Deck 10: Distribution Strategy

Question 1

Which of the following best describes a merchant middleman?

A) A middleman who buys goods outright and takes title to them
B) A middleman who serves as a go-between for a buyer or seller without assuming title risks
C) A middleman who buys from manufacturers and sells to retailers
D) A middleman who possesses limited authority with regard to terms of sale

Answer 1

A

Question 2

Anchor Inc. is a retailer that acts as an intermediary for buyers and sellers. As a marketing intermediary, it serves several functions that include buying, selling, and assuming title risks for a manufacturer's products. Apart from them, it has to serve the function of facilitating a purchase order. In order to do so, which of the following should the company do?

A) Inspect, test, and judge products to assign them quality grade.
B) Create product assortments from several sources to serve customers.
C) Physically move products to customers.
D) Assemble products at a convenient location to offer better customer service.

Answer 2

A

Question 3

Soliciting orders and assuming business risks pertain to the _____ functions of a marketing intermediary.

A) logistical
B) facilitating
C) transactional
D) grading

Answer 3

C

Question 4

A computer manufacturer markets its computers through a variety of methods-telemarketing, catalog selling, cable selling, and online selling-that do not involve the use of intermediaries. Which of the following channels or types of marketing is the manufacturer using?

A) Horizontal channel
B) Direct channel
C) Intermediary marketing
D) Administered marketing

Question 5

The primary role of all marketing intermediaries is to:

A) bring supply and demand together in an efficient and orderly fashion.
B) create timely demand for products that a manufacturer produces.
C) produce goods and services efficiently to meet the demands of customers.
D) prevent customers from making poor buying decisions.

Question 6

Which of the following products is most likely to be distributed through direct channels?

A) Smartphones
B) Staplers
C) Hair dryers
D) Computer systems

Question 7

Which of the following is an example of a direct channel of distribution?

A) Wholesaling
B) Catalog selling
C) Agent selling
D) Retailing

Question 8

_____ are used in organizational markets when there is a large number of buyers but each purchases a small amount of a product.

A) Brokers
B) Distributors
C) Agents
D) Retailers

Question 9

A business unit that negotiates purchases, sales, or both but does not take title to the goods in which it deals is known as a(n) _____.

A) merchandiser
B) agent
C) facilitator
D) broker

Question 10

Which of the following is true of brokers?

A) They typically assume title risks to a product.
B) They usually have physical custody of products.
C) They are looked upon as permanent representatives of both buyers and sellers.
D) They serve as go-betweens for a buyer or a seller.

Question 11

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 12

The direct channel of distribution is often used in the distribution of organizational goods because:

A) the structure of most organizational markets is characterized by relatively few customers.
B) the manufacturers lack economic power for hiring intermediaries.
C) most of the markets are geographically dispersed and heterogeneous.
D) many organizational products need a great deal of presale and postsale services.

Question 13

A _____ refers to a combination of institutions through which a seller markets products to organizational buyers or ultimate consumers.

A) marketing node
B) distribution channel
C) sales consortium
D) logistics conduit

Question 14

Which of the following products or services is most likely to be distributed through an indirect channel?

A) Smartphones
B) Complex medical equipment
C) Tropical flowers
D) Computer systems

Question 15

In contrast to consumer products, organizational goods are often distributed through _____.

A) the direct channel
B) the horizontal channel
C) peer-to-peer marketing
D) administered marketing

Question 16

Under which of the following conditions might a manufacturer wish to have its own sales force?

A) When the manufacturer is a small player in that product category
B) When the market for its products is geographically concentrated
C) When the products require minimal presale and postsale services
D) When the market consists of many small customers

Question 17

In contrast to organizational goods, consumer products are often distributed through _____ channels.

A) matrix
B) indirect
C) horizontal
D) control

Question 18

A shoe manufacturer sells high-end designer shoes to wholesalers who, in turn, sell a variety of shoes and other leather accessories to various retail outlets. Which of the following channels of distribution is the shoe manufacturer using?

A) Matrix channel
B) Indirect channel
C) Peer-to-peer channel
D) Maker to user channel

Question 19

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

A) wholesalers
B) distributors
C) agents
D) retailers

Question 20

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

A) broker
B) non-wholesaler
C) jobber
D) agent

Question 21

A manufacturer utilizing an exclusive form of distribution coverage:

A) manufactures products that are characterized by low unit value and high frequency of purchase.
B) attempts to gain exposure through as many wholesalers and retailers as possible.
C) severely limits distribution and intermediaries are provided exclusive rights within a territory.
D) limits the use of intermediaries to the ones believed to be the best available in the geographic area.

Question 22

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

A) Behavioral perspective
B) Technological perspective
C) Systemic perspective
D) Geodemographic perspective

Question 23

FemPlus, a manufacturer of cosmetics, shares expenditures incurred toward promotional activities like advertising with its intermediaries. Additionally, it provides them with operational aids such as a computer-aided inventory system. These measures by FemPlus primarily seek to:

A) shorten its channel of distribution.
B) curtail distribution costs.
C) provide autonomy to the distributor in selling its products.
D) maintain a degree of control over its intermediaries.

Question 24

Most convenience goods require a(n) _____ form of distribution.

A) focused
B) intensive
C) exclusive
D) selective

Question 25

Which of the following views of distribution channels recognizes that much can be gained by developing long-term commitments and harmony among channel members?

A) Channel integration
B) Vertical marketing
C) Relationship marketing
D) Strategic maneuvering

Question 26

Which of the following forms of distribution coverage will provide minimum flexibility to a manufacturer?

A) Selective distribution
B) Restrictive distribution
C) Exclusive distribution
D) Intensive distribution

Question 27

A manufacturer utilizing an intensive form of distribution coverage:

A) usually produces products that require certain specialized selling effort or investment in unique facilities.
B) manufactures products that are characterized by low unit value and a high frequency of purchase.
C) severely limits distribution and provides intermediaries with exclusive rights within a territory.
D) limits the use of intermediaries to the ones believed to be the best available in the geographic area.

Question 28

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

A) extensive
B) geo-demographic
C) intensive
D) selective

Question 29

Which of the following distribution costs is categorized as an inventory carrying cost?

A) Cost of lost business
B) Insurance
C) Packaging
D) Materials handling

Question 30

In which of the following forms of distribution coverage does the manufacturer attempt to gain exposure through as many wholesalers and retailers as possible?

A) Focused distribution
B) Intensive distribution
C) Exclusive distribution
D) Selective distribution

Question 31

Appliances, home furnishings, and better clothing are usually distributed _____.

A) demographically
B) intensively
C) exclusively
D) selectively

Question 32

If a product requires certain specialized selling effort or investment in unique facilities or large inventories, the _____ distribution arrangement is usually selected.

A) exclusive
B) geodemographic
C) intensive
D) extensive

Question 33

A manufacturer utilizing a selective form of distribution coverage:

A) manufactures products that are characterized by low unit value and high frequency of purchase.
B) attempts to gain exposure through as many wholesalers and retailers as possible.
C) severely limits distribution such that intermediaries are provided exclusive rights within a territory.
D) limits the use of intermediaries to the ones believed to be the best available in a geographic area.

Question 34

_____ manufacturers are most likely to use intensive distribution.

A) Personal computer
B) Laser printer
C) Home furnishings
D) Soda

Question 35

In framing the channel selection decision, which of the following considerations pertains to an intermediary's characteristic?

A) Purchasing patterns of the intermediary
B) Financial condition of the intermediary
C) Political issues
D) Technological changes

Question 36

A computer manufacturer is producing a one-of-a-kind innovation called Innovel, a cloud computing software that helps to navigate Internet content. While making the channel decision and finalizing the distribution arrangement, the manufacturer is keen on limiting the distribution of Innovel and gives only Techaven Inc. the rights to sell Innovel in that region. Techaven is known for its unique facilities and specialized inventories. In this case, the manufacturer is using the _____ arrangement of distribution.

A) selective
B) restrictive
C) exclusive
D) intensive

Question 37

An independent designer sells his exclusive collection of premium sportswear for men and women at specialty stores and select departmental stores nationwide. He considers his products as being characterized by high unit value and limited frequency of purchase. Before choosing his intermediaries, he checks to ensure that they have a good reputation in the market. Which of the following methods of distribution is the designer most likely utilizing?

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

Question 38

Among the distribution costs, storage-space charges are generally considered:

A) packaging costs
B) costs of lost business
C) order processing costs
D) inventory carrying costs

Question 39

_____ stores are an example of exclusive distribution arrangement.

A) Grocery
B) Home appliance
C) Apparel
D) Retail paint

Question 40

A manufacturer of _____ is most likely to use selective distribution.

A) paper clips
B) microwave ovens
C) nail clippers
D) aerated drinks

Question 41

GreenFizz, a popular beverage manufacturer, licenses wholesalers in various markets to buy its syrup concentrate. These wholesalers are then allowed to process it further by carbonating and packaging GreenFizz's products to sell to retailers in their local markets. In this case, GreenFizz is participating in a(n) _____ vertical marketing system.

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

Question 42

_____ are 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.

A) Channel integration systems
B) Vertical marketing systems
C) Parallel marketing channels
D) Systemic marketing channels

Question 43

A contractual vertical marketing system is exemplified by:

A) a florist shop that buys from a wholesale plant nursery.
B) a coffee producer who owns a chain of coffee shops.
C) the relationship of a popular grocery chain of stores with its suppliers.
D) the franchise system of a reputed sandwich brand.

Question 44

A corporate vertical marketing system is exemplified by:

A) a florist shop that buys from a wholesale plant nursery.
B) a coffee producer who owns one of his regular retailers.
C) the relationship of an independent retail giant with its suppliers.
D) the franchise system of a popular apparel store.

Question 45

Which of the following is true of franchises?

A) They involve a parent company and an independent firm entering into a contractual relationship to set up and operate a business in a particular way.
B) They involve a group of independent retailers uniting and agreeing to pool buying and managerial resources to improve competitive position.
C) They involve a wholesaler contracting with a number of retailers performing channel functions for it.
D) They involve a retailer assuming ownership of its primary manufacturer through the presence of a channel leader.

Question 46

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

A) Retail cooperative organizations
B) Wholesaler-sponsored voluntary chains
C) Retail franchising programs
D) Wholesaler corporate channel programs

Question 47

Which of the following vertical marketing systems is characterized by the presence of a channel leader?

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

Question 48

An administered vertical marketing system is exemplified by:

A) an independent retailer uniting with other retailers to manage resources jointly.
B) the franchise program of a parent company with an independent contractor.
C) the long-term relationship of a popular retailer with its regular suppliers.
D) a wholesaler who contracts with many retailers to carry out distribution.

Question 49

Curexa, a popular health food store, obtains over fifty percent of the goods it sells in its retail stores from wholesalers that it partially or wholly owns. In this case, Curexa is participating in a _____ vertical marketing system.

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

Question 50

Which of the following is true of retail cooperative organizations?

A) They involve a parent company and an independent firm entering into a contractual relationship to set up and operate a business in a particular way.
B) They involve a group of independent retailers uniting and agreeing to pool buying and managerial resources to improve competitive position.
C) They involve a wholesaler contracting with a number of retailers performing channel functions for it.
D) They involve a retailer assuming ownership of its primary manufacturer through the presence of a channel leader.

Question 51

Which of the following is true of administered vertical marketing systems?

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

Question 52

Which of the following is true of wholesaler-sponsored voluntary chains?

A) They involve a parent company and an independent firm entering into a contractual relationship to set up and operate a business in a particular way.
B) They involve a group of independent retailers uniting and agreeing to pool buying and managerial resources to improve competitive position.
C) They involve a wholesaler contracting with a number of retailers performing channel functions for it.
D) They involve a retailer assuming ownership of its primary manufacturer through the presence of a channel leader.

Question 53

Which of the following is true of a corporate vertical marketing system?

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

Question 54

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

A) buyer preference.
B) corporate system.
C) channel leader.
D) distributor network.

Question 55

_____ involves a manufacturer purchasing wholesalers or retailers.

A) Forward integration
B) Contractual marketing
C) A manufacturer-sponsored voluntary chain
D) A franchising program

Question 56

Forward integration is typically evident when a:

A) manufacturer purchases wholesalers.
B) wholesaler purchases manufacturers.
C) producer sells wholesalers to retailers.
D) retailer purchases manufacturers.

Question 57

Which of the following is an example of forward integration in corporate vertical marketing system?

A) A car manufacturer acquiring a retail showroom
B) A car dealer achieving a direct channel of distribution without ownership
C) A grocery wholesaler buying a sugar manufacturer
D) A laptop distributor buying a computer chip maker

Question 58

In the context of vertical marketing systems, _____ systems are most similar to conventional channels.

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

Question 59

A retail cooperative organization, a wholesaler-sponsored voluntary chain, and various franchising programs are the three major types of _____ vertical marketing systems.

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

Question 60

_____ vertical marketing systems typically involve single ownership of two or more levels of a channel.

A) Administered
B) Contractual
C) Structured
D) Corporate

Question 61

Which of the following is an example of backward integration?

A) A coffee producer acquiring a chain of coffee shops
B) A car dealer acquiring an automobile spare parts manufacturer
C) A cigarette manufacturer buying a convenience store
D) A fleece fabric manufacturer buying a maker of winter clothing

Question 62

Which of the following is an advantage of franchising?

A) Franchisees tend to function as independent sub units with autonomy.
B) Franchisors tend to have complete control of franchisees in gaining financial success.
C) Franchisees tend to have greater motivation to make the business a success than employees of a company-owned store.
D) Franchisors tend to protect franchisees from possible legal exposure to illegal activities.

Question 63

Backward integration is typically evident when a:

A) manufacturer purchases wholesalers.
B) wholesaler purchases channel members above it.
C) producer purchases distributors below it.
D) manufacturer holds ownership of retailers.

Question 64

One of the limitations of franchising is that it:

A) provides less opportunities for additional profits through supplies sold to franchisees.
B) depends heavily on franchisees for financial success without full control of them.
C) requires many company managers and employees, thus increasing costs.
D) prevents expansion requiring more capital resulting in slower market penetration.

Question 65

Which of the following is an example of a specialty store?

A) Single-line stores
B) Supercenter outlets
C) Discount stores
D) Department stores

Question 66

Which of the following best describes category killers?

A) They are small retailers who handle deep assortments in a limited number of product categories.
B) They are single-line stores that emphasize a single product and effectively market it.
C) They are off-price retailers who compete more on the basis of offering large assortments at lower prices.
D) They are large, low-priced limited-line retail chains that attempt to dominate a particular product category.

Question 67

In which of the following stores is a narrow but very deep product assortment found?

A) A hypermarket
B) A category killer
C) A mass merchandiser
D) A convenience store

Question 68

_____ typically compete with other retailers on the basis of offering lower prices on products in their large assortments.

A) Warehouse clubs
B) Convenience stores
C) Department stores
D) Supermarkets

Question 69

_____ carry broad product assortments and compete on the basis of offering a good selection in different product categories and offering lower prices on products in their large assortments.

A) Specialty stores
B) Mass merchandisers
C) Convenience stores
D) Category killers

Question 70

Which of the following is true of wholesalers?

A) Owing to the distribution functions they perform, wholesalers do not need to actively seek out producers.
B) Agents, brokers, and manufacturers' representatives are types of wholesalers that take title to the merchandise they sell.
C) Wholesalers with track records that carry directly competing products and brands can more easily attract manufacturers of successful products.
D) Wholesalers tend to lower costs for other channel members by assuming the risk of managing large inventories.

Question 71

_____ handle deep assortments in a limited number of product categories.

A) Specialty stores
B) Mass merchandisers
C) Convenience stores
D) Warehouse clubs

Question 72

_____ involves wholesalers purchasing channel members above them.

A) Backward integration
B) Contractual marketing
C) Parallel ownership
D) Franchising system

Question 73

Which of the following is true of mass merchandisers?

A) They handle deep assortments in a limited number of product categories.
B) They compete on the basis of providing variety in different product categories and low-priced products in their large assortments.
C) They are retailers whose primary advantages to consumers are suitable location, close-in parking, and easy entry and exit.
D) They are large, low-priced limited-line retail chains that attempt to capitalize and establish themselves in a single product category.

Question 74

Which of the following is a store-based method of retailing?

A) Television home shopping
B) Vending machines
C) Electronic exchanges
D) Category killers

Question 75

Merchants that are primarily engaged in buying, taking title to, usually storing and physically handling goods in large quantities, and reselling the goods to retailers or to industrial or business users are called _____.

A) agents
B) franchisors
C) wholesalers
D) vendors

Question 76

Which of the following is a benefit wholesalers bring to manufacturers?

A) They reduce potential losses by assuming risks.
B) They increase the product alternatives available in local markets.
C) They reduce retail prices by the effectiveness contributed to the channel.
D) They provide information about industries and other retailers.

Question 77

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 diversification costs.

Question 78

_____ are retailers whose primary advantages to consumers are suitable location, close-in parking, and easy entry and exit.

A) Specialty stores
B) Mass merchandisers
C) Convenience stores
D) Category killers

Question 79

Which of the following is a benefit of wholesalers for end users?

A) They reduce retail prices by the efficiency and effectiveness contributed to the channel.
B) They reduce potential losses by assuming risks and offering expertise.
C) They provide the ability to reach diverse geographic markets cost effectively.
D) They provide potentially profitable products otherwise unavailable for resale in retail area.

Question 80

_____ compete with other retailers on the basis of offering a good selection in a number of different categories.

A) Warehouse clubs
B) Convenience stores
C) Department stores
D) Supercenters