Deck 5: Managing the Supply Chain

Question 1

There are three types of primary marketing institutions: manufacturers,retailers and:

A) transporters.
B) agents/brokers.
C) wholesalers.
D) advertisers.
E) warehouses.

Answer 1

C

Question 2

There are actually three strategy decisions to be made when designing an efficient and competitive supply chain: supply chain length,width,and:

A) convenience.
B) depth.
C) organization.
D) type.
E) control.

Answer 2

E

Question 3

The eight marketing functions are buying,selling,storing,transporting,information gathering,financing,risk taking,and:

A) managing.
B) product development.
C) facilitating.
D) designing.
E) sorting.

Answer 3

E

Question 4

Concerning the "supply chain," which of the following statements is true?

A) Supply chains are so closely associated with high prices that many retailers are dropping out of supply chains and performing the functions themselves.
B) Most supply chains will disappear within the next decade, as all merchandise will soon be purchased directly from manufacturers.
C) Supply chains do not aid the retailer in providing possession, form, or place utility, for the final consumer.
D) Profits sufficient for survival and growth will be difficult for a retailer to achieve without being part of an efficient, effective supply chain.
E) Supply chains seldom change over time.

Question 5

The supply chain,or channel,is affected by five external forces: consumer behavior,the legal and ethical environment,the socioeconomic environment,the technological environment,and:

A) the natural or physical environment.
B) competitive behavior.
C) personal relationships.
D) channel function management.
E) new government regulations.

Question 6

Each of the following is a marketing function that retailers perform EXCEPT:

A) pricing.
B) information gathering.
C) selling.
D) financing.
E) storing.

Question 7

_____ are primarily used by retailers starting a new operation or format.

A) Factors
B) Merchant banks
C) Stock and commodity exchanges
D) Venture-capital firms
E) Insurance firms

Question 8

When all possible retailers are used in a trading area,the channel strategy is termed:

A) exclusive.
B) intensive.
C) selective.
D) partial coverage.
E) pull coverage.

Question 9

A(n)______occurs when the manufacturers sell their goods directly to the final consumer.

A) supply chain width
B) selective distribution channel
C) direct supply chain
D) exclusive distribution channel
E) indirect supply chain

Question 10

A _____ is defined as a set of institutions that moves goods from the point of production to the point of consumption.

A) retail system
B) transporter
C) supply chain
D) franchisee
E) value chain

Question 11

Selective distribution:

A) means that all possible retailers are used to reach the target market.
B) means only one retailer is used in the trading area.
C) means that a smaller number of retailers are used to reach the target market.
D) is associated with the distribution of convenience goods.
E) is identified with specialty goods.

Question 12

The major difference between primary marketing institutions and facilitating marketing institutions is that facilitating members:

A) do not take title to the goods.
B) are paid only a percentage of profits made.
C) take title to the goods.
D) perform all eight functions in all channels situations.
E) are always paid by the manufacturer.

Question 13

A(n)_____ supply chain is the channel that results once independent channel members are added between the manufacturer and the consumer.

A) direct
B) indirect
C) localized
D) undiverted
E) limited

Question 14

Which of the following external forces does NOT have a major influence on the supply chain?

A) Technological environment
B) Employee morale
C) Legal environment
D) Consumers
E) Behavior of competitors

Question 15

Facilitating institutions may best be described as specialists that:

A) while not taking title, still perform marketing functions for supply chain members.
B) create new markets for the manufacturer.
C) serve as the supply chain leaders.
D) perform functions supply chain members cannot legally perform.
E) eliminate conflict from the supply chain.

Question 16

Which one of the following institutions involved in a supply chain would take title to the goods it is dealing with?

A) Trucking company
B) Insurance company
C) Market researcher
D) Retailer
E) Public warehouse

Question 17

Marketing institutions are classified into two categories:

A) those that take title to the goods and those that do not.
B) those that are paid a flat fee and those that work on commission.
C) those that take possession and those that do not.
D) those that are profitable and those that are not.
E) those with high margin and those with low margin.

Question 18

The major facilitating institution involved in storage is the:

A) private warehouse.
B) in-transit warehouse.
C) demand collection channel.
D) contract warehouse.
E) public warehouse.

Question 19

_____ involves breaking down heterogeneous materials or product into more homogenous groups.

A) Organizing
B) Classifying
C) Synthesizing
D) Sorting
E) Grouping

Question 20

Retailers frequently use _____ for short-term loans to fund working-capital requirements.

A) commercial banks
B) factors
C) e-tailing brokers
D) stock and commodity exchanges
E) venture-capital firms

Question 21

What type of vertical marketing channel has a well established authority structure?

A) Franchise system
B) Contractual vertical marketing system
C) Conventional marketing system
D) Corporate vertical marketing systems
E) Wholesaler-sponsored voluntary group

Question 22

Items for which are frequently purchased and the consumer is not willing to spend a great deal of effort to purchase are known as:

A) shopping goods.
B) industrial goods.
C) convenience goods.
D) raw materials.
E) specialty goods.

Question 23

Although there are exceptions,as a general rule _____ distribution is associated with _____ goods.

A) intensive; shopping
B) selective; convenience
C) selective; specialty
D) exclusive; shopping
E) exclusive; specialty

Question 24

Sun Fashions offered to display Shark Sportswear's new line of swimwear at the entrance of its store if Shark pays 50 percent of the advertising expenses for Sun Fashions' Spring/Summer Catalog.Sun Fashions is employing which type of power?

A) Reward power
B) Traffic power
C) Referent power
D) Legitimate power
E) Expertise power

Question 25

A(n)_____ is a type of contractual vertical marketing channel that is actually a form of licensing.

A) retailer-owned cooperative
B) conventional marketing channel
C) franchise
D) wholesaler-sponsored voluntary group
E) independent retailer

Question 26

Although there are exceptions,as a general rule _____ distribution is associated with _____ goods.

A) intensive; shopping
B) intensive; specialty
C) selective; specialty
D) selective; shopping
E) selective; convenience

Question 27

Exclusive distribution:

A) means only one retailer is used in the trading area.
B) means that a smaller number of retailers are used to reach the target market.
C) means that all possible retailers are used to reach the target market.
D) is associated with the distribution of convenience goods.
E) is associated with shopping goods.

Question 28

Vertical marketing channels are typically classified into the following three categories:

A) contractual, administered, and corporate.
B) cooperatives, owned, and voluntary.
C) wholesaler-sponsored, retailer-sponsored, and franchised.
D) vertical, horizontal, and interfaced.
E) facilitating, primary, and conventional.

Question 29

TrueValue,Ace,and Handy Hardware are all examples of a(n):

A) retailer-owned cooperative.
B) contractual vertical marketing system.
C) wholesaler-sponsored voluntary group.
D) independent retailer.
E) franchisee.

Question 30

A supply chain in which each member is loosely aligned with the others is a(n):

A) modified channel.
B) unadministered channel.
C) conventional marketing channel.
D) corporate marketing channel.
E) contractual marketing channel.

Question 31

An attempt by a wholesaler to preserve a market for its products by strengthening the retailers that it sells to is an example of what type of channel arrangement?

A) Retailer-owned cooperative
B) Wholesaler-sponsored voluntary group
C) Corporate system
D) Retail-sponsored marketing system
E) Franchised retail program

Question 32

Although there are exceptions,as a general rule _____ distribution is associated with _____ goods.

A) intensive; shopping
B) intensive; convenience
C) selective; specialty
D) selective; luxury
E) selective; convenience

Question 33

Usually high-prestige branded products that the consumer expressly seeks out,such as Rolex watches,are known as:

A) shopping goods.
B) industrial goods.
C) convenience goods.
D) raw materials.
E) specialty goods.

Question 34

Identify the incorrect statement about the conventional marketing channel.

A) It is historically predominant in the United States.
B) It is a sloppy and inefficient method of conducting business.
C) It fosters intense negotiations within each pair of institutions in the supply chain.
D) Its members are able to divide the marketing functions among all the participants.
E) It has been on the decline in the United States since the early 1950s.

Question 35

Vertical marketing channels attempt to:

A) increase channel effectiveness but not channel efficiency.
B) minimize the suboptimization of the channel.
C) increase channel efficiency while minimizing channel effectiveness.
D) maximize the suboptimization of the channel.
E) coordinate activities among retailers.

Question 36

Sylvan Learning,The UPS Store,AAMCO Transmissions,H&R Block,and Lawn Doctor are examples of what kind of vertical marketing channel?

A) Wholesaler-sponsored voluntary group
B) Contractual channel system
C) Administered system
D) Retailer-owned cooperative
E) Conventional marketing system

Question 37

The three concepts of interorganizational management that a retail executive needs to understand are dependency,_____,and conflict.

A) trouble-shooting
B) interorganizational transfers
C) power
D) chain of command
E) personalities

Question 38

Identify the correct statement about quick response (QR)systems.

A) They are developed by conventional channel members.
B) They are also known as SKU systems.
C) These systems are different despite the similar names adopted by various retail industries.
D) They are designed to obtain real-time information on consumers' actions by capturing ECR data at point-of-purchase terminals.
E) The information obtained is used to develop new or modified products, manage channel-wide inventory levels, and lower total channel costs.

Question 39

A(n)_______ vertical marketing channel exists when one of the members takes the initiative to manage the channel.

A) administered
B) allocated
C) conventional
D) concentrated
E) concentric

Question 40

Manufacturers usually listen to a retailer's statements about the introduction of new products because retailers are often more knowledgeable about how their consumers will react.Manufacturers understand that retailers possess what type of power in this example?

A) Legitimate
B) Expertise
C) Knowledge-based
D) Reward
E) Referent

Question 41

The three main sources of conflict between retailers and their suppliers are:

A) power, control, and interdependency.
B) perceptual incongruity, goal incompatibility, and interdependency.
C) goal incompatibility, perceptual incongruity, and domain disagreement.
D) power, control, and domain disagreement.
E) power, interdependency, and perceptual incongruity.

Question 42

The logistics network consists of all firms that are involved in moving physical inventory from initial source to the retail store.

Question 43

An example of coercive power is a manufacturer's:

A) refusal to sell merchandise to any retailer who sells to diverters.
B) offer to increase the cash discounts if the retailer meets a sales quota.
C) offer a co-op promotional plan to all retailers in a key city.
D) payment for a prominent display area in a retailer's store.
E) act of sending the retailer a Christmas card without a year-end bonus.

Question 44

The dominant behavior in successful supply chains is:

A) collaboration.
B) free-riding.
C) coercive power.
D) conflict resolution.
E) solidarity.

Question 45

Once the retailer's supply chain is developed,it should never be changed.

Question 46

_____ exists when a high value is placed on the relationship between a supplier and retailer.

A) Mutual trust
B) Two-way communication
C) Solidarity
D) Category management
E) Gray marketing

Question 47

The presence of legitimate power is most easily seen in:

A) retailed-owned cooperatives.
B) franchises.
C) administered vertical marketing channels.
D) dependency.
E) contractual marketing channels.

Question 48

_____ occurs when achieving the goals of either the supplier or the retailer would hamper the performance of the other.

A) Perceptual incongruity
B) Domain disagreements
C) Goal incompatibility
D) Gray marketing
E) Dual Distribution

Question 49

_____ occurs when the retailer and supplier have different perceptions of reality.

A) Perceptual incongruity
B) Domain disagreements
C) Goal incompatibility
D) Gray marketing
E) Dual distribution

Question 50

The key difference between a primary and a facilitating marketing institution relates to whether the member takes title of goods.

Question 51

_____ is power derived from one channel member's desire to identify with their channel partner.

A) Reward power
B) Expertise power
C) Legitimate power
D) Referent power
E) Coercive power

Question 52

_____ occurs when both retailer and supplier openly communicate their ideas,concerns,and plans.

A) Mutual trust
B) Two-way communication
C) Solidarity
D) Category management
E) Gray marketing

Question 53

Prior to pulling its products out of Target,Tupperware made its products available in the giant retailer's stores.Independent Tupperware sales representatives complained that this had a "detrimental effect" on Tupperware parties.This was an example of:

A) perceptual incongruity.
B) domain disagreements.
C) goal incompatibility.
D) gray marketing.
E) dual distribution.

Question 54

_____ occurs when the retailer trusts the supplier and the supplier trusts the retailer.

A) Solidarity
B) High dollar performance
C) Coercion
D) Mutual trust
E) Relationship marketing

Question 55

_____ occur when there is a disagreement about which member of the marketing channel should make decisions.

A) Perceptual incongruity
B) Domain disagreements
C) Goal incompatibility
D) Gray marketing
E) Dual distribution

Question 56

A customer visits Best Buy to learn about the different models,their features,and the usage of new digital cameras.This customer then leaves the store without purchasing the camera from Best Buy and makes the actual transaction on Amazon.com.This is an example of:

A) diverting.
B) gray marketing.
C) free-riding.
D) goal incompatibility.
E) perceptual incongruity.

Question 57

External forces affecting channels cannot be completely controlled by the retailer or any other institution in the supply chain,but they need to be taken into account when retailers make decisions.

Question 58

Storing involves breaking down heterogeneous products into more homogenous groups.

Question 59

A supply chain is a set of institutions that moves goods from the point of production to the point of consumption.

Question 60

Profits sufficient for survival and growth would be difficult,if not impossible,to achieve if the retailer ignored the supply chain.

Question 61

Venture-capital firms are primarily used by retailers starting a new operation or format.

Question 62

As a general rule,selective distribution is associated with convenience goods.

Question 63

An indirect supply chain is a channel that results when independent channel members are added between the manufacturer and consumer.

Question 64

A public warehouse is a facility that stores goods for safekeeping for any owner in return for a fee,usually based upon the dollar value of merchandise stored.

Question 65

Insurance firms can make it possible for retailers to have what would be otherwise risky promotions.

Question 66

Most franchisors normally provide financial assistance to existing franchisees.

Question 67

It is common for wholesaler-sponsored voluntary groups to offer the retailer both store site and location analysis as well as assistance in designing the store layout.

Question 68

Agents and brokers are two types of primary channel institutions.

Question 69

In a conventional marketing channel,every member seeks to maximize its own performance,and has little or no concern for the overall performance of the total supply chain.

Question 70

As a general rule,exclusive distribution is associated with specialty goods.

Question 71

While they never actually take title to the goods,most agents and brokers take physical possession of the merchandise.

Question 72

One advantage of franchising is that the owner of a franchise must give up some freedom in making business decisions that the owner of a nonfranchised business would normally be allowed to make.

Question 73

One disadvantage that a franchisor provides a franchisee is that by borrowing from the franchisor,the franchisee has access to a lower cost of capital.

Question 74

As a general rule,intensive distribution is associated with shopping goods.

Question 75

The goal of every channel member should be to "minimize the suboptimization" of the supply chain.

Question 76

Manufacturers and retailers,but not wholesalers,are primary marketing institutions.

Question 77

Public warehouses,trucking companies,and banks are examples of facilitating institutions.

Question 78

There are three types of vertical marketing channels: corporate,contractual,and administered.

Question 79

Faster delivery enables the supply chain to have lower warehousing costs.

Question 80

A franchise is a form of a vertical marketing channel.