Deck 7: Wholesaling Structures and Strategies

Question 1

Which term refers to a type of super wholesaler?

A) master distributor
B) cooperative group
C) catalyst organization
D) channel exporter
E) industrial user

Answer 1

A

Question 2

A third-party logistics provider most likely ________.

A) takes title to the products being handled
B) charges customers an activity-based fee
C) earns rewards for selling new products
D) resells products at wholesale prices
E) markets product for distributors

Answer 2

B

Question 3

Which of the following activities would LEAST likely be handled by a master distributor?

A) delivering products to other distributors
B) consolidating orders from manufacturers
C) providing marketing and advertising support
D) monitoring employee recruitment and training
E) helping manufacturers expand into new channels

Answer 3

D

Question 4

Which of the following best defines the term picking?

A) taking items from shelves that are needed by customers and assembling the items for shipment
B) identifying the most efficient method to collect, assemble, and ship products to global customers
C) maintaining ownership and title to products until another distributor purchases them
D) selecting a master distributor to oversee the logistics and shipment of products
E) choosing the most important service outputs for a particular channel

Question 5

Unlike wholesaler voluntary groups,retailer-sponsored cooperatives require members to ________.

A) conduct a certain amount of business with the co-op
B) adhere to co-op procedures and policies
C) elect a member as co-op chair
D) buy shares in the co-op
E) form a co-op board

Question 6

How did Volvo Trucks North America solve its parts distribution problem?

A) fragmenting its global service outputs
B) establishing a holding company in Sweden
C) acquiring FedEx to form a new conglomeration
D) establishing multiple warehouses linked electronically
E) building a centralized warehouse near FedEx headquarters

Question 7

According to the author,what has been a significant factor in the large number of consolidations in the wholesale distributor industry?

A) globalization of retailers
B) shifting channel power
C) federal regulations
D) investments in IT
E) end user demands

Question 8

According to the text,what was the primary reason for the consolidation of pharmaceutical wholesalers?

A) closure of small pharmacies
B) automation of picking tasks
C) research into new medications
D) deregulation by the government
E) investments by global organizations

Question 9

Carmen,a manager at Dixon Manufacturing,is seeking an export intermediary to improve Dixon's success in foreign markets.Carmen has interviewed managers at multiple export trading companies and noted the key characteristics of each firm.Which export trading company should Carmen most likely select?

A) Alpha Exporting is a large firm with hundreds of employees.
B) Beta Exporting employees are either multilingual or foreign born.
C) Calvin Exporting has strong local connections and community ties.
D) Davis Exporting managers are new to the industry and eager to gain business.
E) Ellison Exporting is employed by manufacturers in the same industry as Dixon.

Question 10

An agent or broker most likely ________.

A) takes ownership of represented products
B) maintains large inventories of products
C) sells tangible products but not services
D) earns a commission for selling products
E) handles delivery and logistical details

Question 11

A wholesaler adds value by performing all of the following channel functions EXCEPT ________.

A) promoting products to prospects
B) granting credit to suppliers
C) manufacturing new products
D) processing orders and payments
E) negotiating transactions

Question 12

A wholesaler-distributor is LEAST likely to ________.

A) be independently owned
B) operate from a warehouse
C) claim ownership of goods
D) sell products to end users
E) hold inventory for reshipping

Question 13

Consortiums,such as Intercore Resources,help distributors to ________.

A) analyze service outputs
B) evaluate master distributors
C) address vertical integration issues
D) provide better service to customers
E) profit from storing unwanted inventory

Question 14

An independent firm located in the exporter's country that performs channel functions for multiple manufacturers in noncompeting product categories is most likely a(n)________.

A) licensed exporter
B) export franchisor
C) wholesale agency
D) master-distributor
E) export trading company

Question 15

What is the primary reason that the onion industry has failed to be successful in Niger?

A) high amount of local sourcing
B) poor reputation of wholesalers
C) formation of wholesaler co-ops
D) involvement of retailer-sponsored alliances
E) deregulation of food industry by the government

Question 16

Which term refers to the strategic coordination of traditional business functions systematically across the channel,with the goal of enhancing long-term performance for the channel overall?

A) value chain analysis
B) channel consolidation
C) supply chain management
D) service output concentration
E) master distribution management

Question 17

What is an objective of wholesaler federations?

A) sharing title to products and services
B) reducing promotional costs and activities
C) eliminating redundant inventory or service operations
D) providing an alternative to retailer and manufacturer cooperatives
E) assisting manufacturers with their exporting and importing activities

Question 18

A firm that sells physical inputs and products to other businesses is best described as a(n)________.

A) contractor
B) wholesaler
C) merchant
D) marketer
E) retailer

Question 19

A wholesaling operation that is owned and run by a manufacturer and that performs selling and marketing functions is best known as a(n)________.

A) retailer
B) service broker
C) master distributor
D) supply chain manager
E) manufacturers' sales branch

Question 20

Pittsfield Fabric,a U.S.manufacturer,is considering the idea of selling fabrics to European consumers.Which type of intermediary would most likely assist Pittsfield with this plan?

A) export trading company
B) master distributor
C) commission agent
D) franchiser
E) retailer

Question 21

The Ace Hardware Corporation was initially formed to ________.

A) establish a vertically integrated firm
B) bypass wholesalers and reduce costs
C) compete with big box hardware stores
D) share marketing and advertising costs
E) provide product variety to consumers

Question 22

What is the LEAST likely reason that some French farmers have stopped direct selling and started using intermediaries again?

A) being expected to provide credit to buyers
B) having to promote products to build clientele
C) needing to locate where customers want to buy
D) matching crops to product assortment demands
E) complying with significant certification procedures

Question 23

How has e-commerce most likely benefitted wholesalers?

A) Wholesalers with an online presence can globalize the supply chain.
B) Independent electronic exchanges allow wholesalers to promote services.
C) The risk of defective goods sold by fake e-merchants has been eliminated.
D) Reverse online auctions enable wholesalers to improve customer relationships.
E) Wholesalers gain more customer knowledge which leads to better service and value.

Question 24

What is a key reason for the fast pace of wholesaler consolidation in the U.S.?

A) improvements in information technology
B) shifts in channel power and sources
C) increased use of master distributors
D) growth of consumer co-ops
E) opportunities to globalize

Question 25

Which term refers to a large,full-line,versatile wholesaler that is able to serve many environments well?

A) progressive firm
B) extreme generalist
C) fragmented firm
D) extreme specialist
E) catalyst firm

Question 26

Which statement best explains the success of consumer co-ops in the French food sector?

A) Grocery chains in France have historically supported direct selling and local food sourcing.
B) French consumers want intermediaries to conduct more safety inspections of food and wine.
C) Many French shoppers demand regional, organic foods and oppose conventional farming.
D) French shoppers appreciate the lower prices of food purchased directly from farmers.
E) Many French consumers support the government and its food standardization tactics.

Question 27

According to the text,why will most wholesalers never be truly global?

A) Increasing trade barriers discourage wholesalers from globalizing.
B) Cross-border shipping costs for wholesalers are expected to rise.
C) Wholesaling involves meeting the varied needs of local markets.
D) Global wholesaling channels are too standardized to be profitable.
E) Wholesaler consolidation prevents manufacturers from outsourcing.

Question 28

Why are cooperatives becoming popular in Japan?

A) rising demand for service coordination
B) increasing number of small wholesalers
C) growing need to export goods overseas
D) changing demographics of consumers
E) decreasing length of marketing channels

Question 29

Wilson Wholesalers,an electrical component distributor,charges customers separate amounts for various services,such as inspecting components prior to packaging,using priority shipping,and sorting components by part number.Which term best describes the strategy used by Wilson Wholesalers?

A) fee for service model
B) activity-based costing
C) service consolidation
D) fragmentation
E) bundling

Question 30

Which term best describes Ace Hardware?

A) wholesaler co-op
B) holding company
C) retailer co-op
D) distributor
E) consortium

Question 31

Which of the following is most likely a true statement about Ace Hardware?

A) Ace dealers pay membership fees and receive stock to ensure a profitable system.
B) The primary competition for independent Ace stores is other dealer cooperatives.
C) Ace eliminated its private-label merchandise because of poor retail sales.
D) Ace focuses on independent dealers rather than operating its own stores.
E) Independent Ace stores are homogeneous, which simplifies distribution.

Question 32

Buyers attracted to online reverse auctions most likely want to ________.

A) analyze a product's lifetime cost of ownership
B) form relationships with major wholesalers
C) evaluate overall procurement costs
D) focus on low product prices
E) eliminate buying risks

Question 33

A manufacturer that invests in fragmentation when faced with wholesale consolidation is most likely ________.

A) focusing on forward vertical integration
B) creating partnerships with large distributors
C) increasing its attractiveness to channel members
D) forming alliances with small wholesaler-distributors
E) developing additional channel power through outsourcing

Question 34

Land O'Lakes,Sunkist,and Ocean Spray are examples of ________.

A) wholesalers
B) consumer groups
C) farm cooperatives
D) master distributors
E) independent franchisors

Question 35

What was the most likely reason for the failure of B2B online exchanges?

A) Buyers were unable to purchase similar products from one site.
B) Exchanges overlooked the value provided by wholesalers.
C) Wholesaler consolidation eliminated most e-distributors.
D) Exchanges added an unnecessary and costly intermediary.
E) Grey market pricing was unexpected by the exchanges.

Question 36

Which statement about power retailers is most likely FALSE?

A) Power retailers usually buy in large quantities in select product categories.
B) Power retailers usually adopt a buy direct approach due to purchasing volume.
C) Power retailers typically rely heavily on small, regional wholesaler-distributors.
D) Power retailers tend to reduce channel costs by creating in-house distribution systems.
E) Power retailers in Europe, Japan, and the U.S. are bypassing independent wholesaler-distributors

Question 37

An ABC analysis is most likely used by wholesalers to ________.

A) strengthen a business portfolio with key customers
B) compare outsourcing with vertical integration
C) estimate the service costs of customers
D) separate product and service costs
E) measure direct selling effects

Question 38

What is the primary benefit of Ace managing the wholesale side of the business?

A) providing better customer service
B) offering a heterogeneous inventory
C) ensuring that dealers are successful
D) keeping procurement costs down
E) customizing store offerings

Question 39

A(n)________enables buyers of similar products to source and purchase items from multiple suppliers from a single location.

A) independent electronic exchange
B) online distribution center
C) electronic auction house
D) book-and-ship website
E) online reverse auction

Question 40

Watson Wholesalers typically charges customers slightly higher product prices with the explanation that the services the firm provides are free.Which term best describes the strategy of Watson Wholesalers?

A) activity-based costing
B) value-added pricing
C) fragmentation
D) consolidation
E) bundling

Question 41

Agents,brokers,and commission agents buy or sell products,earn commissions or fees,and take ownership of the products they represent.

Question 42

Collaborative filtering software enables wholesalers to use customer information to identify and suggest appropriate products for prospects.

Question 43

Independent electronic exchanges rely on specialized software that allows bidders to submit progressively declining bids to win a customer's business.

Question 44

Cooperatives are increasingly popular among small and medium-sized Japanese wholesalers that want to gain economies of scale and compete more effectively with large wholesalers.

Question 45

How do channel members benefit from joining federations?

Question 46

What have been the causes and effects of consolidation in the wholesale sector?

Question 47

What is a master distributor? What functions do master distributors perform?

Question 48

Wholesalers are business establishments that sell products primarily to end-users but also to other businesses.

Question 49

What have been the positive and negative effects of e-commerce on wholesalers? How might online reverse auctions impact wholesalers?

Question 50

How do wholesaler voluntary groups differ from cooperative groups? What are the benefits of cooperative groups?