Deck 12: Distribution and Pricing: Right Product, Right Person, Right Place, Right Price

Question 1

Truck jobbers are limited service merchant wholesalers who deliver goods to their customers.

Answer 1

True

Question 2

The channel of distribution refers to the actual movement of products as they travel from the producer to the ultimate consumer.

Answer 2

False

Question 3

Distributors can create time and place utility due to the nature of the utilities' functions, but not information or service utility.

Answer 3

False

Question 4

Agents and brokers are the most common type of merchant wholesaler.

Question 5

Independent wholesaling businesses are independent distributors who represent a number of different producers and distribute their goods to a range of customers.

Question 6

Recently, Sal Grasso purchased an expensive European automobile. He was impressed that the car dealer delivered the car to his house and offered to pick up the vehicle every four months so it can be regularly serviced at the dealership. While Sal's car is being serviced, he will be able to use a loaner car from the dealership at no additional charge. This is an example of a business providing service utility.

Question 7

Drop shippers are often part of the distribution channel for bulky items such as timber and coal.

Question 8

Providing credit, cashing cheques, and delivering products are all examples of how distributors provide ownership utility.

Question 9

Marketing intermediaries can deliver utility created by producers, but they can't create new utility.

Question 10

Physical distribution involves the actual shipment of products through the channel of distribution.

Question 11

Producers use channel intermediaries to move products more efficiently and effectively from factories to consumers.

Question 12

One drawback of using distributors in a distribution channel is that the addition of these intermediaries increases the total number of transactions that must occur to get the good from the producer to the consumer.

Question 13

Distributors reduce the costs associated with moving goods from producers to consumers.

Question 14

Cash and carry wholesalers are full-service merchant wholesalers who specialize in selling to small retailers.

Question 15

Physical distribution occurs as products actually travel along the distribution pathway.

Question 16

Merchant wholesalers are independent distributors who take legal possession, or title, of the goods distributed.

Question 17

Drop shippers do not take title to the goods they help distribute. Instead, they merely provide delivery services for other wholesalers.

Question 18

A distribution strategy consists of two main parts: pricing strategy and promotion strategy.

Question 19

Retailers buy products from producers and sell them to businesses while wholesalers sell products to businesses for personal consumption.

Question 20

A producer sells products directly to consumers through a direct channel.

Question 21

Best Buy, Home Depot, and Staples are examples of retailers who rely mainly on outlet stores.

Question 22

Firms that use multichannel retailing may sell products to their final customers using both store and nonstore approaches.

Question 23

Successful online retailers such as Lands' End and Nike use technology to create a personal, in-the-moment shopping experience.

Question 24

Direct selling includes all methods of selling directly to customers at home and work.

Question 25

Examples of limited service wholesalers include drop shippers, truck jobbers, and cash and carry wholesalers.

Question 26

Outlet stores are owned by producers who sell directly to final customers and may offer discontinued or flawed goods.

Question 27

Agents and brokers connect buyers and sellers, facilitate transactions in exchange for commissions, and take legal ownership of the goods distributed.

Question 28

Mary Kay Cosmetics, Tupperware, and The Pampered Chef all use multilevel marketing as a means to sell products directly to consumers.

Question 29

An exclusive distribution strategy works best for sellers of luxury goods such as Porsche and Cartier.

Question 30

A selective distribution strategy involves establishing a single retailer as the sole provider of a product in a given area.

Question 31

Firms producing high-end goods with a customer base that actively seeks out their products (such as very expensive luxury automobiles, jewellery, and watches) usually rely on a selective distribution method.

Question 32

Many medium- and high-priced products use a selective distribution strategy.

Question 33

Ben Arrington is an agent. This means that he assumes a significant risk of loss because he takes legal title to the products he helps distribute.

Question 34

Convenience stores offer multiple locations with a wide variety of merchandise and superior service.

Question 35

Though Newton Coal Supply does actually take possession of coal from local mining companies, it never stores a single ounce of coal on its premises. Instead, it simply arranges for the coal to be shipped directly from the mining company to its customers. This type of arrangement suggests that Newton is a drop shipper.

Question 36

Examples of the services provided by full-service merchant wholesalers include extension of credit, promotional assistance, product repairs, and warehousing.

Question 37

Infomercials and telemarketing are examples of direct response retailing.

Question 38

Firms that produce items for which customers are not willing to make special trips or travel long distances to buy normally use an intensive distribution strategy.

Question 39

Category killers dominate a category by offering a huge variety of one type of product.

Question 40

Intensive, selective, and exclusive are the three key strategic distribution strategies retailers use.

Question 41

The channel evolution theory helps explain the evolution of retailers that enter a market and initially attempt to attract customers by offering lower prices. It suggests that eventually low profit margins will force such firms to evolve into more upscale markets, leaving their original customer base behind.

Question 42

Logistics refers to the logical criteria used in the selection of the best mix of retail strategies for marketing a good to its final consumers.

Question 43

The wheel of retailing has proven to be a theory that describes the evolution of virtually every real-world retailer with exceptional accuracy.

Question 44

Online retailers do not encourage customers to custom-create branded merchandise.

Question 45

Door-to-door selling is a popular type of direct response retailing.

Question 46

Vendor-managed inventory strategies allow suppliers to determine their buyers' needs and automatically ship supplies as needed.

Question 47

Supply chain management is a subset of a much broader function of marketing known as logistics.

Question 48

Physical distribution strategy is primarily concerned with determining when the product will flow from producer to consumer.

Question 49

The wheel of retailing refers to the tendency for the price of products at the retail end of the distribution channel to fall over time.

Question 50

The advent of the National Do Not Call list has resulted in a serious decline in all forms of direct selling.

Question 51

Physical distribution strategy involves determining how products will flow through the distribution channel from producer to consumer.

Question 52

Multilevel marketing involves hiring independent contractors to sell products within personal networks of family and friends.

Question 53

Cost, speed, and dependability need to be considered when deciding upon modes of transportation.

Question 54

The wheel of retailing helps explain the evolution of firms that enter a market on a shoestring budget and gain customers by offering lower prices. It suggests that once a customer base is established, the retailer begins offering higher-end products, more upscale facilities, and better service.

Question 55

Many firms now outsource the management of their supply chains.

Question 56

Building profitability and boosting volume are two common objectives that influence marketers' pricing decisions.

Question 57

The supply chain for a product includes not only its distribution channels but also the suppliers who deliver raw materials and other inputs to producers.

Question 58

Depending on factors such as warehousing, docking facilities, and accessibility, some distributors use several different modes of transportation.

Question 59

Logistics focuses primarily on the tactics involved in moving products along the supply chain.

Question 60

As technology evolves, consumers will see a growing number of vending machines for products, including fresh cooked French fries, digital cameras, and premium-style coffee.

Question 61

The use of skimming pricing is illegal because it discourages competition.

Question 62

Everyday low pricing is a pricing strategy that is consistent with a goal of achieving long-term profitability through high volume.

Question 63

A firm only earns a profit if its revenues are greater than its costs.

Question 64

Breakeven analysis determines the level of sales at which the business will earn enough revenue to cover all of its costs.

Question 65

Price is the easiest variable in the marketing mix for marketers to control.

Question 66

Penetration pricing makes the most sense in situations where a significant group of potential customers are willing to pay a premium price for the good.

Question 67

Skimming pricing is an especially effective pricing technique in highly competitive markets with many firms offering similar products.

Question 68

Jorge Castilla willingly paid $499 for an Apple iPhone on the day it hit the market, even though it was far more expensive than cell phones he had bought in the past. He wasn't concerned about the price; he just wanted to be one of the first on campus to have this product. Consumers like Jorge are the target of firms using skimming pricing strategies.

Question 69

A company that breaks even is making a profit.

Question 70

Truck transport is the most expensive form of transportation.

Question 71

Grocery stores and department stores often use high/low pricing.

Question 72

Walmart and Costco use everyday low pricing to sustain their customer base.

Question 73

Rolex watches, Mont Blanc pens, and Bentley cars use prestige pricing to reinforce their image of high quality and exclusivity.

Question 74

A 1-litre bottle of Coca-Cola or Pepsi is the same price in your local bookstore; therefore, you are forced to make a choice based on other factors, such as taste or brand preference. This pricing tactic is an example of matching the competition.

Question 75

Marketers who want to boost volume are likely to use skimming pricing.

Question 76

The key to a successful pricing strategy is to focus on maintaining stability.

Question 77

Profits may be increased either by increasing revenue or by decreasing costs.

Question 78

Rail transport is the mode dependable form of transportation.

Question 79

Marketers normally have nearly complete control over how their products are priced.

Question 80

High/low pricing is the strategy of charging some customers a high price while charging other customers a low price for exactly the same product at the same time.