Question 1

McKesson Company provides health care products to pharmacies. For example, it purchases bandages, gauze, antibacterial cream, and ointments (or anything else you would need to treat a cut or scrape) from a variety of different manufacturers. Its goal is to provide each pharmacy with every item a customer might want to treat a cut. What is McKesson overcoming to aid consumers?

Accepted Answer

McKesson is providing the pharmacies with a wide range of products to address the discrepancy of assortment - ensuring that the pharmacies have a variety of products to offer their customers for treating cuts and scrapes.

Question 2

Aspen Furniture operates only one manufacturing plant in Edmonton, although it has end-customers in both Asia and Europe. What type of discrepancy has been created?

Accepted Answer

The discrepancy created is spatial because the manufacturing plant is located only in Edmonton, while the end-customers are located in different continents, Asia and Europe.

Question 3

Cutter & Buck is a high-end fashion sportswear company. Even though swimwear is a product category that does not sell year-round, its sales remain steady all year because Cutter & Buck sells to wholesale distributors that stock the product. Which type of discrepancy are its wholesale distributors helping to overcome?

Accepted Answer

Wholesale distributors help to overcome temporal discrepancy, which refers to the mismatch between the timing of production and the timing of consumption. In this case, the swimwear is not in demand year-round but the distributors stock it, ensuring that there is steady availability throughout the year.

Question 4

Walmart offers many product categories under one roof. This reduces the number of stores customers must shop in to complete their purchases. In this case, what does Walmart provide?

Accepted Answer

Walmart provides contact efficiency by offering multiple product categories under one roof. This means customers don't have to visit multiple stores to complete their purchases, saving time and effort. Horizontal integration refers to a company acquiring or merging with other companies in the same industry, which is not the case with Walmart. Vertical integration involves a company owning or controlling its entire supply chain, which is also not applicable in this scenario. Reciprocity refers to a mutual exchange of benefits or privileges, which is not relevant in this case.

Question 5

How can marketing channels achieve economies of scale?

Accepted Answer

Economies of scale refer to the cost advantages that arise from producing larger quantities of a particular product. As a marketing channel produces more of a single product, it can take advantage of cost savings such as bulk purchasing discounts, efficient manufacturing processes, and reduced per-unit transportation costs. Therefore, producing large quantities of a single product can help achieve economies of scale in marketing channels.

Question 6

R.H. Kurt & Son Inc. distributes rifles for hunting and target shooting to sporting equipment retailers and many large discount stores. It carries products from 41 different manufacturers. What is its marketing channel composed of?

Accepted Answer

The marketing channel for R.H. Kurt & Son Inc. is composed of the 41 different manufacturers whose products it carries, R.H. Kurt as the distributor, the retailers it serves, and their customers. It is not solely composed of the transportation, storage, inventory control, materials handling, and order processing functions, or the trucking companies that deliver the rifles. It also includes any organization that had a part in moving the product from the distributor to the retailer, but this is not a comprehensive description of the channel.

Question 7

R.H. Kurt & Son, Inc., distributes rifles for hunting and target shooting to sporting equipment retailers and many large discount stores. Customers at retail stores want only one rifle or one scope. They do not want to buy in the quantities the manufacturers need to sell. Which of the following discrepancy can be overcome by the marketing channels?

Accepted Answer

Marketing channels help overcome the discrepancy of quantity by breaking down large quantities from manufacturers into smaller, more manageable amounts that individual consumers want to purchase.

Question 8

Walmart sells all over the globe and is currently considering manufacturing its own line of computers. Keeping this in mind, how can they attain economies of scale?

Accepted Answer

Economies of scale can be achieved through specialization and division of labor when a company focuses on producing a large volume of goods with standardized production methods. By manufacturing their own line of computers, Walmart can optimize their production process to achieve greater efficiency and reduce costs. This means that they could potentially produce computers at a lower cost per unit due to the higher volume of production.

Question 9

To facilitate manufacturing in India, Tata Automotive uses many different local suppliers of key component parts. What are these suppliers part of for Tata Automotive?

Accepted Answer

The answer of To facilitate manufacturing in India, Tata Automotive...

Question 10

A manufacturer may produce only one product, yet additional products may be required to actually use the first product. What does this create?

Accepted Answer

This creates a discrepancy of assortment, where the manufacturer may only produce one type of product but additional products are required to actually use or fully experience the first product. For example, a printer manufacturer may only produce printers but customers also need to buy ink cartridges to use the printer. This creates a discrepancy in the assortment of products that the manufacturer offers.

Question 11

YKK slide fasteners (zippers) are made in Brandon, Manitoba, yet manufacturers all over the world use YKK zippers to manufacture clothes, luggage, shoes, and other items. Which type of discrepancy do wholesalers around the world primarily help to overcome?

Accepted Answer

Wholesalers help to overcome spatial discrepancy by distributing goods from the manufacturer to retailers and consumers in different geographical locations. In the case of YKK zippers, wholesalers help to distribute the zippers made in Brandon, Manitoba to manufacturers around the world, thus overcoming the spatial discrepancy of having the manufacturer in one location and the users of the zippers in various other locations.

Question 12

What is the term for a business structure of interdependent organizations that reaches from the point of product origin to the consumer?

Accepted Answer

The term for a business structure of interdependent organizations that reaches from the point of product origin to the consumer is a marketing channel or channel of distribution. Option A (a marketing mix channel) is not a widely recognized term and does not refer to the complete structure of distribution. Option B (a selective distribution channel) refers to a distribution method in which a limited number of outlets are chosen to sell a product, but it does not encompass the entire structure of distribution. Option D (a transportation channel or channel of movement) refers only to the physical movement of goods from one point to another, and does not encompass the multiple organizations involved in the entire distribution process.

Question 13

Virtual Supermarket only sells Aunt Jemima pancake mix. Once customers have purchased the mix, they must purchase their syrup, butter, knives, forks and plates somewhere else. What has Virtual Supermarket created?

Accepted Answer

Virtual Supermarket only sells a limited range of products, creating a discrepancy of assortment where customers need to purchase other necessary items elsewhere.

Question 14

Ontario Natural Food is a grocery wholesale cooperative, it provides all kinds of meats, cereals, canned and fresh fruits and vegetables, beauty aids, healthcare items, and pet products to the supermarkets in its channel. What is Ontario Natural Food overcoming to aid its customers?

Accepted Answer

Ontario Natural Food is overcoming the discrepancy of assortment by providing a wide range of products to its customers, ensuring that the supermarkets have access to a diverse selection of items for their customers.

Question 15

Taco Bell sells Mexican-style food using various channels of distribution. Beef and vegetables are key ingredients used by Taco Bell. What are beef producers, vegetable growers, Taco Bell, and consumers part of?

Accepted Answer

Beef producers and vegetable growers are part of the upstream portion of the marketing channel, supplying raw materials to Taco Bell. Taco Bell is part of the downstream portion of the marketing channel, transforming these raw materials into finished products and distributing them to consumers through various channels such as restaurants, delivery, and retail. Therefore, they are all part of a marketing channel.

Question 16

In order to achieve low unit costs, Logitech Electronics has only produced 1000 computer mice. It's wholesale customers want to buy at least 1500 units. What has the quantity produced to achieve low unit costs created?

Accepted Answer

The production quantity of 1000 units created a discrepancy of quantity, as there is a difference between the quantity produced and the quantity demanded by wholesale customers. This could potentially lead to higher unit costs if Logitech Electronics decides to produce additional units to meet demand, as they may not be able to achieve the same low unit costs due to economies of scale.

Question 17

Vicobello is a major manufacturer of outdoor fountains that are currently popular in gardens. Even though fountains represent a product category that does not sell year-round due to inclement weather, Vicobello's sales remain steady all year because it sells to wholesale distributors that stock the product. Which type of discrepancy are its wholesale distributors primarily helping to overcome?

Accepted Answer

Vicobello's sales remain steady all year because its wholesale distributors stock the product, helping to overcome the temporal discrepancy, which is the difference in the timing of production and consumption.

Question 18

When a consumer goes to a sporting goods store to buy a rifle scope and cleaning equipment and discovers the store does not carry rifle scopes, what is created that results in the consumer dissatisfaction?

Accepted Answer

A discrepancy of assortment occurs when a store does not carry a specific product that a consumer is looking for. In this case, the consumer was looking for a rifle scope which the store did not carry, resulting in dissatisfaction.

Question 19

Quaker Oats can efficiently produce its Aunt Jemima instant pancake mix at a rate of 5000 units in a typical day. What has the quantity produced to achieve low unit cost led to?

Accepted Answer

The quantity produced to achieve low unit cost has led to a discrepancy of quantity, which occurs when the amount produced by the manufacturer does not match the amount desired by the consumer. In this case, producing 5000 units in a day may exceed immediate consumer demand, creating a surplus.

Question 20

Cianin Limited, a Christmas decoration manufacturer, produces its products all year round despite the fact that customers are not ready to buy their products until Christmas. What kind of discrepancy has been created?

Accepted Answer

Cianin Limited has created a temporal discrepancy by producing Christmas decorations all year round, despite the fact that customers only want to buy them during the Christmas season.

Quiz 14: Marketing Channels and Supply Chain Management