Deck 14: Channels of Distribution

Question 1

ArvinMeritor is a company that manufactures parts for the motor vehicle industry. In a newspaper article, ArvinMetrotor's vice presidents said, "Significantly reducing our supply base during the next four years is a key element in our corporate-wide efforts for continuous improvement throughout the supply chain." Over the next four years, ArvinMeritor will concentrate on gaining efficiency through modifying its _____ strategy.

A) production
B) pricing
C) promotion
D) distribution
E) product

Answer 1

distribution

Question 2

A middleman:

A) cannot deal directly with ultimate consumers.
B) never takes physical possession of the product.
C) does not aid in the transfer of ownership.
D) can always be labeled as "full service."
E) is described by none of the above.

Answer 2

is described by none of the above.

Question 3

According to the text, middlemen are most meaningfully classified on the basis of:

A) prices charged to their customers.
B) geographic area served.
C) whether they take title to the products they handle.
D) number of different customers served.
E) type of customer service demanded of producers.

Answer 3

whether they take title to the products they handle.

Question 4

Which of the following is an example of a merchant middleman?

A) ReMax real estate agency
B) Freeman Auction Company
C) JCPenney department store
D) USAA Travel Service
E) all of the above

Question 5

Wal-Mart, Target, The Limited, and Morgan's Hardware Store are all examples of:

A) agent middlemen.
B) consumer products brokers.
C) facilitating organizations.
D) disintermediaries.
E) merchant middlemen.

Question 6

Which of the following is an example of an agent middleman?

A) JCPenney department store
B) Better Homes & Gardens real estate agency
C) Hudson & Sons hardware wholesalers
D) A&P supermarket
E) Wal-Mart discount store

Question 7

Worldwide Travel Agency, ReMax real estate agency, and Jonson Equipment Brokerage Company are all examples of:

A) agent middlemen.
B) consumer products brokers.
C) "do-it-yourself" distributors.
D) distribution facilitators.
E) merchant middlemen.

Question 8

Fisher-Price toys can be purchased at retail stores and through its shop-at-home catalog as well as at its Web site, www.fisherprice.com. Fisher-Price is engaged in which of the following practices?

A) multiple sourcing
B) disintermediation
C) cross-selling
D) collaborative selling
E) relationship marketing

Question 9

Unilever is the world's largest manufacturer of ice cream. When the Anglo-Dutch company decided to invest in retailing ice cream, it developed ice-cream vans and kiosks that it would set up on the world's beaches. Unilever engaged in:

A) multiple sourcing
B) disintermediation
C) cross-selling
D) collaborative selling
E) relationship marketing

Question 10

CDW is the largest reseller of computer equipment in the United States. The bulk of CDW's 360,000 customers are small- and medium-sized businesses. Such companies have modest IT departments at best, and they lack the volume to command much attention from equipment manufacturers. They need a relationship with a knowledgeable vendor, which is exactly the service CDW sells. CDW is working to prevent its customers from eliminating it from their distribution channels. In other words, CDW is creating an environment in which _____ would be impractical.

A) multiple sourcing
B) disintermediation
C) cross-selling
D) collaborative selling
E) relationship marketing

Question 11

_____ is the practice of eliminating middlemen from distribution channels.

A) Multiple sourcing
B) Disintermediation
C) Cross-selling
D) Collaborative selling
E) Relationship marketing

Question 12

A _____ consists of the set of people and firms involved in the transfer of title to a product as it moves from producer to ultimate consumer or business user.

A) logistics network
B) production channel
C) distribution channel
D) middlemen hierarchy
E) marketing program

Question 13

The _____ for Uncle Donald's Pecan Pralines includes the company that manufactures the candy, the wholesaler who buys that brand of candy and many other brands, and the convenience stores where the ultimate consumer can purchase the candy.

A) logistics network
B) production channel
C) distribution channel
D) middlemen hierarchy
E) marketing program

Question 14

Which of the following is an example of an intermediary that aids the distribution process?

A) advertising agencies
B) public relations consultants
C) financial institutions
D) management consultants
E) distribution boutiques

Question 15

Middlemen acting in the role of purchasing agent for their customers would:

A) perform a decision-making function for customers.
B) provide market information.
C) guarantee products.
D) interpret consumers' wants.
E) promote producers' products.

Question 16

Middlemen acting in the role of sales specialist for their suppliers would:

A) encourage disintermediation.
B) provide market information.
C) subdivide large quantities of a product.
D) transport products.
E) guarantee products.

Question 17

When Gourmet Concepts, a company that makes and sells specialty desserts to restaurant chains, began operations, it had to design its distribution strategy very carefully. The first decision it had to make about its distribution channel was to:

A) specify the role of distribution in its entire marketing mix.
B) examine competitors' channels.
C) choose specific channel members.
D) determine the desired intensity of distribution.
E) select the type of distribution channel to use.

Question 18

When Gourmet Concepts, a company that makes and sells specialty desserts to restaurant chains, began operations, it had to design its distribution strategy very carefully. Once its management had decided exactly what role distribution would play in its overall marketing program, it was next necessary to:

A) determine the pricing strategy to be used.
B) select the type of distribution channel it would use.
C) choose specific channel members.
D) determine the desired intensity of distribution.
E) examine competitors' channels.

Question 19

If the manufacturer of Charlee's Gourmet Beef Jerky is trying to decide whether to market the product by mail order, in convenience stores, through local caterers, and/or at independent supermarkets, it is involved in:

A) choosing specific channel members.
B) assessing its competition.
C) selecting the type of distribution channel it wants to use.
D) delineating the role of distribution in its marketing program.
E) examining how its competition markets snack products.

Question 20

If the manufacturer of Hot & Spicy Pickled Asparagus is deciding whether to limit product sales to local Kroger supermarkets or sell the snack at every appropriate outlet, she is involved in:

A) delineating the role of distribution in its marketing program.
B) examining how its competition markets similar snacks.
C) making sure they don't have to pay a slotting fee.
D) choosing specific channel members.
E) determining the intensity of distribution needed to efficiently market the asparagus.

Question 21

Intensity of distribution refers to:

A) which element of the marketing mix is emphasized.
B) the number of middlemen used at the wholesale and retail levels in a particular territory.
C) whether a direct or indirect channel is used.
D) which forms of transportation will be used to distribute the product.
E) the amount of money spent on promotion.

Question 22

What is the final decision a producer must make in order to design a suitable distribution channel for its product?

A) Choose specific channel members.
B) Select the type of distribution channel.
C) Determine the intensity of distribution.
D) Evaluate conflict and control within the channel.
E) Delineate the role of distribution within the entire marketing program.

Question 23

Another term for gray marketing is:

A) buyback exporting.
B) countertrading.
C) export disintermediation.
D) dumping.
E) export diversion.

Question 24

A channel consisting of only producer and final customer, with no middlemen providing assistance, is called _____ distribution.

A) selective
B) indirect
C) horizontal
D) direct
E) administered

Question 25

The interior decorator suggested Michele find some iron scrollwork to use as a headboard in her guest bedroom. Michele hired Jago, an artist who works in metal to design and install her headboard. In this example of _____ distribution, Michele paid Jago $1,500 for his work.

A) selective
B) indirect
C) horizontal
D) direct
E) administered

Question 26

Cummins Engine Company uses _____ distribution in business-to-business markets. Its sales force is knowledgeable about maintenance costs and other technical information. They sell the Cummins engine straight to Navistar, Chrysler, Volvo-GM, and Kenworth.

A) selective
B) indirect
C) horizontal
D) direct
E) administered

Question 27

When Donna purchased five pounds of tomatoes from her neighbor who gardens, _____ distribution occurred.

A) flexible
B) inflexible
C) intensive
D) direct
E) indirect

Question 28

McKee Bakery sells a case of Little Debbie oatmeal raisin cookies to Lester & Sons, a wholesale grocer. Lester & Sons then sells the cookies to an IGA supermarket. The IGA supermarket then sells a package of cookies to Andrew. This is an example of _____ distribution.

A) flexible
B) inflexible
C) selective
D) direct
E) indirect

Question 29

Deborah sells several different varieties of candy at a local flea market. She buys the candy from a wholesaler who specializes in selling to convenience stores. Deborah gets low prices if she is willing to buy open bags, candy that is slightly past its "best-if-used-by-date," and candy that is not selling well to convenience store owners. The wholesaler buys from a number of different manufacturers to get the assortment desired by its buyers. This is an example of _____ distribution.

A) flexible
B) inflexible
C) selective
D) direct
E) indirect

Question 30

The distribution channel used when the manufacturer of art supplies sells its product direct to customers through mail orders is:

A) producer to consumer.
B) producer to retailer to consumer.
C) producer to wholesaler to retailer to consumer.
D) producer to agent to retailer to consumer.
E) producer to agent to wholesaler to retailer to consumer.

Question 31

Which of the following channels for consumer goods is used when Mars candies' sells M&M candies at its Web site, www.colorworks.com?

A) from producer to consumer
B) from producer to retailer to consumer
C) from producer to agent to retailer to consumer
D) from producer to wholesaler to retailer to consumer
E) from producer to agent to wholesaler to retailer to consumer

Question 32

The distribution channel used when the Sessions Folk Gallery buys Okra-Dokies, jewelry made from okra pods, from the artist who crafts them to sell to its customers is:

A) producer to consumer.
B) producer to retailer to consumer.
C) producer to wholesaler to retailer to consumer.
D) producer to agent to retailer to consumer.
E) producer to agent to wholesaler to retailer to consumer.

Question 33

Dobinski's Country Foods manufactures six flavors of corn bread mixes. The mixes are sold to distributors who then sell them to resort gift shops in the Southeastern United States. Visitors to the resorts can leave with a souvenir that tastes great. Dobinski's corn bread mixes are distributed:

A) producer to consumer.
B) producer to retailer to consumer.
C) producer to wholesaler to retailer to consumer.
D) producer to agent to retailer to consumer.
E) producer to agent to wholesaler to retailer to consumer.

Question 34

If there is a traditional channel for consumer goods, it is:

A) from producer to consumer.
B) from producer to retailer to consumer.
C) from producer to agent to retailer to consumer.
D) from producer to wholesaler to retailer to consumer.
E) from producer to agent to wholesaler to retailer to consumer.

Question 35

Which of the following channels of distribution accounts for the greatest dollar sales volume of business products?

A) from producer to user
B) from producer to agent to user
C) from producer to industrial distributor to reseller to user
D) from agent to industrial distributor to user
E) none of the above

Question 36

Which of the following companies is most likely to use the producer to business user channel of distribution?

A) a publisher of mystery novels
B) a kaleidoscope manufacturer
C) a sugar refinery
D) a manufacturer of computer monitors
E) a manufacturer of $100,000 firearms training systems

Question 37

Which distribution channel is the manufacturer of supplies used to clean up hazardous waste spills for business use most likely to employ?

A) from producer to user
B) from producer to industrial distributor to user
C) from producer to agent to user
D) from agent to industrial distributor to user
E) none of the above

Question 38

Palouse Red is a small producer of red bell pepper sauce used as a dip and as a condiment on sandwiches. It does not have its own sales force. Which channel of distribution is it most likely to use?

A) from producer to user
B) from agent to industrial distributor to user
C) from producer to agent to retailer to consumer
D) from producer to industrial distributor to user
E) none of the above

Question 39

Which of the following organizations is most likely to use a direct channel of distribution?

A) a company that manufactures roofing shingles
B) a firm that manufactures adhesives
C) a firm that specializes in recyclable products
D) a professional services firm
E) a manufacturer of luxury automobiles

Question 40

Midnight Physicians provides medical treatment for patients who are unable to see a doctor during the hours doctors' offices are usually open. Midnight Physicians uses a(n) _____ channel of distribution.

A) flexible
B) direct
C) hierarchical
D) administered
E) indirect

Question 41

What kind of distribution channel does a company that prunes trees and removes dead branches use?

A) flexible
B) direct
C) hierarchical
D) administered
E) indirect

Question 42

A manufacturer of dinosaur models is using _____ when it sells its products through middlemen as well as through its own retail outlets.

A) a direct channel of distribution
B) exclusive distribution
C) intensive distribution
D) coordinated distribution
E) multiple distribution channels

Question 43

Chez Ami by Patsy Aiken Designs is classic hand-smocked children's apparel. The company specializes in matching brother/sister outfits. The Chez Ami brand is sold at home shows, in retail stores, on its Web site, and through its retail catalog. Chez Ami uses:

A) a direct channel of distribution.
B) exclusive distribution.
C) intensive distribution.
D) coordinated distribution.
E) multiple distribution channels.

Question 44

Animal Writers is a new pen and pencil line from a company called One in a Million, Inc. The pens and pencils are carved from wood and available in 12 designs. The pens and pencils can be purchased at college bookstores, from several different catalog retailers, and at souvenir stands. One in a Million, Inc. is using _____ to sell its new line of pens and pencils.

A) a direct channel of distribution
B) exclusive distribution
C) intensive distribution
D) coordinated distribution
E) multiple distribution channels

Question 45

Casket Royale sells caskets to funeral homes and to florists who also want to put together a burial package for their customers. Casket Royale uses:

A) a direct channel of distribution
B) exclusive distribution
C) intensive distribution
D) coordinated distribution
E) multiple distribution channels

Question 46

A manufacturer is likely to use multiple channels of distribution if:

A) all of the products it produces are similar.
B) cash discounts are available.
C) the product can be sold to both consumer and business markets.
D) vertical integration exists.
E) it has adopted a production-oriented pricing objective.

Question 47

Which of the following statements about vertical marketing systems (VMSs) is True?

A) The horizontal marketing system is much more efficient than the VMS.
B) VMSs tend to increase duplication of marketing services.
C) There is a trend away from the use of VMSs.
D) VMSs give manufacturers monopolistic control over the channel.
E) None of the above statements about VMSs is True.

Question 48

A vertical marketing system:

A) was the dominant form of distribution until the advent of the horizontal marketing system.
B) evolved because producers were not concerned with the needs of their middlemen.
C) requires all marketing functions be performed by the wholesaler.
D) is a loosely coordinated distribution channel that allows retailer and wholesaler participants to retain their freedom.
E) is used to improve operating efficiency and marketing effectiveness.

Question 49

In a(n) _____, a firm at one level of a channel owns the firms at the next level or owns the entire channel.

A) contractual VMS
B) administered VMS
C) voluntary chain
D) corporate VMS
E) franchise system

Question 50

In a corporate vertical marketing system,:

A) a firm at one level of a channel owns the firms at the next level or owns the entire channel.
B) distribution activities are coordinated by an agent middleman.
C) promotion and distribution are controlled by the strongest channel member.
D) independent firms operate under contracts, which specify how distribution and promotion will be done.
E) none of the above is True.

Question 51

Polo/Ralph Lauren manufactures the clothing in sells in its own retail stores. In this scenario, Polo/Ralph Lauren is an example of a(n):

A) contractual VMS.
B) administered VMS.
C) wholesaler-sponsored voluntary chain.
D) corporate VMS.
E) franchise system.

Question 52

Ashland began as a regional petroleum refinery business. Then it opened Ashland Distribution which has become a leading distributor of oil-based products in the United States. This is an example of a(n) _____ that operates in the business market.

A) contractual VMS
B) administered VMS
C) wholesaler-sponsored voluntary chain
D) corporate VMS
E) franchise system

Question 53

Aga Foodservices, makes specialized cooking equipment such as iron cook stoves, bread ovens, dough mixers, pizza ovens, and doughnut-making equipment. In 2003, the manufacturer acquired a New England-based home furnishings retailer in which to sell its products. This acquisition created a(n):

A) contractual VMS.
B) administered VMS.
C) wholesaler-sponsored voluntary chain.
D) corporate VMS.
E) franchise system.

Question 54

The Kroger supermarket chain operates a factory that manufactures cheese that is sold in the retail stores under the Kroger label. This is an example of a(n):

A) contractual VMS.
B) administered VMS.
C) wholesaler-sponsored voluntary chain.
D) corporate VMS.
E) franchise system.

Question 55

To serve its target market more efficiently, Medusa Cement Manufacturers purchased (1) a gravel pit to make sure it always had a ready supply of gravel and (2) a company that manufactures cement trucks. This is an example of a(n):

A) contractual VMS.
B) administered VMS.
C) wholesaler-sponsored voluntary chain.
D) corporate VMS.
E) franchise system.

Question 56

Which of the following is an example of a contractual VMS?

A) Radio Shack stores owned by the parent company
B) Post cereals
C) Holiday Inn franchises
D) Kraft dairy products
E) all of the above

Question 57

Wendy's, Ford, Midas Muffler, and Avis car rentals are all examples of:

A) contractual VMSs.
B) retailer-sponsored chains.
C) administered VMSs.
D) corporate VMSs.
E) horizontal marketing systems.

Question 58

In a(n) _____, independent firms--producers, wholesalers, and retailers--operate under legal agreements specifying how they will try to improve distribution efficiency and effectiveness.

A) contractual VMS
B) administered VMS
C) direct channel
D) corporate VMS
E) horizontal channel

Question 59

A(n) _____ coordinates distribution activities through the marketing and/or economic power of one channel member or the shared power of two channel members.

A) contractual VMS
B) administered VMS
C) voluntary chain
D) corporate VMS
E) franchise system

Question 60

The leading producer in the U.S. of aluminum railings used in a variety of sites such as hospitals, stadiums, schools controls the channel of distribution through which its railings are sold by the force of its market power. This is an example of a(n):

A) contractual VMS.
B) administered VMS.
C) wholesaler-sponsored voluntary chain.
D) corporate VMS.
E) franchise system.

Question 61

Ralston-Purina, with its lines of cereal, snack food, and pet food, has such brand equity and market position that it is able to coordinate distribution activities through its market power. It uses a(n): _____ for distribution.

A) contractual VMS
B) administered VMS
C) voluntary chain
D) corporate VMS
E) franchise system

Question 62

If a firm is consumer-oriented, the channels of distribution for its products should be determined by:

A) the financial strength of the producer.
B) consumer buying behavior patterns.
C) the volume of business done by its middlemen.
D) whether the retailer or the producer controls the channel.
E) none of the above.

Question 63

_____ can have a significant influence on the selection of distribution channels.

A) Geographic concentration of the market
B) Order size
C) Type of market
D) Number of potential customers
E) All of the above

Question 64

Which of the following is LEAST likely to have a significant influence on the selection of distribution channels?

A) technical installation and servicing needed for the product
B) perishability of the product
C) processes required in the product's manufacture
D) financial strength of producer
E) desire for channel control

Question 65

Which of the following products is most likely to have an indirect channel of distribution?

A) a firearms training system with a $200,000 price tag
B) accounting services
C) hand-crafted animals for carousel rides in amusement parks
D) a $15 case of paper towels
E) organically-grown tomatoes

Question 66

Which of the following products is most likely to have a direct or short channel of distribution?

A) video tapes
B) sporting goods
C) CD players
D) fresh orchids
E) leather sandals

Question 67

Management consulting services, tutoring, and a medical examination would:

A) all use an indirect channel of distribution.
B) all use a direct channel of distribution.
C) have the same number of potential customers.
D) be sold in the same types of markets.
E) have nothing in common.

Question 68

Before choosing a distribution channel for a product, a company should consider:

A) what services it will need to provide for its buyers.
B) if it wants to control the channel.
C) if it has the marketing know-how to distribute the product itself.
D) if it has the financial resources to use a direct channel.
E) all of the above.

Question 69

When is a manufacturer most likely to bypass middlemen as much as possible and use a short channel of distribution?

A) when it is financially weak
B) when it wants to control the distribution of its products
C) when it does not have a marketing department
D) when it does very little advertising
E) when it has a new and inexperienced sales force

Question 70

Which of the following statements about the intensity of distribution is True?

A) The degrees of intensity span an entire continuum.
B) Intensive distribution is not possible at the wholesale level.
C) A firm should use the same degree of intensity at each successive level of distribution.
D) The intensity of distribution refers to whether a pull strategy will be used.
E It the first two steps in designing a channel have been followed carefully, a manager should have no . difficulty in establishing the appropriate intensity of distribution.

Question 71

A manufacturer that uses a(n) _____ strategy of distribution wants to sell its product through every outlet in a market where a consumer might reasonably look for it.

A) exclusive
B) intensive
C) direct
D) selective
E) scrambled

Question 72

When marketing its product, the manufacturer of _____ would most likely use intensive distribution.

A) baseball mitts
B) washing machines
C) flashlight batteries
D) go-carts
E) air rifles

Question 73

A producer-supplier of _____ would be most likely to use an intensive distribution strategy.

A) archery equipment
B) snack crackers
C) college text books
D) designer evening gowns
E) antique reproductions

Question 74

The manufacturer of LifeSavers candy will most likely use _____ distribution.

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

Question 75

The manufacturers of light bulbs, nail clippers, chewing gum, and sodas would most likely want to use _____ distribution.

A) exclusive
B) intensive
C) direct
D) selective
E) scrambled

Question 76

For which of the following products will its manufacturer most likely choose intensive distribution?

A) vacuum cleaners
B) silk ties
C) mountain bikes
D) soft drinks
E) latex paint for painting the inside and outside of homes

Question 77

A manufacturer that uses selective distribution:

A) limits the number of outlets for its product in each market.
B) probably does not sell items classified as shopping goods.
C) is unable to use vertical marketing systems.
D) has only one outlet in each market.
E) encourages its retailers to use price cutting.

Question 78

In _____ distribution, a producer sells its products though multiple, but not all possible, wholesalers and/ or retailers in a market where a consumer might reasonably look for it

A) exclusive
B) intensive
C) direct
D) selective
E) dual

Question 79

If Teresa sent her husband Patrick to buy a BellSouth portable telephone, he could find it at a BellSouth store, at an electronics store, and at The Home Depot. He would not find a BellSouth portable phone for sale at department stores even though he might expect to find phones being sold there. From this information, you can surmise that BellSouth uses _____ distribution.

A) exclusive
B) intensive
C) direct
D) selective
E) twofold

Question 80

Barbie Collectibles are sold in a number of retail stores, but not by all the stores that would like to carry the product line. Mattel is using _____ distribution for its Barbie lines.

A) exclusive
B) intensive
C) direct
D) selective
E) twofold