intermediaries?

A) middlemen that operate between producers and consumers or business users
B) management consulting firms that advise producers on distribution strategy
C) "personal shoppers" who are paid to purchase products for busy customers and businesses
D) financial institutions that arrange financing terms for business purchases

Question 12

Cynthia, a marketing director for a chemical company, is looking for an independent intermediary that will take title to the goods. Who is Cynthia looking for?

A) extended channel member
B) industrial distributor
C) direct seller
D) reverse channel seller

Question 13

In addition to traditional drug stores, Dr. Scholl's foot care company has decided to market through home medical care supply centres and telemarketing to podiatrists. What is this an example of?

A) reverse marketing channels
B) home marketing
C) scrambled merchandising
D) dual distribution

Question 14

When is direct selling MOST common?

A) during raw material purchases in the B2B marketplace
B) during purchases between retailers and consumers
C) during the sale of lower-priced product alternatives
D) during product purchases that require little demonstration

Question 15

Small producers in the industrial market may attempt to market their offerings to large wholesalers by using agents. What are these agents called?

A) industrial distributors
B) manufacturers' representatives
C) direct marketers
D) auction companies

Question 16

Which of the following is an example of direct selling to the consumer market?

A) purchase of hair-care products from a beauty salon
B) car purchase from a Honda dealer
C) SONY television purchase at Best Buy
D) party plan selling jewellery

Question 17

Which variable does NOT affect the selection of a channel strategy?

A) product characteristics
B) the size of the producer and competitive environment
C) legal and liability issues
D) market factors

Question 18

In which decision area does physical distribution NOT extend beyond transportation?

A) inventory control
B) material handling
C) risk analysis
D) protective packaging

Question 19

What is the movement of products through more than one marketing channel to reach the same market called?

A) multiple selling
B) dual distribution
C) distribution redundancy
D) reverse distribution

Question 20

What are the two critical components of a distribution strategy?

A) marketing channels and logistics and supply chain management
B) physical distribution and relationship marketing
C) location and cost
D) warehousing and transportation

Question 21

What occurs when a selective distribution strategy is chosen by a firm?

A) The firm seeks to distribute its products through all available channels in its trade areas.
B) A single wholesaler or retailer in an area is granted exclusive rights to sell its line.
C) Only a limited number of retailers in a market area can handle its line.
D) The number of product outlets available to the consumer is unlimited.

Question 22

What is a common characteristic of a channel when the unit price of the product is low?

A) The product will be sold direct.
B) The channel is short.
C) The channel length will not be affected.
D) The channel is long.

Question 23

Sherwin-Williams Paint Company sells the paint it manufactures through its company-owned retail paint stores. What type of marketing system is the company's marketing channel?

A) corporate
B) horizontal
C) administered
D) contractual

Question 24

Who is primarily responsible for achieving cooperation that resolves conflict among marketing channel members?

A) manufacturer
B) channel captain
C) channel power broker
D) wholesaler

Question 25

What term refers to a planned marketing channel system that is designed to improve distribution efficiency and cost-effectiveness through functional integration?

A) intensive marketing system
B) horizontal marketing system
C) exclusive marketing system
D) vertical marketing system

Question 26

What type of channel conflict is between two or more wholesalers or two or more retailers?

A) competitive
B) vertical
C) horizontal
D) cross-channel

Question 27

Who are marketing intermediaries very beneficial to?

A) producers with wide product lines
B) a small producer trying to sell to large customers
C) suppliers with a small and concentrated market of customers
D) well-financed national manufacturers

Question 28

What does distribution intensity refer to?

A) tying agreements held with intermediaries
B) the amount of monthly cooperative advertising that a producer contracts with a number of retailers
C) the number of intermediaries through which a producer distributes goods in a particular market
D) the concentration of wholesalers carrying competing products in a given geography

Question 29

Lakeview Industries contracts with Marine Motor Distributors to carry its newly patented outboard engine. In exchange for exclusive dealership rights, Marine Motor has agreed to carry the full line of nautical clothing accessories offered by Lakeview. What term best describes this type of arrangement?

A) distributor contract
B) tying agreement
C) channel selection
D) exclusive dealing agreement

Question 30

What are goods called when they are manufactured abroad under license from a Canadian manufacturer, and then sold in the Canadian market in competition with Canadian-produced goods from the Canadian manufacturer?

A) black market goods
B) inferior goods
C) grey goods
D) horizontal goods

Question 31

What must a wholesaler do to grow profitably in a competitive environment?

A) cut costs in every possible area
B) make as many tying agreements as possible
C) move into exclusive distribution of a majority of product lines that are to be carried
D) provide better service at a lower cost than manufacturers or retailers can do themselves

Question 32

While exclusive distribution is legal for companies first entering a market, what does such an agreement violate if used by firms with a sizable market share seeking to bar competitors from the market?

A) a distributor contract
B) a tying agreement
C) the Competition Act
D) a vertical territory restriction

Question 33

What type of distribution has a limited number of marketing intermediaries in a geographic region?

A) selective
B) intensive
C) limited
D) exclusive

Question 34

What is one factor that would ordinarily result in a longer marketing channel?

A) a high level of geographic concentration of customers
B) a product with a low level of technical complexity
C) the manufacturer's desire to control the channel
D) the product's need for specialized knowledge, technical information, and regular service

Question 35

What type of marketing channel conflict can result when identically branded products are carried in competing retail pharmacies, discount houses, department stores, convenience stores, and mail-order houses?

A) coercive
B) vertical
C) competitive
D) horizontal

Question 36

Who is the dominant and controlling member of a marketing channel?

A) vertical leader
B) producer
C) channel captain
D) wholesaler that sells to the retailer

Question 37

What would occur between KitchenAid and retailers if KitchenAid established an electronic storefront where customers could purchase mixers and accessories from the company's website?

A) vertical channel conflicts
B) horizontal channel conflicts
C) exclusive dealing agreements
D) tying agreements

Question 38

When can an intermediary be eliminated from a marketing channel?

A) when another intermediary or a new system replaces it
B) when the elimination is demanded by a retailer
C) when there is mutual consent between manufacturer and wholesaler
D) when the consumer prefers to buy wholesale

Question 39

Which product would NOT be sold through a short channel?

A) deck of cards
B) custom-made computer system
C) dairy products
D) candy bar in a vending machine

Question 40

What type of distribution is the process of using every channel available to bring a product to market?

A) exclusive
B) specialized
C) selective
D) intensive

Question 41

Management at Granger Industries is evaluating the company's distribution system to determine if cost-cutting measures will impact performance. Ralph, an employee with experience in annual cost-cutting negotiations, suggests the company consider synergies between elements of the distribution system instead of judging each activity on its own merits. What is Ralph trying to avoid with the cuts?

A) optimism bias
B) suboptimization
C) framing problem
D) horizontal conflict

Question 42

The manager of each physical distribution function attempts to minimize costs. However, due to the impact of one physical distribution task on the other, he/she obtains less than optimal results. What is this condition called?

A) slow order processing
B) suboptimization
C) inventory fluctuations
D) poor customer service standard

Question 43

What is an improved or supplemental service called that is added to the supply chain to provide enhanced benefits, but is NOT expected by the customer?

A) value-added service
B) demarketing
C) cost-plus products
D) optimization

Question 44

What is managing warehouse and storage facilities a part of?

A) downstream supply chain management
B) backward integration
C) forward integration
D) upstream supply chain management

Question 45

What term refers to an organized group of components linked according to a plan for achieving specific distribution objectives?

A) physical distribution system
B) nonphysical system
C) product promotion system
D) physical promotion system

Question 46

John works for an ice-cream manufacturer. His department focuses on keeping the finished products fresh as well as ensuring that they reach the retailers on time as the products are highly perishable. In addition, his department decides on which flavours of ice-creams should be sent to which retailers in various trade areas. What is this an example of?

A) horizontal integration
B) downstream management
C) backward integration
D) reverse management

Question 47

A fast-food giant invests in potato farms in Prince Edward Island in order to stabilize its raw material prices. What type of integration is this an example of?

A) situational
B) backward
C) balanced
D) horizontal

Question 48

The outsourcing of distribution functions as a way of cutting costs is becoming more common for Canadian and foreign companies. What are the outsourcing specialists who contract to handle distribution called?

A) outsourcing alliances
B) intermodal distributors
C) third-party logistics firms
D) supply chain coordinators

Question 49

What is the sequence of suppliers and activities that contributes to creating and delivering merchandise called?

A) supply chain
B) distribution contract
C) logistics channel
D) retail cooperative

Question 50

What are customer-service standards?

A) definitions of acceptable performance for service quality
B) the result of effective service cost trade-offs
C) functional service areas that require changes in strategy
D) tied directly to service suboptimization requirements

Question 51

What is technology that uses a tiny chip with identification information that can be read by a scanner from a distance called?

A) radio frequency identification
B) Universal Product Code
C) enterprise resource technology
D) logistics technology

Question 52

Pennzoil products are shipped to the Canadian Tire warehouse regularly. Assuming Pennzoil ships three truckloads biweekly, it is in a position to negotiate rates with a trucking company. What is the discounted rate called?

A) insider rate
B) customer rate
C) class rate
D) commodity rate

Question 53

What is a major difference between an administered vertical marketing system and a contractual system?

A) Administered marketing systems are larger than contractual systems.
B) Administered systems depend on channel captains, whereas contractual systems depend on formal agreements.
C) Administered systems usually have common names and similar inventories, whereas contractual systems may include non-competing members.
D) Contractual systems depend on effective working relationships built up over the years, whereas administered systems depend upon finite control.

Question 54

The management at Vision, a company that specializes in high-end eyewear, was dissatisfied with the performance of the marketing intermediaries' in promoting their products. They decided to sell their products only through standalone, exclusive boutiques which are owned and maintained by Vision. What type of integration is this an example of?

A) forward
B) associative
C) balanced
D) horizontal

Question 55

What is the standard rate that carriers charge for transporting specific goods from point A to point B called?

A) contract rate
B) special rate
C) class rate
D) insider rate

Question 56

What is the difference between a retail cooperative and a wholesale-sponsored voluntary chain?

A) The wholesaler buys ownership shares of the retail operations.
B) The cooperative has private label brands.
C) The retailers purchase ownership shares of the cooperative.
D) The wholesaler-sponsored voluntary chain has contractual agreements.

Question 57

Which of the following are NOT physical distribution elements?

A) customer service and order processing
B) inventory control and materials handling
C) raw material procurement and operations management
D) transportation and warehousing

Question 58

What term refers to the rate given by carriers to shippers as a reward either for regular use or for large-quantity shipments?

A) flat rate
B) class rate
C) contract rate
D) commodity rate

Question 59

What does the supply chain begin with?

A) finished good rolling off the end of the production line
B) firms seeking new markets for their products
C) product being loaded aboard the rail car for shipment
D) raw material inputs for the manufacturing process of a product

Question 60

Which statement is an example of a customer service standard?

A) We provide credit for good accounts; all others must pay cash.
B) Our purpose is to minimize time utility.
C) We will deliver orders within four days or fewer.
D) We maintain large inventories to ship dated goods.

Question 61

A home-furnishings distributor needs to ship products to another warehouse 500 kilometres away. The company vans are needed for local deliveries, so the warehouse must call an outside carrier to ship the products. What type of freight carrier will the company most likely call?

A) private carrier
B) common carrier
C) contract carrier
D) intermodal freight company

Question 62

Which of the following is a characteristic of common carriers moving freight?

A) move if freight is non-hazardous
B) move by limited-rate contract
C) move for private contracts
D) move by all modes of transport

Question 63

What is the most efficient form of transportation for coal, grains, nonmetallic minerals, and lumber products?

A) air cargo
B) motor freight
C) railroads
D) water carriers

Question 64

What form of transportation is in control of the largest share of the freight business as measured in tonne-kilometres?

A) air carriers
B) railroads
C) water carriers
D) motor carriers

Question 65

What is the most effective means of transporting products such as natural gas and crude oil?

A) water carrier
B) piggyback
C) pipeline
D) bulk motor carrier

Question 66

What is the shipping activity of a 1,000-tonne shipment that has moved 1,000 kilometres?

A) 10,000 tonne-kilometres
B) 100,000 tonne-kilometres
C) 1,000,000 tonne-kilometres
D) 2,000,000 tonne-kilometres

Question 67

What type of carrier is the "backbone of the transportation industry"?

A) private
B) common
C) institutional
D) bulk

Question 68

What is the air freight industry currently facing?

A) overnight delivery service growth that has leveled off
B) unprecedented growth in market share of freight hauling
C) competition from foreign air carriers
D) deregulation

Question 69

What is the highest cost mode of transportation?

A) overnight common carrier
B) air freight
C) non-stop rail express
D) high-pressure pipeline

Question 70

What is an advantage of pipeline transport?

A) accommodation of only select products
B) limited and specialized transport locations
C) low maintenance
D) careful and slow speed of transport

Question 71

Which statement best illustrates a characteristic of private carriers?

A) They are also called institutional carriers.
B) They observe strict rate and service regulations.
C) They are regional carriers.
D) They do not offer services for hire.

Question 72

Approximately how many trucks cross the Canada-United States border each year?

A) 3 million
B) 7 million
C) 11 million
D) 15 million

Question 73

What type of train runs back and forth between a single loading point and a single destination to deliver one commodity?

A) containerized
B) piggyback
C) intermodal
D) unit

Question 74

What does the term tonne-kilometre refer to?

A) moving one cubic metre of freight one kilometre
B) moving one tonne longer than 100 kilometres
C) moving one tonne of freight one kilometre
D) moving a full load one kilometre

Question 75

What is the form of transportation that has the lowest transport cost per tonne?

A) railroad
B) water freight
C) air freight
D) pipeline

Question 76

Why does the trucking industry receive higher revenues per tonne shipped?

A) The trucking industry charges more.
B) Government regulation limits the fees that the railways can charge.
C) Trucking concentrates on shipping manufactured products.
D) Truck drivers haul smaller loads.

Question 77

Tractor trailers of products ride stacked on barges along a river. When they reach shore, they will be attached to truck cabs and driven to warehouses hundreds of kilometres away. What term refers to the first type of intermodal hauling?

A) birdyback service
B) piggyback service
C) fishyback service
D) double-stack service

Question 78

Which of the following is the most accurate statement concerning pipelines?

A) They are regulated by common carrier rates.
B) They are ranked third in number of tonne-kilometres transported.
C) They are a relatively fast means of shipping due to their 24-hour availability.
D) They are dependable but a high-maintenance carrier.

Question 79

What type of train bypasses intermediate terminals to speed up schedules and may carry a variety of commodities?

A) containerized
B) unit
C) intermodal
D) run-through

Question 80

What are bulky, low-unit-value commodities efficiently transported by?

A) run-through trains
B) double-stack container trains
C) barge lines
D) motor carriers