Question 1

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

Accepted Answer

Direct selling often involves face-to-face interactions with customers in which the salesperson can demonstrate the benefits and features of the product, making it particularly effective for products that require a hands-on, visual approach.

Question 2

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.

Accepted Answer

The FTC's guidelines on territorial restraints state that if producers use closed sales territories that substantially decrease competition, it violates the Federal Trade Commission Act and the Sherman and Clayton Acts. Therefore, the statement is true.

Question 3

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

Accepted Answer

This statement is true. Freight forwarders arrange for the transportation of goods from one destination to another by consolidating multiple shipments to achieve lower rates and pass those savings on to their customers.

Question 4

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.

Accepted Answer

Piggyback operations involve stacking highway trailers or containers on railroad flatcars. This allows for the long-distance transportation capacity of trains to be combined with the flexibility and accessibility of trucks for last-mile transportation.

Question 5

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

Accepted Answer

Dual distribution involves using multiple channels to reach the target market, which is a true statement.

Question 6

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.

Accepted Answer

The Clayton Act prohibits exclusive dealing agreements that substantially lessen competition or tend to create a monopoly. If producers and dealers with significant market power enter into such agreements, it can harm competition and violate the Clayton Act.

Question 7

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

Accepted Answer

Suboptimization occurs when individual processes or departments prioritize their own objectives over the organization's overall goals, resulting in inefficiencies or conflicts that hinder progress.

Question 8

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

Accepted Answer

A value-added service is a service that goes beyond the basic service and adds extra value or benefits to the customer.

Question 9

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

Accepted Answer

Standardized modular shipping containers are designed to be easily transported by vessel, truck, and rail. They are designed in a way to limit handling, reduce damage, and maximize the efficient use of space. This makes them a cost-effective solution for shipping goods over long distances.

Question 10

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

Accepted Answer

NikSnak, being a popular potato wafers brand, would more likely use an intensive distribution strategy to ensure its products are available in as many outlets as possible, maximizing visibility and accessibility to consumers. Exclusive distribution is typically used for high-end, luxury products, not mass-market items like potato wafers.

Question 11

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

Accepted Answer

The statement correctly defines the supply chain as the sequence of suppliers and activities involved in the creation and delivery of goods and services.

Question 12

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

Accepted Answer

Water transportation is generally more cost-effective than other transportation modes such as air or road because of its capacity to carry large amounts of cargo at once, using less fuel and resulting in lower shipping costs per unit.

Question 13

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

Accepted Answer

Class rates are standard rates based on the classification of goods, not typically used as rewards for regular business or large shipments. Discounts or negotiated rates are more common for such incentives.

Question 14

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

Accepted Answer

An agent who connects small companies with consumers does not necessarily take possession of the goods or the title; they may simply facilitate transactions or negotiations between the two parties.

Question 15

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

Accepted Answer

This is because these types of products are often sold in bulk to retailers and wholesalers, who then distribute them to multiple locations, increasing the length of the distribution channel. Additionally, the low unit cost means that the product needs to be sold in large quantities to make a profit, which also contributes to a longer distribution channel. Nonperishable items also have a longer shelf life, allowing them to travel farther and be stored for longer periods of time before reaching the final consumer.

Question 16

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

Accepted Answer

Unitizing is the process of combining multiple packages into a single unit for transportation or storage purposes. The goal is to maximize the use of space and reduce the time and cost associated with handling individual packages.

Question 17

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

Accepted Answer

Backward integration is a strategy where a company acquires or merges with a supplier or manufacturer in order to gain more control over its supply chain. In this case, the beverage company is acquiring a water purification plant, which is a supplier of water for the production of the beverage. This is an example of backward integration.

Question 18

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

Accepted Answer

Marketing channels help buyers and sellers find each other by facilitating searches through various methods such as advertising, trade shows, and online marketplaces. This makes it easier for both parties to connect and conduct business.

Question 19

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

Accepted Answer

Legal provisions and conservation laws aim to promote environmental sustainability by reducing pollution and protecting natural resources. This has led to an increased emphasis on reverse channels, which focus on the flow of products and materials back to manufacturers for proper disposal or recycling. Through reverse channels, businesses can comply with legal requirements and promote environmental responsibility while also generating cost savings through the reuse of materials.

Question 20

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.

Accepted Answer

The statement is incorrect. The U.S. Supreme Court has stated that both horizontal and vertical territorial restrictions may be illegal under certain circumstances, such as if they create a monopoly or restrict competition.

Quiz 14: Marketing Channels and Supply Chain Management