Marketing Exam 3

Merchant wholesalers:

Are independently owned firms that engage primarily in wholesaling and take title to products being distributed.

Toys "R" Us employed its purchasing power with toy producers Mattel and Hasbro to coerce them into not selling to competing retailers such as Costco and Sam's Club. Toys "R" Us actions resulted in [...]

Horizontal channel conflict.

Assume that a number of Texas oil refiners decide to work together to unformly restrict output with the goal of stablizing declining prices. These firms are likely to be accused of [...]

Horizontal price fixing

A retail store's [...] include the decor, merchandise arrangement and crowding, general layout, background music, color schemes, scents, acoustics and noise levels, lighting, and cleanliness of stores

Internal atmospherics

Retailers work hard to design in-store sensory environments that postively affect one or more of consumers' five senses in order to increase the likelihood of a positive emotional experience. These retailers are focusing on creating positive [...]

Internal atmospherics

Which of the following is not a federal law that regulates aspects of supply chain relationships?

Lanham Trademark Act

The number of different product lines carried by a retailer is it

Merchandise breadth

Stores such as Family Dollar and Dollar General tend to locate their facilities in [...] in order to target consumers living nearby, attracting consumers who are primarily interested in a combination of convenience and lower prices

Neighborhood centers

[...] include stores such as Ross Dress For Less, Dress Barn, T.J. Maxx, DSW Designer Shoe Warehouse, and Marshall's.

Off-price retailers

[...] sell seconds, production overruns, discontinued, outdated or out-of-season brand name merchandise at prices that are often below those charged by other discount stores for comparable merchandise.

Off-price retailers

The physical movement of finished goods from producers to middlemen and, eventually, to consumers is:

Physical distribution

is variously called rent, tuition, interest, fee, toll, wage, commission, dues, salary, bribe, blackmail, and more.

Price

Which distribution channel is the manufacturer of small fireproof safes for businesses most likely to use?

Producer to industrial distributor to user

The most common channel of distribution for consumer goods is [...]

Producer → Wholesaler → Retailer → Consumer

Consider the following statement: "If the net profit margin on each sales dollar earned is 5%, a supply chain operational savings of $5,000 yields the same return to the Firm's bottom line as would a sales increase of $100,000." This statement reflects:

Profit leveraging of costs

A grocery store chain has decided to sell a small assortment of fast moving hardware items. However, it is not certain what stock to carry in which stores and does not want to leave the decision to the local store manager. The chain could use a:

Rack jobber

[...] exist and operate as the last link in supply chains, primarily making sales to ultimate consumers.

Retailing intermediaries

Amazon.com sells products via the Internet predominantly to ultimate consumers for their own personal or household use. Amazon is a

Retailing intermediary

[...] attempt to avoid price competition, prefering instead to differentiate themselves by precisely targeting customer segments with narrow and deep assortemts of specialized product lines and by providing superior customer service and friendly, knowledgeable sales staff.

Specialty stores

Which channel function creates time utility for consumers?

Storage

The channel of distribution for consumer products does not include which of the following?

Suppliers of component parts to the producer

[...] are groups of independent firms involved in the process of making products or services available for use or consumption by organizations or consumers.

Supply chains

The main difference between agent middlemen and merchant wholesalers is:

That agent middlemen do not own the products they sell--while merchant wholesalers do.

The sequence of organizations and individuals through which finished consumer goods move is called:

The channel of distribution

Estee Lauder Co. now sells most of its flagship products directly online. This choice, made around 2000, resulted in substantial [...] with the various high-end retailers through which it had been selling.

Vertical supply chain conflict.

[...] is most likely to arise when manufacturers attempt to bypass wholesalers or retailers and sell direct to consumers.

Vertical supply chain conflict.

Grainger Worldwide buys a wide range of industrial products (mainly maintenance, repair, and operating supplies) from manufacturers and resells these products to other business users. When making sales to its customers, Grainger is engaged in

Wholesaling

Grainger Worldwide buys a wide range of industrial products (mainly maintenance, repair, and operating supplies) from manufacturers and resells these products to other business users. Grainger is a [...]

Wholesaling intermediary

[...] includes all activities involved in selling goods and services to ultimate consumers for their own personal use.

Retailing

A manufacturer sells a product for $35 to a wholesaler, and the wholesaler sells it to a retailer. The wholesaler's normal markup (based on selling price) is 20%. The retailer prices the item to consumers to include a 30% markup (also based on selling price). What is the selling price to the consumer? (Select the closest answer)

$63.00

Consider the following data: TFC = $1,500,000 per year; price = $.79; AVC = $.39. What is the Unit Contribution? (Select the closest answer)

.39

The rent for a booth at the local flea market is $150 per month with a $15 charge for utilities. The variable cost per picture frame sold is $5. The selling price for each frame is $20. Calculate the break-even point in units. (round to the nearest unit).

11

Assume that you are estimating the demand curve for a product using buy-response data and have collected the following via a survey:

450,000 units

Consider the following data: TFC = $1,500,000 per year; price = $.79; AVC = $.39. What is the Contribution Margin?

49%

Which of the following manufacturers would be most likely to use a manufacturers' agent to distribute its product?

A well-established Southern firm that wants to expand its market area by making its products available for the first time in Washington state and Oregon

Denton Plumbing, Inc. buys plumbing supplies, piping, fixtures, and tools from different manufacturers and resells them to construction companies. Denton is MOST LIKELY:

A merchant wholesaler

When large-scale retailers, such as Walmart and Target, vie with one another for sales and market share, they are engaging in [...]

A mild form of horizontal channel conflict

Lois Lane wants to open a convenience store in Cripple Creek Colorado. What kind of wholesaler will likely provide her chewing gum, tobacco products, candy bars, and other snack foods?

A truck jobber

With respect to telemarketing, which of the following techniques are employed for idenfying potential prospects?

All of the above

Which of the following is not an advantage of vertical marketing systems?

All of the above are advantages

A manufacturer could try to defend itself against charges of price discrimination under the Robinson-Patman Act by claiming that:

All of the above are possible defenses against price discrimination charges

Under which of the following conditions is a tying contract likely to be declared as legal?

All of the above increase the likelihood that a tying contract will be legal.

The television home shopping format appeals to some consumers for which of the following reasons?

All of the above.

Aggregate Chemical Supply is a large wholesaler of chemical products. Aggregate buys in large quantities from its suppliers and then resells these chemicals in smaller amounts to its customers across the Southwest US. Which supply chain (channel) function is being performed by Aggregate?

Allocating

One of the primary keys to wholesaling and retailing success is matching the variety of products sold to the wants and needs of customers. This process is the [...] channel function.

Assorting

Wal-Mart distribution centers bring together a large variety of different kinds of products from a wide range of manufacturers. Wal-Mart is performing the ______________ function when, based on what each store's needs are at the time, it combines a number of different products together for shipping to each of its Wal-Mart stores.

Assorting

When retailers such as Kroger or Winn-Dixie bring together a variety of different products to offer their customers, they are performing the [...] channel function.

Assorting

Break-even analysis is normally conducted during the[...] stage of the price setting process.

Cost-volume-profit analysis

A [...] is an independent agent wholesaling middleman that brings buyers and sellers together and provides marketing information to both parties

Broker

For which of the following products is exclusive distribution most likely?

Caterpillar tractors

[...] occurs when one supply chain member perceives that another supply chain member is making decisions in a manner that interferes with the ability of the first supply chain member to achieve its own objectives.

Channel conflict.

The primary benefit to consumers when buying from a vending machine is:

Convenience

In a [...], each level in the supply chain operates under independent ownership. In other words, the producers and their suppliers, as well as all downstream marketing intermediaries (wholesaling middlemen and retailers) are separate business entities.

Conventional supply chain

With respect to the product life cycle, prices are usally lowest during the ___________ stage.

Decline.

Sam's Club uses information from its membership database to target email to existing customers for purposes of informing them about special sales, new products, and other events. Sam's Club is using which form of direct marketing?

Direct mail

Time-Life regularly airs TV commercials promoting books, DVDs, and CDs. Consumers are shown 1-800 numbers and encouraged to use credit cards to make purchases. Time-Life is employing [...]

Direct response advertising

Walmart, Kmart, Target, Big Lots, Dollar Tree, Dollar General, and Family Dollar are all classified as

Discount stores

Core-Mark, a large grocery wholesaler, maintains a number of _____________ at key points in the United States that receive products from a large number of manufacturers in truckloads. Deliveries are received, sorted, accumulated, and reallocated to retailers in an efficient and timely manner.

Distribution centers

A [...] consists of the set of people and firms involved in the transfer of title to a product as it moves from producer to ultimate consumer or business user.

Distribution channel

Steve Johnson sells fiberglass resins and fiberglass fabrics to the many small sailboat manufacturers in Florida. He takes title to the products but does not handle them. Instead, the materials are shipped directly from the producer to the sailboat manufacturers. Steve is a:

Drop shipper

[...] are wholesaling middlemen that buy and sell bulky commodities, such as coal and building materials. These products are very expensive to handle and ship, relative to their unit value. These wholesaling middlemen never physically handle the products they buy from their suppliers. The products are shipped directly from the supplier to the middlemens' buyers.

Drop shippers

Farmer Brothers distributes its coffee to restaurants, delis, vending operators, and coffee services through a variety of channels to reach essentially the same customers. Farmer Brothers is engaging in the practice commonly referred to as:

Dual distribution

A small manufacturer of custom cabinets wants to expand sales but does not wish to get involved directly with selling or any other marketing activities. The manufacturer probably will opt to employ which form of channel structure for reaching consumers?

Employing an agent to handle sales to other intermediaries

[...] are being employed when a producer prohibits its dealers from carrying its competitors' products.

Exclusive dealing agreements

Yesterday Delta Press in Dallas, Texas shipped 1,000 books to a retailer in Florida, 150 books to a retailer in Georgia, and 50 books to a buyer in Montana. However, Delta Press paid no freight charges. Which geographic pricing strategy did Delta use?

FOB plant pricing

Wells Fargo provides the financial services that allow supply chain members (wholesaling and retailing intermediaries) to establish and operate their businesses. In this context, Wells Fargo is a(n) [...]

Facilitating agent.

Transportation firms, such as trucking companies and railroads, assist other supply chain members (producers, wholesalers, and retailers) by transporting products from point of production to point of consumption. In the context of supply chains, these transportation firms are called [...]

Facilitating agents

Movement of parts and materials from their sources of supply into the manufacturing process is called:

Materials management

[...] are not directly involved in the transfer of title for products moved through distribution channels. They do, however, provide a range of specialized support services that allow supply chains to function more efficiently.

Facilitating agents.

Even when production stops (i.e. no units produced), the firm still generally incurs some

Fixed production costs.

Which of the following is not a benefit of business format franchises for franchisees?

Franchisees are paid royalties by franchisors to offset their initial investment in the franchise.

In order to offset the competitive disadvantage of FOB plant pricing, Texas Granite Company in Dallas could use _____ pricing to ship its products to building contractors and furniture restorers in any part of the United States.

Freight-absorption

User Answer Correct If there is a traditional channel for consumer goods, it is:

From producer to wholesaler to retailer to consumer

When a manufacturer requires that its dealers carry its entire line or the dealer will be dropped, the manufacturer is engaged in [...]

Full-line forcing.

For which of the following products is intensive distribution most likely to be employed?

Gillette razor blades

The strategy of market-skimming pricing is especially suited for new products because:

High initial prices can keep demand from exceeding supply.

"Inventory in motion or at rest throughout the supply chain" is called:

Logistics

The final step in the price setting process is __________.

Managing price.

Old Smokie, Inc. is a small producer of specialty equipment for smoking meats. The company does not have its own sales force and has just introduced a cooker which smokes meats 50% faster. The cooker will most likely be distributed by a:

Manufacturers' agent

Sandra Locke sells gluten-free specialty food products to grocery wholesalers and large retail grocery chains in Tampa. She sells for several manufacturers with noncompeting lines of gluten-free foods and earns a 4% sales commission. Sandra does not own or inventory the products she sells. Evidently, Sandra is a:

Manufacturers' agent.

When Nintendo video games were introduced into the United States, they were priced at an introductory price of $299. This price was $100 lower than the Sega games. Nintendo probably used _____ a pricing strategy to quickly gain a large share of the market.

Market penetration

Managing the flow of parts and other factors of production into the manufacturing process has been traditionally called [...] by logisticians.

Materials Management

Joe Duncan sells a wide assortment of "emergency" home repair items (fuses, electrical tape, small packets of nails) to grocery and convenience stores. He owns the products he handles, provides the shelves and stocks the display, and monitors the inventory for his customers. Joe is a:

Rack jobber

Alberton's supermarket prominently displays the prices of its brands side-by-side with prices you may pay at competing grocery stores for the same brand. Albertson's hopes to stimulate added sales by inducing the perception that consumers are getting a 'deal.' Alberston's is using:

Reference pricing.

America's largest [...] is the Mall of America, located outside of Minneapolis. The mall contains over 800 stores, including 100 restaurants and nightclubs. The mall also hosts a theme park, hotels, miniature golf courses, and water slides.

Regional center

A [...] essentially substitutes for a manufacturer's marketing department by marketing the firm's entire output.

Selling agent

Sophie Taylor sells the entire output of several small companies based in Colorado Springs' Tech Center. Each of the companies designs and produces computer components. Sophie has almost complete control of all marketing activites since the engineers who started the companies lack marketing experience and want to focus on what they do best --- inventing things. Sophie is paid a substantial commission on all sales. She is a:

Selling agent

For which of the following products is a manufacturer most likely to use intensive distribution?

Soft drinks

Merril Lynch, an investment firm, groups investment opportunties based on "risk" and "return" from which its clients will choose. Merril-Lynch is performing which channel function?

Sorting

When producers and channel intermediaries separate products into categories based on differences in "grade," or some other aspect of "quality," they are performing the [...] channel function

Sorting

The primary factor that distinguishes between a merchant wholesaler and an agent is:

The wholesaler takes title; the agent does not.

Factory outlet malls usually are located in outlying, rural areas in order t

To avoid conflict with traditional retailers located in regional and power centers that may sell the same brands

A retailer might expect a stocking allowance:

To offset the handling costs for a new product.

For which of the following products is selective distribution most likely?

Tommy Bahama men's clothing

[...] carry a select line of perishable products and deliver them by trucks to retail stores.

Truck jobbers

When franchisors demand that their franchisees buy all products from the franchisor in order to assure the quality of the franchise's products, they are employing [...]

Tying contracts.

When production stops (i.e. no units produced), [...]_become zero.

Variable costs of production.

Machines that dispense products, video game machines, and bank ATMs all illustrate which form of retailing

Vending

When Jon Jones decided to sell 10 acres of land, he contacted Leona Anderson. She showed the land to a potential buyer who wanted to build a home on the site, explained the market conditions for land in the area, and helped negotiate the terms of the sale. She left the final decision about the sale up to Jon and the young couple. Anderson is most likely a

broker

A retail firm that uses leader pricing is:

cutting the regular price on a few items with the hope of attracting customers.