Chapter 10
A direct channel is the simplest and shortest marketing channel, but most channels involve at least one intermediary. Which statement below describes a marketing intermediary? A. Wholesalers and retailers are both marketing intermediaries. B. Marketing through an intermediary is usually inefficient, expensive, and time-consuming. C. Intermediaries develop networks of independent representatives who sell directly to consumers. D. Marketing intermediaries do not take title to the goods they handle. E. Service firms market primarily through long intermediary channels.
A.
A standard rate for a specific commodity moving between any pair of destinations is known as a _____ rate. A. class B. repo C. special D. going
A.
A store's exterior appearance, including architectural design, window displays, signs, and entryways: A. helps identify the retailer and attract its target market. B. exerts a major influence on the pricing of the goods sold by the store. C. exerts no influence on the retailer's image. D. indicates the range and assortment of product lines it offers.
A.
A(n) _____ gathers buyers and sellers in one location and allows potential buyers to inspect merchandise before submitting competing purchase offers. A. auction house B. truck jobber C. commission merchant D. selling agent
A.
Birky Trucking is a family-owned trucking company serving the agriculture industry in the Midwest. They have a fleet of 8 trucks and establish contracts with individual farmers or manufacturing companies who contract with farmers such as Libby's and DelMonte. Birky Trucking does not offer their services to the general public and are classified as _____ carriers. A. contract B. private C. over-the-road D. common
A.
Casey's General Store is a popular ______-type retailer offering gasoline, snacks, extended store hours, and rapid checkout service. A. convenience B. grocery C. discount D. specialty
A.
Dmitri recently opened a sporting goods store. There are several other sporting goods stores in his town, all of which have been open for several years. These rival businesses offer reasonably priced goods as well as such "extras" as appointments with equipment consultants, in-house equipment personalization, and special ordering of items not included in the regular store inventory. Dmitri knows that he needs to make his new business stand out if it is going to compete successfully with the established businesses. According to the wheel of retailing, what strategy would help Dmitri gain a foothold for his business in the local sporting goods market? A. offer limited services and lower prices than his rivals B. offer a service that none of his rivals offer C. offer products and services that are slightly different from those of his rivals D. offer exactly the same product prices and services as his rivals E. offer the same services as his rivals and lower his prices
A.
Possession utility can occur even if the actual title is not transferred, as in the case of: A. car rentals. B. vending machine transactions. C. college education. D. beauty salon services.
A.
The basic antidote to channel conflict is effective cooperation among channel members. Who among the following is primarily responsible for providing the leadership necessary to achieve this kind of cooperation?' A. Channel captain B. Channel navigator C. Vertical leader D. Horizontal leader
A.
The process through which a manufacturer attempts to gain greater control over inputs in its production process, such as raw materials, is called _____ integration. A. backward B. balanced C. horizontal D. synergic
A.
The strategy of convincing a customer to buy a higher-priced item than he or she had originally intended is called: A. selling up. B. value-added selling. C. bait-and-switch selling. D. cross-selling.
A.
Which of the following factors is a characteristic of a long marketing channel? A. Durable and inexpensive products B. Manufacturers with broad product lines C. Manufacturers that cater to large orders of their products D. Marketers with a small and concentrated market
A.
Which of the following is the most frequently used form of direct marketing? A. Telemarketing B. Direct-response retailing C. Direct mail D. Online retailing
A.
You are considering the purchase of a McDonald's franchise. If the sale goes through, you will be involved in a marketing system known as a: A. Contractual VMS B. None of the above C. Franchisor-sponsored VMS D. Corporate marketing system E. Voluntary chain
A.
A _____ is a limited-function wholesaler that markets perishable food items. A. cash-and-carry wholesaler B. truck jobber C. mail-order wholesaler D. drop shipper
B.
AAA Insurance Company specializes in property and casualty insurance for individuals such as automobile and home insurance. The company has their own branch offices across the United States with representatives who only market AAA insurance policies. In addition, consumers can get quotes and purchase via the AAA web portal. AAA Insurance also works with independent insurance agents as a way to maximize their coverage in the marketplace. AAA insurance is utilizing ______. A. direct channel B. dual distribution C. reverse channels D. captive channel system
B.
An offering within a product line, such as a specific size of liquid detergent, is known as a(n) _____. A. product array element stock-keeping unit price look-up factor unique article number
B.
Brighton Jewelry is a manufacturer of fashionable jewelry and accessories for women such as wallets, purses, and belts. Their products are sold in specialty retail outlets as well as Brighton's own specialty stores which feature all of its products. By operating and managing their own retail outlets, Brighton is using _____ integration. A. multi-channel B. forward C. horizontal D. backward
B.
Customers who cannot afford to pay cash for purchases made directly from the manufacturer can buy those products from a wholesale intermediary who grants them credit for the purchase. Which of the following marketing functions is being performed by the wholesaler in this situation by granting credit? A. Production B. Financing C. Risk taking D. Transporting
B.
Dollar General is one of the fastest growing retail store chains in the United States and typically establishes store locations in under-served or rural towns. In the early days, the stores were small with limited product lines but as Dollar General has seen its revenues grow, it's built new stores, added product lines, and has become a major grocery and household item competitor. What concept explains the patterns of change over time for the Dollar General company? A. retail growth theorem B. wheel of retailing C. evolution of retail D. law of retail metamorphosis
B.
Slurry pipelines are typically used for the transportation of: A. jet fuel. B. coal. C. natural gas. D. kerosene.
B.
The U.S. Supreme Court has ruled that closed sales territories may meet the legal criteria if: A. the restriction agreement is between wholesalers. B. the restriction is a vertical territorial restriction. C. the restriction decreases competition. D. the restriction is a horizontal territorial restriction.
B.
The dominant and controlling member of a marketing channel is known as a: A. channel navigator. B. channel captain. C. vertical lead. D. horizontal lead.
B.
Vending machines are an example of: A. direct selling. B. automatic merchandising. C. Internet retailing. D. telemarketing.
B.
Which of the following factors is most likely to be associated with a short marketing channel? A. Manufacturer lacks adequate resources to perform channel functions. B. The products are perishable. C. The products require little or no technical knowledge and servicing. D. Manufacturer serves a geographically dispersed potential trade area.
B.
Which of the following modes of transportation ranks highest in terms of availability in different locations? A. Pipelines B. Motor carriers C. Water freight D. Railroads
B.
Which of the following wholesaling intermediaries delivers goods to the consumers? A. A selling agent B. A commission merchant C. An auction house D. A broker
B.
When a logistics manager combines several unitized loads into a single, well-protected load for shipment, it is called: A. consolidation. B. palletization. C. containerization. D. suboptimization.
C
Advertising in which the manufacturer pays a percentage of the retailer's advertising expenditures and the retailer prominently displays the firm's products is known as _____ advertising. A. affinity B. community C. cooperative D. sustainable
C.
Direct selling is a marketing channel that moves goods directly from producer to the: A. marketing intermediary. B. retail storage warehouse. C. ultimate consumer or business purchaser. D. channel captain.
C.
Freight carriers are classified as common carriers, contract carriers, and private carriers. Which of the transactions below was completed using a contract carrier? A. A food manufacturing company ships snacks, soft drinks, and bottled water to convenience stores. B. A major appliance retailer delivers a refrigerator, range, and microwave oven suite to a customer's home. C. A motor carrier transports automobiles in intrastate, interstate, and foreign commerce. D. An artisan sells her wares online and ships them via a for-hire carrier. E. A company ships merchandise from its warehouses to its retail outlets nationwide in its own fleet of trucks.
C.
Reminding a customer that the flashlight he just purchased requires batteries (which are available for sale) would be an example of: A. selling up. B. bait-and-switch selling. C. suggestive selling. D. cross selling.
C.
The basic distinction between a company's sales branches and its sales offices is that: A. sales branches are always national, whereas sales offices are always local. B. sales branches are used only for services, whereas sales offices are used only for physical goods. C. sales branches carry inventory whereas sales offices do not. D. sales branches are manufacturer-owned, whereas sales offices are not.
C.
The distinctions between the types of retailers and the merchandise they offer are getting blurred because of: A. home selling. B. direct selling. C. retail convergence. D. mass merchandising.
C.
When the same branded product is carried in competing retail pharmacies, discount houses, department stores, and convenience stores, the marketing channel conflict that can result is referred to as: A. cross-channel conflict. B. vertical conflict. C. horizontal conflict. D. exclusive conflict.
C.
Which of the following modes of transportation controls the largest share of the freight business as measured by ton-miles? A. Water carriers B. Motor carriers C. Railroads D. Pipelines
C.
You represent a group of investors who are interested in entering the retail business. Many of these investors have significant past experience working with retailers, and they realize that the retail world is very competitive. They are also aware of the high failure rate for startups in this industry, so they ask you to recommend a retail strategy that could minimize potential losses by meeting the following criteria: Overall operating expenses would be low. No traditional storefront or personal selling would be necessary. Minimal customer service would have to be provided. Customers would be able to place orders via the Internet, telephone, or mail. Based on the investors' preferences, which retail strategy would you recommend? A. automatic merchandising B. telemarketing C. catalog marketing D. direct selling E. television home shopping
C.
_____ make regular deliveries to retailers, perform sales and collection functions, and promote product lines. A. Boundary spanners B. Drop shippers C. Truck jobbers D. Clearing agents
C.
Some supermarkets now offer in-store bank branches, photography studios, and Starbucks or Dunkin' Donuts outlets. This is an example of: A. Scrambled merchandising B. Supercenters C Hypermarkets D. Direct marketing E. Retail convergence
C.
When purchasing a new home, Tim and Brenda were represented by their realtor and met at their attorney's office to authorize the paperwork transferring the home from the sellers to them. The attorney provided _____ utility as part of the purchase of the home. A. time B. legal C. possession D. place
C.
You handle transportation issues for a chain of department stores selling clothing, furniture, and home lighting fixtures. The primary mode of transport you rely on is: A. Railroads B. Motor carriers C. Common carriers D. Water carriers E. Air freight
C.
A mail-order wholesaler is a limited-function merchant wholesaler that: A. conducts its business by sending sales representatives to contact retail, business, and institutional customers. B. exerts full authority over pricing decisions and promotional outlays, and even provides financial assistance for the manufacturer. C. accepts orders from customers and forwards these to manufacturers who ship the products direct to the customer. D. distributes catalogs instead of sending sales representatives to contact customers.
D.
A planned channel system designed to improve distribution efficiency and cost-effectiveness by integrating various functions throughout the distribution chain is called a(n) _____ marketing system. A. integrative B. intensive C. associative D. vertical
D.
A vertical marketing system (VMS) in which a single owner operates the entire marketing channel is called a(n) _____ marketing system. A. contractual B. community C. administered D. corporate
D.
A wide variety of services such as charge accounts, delivery, gift wrapping, and liberal return privileges are most likely to be associated with _____. A. industrial distribution stores B. clearing houses C. merchandise mart D. department stores
D.
Clarke's, a popular and high-end brand of men's formalwear, has just five main distributors to cater to the five zones in the country: north, south, east, west, and central. According to the information given in this case, Clarke's uses: A. contractual collusion. B. tying agreements. C. intensive distribution. D. closed sales territories.
D.
Macy's focuses on fashion-oriented merchandise, backed by a complete array of customer services. Hence, Macy's can be regarded as a: A. partial-assistance retailer. B. self-service retailer. C. self-selection retailer. D. full-service retailer.
D.
The management at Granger Industries is evaluating their distribution system to determine if cost-cutting measures will impact performance. Ralph, an employee with experience in the implementation of total quality management programs, suggests that the company should consider synergies between elements of the distribution system instead of judging each activity on its own merits. Ralph is trying to avoid: A. polarization. B. the framing problem. C. the optimism bias. D. suboptimization.
D.
The two broad categories of independent wholesaling intermediaries include agents and brokers, and _____. A. full-function intermediaries B. contract agents C. exclusive-function intermediaries D. merchant wholesalers
D.
Which of the following functions as a manufacturer's representative? A. A retailer B. An industrial distributor C. A wholesaler D. A broker
D.
Which of the following is most likely to be an example of a mass merchandiser? A. A rack jobber B. A trade fair owner C. A convenience retailer D. A catalog retailer
D.
You are conducting a business startup workshop sponsored by the Small Business Administration. The workshop attendees are all aspiring business owners who are excited yet fearful about the prospect of starting their own businesses. Earlier in the workshop, you asked the attendees to complete a questionnaire about their major concerns in starting a new business. The majority of the respondents indicated their biggest concern is lack of business experience. Based on this concern, which of the following business strategies is most appropriate for these workshop attendees? A. start their business as a merchant wholesaler B. start their business as a franchiser C. start their business as a full-service wholesaler D. start their business as a franchisee E. start their business as a mail-order wholesaler
D.
DHL is one of the top companies specializing in handling logistics activities to other firms especially in the international sector. For example, DHL was under contract to assist Prestige Distributors to transport a container ship of French wine to the United States and provided its expertise to ensure transportation from each wine maker to the port as well as managed all export duties. In this case, DHL is operating as a(n): A. administered logistics provider B. upstream management contractor C. downstream management contractor D. third-party logistics firm
D.
Walmart is the largest retailer in the world and is known for being very demanding with its suppliers. Walmart exerts control over its suppliers due to its large size and buying capacity and manufacturers often acquiesce to the demands made by Walmart. Walmart is an example of a channel _______. A. sponsor B. leader C. intermediary D. captain
D.
You have been asked to evaluate the services provided to your book publishing firm by its wholesaling intermediaries. To begin, you create a table listing the types of services your firm expects to receive from each of these specialists. The table includes all of the following except: A. Evaluating the credit risk of small or independent book shops B. Providing prompt delivery of new books C. Maintaining book warehouses D. Providing a sales force to call on bookstores E. Repairing damaged books
E
An independent wholesaling intermediary who brings together buyers and sellers but represents only one of the parties and receives a fee when the transaction is completed is a ______________. A. manufacturers' representative B. commission merchant C. rack jobber D. selling agent E. broker
E.
An independent wholesaling intermediary who brings together buyers and sellers but represents only one of the parties and receives a fee when the transaction is completed is a ______________. A. manufacturers' representative B. commission merchant C. rack jobber D. selling agent E. broker
E.
Which of the following independent wholesaling intermediaries ranks as a relatively high-cost intermediary because of the number of services it performs? A. Drop shipper B. Mail-order wholesaler C. Cash-and-carry wholesaler D. Rack jobber
NOT B
Which of the following wholesaling intermediaries carries inventory? A. A commission merchant B. A manufacturer's agent C. A selling agent D. A broker
NOT B
Which type of non-store retailing both allows products to be easily demonstrated and allows time for prospective customers to become well informed about the product? A. automatic merchandising B. mail-order wholesaling C. television home shopping D. telemarketing E. catalog marketing
NOT E.
Logistics is the process of coordinating the flow of information, goods, and services among members of the distribution channel. True or False?
True
Who among the following is an agent who predominates in the markets for agricultural products?
a commission merchant
When choosing a distribution strategy, manufacturers also focus on developing and maintaining relationships with those in their marketing channels. What is this concept called? Select the best answer from the choices below.
channel management
A VMS that coordinates channel activities through formal agreements among participants is called a(n) _____ marketing system.
contractual
After studying the success of direct marketers like Amway and Tupperware, you've decided to build a skin care business based on this nonstore retailing approach. Choose the direct marketing tools you could use.
direct mail, telemarketing, mail-order catalogs, direct shopping
A storage warehouse assembles and redistributes goods, keeping them moving as much as possible. True or false
false
In the case of convenience stores, customers usually compare prices, assortments, and quality levels at competing outlets before making purchase decisions.
false
Mass merchandisers usually provide the same depth of assortment as a department store within each product line.
false
The terms "transportation" and "physical distribution" can be used interchangeably because these terms carry the same meaning.
false
When a producer grants exclusive rights to a wholesaler or retailer to sell its products in a specific geographic region it practices intensive distribution.
false
Conflicts resulting from disagreements among channel members at the same level, such as two or more wholesalers or two or more retailers, or among marketing intermediaries of the same type are called _____ conflicts.
horizontal
Some supermarkets now offer in-store bank branches, photography studios, and Starbucks or Dunkin' Donuts outlets. This is an example of:
hypermarkets
Frito Lay is owned by Pepsi and has a variety of billion dollar brands such as Doritos, Cheetos, Lays, and Ruffles. These famous snack brands are available in a wide variety of sizes at almost every store location and vending center - from gas stations, to dollar stores, grocery stores, drug stores and super centers. Which level of distribution intensity does Frito Lay utilize?
intensive
When buyers refuse to pay a product's stated price or when improvements in other items or fashion changes reduce the appeal of the current merchandise, a retailer must take a _____.
markdown
The situation in retailing in which similar merchandise is available from multiple retail outlets distinguished by price more than any other factor is known as:
retail convergence
The strategy of convincing a customer to buy a higher-priced item than he or she had originally intended is called:
selling up
The concept of the wheel of retailing attempts to explain:
the patterns of change in retailing
Typically, bread and dairy products are delivered to stores by wholesale intermediaries called:
truck wholesalers
Telemarketing is the most frequently used form of direct marketing and provides high returns to the marketers on their expenditures.
true
The first thing to do in selecting a marketing channel is to determine which type of channel will best meet both the seller's objectives and the distribution needs of customers. True or False?
true
Wholesaling intermediaries create utility in the form of time, place, and ownership.
true
Which of the following modes of transportation offers the most flexibility in handling?
water freight
