Deck 15: Distributing Products

Question 1

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

Answer 1

True

Question 2

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

Answer 2

False

Question 3

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.

Answer 3

False

Question 4

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

Question 5

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

Question 6

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 7

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

Question 8

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

Question 9

Retailers are marketing intermediaries who sell to ultimate consumers.

Question 10

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

Question 11

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 12

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 13

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 14

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

Question 15

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

Question 16

Agents and brokers and wholesalers are types of marketing intermediaries.

Question 17

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 18

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

Question 19

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 20

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

Question 21

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

Question 22

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

Question 23

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

Question 24

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

Question 25

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

Question 26

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

Question 27

Hartselle Home Products, Inc., manufacturers 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 28

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

Question 29

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 30

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 31

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

Question 32

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

Question 33

In the Spotlight on Small Business box in the chapter, Copart has found a ready market for its salvaged cars in the United States but has been unable to find a market globally due to distribution problems.

Question 34

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

Question 35

Some marketing intermediaries make both wholesale and retail sales.

Question 36

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

Question 37

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

Question 38

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 39

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

Question 40

Frank Crimmins was driving on Interstate 85 in eastern Alabama when he noticed he was running low on fuel. 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 41

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

Question 42

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 43

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

Question 44

Limited-function wholesalers are a type of merchant wholesaler.

Question 45

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 46

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 47

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

Question 48

(Melanie is a broker who has just helped negotiate a major deal. As a broker Melanie can expect to earn a fixed amount of profit for her efforts regardless of the dollar value of the contract she negotiated.

Question 49

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

Question 50

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

Question 51

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.

Question 52

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

Question 53

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

Question 54

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

Question 55

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 56

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

Question 57

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 58

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 59

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

Question 60

Wholesalers may provide market information and business consulting services.

Question 61

The main difference between selective distribution and exclusive distribution is the number and type of market segments the firm chooses. In a selective strategy, a variety of profitable niche markets are selected, while in an exclusive strategy one specific market segment is targeted, and all others are excluded.

Question 62

In order to succeed in today's tough economic times all retailers must compete with low prices.

Question 63

An advantage of a selective distribution strategy is that consumers are able to find a popular product at a wide variety of retailers.

Question 64

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

Question 65

Saul-Mart is the name of a new chain of discount stores. A major part of Saul-Mart's competitive strategy is likely to be based on keeping its prices lower than those of other types of retailers.

Question 66

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

Question 67

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

Question 68

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

Question 69

Retailers that participate in an exclusive distribution strategy will have a strong incentive to carry a large inventory of the good and provide exceptional service to customers.

Question 70

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

Question 71

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

Question 72

Soundworthy Stereo is a producer of high quality speakers and stereo components. The company sells its products through a few preferred retailers in any geographic area. Soundworthy uses a selective distribution strategy.

Question 73

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

Question 74

Producers of shopping goods such as furniture, appliances, and clothing usually rely on an exclusive distribution strategy.

Question 75

Warehouse clubs are usually smaller than supermarkets.

Question 76

Retail organizations employ more than 11 million people in the U.S.

Question 77

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

Question 78

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

Question 79

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

Question 80

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