Deck 15: Wholesaling

Question 1

Wholesaling includes all of the following channel members EXCEPT

A) the government.
B) final consumers.
C) service providers.
D) retailers.

Answer 1

final consumers.

Question 2

Which of these activities does NOT involve a wholesaling transaction?

A) The sales of pharmaceuticals to U.S. medical labs
B) The sales of pharmaceuticals to final consumers for self-testing
C) The sales of pharmaceuticals to foreign medical labs
D) The sales of pharmaceuticals to state government medical labs

Answer 2

The sales of pharmaceuticals to final consumers for self-testing

Question 3

Which of these statements concerning wholesaling is NOT correct?

A) Total annual wholesale sales equal $6.5 trillion.
B) There are about 440,000 wholesale establishments in the United States.
C) Retail sales revenues are higher than wholesale sales revenues.
D) The sale of a repair service contract to a government agency is considered to be within the scope of wholesaling.

Answer 3

Retail sales revenues are higher than wholesale sales revenues.

Question 4

Which of the following is generally NOT considered a function of all wholesalers?

A) To provide a trained sales force
B) To take title and possession of goods
C) To handle financial records
D) To gather assortments for customers

Question 5

Wholesalers' being "in the middle" means that

A) wholesalers are neither service- nor price-based.
B) wholesalers don't know who should receive their loyalty: their manufacturer/service providers or their own customers.
C) significant channel conflict exists between wholesalers and their manufacturers/service providers.
D) wholesalers feel manufacturers give them inadequate support.

Question 6

Selling to the wholesaler means that

A) manufacturer/service provider wholesaling is emphasized.
B) the wholesaler is viewed as a customer who must be researched and satisfied.
C) the retailer or final consumer is the object of manufacturers'/service providers' interest.
D) the wholesaler is the object of the retailer's interest.

Question 7

Which of the following activities best illustrates a manufacturer selling to the wholesaler?

A) Offering a large seasonal discount
B) Offering a large rebate to final consumers
C) Developing a large cooperative advertising allowance to generate demand by final consumers.
D) Printing a suggested list price on each package

Question 8

Selling through the wholesaler means that

A) manufacturer/service provider wholesaling is emphasized.
B) the wholesaler is viewed as a customer who must be researched and satisfied.
C) the retailer or final consumer is the object of manufacturers'/service providers' interest.
D) the retailer is the object of the wholesaler's interest.

Question 9

The three broad categories of wholesaling are

A) full-service wholesalers, limited-service wholesalers, and agents and brokers.
B) merchant wholesalers, agents and brokers, and selling agents.
C) general merchandise, specialty merchandise, and limited-service merchant wholesalers.
D) manufacturer/service provider wholesaling, merchant wholesaling, and agents and brokers.

Question 10

A producer of personal computers that desires to assume responsibility for all wholesaling tasks should undertake which form of wholesaling?

A) Merchant wholesaling
B) Full-service wholesaling
C) Manufacturer/service provider wholesaling
D) Indirect channels of distribution

Question 11

A firm seeking to vertically integrate (such as a manufacturer's undertaking retail responsibilities through ownership) should utilize

A) general-merchandise (full-line) wholesaling.
B) full-service merchant wholesaling.
C) manufacturer/service provider wholesaling.
D) transshipping.

Question 12

Which of these is a form of manufacturer/service provider wholesaling?

A) A sales office
B) A wholesale cooperative
C) Commission merchants
D) Franchise merchant wholesaling

Question 13

Which of these is a characteristic of a manufacturer's/service provider's sales office?

A) No inventory is carried.
B) The sales office includes facilities for warehousing goods.
C) The sales office includes facilities for the manufacture of goods.
D) The sales office sells goods to final consumers.

Question 14

Which of these is a characteristic of a manufacturer's/service provider's branch office?

A) No inventory is carried.
B) The sales office includes facilities for warehousing and selling goods.
C) The sales office includes facilities for the manufacture of goods.
D) The sales office sells goods to final consumers.

Question 15

Which type of wholesale channel should be considered when a firm has a small group of large and geographically concentrated customers, and when rapid expansion is not a major goal of the firm?

A) Agents and brokers
B) Indirect distribution
C) Merchant wholesaling
D) Manufacturer/service provider wholesaling

Question 16

Merchant wholesalers can be differentiated from other forms of wholesalers in that they

A) provide a wide range of services to their suppliers and their customers.
B) resell the goods to other wholesalers.
C) purchase, take title, and take possession of products.
D) are paid on the basis of commissions.

Question 17

Which type of wholesale channel should be considered when a manufacturer/ service provider seeks an individual wholesaler that can perform the broadest range of distribution tasks?

A) Full-service merchant wholesalers
B) Agents
C) Manufacturer/service provider wholesalers
D) Brokers

Question 18

Merchant wholesalers can be further classified as

A) full line and limited line.
B) agents and brokers.
C) manufacturing agents and selling agents.
D) full service and limited service.

Question 19

Which of these is NOT an example of a merchant wholesaler?

A) A rack jobber
B) A franchise wholesaler
C) A selling agent
D) A wholesale cooperative

Question 20

Which wholesaler has a wide range of goods, but limited depth in each product line?

A) General-merchandise wholesaler
B) Specialty-merchandise wholesaler
C) Rack jobber
D) Wholesale cooperative

Question 21

Which merchant wholesaler has a narrow, but deep product mix?

A) Drop shipper
B) Specialty-merchandise wholesaler
C) Truck/wagon wholesaler
D) Wholesale cooperative

Question 22

Which wholesaler sells self-service merchandise on the basis of consignment sales?

A) Drop shipper
B) Cash-and-carry wholesaler
C) Rack jobber
D) Franchise wholesaler

Question 23

Which wholesaler is most likely to sell nonfood items to supermarkets?

A) Truck/wagon wholesaler
B) Rack jobber
C) Drop shipper
D) Franchise wholesaler

Question 24

In which wholesaling format are independent retailers likely to affiliate with an existing wholesaler?

A) Selling agents
B) Rack jobbers
C) Wholesale cooperatives
D) Franchise wholesaling

Question 25

Joint advertising programs and the use of prototype store designs are common characteristics of which wholesaling format?

A) Selling agents
B) Rack jobbers
C) Franchise wholesalers
D) Drop shippers

Question 26

A common business format is often a characteristic of which two wholesaling formats?

A) Selling agents and commission merchants
B) Rack jobbers and drop shippers
C) Rack jobbers and cash-and-carry wholesalers
D) Franchise wholesalers and wholesale cooperatives

Question 27

The basic difference between franchise wholesaling and wholesale cooperatives is based on

A) ownership.
B) common business format.
C) operating costs.
D) level of services provided.

Question 28

Which wholesale format is owned by its member firms?

A) Cash-and-carry wholesaler
B) Rack jobber
C) Franchise wholesaler
D) Wholesale cooperative

Question 29

Wholesale cooperatives are most popular in (for)

A) farming/agriculture. .
B) pharmaceuticals.
C) minority enterprises
D) cabinet makers.

Question 30

Wholesale cooperatives are generally classified by

A) degree of service.
B) geographic area. .
C) ownership.
D) size

Question 31

Immediate product availability and low prices are the major competitive advantages of

A) cash-and-carry wholesalers.
B) specialty-merchandise wholesalers.
C) franchise wholesalers.
D) drop shippers.

Question 32

Which statement concerning cash-and-carry wholesaling is NOT correct?

A) Cash-and-carry wholesalers do not typically offer trade credit.
B) Cash-and-carry wholesalers provide retailer members with prototype store designs, common promotional materials, and a common business name.
C) Cash-and-carry wholesalers offer immediate product availability.
D) Cash-and-carry wholesalers are an important source for fill-in merchandise.

Question 33

Which is the only merchant wholesaler that does NOT take physical possession of goods?

A) Specialty merchandise
B) Drop shipper
C) Cash-and-carry wholesaler
D) Wholesale cooperative

Question 34

Which wholesaler does NOT have warehouse facilities?

A) Cash-and-carry wholesaler
B) Truck/wagon wholesaler
C) Drop shipper
D) Mail-order wholesaler

Question 35

Which statement concerning drop shippers is correct?

A) They arrange direct shipments from suppliers to customers.
B) They do not legally own the products they store.
C) They do not assume responsibility for unsold goods.
D) They purchase, store, and ship products.

Question 36

Which merchant wholesaler delivers merchandise but does NOT offer trade credit?

A) Truck/wagon wholesalers
B) Cash-and-carry wholesalers
C) Franchise wholesalers
D) Drop shippers

Question 37

Which of these wholesalers does NOT have storage facilities?

A) Drop shippers
B) Wholesale cooperatives
C) Rack jobbers
D) Mail-order wholesalers

Question 38

Which type of independent wholesaler does NOT take title to goods?

A) Agent
B) Drop shipper
C) Merchant wholesaler
D) Manufacturer wholesaler

Question 39

The major difference between agents and brokers is that agents are more likely to

A) use catalogs than a personal sales force.
B) be employed on a permanent basis.
C) be paid by both the seller and the buyer.
D) represent the buyer, not the seller.

Question 40

From the perspective of a manufacturer/service provider, a major advantage of the use of agents and brokers (as opposed to merchant wholesalers) is that agents and brokers are

A) compensated on the basis of a straight salary.
B) less costly than merchant wholesalers.
C) compensated on the basis of their sales performance.
D) more controllable than merchant wholesalers.

Question 41

Manufacturers'/service providers' agents sell only noncompetitive products to

A) spread the risks of providing trade credit to smaller customers.
B) provide ample customer service to both small and large customers.
C) avoid a conflict of interest among their manufacturers/service providers.
D) handle smaller territories.

Question 42

Which of the following works for a number of noncompeting manufacturers?

A) Mail-order wholesalers
B) Commission merchants
C) Wholesale cooperatives
D) Manufacturers'/service providers' agents

Question 43

Complementary products of multiple manufacturers/service providers are distributed in exclusive sales territories by

A) commission agents.
B) manufacturers'/service providers' agents.
C) selling agents.
D) mail-order wholesalers.

Question 44

Which of these wholesalers is NOT an agent or broker?

A) Factor merchant
B) Selling agent
C) Drop shipper
D) Commission merchant

Question 45

Which wholesaler assumes responsibility for marketing the entire output of a manufacturer?

A) Manufacturers'/service providers' agents
B) Commission merchants
C) Rack jobbers
D) Selling agents

Question 46

Which wholesale function is NOT provided by selling agents?

A) The negotiation of price
B) Delivery of goods to customers
C) The granting of trade credit
D) Taking title to products

Question 47

Which statement concerning selling agents is NOT correct?

A) Selling agents assume responsibility for a manufacturer's entire output.
B) Selling agents are empowered by the manufacturer/service provider to negotiate price.
C) Selling agents undertake all marketing functions except taking title to goods.
D) A manufacturer may employ multiple selling agents, such as one for each product line.

Question 48

Which wholesaler receives goods on consignment, accumulates them from local markets, and arranges for their sale in a central market location?

A) A commission merchant
B) A manufacturers'/service providers' agent
C) A selling agent
D) A drop shipper

Question 49

A broker's fee is generally paid by the

A) retailer.
B) wholesaler.
C) buyer.
D) seller.

Question 50

Which of these is NOT a major recent wholesaling trend?

A) The greater focus by wholesalers on increased productivity
B) A trend toward larger wholesalers
C) The growth of the role of the Internet in wholesale transactions
D) The increased percentage of wholesale sales by manufacturer wholesalers

Question 51

The primary difference between wholesaling and retailing is that wholesalers do NOT

A) sell a significant volume to final consumers.
B) take title to merchandise.
C) sell goods to other wholesalers.
D) sell to industrial, commercial, and government institutions.

Question 52

Total U.S. wholesale sales are higher than total U.S. retail sales because

A) wholesalers add more value to products than retailers.
B) goods can be resold several times as they move through several levels of wholesalers.
C) wholesalers have higher operating costs and markups.
D) wholesaler sales include sales to industrial, commercial, and government institutions.

Question 53

Which of these is NOT a wholesaler function?

A) Providing a trained sales force
B) Setting list prices on goods and services
C) Taking risks for theft, deterioration, and obsolescence of inventory
D) Enabling manufacturers and service providers to distribute locally without making customer contacts

Question 54

While an agent would like to recommend a given insurance company to a local business to receive a sales contest award, the agent is concerned that the insurance company's premium is 10 percent above the market average price. This illustrates

A) derived demand.
B) selling to the wholesaler.
C) selling through the wholesaler.
D) the wholesaler's being "in the middle."

Question 55

Selling to the wholesaler involves which channel strategy?

A) Pulling
B) Pushing
C) Direct distribution
D) Indirect distribution

Question 56

Selling through the wholesaler involves which channel strategy?

A) Pushing
B) Pulling
C) Direct distribution
D) Indirect distribution

Question 57

Selling through the wholesaler best relates to which of these marketing concepts?

A) A pushing strategy
B) Channel cooperation
C) The accelerator principle
D) Derived demand

Question 58

Which of these is the LEAST desirable form of wholesaling if a firm has limited marketing expertise and seeks widespread market expansion as a goal?

A) Manufacturer/service provider wholesaling
B) Selling agents
C) Merchant wholesaling
D) Food brokers

Question 59

The major difference between a manufacturer's sales office and a manufacturer's branch office is due to the

A) degree of decentralization. .
B) presence of warehousing facilities.
C) size of the wholesale operation
D) consistency of the product mix.

Question 60

With which type of wholesaling would a manufacturer's investment generally be the highest?

A) Full-service merchant wholesaling
B) Limited-service merchant wholesaling
C) Manufacturer's/service provider's branch offices
D) Manufacturer's/service provider's sales offices

Question 61

Which form of wholesaling should be used by a manufacturer that seeks the highest possible degree of channel control?

A) Merchant wholesaling
B) Manufacturer/service provider wholesaling
C) Brokers
D) Agents

Question 62

Manufacturer/service provider wholesaling represents a form of

A) direct distribution.
B) indirect distribution.
C) merchant wholesaling.
D) derived demand.

Question 63

Manufacturer/service provider wholesaling represents a form of

A) vertical integration.
B) horizontal integration.
C) merchant wholesaling.
D) indirect distribution.

Question 64

A firm is most likely to use manufacturer/service provider wholesaling when it

A) wishes to minimize its wholesale investment.
B) has limited financial resources.
C) seeks to control customer service throughout the channel.
D) has many small and geographically dispersed customers.

Question 65

The major difference between manufacturer and merchant wholesaling is related to the

A) number of retailers supported by the channel.
B) wholesale functions provided to retailers.
C) degree of customer service provided within the channel.
D) independence of the wholesaler.

Question 66

An example of an activity typically performed by a full-service merchant wholesaler that would NOT be performed by a limited-service merchant wholesaler is

A) contacting customers.
B) providing a trained sales force.
C) purchasing goods in large quantities and selling them in smaller quantities.
D) providing trade credit.

Question 67

An independent supermarket operator seeks to minimize the number of wholesalers he or she must purchase from. The operator wants to use a wholesaler that can ship 90 percent of the store's total requirements within 1 day of receipt of an order. The retailer should seek what kind of wholesaler?

A) A specialty-merchandise wholesaler
B) A general-merchandise wholesaler
C) A drop shipper
D) A cash-and-carry wholesaler

Question 68

Compared with a general-merchandise wholesaler, a specialty-merchandise wholesaler is more likely to

A) carry a greater assortment of products.
B) carry a greater variety of products.
C) provide trade credit.
D) sell products on the basis of consignment sales.

Question 69

A ___ wholesaler is most likely to stock specialized printer ribbons for a seldom-purchased computer printer.

A) specialty-merchandise
B) general-merchandise
C) drop shipper
D) rack jobber

Question 70

The Following Questions are linked to this scenario: An independent supermarket, with one retail unit, is evaluating alternate wholesalers.

-Which of these is NOT a unique major benefit of an independent supermarket doing business with a rack jobber?

A) The rack jobber provides a functional discount to the supermarket.
B) Goods do not have to be paid for by the supermarket operator until they are sold.
C) The rack jobber maintains the racks, stocks merchandise, and maintains inventory records.
D) The rack jobber furnishes the racks or shelves for the proper display of the goods.

Question 71

The Following Questions are linked to this scenario: An independent supermarket, with one retail unit, is evaluating alternate wholesalers.

-Although the supermarket owner knows that many of his customers seek hardware items (such as bolts and wood screws) and inexpensive hand tools (such as hammers and screw drivers), the personnel lack the time/expertise to determine the best-selling items, to maintain ample quantities, and to set retail prices. The most appropriate wholesaler for the independent supermarket is a

A) rack jobber.
B) wholesale cooperative.
C) franchise wholesaler.
D) drop shipper.

Question 72

The basic difference between a rack jobber and a truck/wagon wholesaler is that a truck/wagon wholesaler does NOT

A) own the goods it sells.
B) carry perishable products.
C) offer any form of trade credit.
D) set up displays.

Question 73

Which limited-service merchant wholesaler is most similar to a rack jobber in terms of most of its wholesaler functions?

A) Drop shipper
B) Truck/wagon wholesaler
C) Cash-and-carry wholesaler
D) Mail-order wholesaler

Question 74

The major difference between a franchise wholesaler and a wholesale cooperative is based on the

A) size of the parent organization.
B) ownership of the wholesaler.
C) range of services provided to retailers.
D) degree of standardization among retail units.

Question 75

Which two wholesalers provide a similar range of services for their retailer members?

A) Rack jobbers and cash-and-carry wholesalers
B) Rack jobbers and drop shippers
C) Cash-and-carry wholesalers and drop shippers
D) Franchise wholesalers and wholesale cooperatives

Question 76

Agricultural produce is typically handled by which two types of wholesalers?

A) Rack jobbers and franchise wholesalers
B) General-merchandise and specialty-merchandise wholesalers
C) Wholesale cooperatives and commission merchants
D) Food brokers and rack jobbers

Question 77

Which wholesaler operates in a manner similar to a traditional discount retailer (in that customers visit the outlet, pick out the merchandise, and transport the goods themselves)?

A) Franchise wholesaler
B) Wholesale cooperative
C) Truck/wagon wholesaler
D) Cash-and-carry wholesaler

Question 78

Which of these wholesalers can best focus their efforts on small business accounts because of the wholesalers' low selling costs?

A) Truck/wagon wholesalers and rack jobbers
B) Mail-order wholesalers and cash-and-carry wholesalers
C) Franchise wholesalers and wholesale cooperatives
D) General- and specialty-merchandise wholesalers

Question 79

Which type of wholesaler does NOT require a traditional field-based sales force?

A) Franchise wholesaler
B) Selling agent
C) Full-service wholesaler
D) Mail-order wholesaler

Question 80

Which type of wholesaler is best equipped to serve small and scattered accounts on a profitable basis?

A) Rack jobber
B) Truck/wagon wholesaler
C) Mail-order wholesaler
D) Franchise wholesaler