Deck 10: Distribution Strategy

Question 1

A _____ is the combination of institutions through which a seller markets products to the user.

A) retailer
B) distribution channel
C) wholesaler
D) logistics organization

Answer 1

B
Explanation: A channel of distribution is the combination of institutions through which a seller markets products to the user or ultimate consumer.

Question 2

Which intermediary is an independent concern that operates as a link between producers and ultimate consumers or organizational buyers?

A) Representative
B) Middleman
C) Retailer
D) Jobber

Answer 2

B

Question 3

The _____ provide(s) the ultimate consumer or organizational buyer with time, place, and possession utility.

A) marketing plan
B) strategic plan
C) channels of distribution
D) marketing concept

Answer 3

C
Explanation: Channels of distribution provide the ultimate consumer or organizational buyer with time, place, and possession utility.

Question 4

The primary role of all marketing intermediaries is to

A) bring supply and demand together in an efficient and orderly fashion.
B) gather information from consumers in order to help manufactures design products better.
C) produce goods and services efficiently to meet the demands of customers.
D) perform different production functions for the manufacturers.

Question 5

Jason sells Hanes flannel pajamas and nightgowns, London Fog all-weather coats in the summer, Jantzen bathing suits and Gloria Vanderbilt linen shorts and silk tank tops to the same retailers in the winter. Jason has limited control over prices or the terms of sale. Jason can be best described as a

A) facilitating agent.
B) manufacturers' agent.
C) broker.
D) manufacturer.

Question 6

Providing information to customers and suppliers, including competitive conditions and trends belongs to which category of facilitating function?

A) Financing and grading.
B) Marketing information and research.
C) Assorting
D) Risk taking.

Question 7

Which of the following observations concerning channels of distribution is true?

A) Time and money are least important for setting up efficient channels.
B) Channels can be easily changed once they are setup.
C) Involves numerous interrelated variables integrated into total marketing mix.
D) They are not critical to the success of the firm.

Question 8

_____ is a facilitating function of channels of distribution.

A) Financing
B) Buying
C) Selling
D) Transporting

Question 9

The need for _____ in the delivery of goods is sometimes questioned, particularly since the profits they make are viewed as adding to the cost of the product.

A) consumers
B) intermediaries
C) contract employees
D) wholesalers

Question 10

Abby Brown buys consumer food products, tobacco products, and paper products; brings these products to its distribution center in Georgia, and then sells these products to convenience stores all over the southeastern U.S. Abby Brown is an example of

A) a facilitating agent.
B) a broker.
C) a retailer.
D) a merchant middleman.

Question 11

A(n) _____ is a middleman who buys from manufacturers and sells to retailers and wholesalers.

A) facilitating agent
B) distributor
C) jobber
D) agent

Question 12

______ is an agent who generally operates on an extended contractual basis, often sells within an exclusive territory, handles noncompeting but related lines of goods, and possesses limited authority with regard to prices and terms of sale.

A) A facilitating agent
B) A competitor
C) A jobber
D) A manufacturer's agent

Question 13

Major functions performed in the channels of distribution include all of the following, except

A) buying.
B) selling.
C) producing.
D) financing.

Question 14

Which of the following is not a function performed by the channels of distribution?

A) Logistical function
B) Facilitating function
C) Transactional function
D) Designing function

Question 15

A broker

A) is an independent business concern that operates as a link between producers and ultimate consumers or organizational buyers.
B) is a merchant middleman who is engaged primarily in selling to ultimate consumers.
C) assists in the performance of distribution tasks other than buying, selling, and transferring title.
D) does not usually have physical custody of products, and is not looked upon as a permanent representative of either the buyer or the seller.

Question 16

Transactional functions performed by channels of distribution include buying, selling and

A) grading.
B) assorting.
C) marketing research.
D) risk taking.

Question 17

All of the following observations about the distribution channel are true except

A) developing and managing channels of distribution and the process of goods distribution.
B) channels of distribution provide ultimate consumers or organizational buyers with time, place, and possession utility.
C) channels deliver the product when they are wanted but at a substantially high total cost.
D) integrating numerous interrelated variables of channels of distribution into the total marketing mix.

Question 18

In transactional functions of channels of distribution, contacting potential customers, promoting products, and soliciting orders is concerned with

A) buying.
B) assorting.
C) selling.
D) sorting.

Question 19

Identify the merchant establishment operated by a concern primarily engaged in buying, taking title to, usually storing and physically handling goods in large quantities, and reselling the goods to retailers or to organizational buyers.

A) Broker
B) Wholesaler
C) Middleman
D) Facilitating agent

Question 20

Which of the following is not a logistical function performed by channels of distribution?

A) Assorting
B) Grading
C) Storing
D) Sorting

Question 21

Which of the following observations about direct channels of distribution is true?

A) Direct marketing is a good example of an indirect distribution center.
B) The movement of products from a manufacturer, to a wholesaler, to a retailer, to a consumer is an example of a direct channel.
C) No more than two intermediaries are ever used in a consumer physical distribution channel.
D) In contrast to consumer products, the direct channel is often used in the distribution of organizational goods.

Question 22

Which of the following products is most likely to require a direct channel of distribution?

A) Coal
B) Lighting fixtures
C) Tropical flowers
D) Wooden picture frames

Question 23

In the consumer markets, _____ are used when manufacturers do not wish to have their own sales force.

A) wholesalers
B) planners
C) agents
D) producers

Question 24

In the early stages of _____, executives map out elaborate channel networks only to find out later that no independent intermediaries exist for the firm's product in the geographic region.

A) consumer research
B) product planning
C) channel design
D) mission statement development

Question 25

All of the following are environmental characteristics that need to be considered in channel planning except

A) degree of standardization.
B) technological changes.
C) economic conditions.
D) political issues.

Question 26

In intensive distribution the manufacturer attempts to gain exposure through as many _____ as possible.

A) selected dealers
B) wholesalers and retailers
C) exclusive resellers and agents
D) consumers

Question 27

_____ is a merchant middleman who is engaged primarily in selling to ultimate consumers.

A) Facilitating agent
B) Jobber
C) Agent
D) Retailer

Question 28

Which among the following requires a direct channel of distribution, and why?

A) Cream dessert, because it is perishable.
B) Beer cans, because they are inexpensive.
C) Soda cans, because they are perishable.
D) Box of candies, because they are prestige products.

Question 29

Distribution coverage can be viewed along a continuum ranging from intensive to selective to

A) segmented distribution.
B) divisional distribution.
C) exclusive distribution.
D) proportional distribution.

Question 30

Eby-Brown Wholesale Company buys truckloads of motor oil, candy bars, disposable diapers, snack food, etc. From this merchandise, Eby-Brown's employees fill orders received from convenience stores. The orders are then placed on Eby-Brown trucks and carried to the stores. Eby-Brown, at times, provides credit to the store owners. What are the various marketing functions performed by Eby-Brown in the channel of distribution?

A) Buying, selling, manufacturing, transportation, risk taking, grading, storage, financing, and sorting out.
B) Manufacturing, selling, transportation, packaging, sorting out, financing, buying, and accumulation.
C) Transportation, buying, selling, financing, risk-taking, storage, and sorting.
D) Financing, risk-taking, allocation, manufacturing, sorting out, buying, and selling.

Question 31

In _____ the manufacturer limits the use of intermediaries to the ones believed to be the best available in the geographic area.

A) exclusive distribution
B) geodemographic distribution
C) wholesale distribution
D) selective distribution

Question 32

Gateway 2000 sold computers through a variety of methods which included telemarketing, catalog selling, and cable selling, and online selling. Identify the type of channel used by Gateway 2000.

A) Direct channel
B) Indirect channel
C) Peer to peer marketing
D) Indirect marketing

Question 33

Identify the incorrect conventional channel of distribution of consumer goods?

A) Manufacturer to agent to wholesaler to retailers to consumers.
B) Manufacturer to retailers to wholesaler to consumers.
C) Manufacturer to consumers.
D) Manufacturer to retailers to consumers.

Question 34

All of the following are reasons why manufacturers may not wish to have their own sales forces except

A) it may not be economical for sellers to have their own sales teams.
B) the market may be geographically too dispersed.
C) it is always more efficient to have outside sales agents.
D) the market may consist of too many small customers.

Question 35

During the channel selection process, a manufacturer should consider all the following except the

A) distribution coverage required by its product.
B) behavioral patterns of individual employees.
C) degree of control the manufacturer wants to have over the channel.
D) total distribution cost.

Question 36

Public warehouses, trucking companies, credit unions, and railroad companies are all examples of

A) facilitating agents.
B) merchant middlemen.
C) merchandise jobbers.
D) product sellers.

Question 37

Channels with one or more intermediaries are referred to as

A) administered systems.
B) direct channels.
C) indirect channels.
D) centralized channels.

Question 38

Which of the following is a direct way of selling products?

A) Hewlett-Packard sells its computers and printers through Best Buy and Office Max.
B) Selling through telemarketing and catalog selling.
C) Consumer product selling with one or more intermediaries.
D) Marketing of insurance policies through agents.

Question 39

For a particular product, any one amongst the customer, product, intermediary, or competitor may greatly influence the

A) raw materials needed.
B) choice of channel.
C) amount of service.
D) vertical market.

Question 40

One of the reasons why the direct channel is often used in the distribution of organizational goods is that

A) their pricing plans to achieve a target return of investment require direct channels of distribution.
B) there is a lack of stabilization of price and margin.
C) a number of intermediaries are required for their sales.
D) they need a great deal of presale and post sale services.

Question 41

In terms of distribution costs, the total system should be designed to minimize costs, ceteris paribus. Which of the following is a major distribution cost that needs to be minimized?

A) Product development cost.
B) Salaries
C) Packaging
D) Product design cost.

Question 42

All of the following are inventory carrying costs except

A) taxes.
B) insurance.
C) obsolescence and deterioration.
D) packaging and materials handling.

Question 43

When _____ are (is) used, the manufacturer must surrender some control over the marketing of the firm's product.

A) direct channels
B) exclusive distribution
C) selective distribution
D) indirect channels

Question 44

All of the following are stated characteristics of perfect intermediaries except

A) they provide services to customers-credit, delivery, installation, and product repair-and honor the product warranty conditions.
B) they carry adequate stocks of the manufacturer's products and a satisfactory assortment of other products.
C) they have access to the market that the manufacturer wants to reach.
D) they build product demand for these products by advertising them.

Question 45

Which perspective views a channel of distribution as more than a series of markets or participants extending from production to consumption?

A) Behavioral
B) Psychological
C) Systems
D) Geodemographic

Question 46

Until recently, in theory and in practice, marketing had taken a _____ view of channels of distribution.

A) relationship building
B) accommodative
C) cooperative
D) competitive

Question 47

Which of the following is an intermediary characteristic that needs to be considered while channel planning?

A) Number of competitors
B) Product perishability
C) Geographic dispersion of consumers
D) Willingness to accept product or product line

Question 48

In many places much of the population has moved from inner cities to suburbs, and thus buyers make most of their purchases in shopping centers and malls. If a manufacturer had a long-term _____ dealership with retailers in the inner city, the ability to adapt to the population shift from inner cities to suburbs could have been severely limited.

A) selective
B) extensive
C) exclusive
D) widespread

Question 49

For which of the following products would its manufacturer be more likely to use selective distribution?

A) Paper clips
B) Microwave oven
C) Nail clippers
D) Bags of potato chips

Question 50

A sporting goods store that was granted the right to sell Tasco rifle scopes was the only store that carried Tasco products in the geographical area. This is an example of

A) selective distribution.
B) restrictive distribution.
C) exclusive distribution.
D) extensive distribution.

Question 51

Why would a manufacturer of health and beauty products share promotional expenditures with its intermediaries as well as provide them with the computer software needed for an inventory system?

A) To shorten its channel of distribution.
B) To avoid having to perform risk-taking activities.
C) To avoid having to perform any sorting activity.
D) To maintain a degree of control over its intermediaries.

Question 52

In _____ the manufacturer severely limits distribution, and intermediaries are provided sole rights within a territory.

A) exclusive distribution
B) geodemographic distribution
C) wholesale distribution
D) selective distribution

Question 53

In selecting channels of distribution, the seller must make decisions concerning the degree of control desired over the

A) consumer behavior patterns.
B) marketing of the firm's products.
C) design of the product entering the market.
D) demographic factors of the market.

Question 54

All of the following are competitor characteristics considered during channel planning, except

A) their distribution channels and strategy.
B) their financial condition and estimated marketing budget.
C) their overall marketing strategy employed.
D) their past channel experiences.

Question 55

In context to channels of distribution, _____ relates to the ability of the manufacturer to adapt to changing conditions.

A) channel flexibility
B) design flexibility
C) price flexibility
D) product flexibility

Question 56

Which of the following is a company characteristic that needs to be considered while channel planning?

A) Past channel experience
B) Product perishability
C) Geographic dispersion of consumers
D) Number of competitors

Question 57

For which of the following products would its manufacturer be more likely to use intensive distribution?

A) Personal computer
B) Laser printer
C) Gourmet food
D) Can of soda

Question 58

The general considerations in channel planning include customer characteristics, company characteristics, environmental characteristics, product characteristics, competitor characteristics, and

A) structural characteristics.
B) individual characteristics.
C) intermediary characteristics.
D) behavioral characteristics.

Question 59

Designer Mossimo Giannulli sells his collection of denim-based sportswear for men and women at specialty stores and select departmental stores nationwide. It would be possible to find at least three stores in a mall carrying the designer's clothing. Which distribution method does the designer use?

A) Selective
B) Restrictive
C) Exclusive
D) Extensive

Question 60

During channel planning, all of the following customer characteristics are considered except

A) geographic dispersion.
B) preferred channels and outlets for purchase.
C) degree of standardization.
D) purchasing patterns.

Question 61

Major types of vertical marketing systems consist of administered systems, contractual systems, and

A) structural systems.
B) extended systems.
C) corporate systems.
D) purchasing systems.

Question 62

In terms of distribution costs, a distributor of petroleum products might be able to optimize total system performance if it could minimize

A) its inventory carrying costs .
B) the number of products it sells.
C) the number of products in the introductory stage of the product life cycle.
D) the time spent on personal selling.

Question 63

Firms may choose to develop corporate vertical marketing systems in order to

A) obtain scale economies.
B) acquire location convenience.
C) concentrate sales in category killer chains.
D) decrease channel cooperation.

Question 64

Wholesalers purchasing channel members above them is called

A) forward integration.
B) backward integration.
C) a wholesaler-sponsored voluntary chain.
D) a franchising program.

Question 65

The dependence in administered vertical marketing systems can result from the existence of a strong

A) management commitment.
B) employee union.
C) channel leader.
D) distributor network.

Question 66

_____ involve independent production and distribution companies entering into formal contracts to perform designated marketing functions.

A) Administered systems
B) Contractual systems
C) Selective systems
D) Corporate systems

Question 67

More recently, a new view of distribution channels has developed which recognizes that much can be gained by developing long-term commitments and harmony among channel members. This view is referred to as

A) customer service.
B) team building.
C) relationship marketing.
D) conflict resolution.

Question 68

Which of the following vertical marketing systems is most similar to conventional channels?

A) Administered systems
B) Contractual systems
C) Selective systems
D) Corporate systems

Question 69

Channels in which members are more dependent on one another and develop long term working relationships in order to improve the efficiency and effectiveness of the system are called

A) virtual marketing systems.
B) horizontal marketing systems.
C) vertical marketing systems.
D) disintegrated marketing systems.

Question 70

A manufacturer purchasing wholesalers or retailers is called

A) forward integration.
B) backward integration.
C) a wholesaler-sponsored voluntary chain.
D) a franchising program.

Question 71

In marketing literature, _____ throughout the channel often leads to high quality products and low price.

A) customer service
B) change management
C) long-term relationships
D) leadership development

Question 72

Which of the following is an example of backward integration?

A) A manufacturer purchasing wholesalers.
B) A wholesaler purchasing channel members above it.
C) A wholesaler purchasing retailers.
D) A manufacturer purchasing retailers.

Question 73

A contractual vertical marketing system

A) is exemplified by a florist shop that buys from a wholesale plant nursery.
B) is very similar to a conventional marketing channel of distribution.
C) operates with a channel leader.
D) is exemplified by the subway sandwich shop franchise system.

Question 74

Franchises involve

A) a parent company and an independent firm entering into a contractual relationship to set up and operate a business in a particular way.
B) a group of independent retailers uniting and agreeing to pool buying and managerial resources to improve competitive position.
C) a wholesaler contracting with a number of retailers performing channel functions for it.
D) a higher degree of interorganizational planning and management, with the presence of a channel leader amongst them.

Question 75

In which of the following type of contractual vertical marketing systems do a group of independent retailers unite and agree to pool buying and managerial resources to improve competitive position?

A) Retail cooperative organization
B) Wholesaler-sponsored voluntary chain
C) Franchising programs
D) Sponsored organizational programs

Question 76

Sears obtains over 50 percent of the goods it sells in its retail stores from companies that it partially or wholly owns. Sears participates in a _____ vertical marketing system.

A) retail cooperative
B) contractual
C) selective
D) corporate

Question 77

Which of the following key ingredients of a franchised business involves the explanation and codification of prescribed methods of buying and selling?

A) Commercial knowledge
B) Technical knowledge
C) Managerial techniques
D) Accounting controls

Question 78

Corporate vertical marketing systems involve single ownership of

A) factory outlets.
B) two or more levels of a channel.
C) risk taking ventures.
D) customer service partners.

Question 79

Coca-Cola licenses wholesalers in various markets that buy its syrup concentrate and then carbonate, bottle, and sell Coke products to retailers in their local markets. Coca-Cola participates in a(an) _____ vertical marketing system.

A) selective
B) administered
C) corporate
D) contractual

Question 80

A corporate vertical system

A) unites independent retailers for the purposes of pool buying to improve their competitive position.
B) has a strong channel leader at or near the end of the channel.
C) is exemplified by the Dunkin' donuts franchise system.
D) involves single ownership of two or more levels of a channel.