Question 1

Intensive distribution is the use of only a portion of the available outlets for a product in each geographic area.

Accepted Answer

Intensive distribution is the use of all available outlets for a product in each geographic area. So, the statement given is false.

Question 2

Wholesalers assume the credit risk for producers by extending retailers credit, collecting payment from retailers, and assuming the risk of nonpayment.

Accepted Answer

Wholesalers often provide credit to retailers and are responsible for collecting payments from retailers. Therefore, they assume the credit risk for the producers by guaranteeing the payment from the retailers and assuming the risk of nonpayment.

Question 3

In a channel of distribution, the function of wholesaling must be performed, but the wholesaler can be removed.

Accepted Answer

While the function of wholesaling is necessary in a channel of distribution, it is possible for the wholesaler to be removed through alternative strategies such as direct selling or dropshipping.

Question 4

Use of barcodes and EDI technology can be closely related to positive results in supply-chain management.

Accepted Answer

Barcodes help in tracking inventory and reducing errors in data entry, improving supply-chain efficiency. EDI technology allows for automated communication between trading partners, reducing the need for manual data entry and improving communication speed and accuracy in the supply chain. Together, they can lead to positive results in supply-chain management.

Question 5

Eliminating wholesalers would bring prices down.

Accepted Answer

Eliminating wholesalers could actually increase prices as they perform important functions such as sourcing products, negotiating with manufacturers, and distributing goods to retailers. Without wholesalers, manufacturers would have to take on additional costs and responsibilities, which could lead to higher prices for consumers.

Question 6

Producers of business products generally tend to use long channels of distribution.

Accepted Answer

Producers of business products typically use shorter channels of distribution, often selling directly to business users or through a limited number of intermediaries, to maintain control over the distribution process and reduce costs.

Question 7

Moving products from producer to wholesaler to retailer to consumer is called the traditional channel because most consumer goods are sold this way.

Accepted Answer

The statement is true. The traditional channel involves the movement of products from the producer to the wholesaler, then to the retailer, and finally to the consumer.

Question 8

In a corporate vertical marketing system, actual ownership is the vehicle by which production and distribution are joined.

Accepted Answer

In a corporate vertical marketing system, a single entity owns multiple levels of the production and distribution process. This ownership allows for better coordination and control within the system.

Question 9

Middlemen between the producer and the consumer in the chain of marketing organizations are called marketing intermediaries.

Accepted Answer

Marketing intermediaries are individuals or organizations that stand between the producer and final purchaser, such as wholesalers, retailers, and brokers.

Question 10

Supply-chain management primarily focuses on two or more stages of the marketing channel under one management.

Accepted Answer

The answer of Supply-chain management primarily focuses on two or...

Question 11

Exclusive distribution is usually limited to very prestigious products like jewelry or fine china.

Accepted Answer

Exclusive distribution aims to limit the availability of a product to create a sense of prestige and exclusivity, making it a suitable strategy for high-end or luxury products like jewelry or fine china. Therefore, the statement is true.

Question 12

Category management involves a direct channel from a producer to a retailer without including any marketing intermediaries.

Accepted Answer

Category management involves collaboration and coordination between producers, retailers, and marketing intermediaries to optimize the performance of a specific product category. It is a strategic approach that aims to increase sales, reduce costs, and improve customer satisfaction. Marketing intermediaries, such as distributors, wholesalers, and brokers, play a crucial role in facilitating the flow of goods and information between producers and retailers, and adding value to the overall supply chain.

Question 13

Exclusive distribution is the use of a single retail outlet in each geographic area.

Accepted Answer

Exclusive distribution involves limiting the distribution of a product to one retail outlet in a specific geographic area in order to maintain control over pricing, promotion, and brand image.

Question 14

Vertical channel integration occurs when a manufacturer controls its entire supplier channel.

Accepted Answer

Vertical channel integration occurs when a company controls multiple stages of the supply chain, either from production to retail or from raw materials to production, not just its entire supplier channel.

Question 15

The most direct channel for consumer products is from producer to retailer to consumer.

Accepted Answer

The most direct channel for consumer products is from producer directly to consumer, eliminating any intermediaries.

Question 16

The use of only a single retail outlet in each geographic area would be an example of selective distribution.

Accepted Answer

Selective distribution involves using more than one, but not all, available outlets in a geographic area, whereas using only a single outlet is an example of exclusive distribution.

Question 17

Under an administered vertical marketing system, an outside agent manages the marketing channel, including production and distribution.

Accepted Answer

In an administered vertical marketing system, coordination and management across the marketing channel are achieved through the size and power of one of the parties involved, not through an outside agent.

Question 18

Bill Yee was granted franchise rights from McDonald's for the community in which he lives. McDonald's practice of granting franchises for specific geographic areas is commonly known as selective distribution.

Accepted Answer

This statement is true. McDonald's practice of granting franchises for specific geographic areas is known as selective distribution.

Question 19

After six years in business, Hellman Candy Company still found it difficult to predict seasonal demand for its line of assorted chocolates. To remedy the situation, Chris, the director of marketing, contacted Hellman's wholesalers for estimates of consumer demand during peak seasonal times. The service that these wholesalers provide is referred to as reducing inventory costs.

Accepted Answer

The service that the wholesalers are providing is not reducing inventory costs, but rather providing demand estimates to help with demand planning and forecasting.

Question 20

When a producer wants to give its product the widest possible exposure in the marketplace, it chooses intensive distribution.

Accepted Answer

Intensive distribution is a strategy in which a producer aims to make its product available in as many outlets as possible to achieve maximum market coverage. This strategy is ideal for products with high demand and low differentiation.

Quiz 14: Wholesaling, Retailing, and Physical Distribution