Deck 12: Marketing Channels and Supply Chain Management

Question 1

Supply chain management is completely producer-driven.

Answer 1

False

Question 2

Harris Peng represents a manufacturer of prefabricated housing and gets paid a commission for finding buyers and linking them up with the manufacturer.Peng is a merchant wholesaler.

Answer 2

False

Question 3

Horizontal conflict occurs among channel members on the same level,such as two or more different wholesalers or two or more different retailers that handle the same manufacturer's brands.

Answer 3

True

Question 4

Exclusive distribution is the most restrictive form of market coverage.

Question 5

Metallurgical Designs makes gold and silver charms for necklaces and bracelets.It markets its charms to a few retailers in any one region and promotes them intensively to those retailers.This is an example of intensive distribution.

Question 6

As products move through the marketing channel,channel members provide specialization and division of labor,overcome discrepancies,and provide contact efficiency.

Question 7

LoneStar Bar & Grill is a small chain of restaurants that feature marinated steaks.The marinade is so popular that LoneStar sells it at its restaurants and also sells it at Kroger supermarkets.This is an example of intensive distribution.

Question 8

An international consumer products manufacturer requires all of its suppliers to provide the lowest possible cost and to adhere to a just-in-time inventory system.Wholesalers and manufacturers generally yield to the authority of this large manufacturer.This consumer products manufacturer exercises channel power.

Question 9

A marketing channel is a business structure composed of interdependent organizations that reach from the point of product origin to the consumer.Its purpose is to move products to their final consumption destination.

Question 10

Shopping goods are usually distributed selectively.Consumers are willing to look around for them but may not be willing to search or travel extensively to acquire the product.

Question 11

Grace Yoder makes jams and jellies,which she sells at craft festivals to end users.Yoder does not the use channel intermediaries; she uses a direct channel.

Question 12

The use of supply chain management results in reduced inventory management costs.

Question 13

The three basic functions a channel intermediary provides are transactional (including physical distribution and sorting),logistical (including research and financing),and facilitating (including contacting,promoting,negotiating,and risk taking).

Question 14

The direct channel is used more often in consumer markets than in business-to-business markets.

Question 15

Companies that use supply chain management techniques typically also use a push promotional strategy.

Question 16

Theo stopped by the convenience store to buy a loaf of bread.He is glad that he can buy one loaf at a time,instead of having to buy the thousands of loafs of bread the manufacturer produces every day.For Theo,the convenience store overcomes a discrepancy of quantity.

Question 17

A merchant wholesaler is an institution that buys goods from manufacturers and resells them to businesses,government agencies,and other wholesalers or retailers.

Question 18

Residents of Sobarro,New Mexico live in an isolated area of the state.Residents must travel two hours to receive medical treatment.Luckily,a physician has just opened a new practice in Sobarro.In this case,the physician has overcome service discrepancies by opening an office close to consumers.

Question 19

Logistics is a subset of physical distribution and refers to the transporting of raw materials and/or finished goods.

Question 20

Consider a scenario in which there are four manufacturers,no intermediaries,and three consumers.Twelve transactions would be required for each consumer to receive products from each manufacturer.The introduction of one intermediary reduces the required number of transactions to four and demonstrates the idea of contact efficiency,

Question 21

Despite its name,the goal of a materials-handling system is to handle products as infrequently as possible.

Question 22

Master Technology produces neon insulator sign components on an assembly line,and suppliers deliver the needed parts in four small shipments each day.Master Technology has noticed a dramatic decrease in carrying costs using this method,but a sharp increase in delivery costs since the company must pay more for the added delivery convenience.Master Technology uses just-in-time (JIT)manufacturing.

Question 23

The six criteria important in selecting a transportation mode are cost,time involved,reliability,capability,how easily a shipment can be traced,and price.

Question 24

Airways are faster,cheaper,and more dependable than railways

Question 25

"Gray" marketing channels exist in many countries.

Question 26

Contract logistics allows companies to cut inventories,locate stock at fewer plants and distribution centers,and still provide the same service level or even better.

Question 27

If a retail outlet does not offer all the items necessary in order to use or to receive full satisfaction from a product that it sells,there is a:

A) discrepancy of assortment
B) discrepancy of quantity
C) spatial discrepancy
D) temporal discrepancy
E) discrepancy of possession

Question 28

McKesson Company provides healthcare products to pharmacies.For example,it purchases bandages,gauze,antibacterial cream,and ointments (or anything else you would need to treat a cut or scrape)from a variety of different manufacturers.Its goal is to provide each pharmacy with every item a customer might want to treat a cut.McKesson is aiding consumers by overcoming:

A) spatial discrepancy
B) discrepancy of quantity
C) discrepancy of assortment
D) demand discrepancies
E) discrepancy of possession

Question 29

A flour mill purchases bags of wheat from hundreds of different farmers.Then it grinds the wheat into flour and packages it into 2-pound,5-pound,10-pound,and 25-pound bags.By selling the packaged flour,the mill has aided the grocery stores by overcoming the discrepancy of:

A) possession
B) space
C) assortment
D) accumulation
E) quantity

Question 30

To facilitate manufacturing in China,Ingersoll-Rand uses 18 different local suppliers of key component parts.These suppliers are part of the _____ for Ingersoll-Rand.

A) communication network
B) channel of distribution
C) supply pyramid
D) materials-handling network
E) demand chain

Question 31

Distribution channels aid in overcoming barriers to exchange that are created in the production process by overcoming all of the following types of discrepancies EXCEPT:

A) possession
B) assortment
C) quantity
D) spatial
E) temporal

Question 32

Marketing channels can achieve economies of scale through:

A) overcoming spatial discrepancies
B) contact expertise
C) specialization and division of labor
D) overcoming temporal discrepancies
E) overcoming discrepancies of quantity

Question 33

A manufacturer may only produce one product,yet additional products may be required to actually use the first product.This creates a:

A) discrepancy of quantity
B) discrepancy of assortment
C) spatial discrepancy
D) temporal discrepancy
E) discrepancy of possession

Question 34

Another name for outsourcing is downsizing.

Question 35

Unlike marketers of physical products,marketers of services do not have to address the question of logistics since services do not require a distribution strategy.

Question 36

A _____ is a business structure of interdependent organizations that reaches from the point of product origin to the consumer.

A) facilitating agency or place member
B) marketing mix intermediary
C) selective distribution channel
D) marketing channel or channel of distribution
E) transportation channel or channel of movement

Question 37

A(n)_____ discrepancy is created when a product is produced but a consumer is not ready to purchase it.

A) quantity
B) supply
C) possession
D) temporal
E) assortment

Question 38

Since the criterion that is most important in the transportation of flour is accessibility to consumers,a flour mill would deliver by truck.

Question 39

A discrepancy of _____ is the difference between the amount of product produced and the amount an end user wants to buy.

A) space
B) quantity
C) assortment
D) accumulation
E) possession

Question 40

Both water transportation costs and transit speed are low when compared with any other transportation mode.

Question 41

Agents and brokers:

A) have a great deal of control and risk invested in the goods
B) only represent manufacturers in sales situations
C) have a great deal of input on the terms of the sale
D) generally are on salary with the manufacturer
E) do not take title to merchandise

Question 42

Marketing channels make distribution simpler by reducing the number of transactions required to get products from manufacturers to consumers.This is called:

A) forward integration
B) contact efficiency
C) elimination of temporal discrepancies
D) sorting
E) reciprocity

Question 43

Transactional channel functions include all of the following activities EXCEPT:

A) contacting buyers
B) promoting the products to be sold
C) taking the risks associated with product inventories
D) negotiating the sale
E) physical distribution and sorting

Question 44

Cutter & Buck is a high-end fashion sportswear company.Even though swimwear is a product category that does not sell year round,its sales remain steady all year because Cutter & Buck sells to wholesale distributors that stock the product.The wholesale distributors are helping to overcome a(n)_____ discrepancy.

A) assortment
B) spatial
C) possession
D) quantity
E) temporal

Question 45

Which of the following statements about merchant wholesalers is true?

A) Products typically carried by merchant wholesalers are technically simple.
B) Customers of merchant wholesalers are typically concentrated.
C) The buyer is generally satisfied with a long lead time when the merchant wholesaler is acting as the facilitating intermediary.
D) Frequent ordering is commonplace with a merchant wholesaler.
E) Merchant wholesalers tend to carry products with low gross margin

Question 46

W.W.Grainger,Inc.,is one of the world's largest business-to-business distributors of equipment,component parts,and supplies in the U.S.and Canada.It has ownership title to over 220,000 products,which are stocked in one national and nine regional warehouses to guarantee product availability and quick service to the many manufacturers who are its customers.W.W.Grainger is an example of a(n):

A) agent or broker
B) merchant wholesaler
C) retailer
D) consumer market
E) hypermarket intermediary

Question 47

Marketing channels perform all of the following logistical activities EXCEPT:

A) sorting
B) storing
C) grading
D) risk-taking
E) assorting products into homogeneous or heterogeneous collections

Question 48

_____ includes managing the movement of raw materials and parts from their sources to production sites,managing the movement of materials,semi-finished,and finished products within and among plants,warehouses,and distribution centers,as well as the planning and coordinating of the physical distribution of finished goods to intermediaries and final buyers.

A) Disintermediation
B) Logistics
C) Materials handling
D) Intermodal transportation
E) Contract logistics

Question 49

YKK slide fasteners (zippers)are made in Macon,Georgia,yet manufactures all over the world use zippers to manufacture,clothes,luggage,shoes,and other items.Wholesalers around the world help to overcome a(n)_____ discrepancy.

A) creation
B) temporal
C) assortment
D) spatial
E) ownership

Question 50

Generally,_____ determine what type of intermediary a manufacturer should use:

A) product characteristics,buyer consideration,and market conditions
B) internal environmental characteristics only
C) competitive conditions and government regulations
D) all controllable marketing factors
E) only noncontrollable environmental factors

Question 51

Which of the following is NOT a sorting activity?

A) assorting
B) accumulation
C) sorting out
D) allocation
E) possession

Question 52

Markets are often scattered over large geographic regions,yet a manufacturer may only have one location in the country.This creates a(n)_____ discrepancy.

A) spatial
B) temporal
C) assortment
D) quantity
E) ownership

Question 53

Breaking bulk at the wholesale level is called:

A) allocating
B) accumulation
C) sorting out
D) downsizing
E) grading

Question 54

Retailers and merchant wholesalers are examples of intermediaries that:

A) take title to a product
B) create temporal and spatial discrepancies
C) use consumer promotions
D) do not benefit from any economies of scale
E) are accurately described by all of these statements

Question 55

_____ are wholesaling intermediaries who facilitate the sales of a product from producer to end user by representing retailers,wholesalers,or manufacturers and providing little input as to the terms of the sale.

A) Marketing facilitators
B) Channel cooperatives
C) Agents and brokers
D) Merchant wholesalers
E) Channel functionaries

Question 56

The major characteristic that is used to differentiate between types of intermediaries is whether they:

A) install exchange barriers such as location,time,and quantity
B) prevent specialization of labor
C) decrease economies of scale
D) take title to the products they sell
E) raise profit margins for independent middlemen

Question 57

_____ describes the process of strategically managing the efficient flow and storage of raw materials,in-process inventory,and finished goods from point of origin to point of consumption.

A) Contract logistics
B) Logistics
C) Cross-docking
D) Disintermediation
E) Channel facilitation

Question 58

A(n)______ is an institution that buys goods from manufacturers,takes title to these goods,and resells them to businesses,government agencies,and/or other wholesalers or retailers.

A) merchant wholesaler
B) agent
C) drop shipper
D) channel cooperative
E) marketing cooperative

Question 59

Cutter & Buck is a high-end fashion sportswear company.Even though swimwear is a product category that does not sell year round,its sales remain steady all year because Cutter & Buck sells to wholesale distributors that perform _____ functions for Cutter & Buck.

A) financial
B) transactional
C) facilitating
D) logistical
E) promotional

Question 60

The three basic functions channel members perform are:

A) transactional,logistical,and facilitating
B) contacting,negotiating,and ownership
C) promoting,distributing,and bulk-breaking
D) assorting,accumulating,and allocating
E) financing,mediating,and storing

Question 61

The most typically used channel for industrial products is the _____ channel.

A) direct
B) industrial distributor
C) wholesaler
D) retailer
E) extended

Question 62

Canesta Co.has developed a virtual keyboard out of light to be used with cell phones and personal digit assistants.The product beams an image of a keyboard on a desk,allowing the user to type on the image.The words are picked up by the user's digital device.When introduced to the market,the device will sell for less than $50.If in choosing its channel,Canesta is most concerned about the life cycle of the device,then its choice of channels will largely be influenced by:

A) factors of production
B) customer characteristics
C) ownership factors
D) product factors
E) market factors

Question 63

Which of the following is NOT a channel member typically used by manufacturers as they route their products to consumers?

A) retailer
B) agent/broker
C) industrial distributor
D) producer
E) wholesaler

Question 64

When the new father left the maternity ward to find something to eat,he was surprised to see that he could buy McDonald's fast food in the hospital dining room.McDonald's is utilizing:

A) an agent/broker dominated channel
B) logistical distribution
C) multiplicative channels
D) a nontraditional channel
E) a strategic channel alliance

Question 65

_____ coordinates and integrates all of the activities performed by channel members into a seamless process,from the source to the point of consumption,resulting in enhanced customer and economic value.

A) Yield management
B) Channel power
C) Materials handling
D) Supply chain management
E) Physical distribution

Question 66

One configuration of a marketing channel entails producers selling to consumers with no intermediaries involved.This is called a(n):

A) limited distribution system
B) conventional channel
C) vertical marketing system
D) reciprocal channel
E) direct channel

Question 67

The only way Sal Ford in Idaho can get one of Ian Broan's wind chimes from Alabama is to order it through the mail.Ian Broan,who makes the wind chimes from scrap metal,uses a(n)_____ exclusively.

A) exclusive distribution system
B) conventional channel
C) vertical marketing system
D) reciprocal channel
E) direct channel

Question 68

Which of the following statements about supply chain management is true?

A) Supply chain management is supply chain-driven.
B) Supply chain management focuses on pulling products into the marketplace.
C) Outsourcing is not used with supply chain management.
D) Supply chain management provides customers with maximum service levels.
E) Supply chain management focuses on pushing products into the marketplace.

Question 69

Peachtree Windows has no windows in inventory waiting for someone to order them.It does not make a window until it is ordered.It is able to make 27,000 different window configurations and promises delivery in five working days because of the excellent relationships it has established with its suppliers.This partnering relationship that Peachtree Windows has established with its suppliers and contractors indicates the use of:

A) supply chain management
B) yield management
C) channel networks
D) horizontal marketing channels
E) intensive distribution strategy

Question 70

Selfridges is the second-largest department store in Great Britain.It works with House of Frasier,one of its competitors,to reduce operating costs by sharing channels of distribution to ship goods from 1,500 plus suppliers.In choosing a channel of distribution,Selfridges more than likely relied on:

A) market factors
B) ownership requirements
C) producer factors
D) production factors
E) geodemographic factors

Question 71

Which of the following statements concerning how market factors affect channel decisions is true?

A) Industrial customers tend to buy in larger quantities and require more customer service.
B) Geographically concentrated target markets should be served with an indirect sales force.
C) Widely dispersed markets require fewer intermediaries.
D) New firms in extremely competitive markets will be more successful if they use indirect channels.
E) A very large market requires fewer intermediaries.

Question 72

Supply chain management:

A) is a physical flow process
B) is customer-driven
C) provides enhanced customer and economic value
D) plays the role of communicator of customer demand
E) is accurately described by all of these statements

Question 73

_____ use another manufacturer's already established channel and are used when the creation of marketing channel relationships may be expensive and time-consuming.

A) Strategic channel alliances
B) Relationship channels
C) Reverse channels
D) Multiple distribution systems
E) Nontraditional channelization

Question 74

Selfridges is the second-largest department store in Great Britain.It works with House of Frasier,one of its competitors,to reduce operating costs by sharing channels of distribution to ship goods from 1,500 plus suppliers.Selfridges and House of Frasier are engaged in:

A) vertical conflict
B) an integrated supply chain
C) a strategic channel alliance
D) an information-based distribution channel
E) a distribution cooperative

Question 75

LeBlanc Pecan Company in Richmond,Texas,would like to expand to international markets,but it does not have the time or resources to spend on developing channels of distribution.The company should consider a(n):

A) industrial distributor
B) franchising system
C) reverse channel
D) strategic channel alliance
E) channel cooperative

Question 76

Which of the following are examples of facilitating functions performed by wholesaling intermediaries?

A) sorting and storing
B) risk-taking and promotion
C) assorting,accumulating,grading,and allocating
D) researching and financing
E) financial management and storing

Question 77

Vutek manufactures printing machines used to print high resolution graphics for billboards,bus cards,banners,and posters.For distribution,you would expect Vutek to use a:

A) network of facilitating agents
B) horizontally integrated channel
C) reciprocal channel
D) direct channel
E) vertical marketing system

Question 78

_____ distribution occurs when a producer selects two or more different channels to distribute the same products to target markets.

A) Selective
B) Intensive
C) Multiple
D) Contractual
E) Cumulative

Question 79

McKesson Corporation is a wholesale company that sells healthcare products to pharmacies,hospitals,rehabilitation centers,and nursing homes.This is an example of _____ distribution.

A) intensive
B) multiple
C) selective
D) cumulative
E) aggregated

Question 80

Companies selling standardized items of moderate or low value to other companies often use:

A) retailers
B) industrial distributors
C) direct marketing organizations
D) agents and brokers
E) disintermediation