Question 1

A direct channel of distribution is one that involves only one intermediary.

Accepted Answer

A direct channel of distribution involves no intermediaries; the manufacturer sells directly to the consumer.

Question 2

Annabelle's company makes pottery. She would like to expand her business and is looking for ideas. Which of the following would you advise her to do?
A) Think outside the box; go into a completely different line of products.
B) Pursue innovation that customers will perceive as adding excitement to their lives.
C) Base innovative efforts on her experience.
D) Focus on products or services offered by her largest competitors.

Accepted Answer

The answer of Annabelle's company makes pottery. She would like...

Question 3

Physical distribution of products includes only transportation.

Accepted Answer

Physical distribution of products includes not only transportation but also inventory management, order processing, warehousing, and customer service.

Question 4

If a firm extends a janitorial cleanser from the industrial market to reach the home market, it is following a one product/multiple markets strategy.

Accepted Answer

This statement is true. A one product/multiple markets strategy involves selling the same product to multiple markets or segments. In this scenario, the firm is selling their janitorial cleanser to both the industrial and home markets.

Question 5

Thanks to the national press, Wonderful Gifts has had 100 percent more orders placed in this quarter than in the last quarter. The company could be caught in a _____ if proper planning does not occur.
A) growth net
B) growth trap
C) profit net
D) profit trap

Accepted Answer

The term "growth trap" refers to a situation where a company experiences rapid growth without having the necessary resources or infrastructure in place to sustain it. In this case, Wonderful Gifts has seen a significant increase in orders due to media exposure, but without proper planning and preparation, they may not be able to fulfill those orders in a timely manner or maintain quality control. Therefore, a growth trap is the most appropriate term to describe their situation.

Question 6

Distribution is essential for tangible products, but not for intangible products.

Accepted Answer

While distribution may look different for intangible products, it is still essential in order to get the product in front of potential customers and create brand awareness. For example, marketing efforts, online advertising, and word-of-mouth can all be forms of distribution for intangible products.

Question 7

Attorneys are rarely used by entrepreneurs when conducting a trademark search.

Accepted Answer

It is highly recommended for entrepreneurs to consult with a trademark attorney when conducting a trademark search to ensure that all potential conflicts are identified and properly addressed.

Question 8

Channel management is synonymous with the term logistics.

Accepted Answer

Channel management refers to the process of managing relationships and communication between a company and its distribution partners, while logistics refers specifically to the movement and storage of goods. While they are related, they are not synonymous terms.

Question 9

A garden center selling two varieties of mint plant has one product item in two product lines.

Accepted Answer

The information provided is insufficient to determine whether the garden center sells one product item in two product lines or two different product items in the two product lines.

Question 10

A utility patent covers the appearance of a product and its inseparable parts.

Accepted Answer

A utility patent actually covers the functionality and usefulness of an invention or process, not the appearance or design. Design patents are the ones that cover the appearance of a product and its inseparable parts.

Question 11

The three main considerations in evaluating a channel of distribution are costs, coverage, and customer service.

Accepted Answer

The answer of The three main considerations in evaluating a...

Question 12

Successful growth
A) happens on its own.
B) occurs only when a number of factors are carefully considered and well managed.
C) should be easy if the owner has the correct management style.
D) will keep most business functions the same, just larger in scope.

Accepted Answer

Successful growth requires careful consideration and management of multiple factors, such as financial resources, organizational structure, marketing strategies, and human resources. It is not a passive or easy process that can be achieved solely through the correct management style, and it often involves changes in various business functions to accommodate the larger scale. Therefore, option A, C, and D are incorrect.

Question 13

Which of the following statements is true about company growth?
A) Successful growth occurs on its own.
B) A high-growth firm's need for additional financing may exceed its available resources, even though the venture is profitable.
C) Inventory needs will increase while account receivables will decrease with growth.
D) While rapid growth may stress personnel, the increase in pay will be sufficient.

Accepted Answer

High-growth firms often require additional financing to sustain their growth, even if the venture is profitable. This is because the need for financing may exceed the resources available to the company. The other statements are false. Successful growth requires strategic planning and effort, inventory needs and account receivables may both increase with growth, and rapid growth can create personnel challenges beyond just compensation.

Question 14

Using 3PLs is considered more cost effective by many small businesses because it allows them to focus on their primary operations and outsource the accounting challenges to another company.

Accepted Answer

Using 3PLs (Third-Party Logistics) is considered more cost-effective by many small businesses because it allows them to outsource logistics and supply chain management, not accounting challenges, to another company, enabling them to focus on their core activities.

Question 15

Which of the following statements is correct concerning the role of innovation for small businesses?
A) Fortune magazine reports that 93 percent of company founders indicated that their business turned out to be nothing like their original venture concept.
B) Studies have shown that small entrepreneurial firms produce 95 percent as many innovations per employee as large firms.
C) According to Clayton Christensen, 60 percent of all new products end up failing or performing well below expectations.
D) Small entrepreneurial firms produce twice as many innovations per employee as large firms.

Accepted Answer

Studies have shown that small entrepreneurial firms produce twice as many innovations per employee as large firms. This demonstrates the importance of innovation for small businesses and their ability to compete with larger firms.

Question 16

Trade dress describes those elements of a firm's distinctive operating image that are specifically protected under a trademark, patent, or copyright.

Accepted Answer

Trade dress refers to the visual appearance of a product or its packaging that signifies the source of the product to consumers, and it is protected under trademark law, not patent or copyright.

Question 17

Distribution includes only the physical movement of products.

Accepted Answer

Distribution includes not only the physical movement of products but also the activities related to the delivery of products or services to the end-users or customers. It involves managing the logistics, inventory, transportation, and delivery of products to different locations.

Question 18

According to the Food and Drug Administration regulations, food products must have a standard nutrition label listing the amounts of calories, fat, salt, and nutrients in the product.

Accepted Answer

The answer of According to the Food and Drug Administration...

Question 19

Shippers that own their own means of transport are called private carriers.

Accepted Answer

Private carriers are shippers that own their own means of transportation.

Question 20

Delivery terms include paying the freight costs, selecting the carriers, bearing the risk of damage in transit, and selecting the modes of transport.

Accepted Answer

Delivery terms commonly include all of these factors, which determine responsibility and costs associated with the shipment of goods.

Quiz 15: Product Development and Supply Chain Management