Deck 14: Marketing Channels and Supply Chain Management

Question 1

Simple Foods,a breakfast cereal brand,has two wholesalers supplying to almost 100 retailers in California.Conflicts arising between the retailers and wholesalers within California will be referred to as horizontal conflicts.

Answer 1

False

Question 2

A distribution warehouse holds goods for moderate to long periods in an attempt to balance supply and demand for producers and purchasers.

Answer 2

False

Question 3

The term industrial distributor commonly refers to intermediaries in the business market that take title to the goods.

Answer 3

True

Question 4

Horizontal territorial restrictions result from agreements between retailers or wholesalers to avoid competition among sellers of products from the same producer.

Question 5

Marketers usually adopt a dual distribution strategy either to maximize their firm's coverage in the marketplace or to increase the cost effectiveness of the firm's marketing effort.

Question 6

Closed sales territories are exclusive geographic selling region of a distributor.

Question 7

When a producer grants exclusive rights to a wholesaler or retailer to sell its products in a specific geographic region it practices intensive distribution.

Question 8

Gray goods are products manufactured abroad under license from a U.S.firm and then sold in the U.S.market in competition with that firm's own domestic output.

Question 9

Selective distribution helps marketers reduce total marketing costs while establishing strong working relationships within the channel.

Question 10

The strategy of selective distribution involves distributing a product through a limited number of channels.

Question 11

The dominant and controlling member of a marketing channel is called the channel captain.

Question 12

Pipelines can accommodate shipments of a large number of products.

Question 13

Changing channel strategies can produce conflicts between established intermediaries and the new channels for the product.

Question 14

A merchant wholesaler is an independently owned wholesaler that takes title to the goods.

Question 15

In transportation,a class rate is the standard rate for a specific commodity moving between any pair of destinations.

Question 16

The traditional channel for consumer goods proceeds from producer to wholesaler to retailer to user.

Question 17

The biggest advantage of a physical distribution system is that its components are independent and hence,a decision in one area is unlikely to affect the functioning of the other components.

Question 18

Railroads control the largest share of the freight business in the United States as measured by ton-miles.

Question 19

Common carriers move freight via all modes of transport.

Question 20

Business products tend to move through longer marketing channels than consumer products.

Question 21

Direct selling is an important option for goods requiring extensive demonstrations in persuading customers to buy.

Question 22

If producers set up closed sales territories that substantially decrease competition,then it is in violation of the Federal Trade Commission Act and provisions of the Sherman and Clayton Acts.

Question 23

Freight forwarders act as transportation intermediaries,consolidating shipments to gain lower rates for their customers.

Question 24

In piggyback operations,highway trailers and containers ride on railroad flatcars,thus combining the long-haul capacity of the train with the door-to-door flexibility of the truck.

Question 25

Dual distribution is the movement of products through more than one channel to reach the firm's target market.

Question 26

Producers and dealers whose sales volumes represent a substantial percentage of total sales in the market area will be guilty of violating the Clayton Act if they enter into exclusive dealing agreements.

Question 27

The term "suboptimization" refers to a condition that results when individual operations achieve their objectives but interfere with progress toward broader organizational goals.

Question 28

A value-added service is a basic service that customers normally receive and expect.

Question 29

Standardized modular shipping containers maximize savings by limiting loading,unloading,and other handling.

Question 30

NikSnak,a popular potato wafers brand,is most likely to use an exclusive distribution strategy.

Question 31

The complete sequence of suppliers and activities that contribute to the creation and delivery of goods and services is known as the supply chain.

Question 32

Shippers that transport goods via water carriers incur very low costs compared with the rates for other transportation modes.

Question 33

Freight carriers often charge class rates as a reward for either regular business or a large shipment.

Question 34

An agent,who connects small companies with the consumers,always takes possession of the goods as well as the title.

Question 35

Relatively standardized items that are also nonperishable and products with low unit costs pass through comparatively long channels of distribution.

Question 36

Unitizing combines as many packages as possible into each load that moves within or outside a facility.

Question 37

When a beverage company acquires a water purification plant,it is an example of backward integration of distribution channels.

Question 38

One of the functions of marketing channels is to facilitate searches by both buyers and sellers.

Question 39

Legal provisions against pollution and conservation laws have increased the importance of reverse channels.

Question 40

The U.S.Supreme Court has ruled that horizontal territorial restrictions may meet legal criteria in certain cases but it has consistently declared vertical territorial restrictions to be illegal.

Question 41

Large facilities offer economies of scale in facilities and materials handling systems; per-unit costs for these systems decrease as volume increases.

Question 42

Tandy Corporation has its own distribution network that transports its products to its own retail stores.This is an example of a corporate marketing system.

Question 43

​The channel captain is the key channel member to create cooperative relationships among members of the channel and avoid channel conflict.

Question 44

The terms "transportation" and "physical distribution" can be used interchangeably because these terms carry the same meaning.

Question 45

A business product with large unit sales,for which transportation accounts for only a small percentage of the total cost,is usually distributed using the producer-agent-business user channel.

Question 46

Exclusive distribution allows greater market coverage than any other distribution strategy.

Question 47

Common carriers cannot conduct their operations without permission from the appropriate regulatory authority.

Question 48

Merle Norman,a cosmetics manufacturer,sells its products exclusively through its own retail stores.This is an example of forward integration of distribution channels.

Question 49

Customer service standards state the goals and define acceptable performance for the quality of service that a firm expects to deliver to its customers.

Question 50

In exclusive distribution,producers and retailers cooperate closely in decisions concerning advertising and promotion,inventory carried by the retailers,and prices.

Question 51

Manufacturers of specialty or luxury goods limit the number of retailers that can carry their products.

Question 52

An enterprise resource planning (ERP)system is a software system that consolidates data from among a firm's various business units.

Question 53

An example of vertical conflict within the clothing industry would be when a firm such as Jones,New York decides to sell its line of women's blazers directly to consumers via their website,as opposed to distributing them via its usual wholesale channels.

Question 54

Distributors adjust for discrepancies in the market's assortment of goods and services via a process known as suboptimization.

Question 55

High sales volume spreads selling costs over a large number of items,generating adequate returns from direct sales.

Question 56

Marketing channels increase the number of marketplace contacts necessary to make a sale.

Question 57

The simplest and shortest marketing channel is a direct channel.

Question 58

Designers of a physical distribution system begin by establishing acceptable levels of customer service.

Question 59

Common carriers operate under much looser regulations than contract carriers.

Question 60

Unit trains run back and forth between single loading points and single destinations to deliver a commodity.

Question 61

A wholesaler-sponsored voluntary chain allows retailers to save on advertising costs.

Question 62

Physical distribution refers to a broad range of activities aimed at efficient movement of finished goods from the end of the production line to the consumer.

Question 63

A marketing intermediary is an organization that operates between producers and consumers or business users.

Question 64

Logistics is the process of coordinating the flow of information,goods,and services among members of the distribution channel.

Question 65

A wholesaler is an intermediary that takes title to the goods it handles and then distributes these goods to retailers,other distributors,or sometimes end consumers.

Question 66

Horizontal conflict causes problem between different types of marketing intermediaries that handle similar products.

Question 67

The first thing to do in selecting a marketing channel is to determine which type of channel will best meet both the seller's objectives and the distribution needs of customers.

Question 68

A marketing channel is an organized system of marketing institutions and their interrelationships that enhances the physical flow and ownership of products from producer to consumer or business user.

Question 69

A storage warehouse assembles and redistributes goods,keeping them moving as much as possible.

Question 70

Lands' End products are sold through catalogs,the Internet,and Sears retail stores.The Lands' End brand practices dual distribution.

Question 71

Service firms market primarily through long distribution channels.

Question 72

Motor carriers concentrate on shipping raw materials while railroads typically haul bulk shipments of manufactured products.

Question 73

Not-for-profit organizations tend to distribute their products through long,multi-level channels using wholesalers as intermediaries.

Question 74

Water carriers continue to control the largest share of the freight business as measured by ton-miles.
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Question 75

Product recalls and repairs are handled through reverse channels.

Question 76

When a producer decides to advertise products on its website and sell them online,while continuing to distribute products to its current retailer customer base,the decision is likely to result in horizontal channel conflict.

Question 77

Piggyback service is the most widely used form of intermodal coordination.

Question 78

A third-party (contract)logistics firm is a company that specializes in handling logistics activities for other firms.

Question 79

Transportation and delivery expenses typically account for 25 percent of the cost of a product.​

Question 80

Supply chain management refers to the control of the activities of purchasing,processing,and delivery through which raw materials are transformed into products and made available to final consumers.