MKTG 300 Chapter 14
Southwestern Company recruits and trains college students to sell educational reference books, software, and children's books door-to-door. This form of non-store retailing is called: a. direct retailing b. personal marketing c. direct marketing d. automatic vending e. electronic retailing
ANSWER: a RATIONALE: Direct retailing is the selling of products by representatives who work door-to-door, office-tooffice, or at home sales parties.
Horizontal channel conflict occurs most often when manufacturers practice: a. dual or multiple distribution b. trade loading c. promotional pricing d. direct distribution e. channel distribution
ANSWER: a RATIONALE: Horizontal conflict occurs when more than one channel is used to handle the same brand
Kroger is the second-largest supermarket chain in the United States. Which of the following is the most likely reason why Kroger supermarkets sell all types of foodstuffs as well as nonfood products including a wide range of eyewear and accessories? a. Consumer demand for one-stop shopping often leads to scrambled merchandising. b. The fulfillment of the wheel of retailing hypothesis c. Inflationary economic climate d. Repositioning as a discounter e. Growth of convenience merchandising
ANSWER: a RATIONALE: In many cases, supermarkets offer a wide variety of nontraditional goods and services under one roof (a strategy called scrambled merchandising) to respond to consumers who want convenience.
Chattanooga Bottling Company is licensed to bottle Coke products. The Chattanooga Bottling Company is an example of a: a. product and trade name franchisee. b. redistributor franchisor. c. business format franchisee. d. licensed franchisor. e. relationship franchisee.
ANSWER: a RATIONALE: In product and trade name franchising, a dealer agrees to sell certain products provided by a manufacturer or wholesaler.
Around the world, most retailers are _____, operating one or a few stores in their community, owned by a single person or partnership and not operated as part of a larger retail institution. a. independent b. chain stores c. franchise outlets d. specialty clubs e. product assortment stores
ANSWER: a RATIONALE: Independent retail outlets are owned by a single person or partnership and not operated as part of a larger retail institution.
Jim's Bike Shop sells bicycles for the serious racer to the casual cyclist. Jim's also sells biking gear and clothing. Jim is the sole owner of the store, so in terms of ownership, his store would be classified as a(n): a. independent retailer. b. freestanding store. c. franchise. d. chain store. e. common retailer.
ANSWER: a RATIONALE: Independent retailer stores are owned by a single person or partnership and not operated as part of a larger retail institution.
Which of the following statements concerning how market factors affect channel decisions is true? a. Industrial customers tend to buy in larger quantities and require more customer service. b. Geographically concentrated target markets should be served with an indirect sales force. c. Widely dispersed markets require fewer intermediaries. d. New firms in extremely competitive markets will be more successful if they use indirect channels. e. A very large market requires fewer intermediaries.
ANSWER: a RATIONALE: Industrial customers' buying habits are very different from those of consumers, and they tend to buy in larger quantities and require more customer service.
_____ refers to shopping without visiting a store and is currently growing faster than in-store shopping because of the consumer demand for convenience. a. Non-store retailing b. Customerization c. Hypershopping d. Niche marketing e. Specialty merchandising
ANSWER: a RATIONALE: Non-store retailing is selling to consumers through other means than by visiting a store.
Off-price retailers: a. usually don't ask for return privileges b. very often offer a consistent assortment of merchandise. c. seldom stock brand name merchandise. d. are owned by the manufacturer of the products they sell. e. offer very deep assortments.
ANSWER: a RATIONALE: Offprice retailers usually don't ask for return privileges.
The Cedar Store carries a full line of cedar swings, gliders, garden benches, and tables. All of its products can be purchased through its Web site. The site has done well since the Cedar Store's products do not need to be touched or smelled before purchase. The Cedar Store is engaging in: a. online retailing. b. shop-at-home networking. c. mobile vending. d. franchising. e. electronic wholesaling
ANSWER: a RATIONALE: Online retailing is a two-way interactive service offered to users with personal computers.
Which of the following intermediaries sell mainly to consumers? a. Retailers b. Merchant wholesalers c. Agents d. Brokers e. Specialists
ANSWER: a RATIONALE: Retailers are firms that sell mainly to consumers.
The three basic functions channel intermediaries perform are: a. transactional, logistical, and facilitating b. contacting, negotiating, and ownership c. promoting, distributing, and bulk-breaking d. assorting, accumulating, and allocating e. financing, mediating, and storing
ANSWER: a RATIONALE: Retailing and wholesaling intermediaries in marketing channels perform essential transactional, logistical, and facilitating functions.
A common practice among most retailers that seeks to broaden customers' original purchases with related items is called: a. suggestion selling. b. trading up. c. bait and switch. d. comprehensive selling. e. interactive selling.
ANSWER: a RATIONALE: Suggestion selling is common in helping customers recognize true needs.
Paul operates Kayak.com, a company that allows customers to efficiently search company databases and find the best airline and hotel deals all over the Web. Kayak does not make bookings but rather provides recommendations for the best travel plans. Travel providers pay Kayak a commission for most customers who click through to their sites. Paul wants his users to have as short and sweet an experience on Kayak as possible. Time is of the essence in responding to any customer question, especially in this day where airfare can increase dramatically in just a couple of hours. Paul is devoted to: a. improving service delivery. b. maximizing queues. c. reducing discrepancies of assortment. d. reducing wait time. e. managing service capacity.
ANSWER: a RATIONALE: The Internet is an alternative channel for delivering these deals. Kayak is a service organization.
This summer, college student Pat is planning on selling kites at Panama City Beach. He has found some suppliers and has preordered all of the kites he thinks he can sell this summer. What type of a distribution channel relationship does Pat have with his suppliers? a. Arm'slength b. Functional c. Cooperative d. Hierarchical e. Integrated
ANSWER: a RATIONALE: The arm'slength relationship is considered to be temporary.
With the _____ channel relationship, both parties retain their independence and pursue their own interests while attempting to benefit from the goods or services provided by the other. a. arm'slength b. functional c. cooperative d. co-opetitive e. integrated
ANSWER: a RATIONALE: These types of relationships are often referred to as "arm'slength" relationships due to the company's unwillingness or lack of ability to develop a closer type of relationship.
When Irvin went into Lowe's to buy his wife a small tool set she said she wanted, the sales clerk suggested a larger set with a tool kit on wheels that included a router and circular saw. In this example, the sales clerk engaged in: a. trading up. b. suggestion selling. c. bait and switch. d. customer relationship retailing. e. service-disguised selling.
ANSWER: a RATIONALE: Trading up means persuading customers to buy a higher-priced item than the one they intended to buy.
Marketers can precisely target their customers according to demographics, geographics, and psychographics with: a. direct mail. b. vending machines. c. franchise stores. d. specialty retail outlets. e. electronic selling.
ANSWER: a RATIONALE: With direct mail, marketers can precisely target their customers according to demographics, geographics, and even psychographics.
W.W. Grainger, Inc. is one of the world's largest businesstobusiness distributors of equipment, component parts, and supplies in the United States and Canada. It has ownership title to over 220,000 products, which are stocked in one national and nine regional warehouses to guarantee product availability and quick service to the many manufacturers who are its customers. W.W. Grainger is an example of a(n): a. agent or broker b. merchant wholesaler c. retailer d. consumer market e. hypermarket intermediary
ANSWER: b RATIONALE: A merchant wholesaler is an institution that buys goods from manufacturers and resells them to other wholesalers and retailers. Merchant Wholesalers receive and take title to the goods, own warehouses, and ship the products they sell.
Toys "R" Us sells a huge assortment of toys and children's books at greatly reduced prices. It offers customers few services and competes on the basis of moderate to low prices on the large quantities of merchandise it stocks. Toys "R" Us is an example of a: a. full-line discount store. b. specialty discount store. c. general store. d. department store. e. wholesale store.
ANSWER: b RATIONALE: A specialty discount store (also called a category killer) offers a nearly complete selection of single-line merchandise and uses self-service, discount prices, high volume, and high turnover to its advantage.
Another name for an anchor store is a: a. mass merchandiser. b. generator store. c. host store. d. shopping center pillar. e. destination store.
ANSWER: b RATIONALE: Anchor stores or generator stores are usually located at opposite ends of the mall to create heavy foot traffic.
A situation that occurs when one marketing channel member intentionally affects another member's behavior is called: a. channel power. b. channel control. c. channel conflict. d. channel dominance. e. channel inversion.
ANSWER: b RATIONALE: Channel control is when one channel member actually affects another.
Which channel relationship is less ambiguous than an arm'slength relationship but without the longerterm and/or capital investment required to achieve full integration? a. Co-opetitive b. Cooperative c. Functional d. Integrated e. Supplemental
ANSWER: b RATIONALE: Cooperative relationships are between companies that take the form of informal partnership with moderate levels of trust and information sharing as needed to further each company's goals.
When opening a new retail operation, the retailer needs to consider all of the following factors EXCEPT: a. traffic flow. b. employee density. c. geographic region. d. growth potential. e. zoning regulations.
ANSWER: b RATIONALE: Employee density is concerned with the amount of employees per 1,000 square feet in the store--not in the neighborhood. The other four factors are to be considered when deciding on a location.
Jones Soda is positioned as the anti-Coke. In the early years, few mainstream retailers sold Jones Soda. Fans had to get their Jones fix in surf shops, tattoo parlors, and bookstores, adding to the brand's mystique. Jones Soda used its _____ to create a competitive advantage. a. channel ascendancy b. distribution channel c. channel conflict d. channel focus e. vertical integration
ANSWER: b RATIONALE: Its unusual retail venues added to the brand's mystique.
Marketing channels make distribution simpler by reducing the number of transactions required to get products from manufacturers to consumers. This is called: a. forward integration b. contact efficiency c. elimination of temporal discrepancies d. sorting e. reciprocity
ANSWER: b RATIONALE: Marketing channels provide contact efficiencies by reducing the number of stores customers must shop in to complete their purchases.
Customers can purchase Hewlett-Packard computers from retail stores like Best Buy and Office Depot, online directly from HP, and through various catalogs. HP is using a(n) _____ distribution arrangement. a. intensive b. multiple c. exclusive d. cumulative e. aggregated
ANSWER: b RATIONALE: Multiple distribution occurs when a producer selects two or more different channels to distribute the same products to target markets.
_____ is a type of shopping available to consumers with access to the Internet. a. Shop-at-home networks b. Online retailing c. Franchising d. Electronic wholesaling e. Mobile vending
ANSWER: b RATIONALE: Online retailing, also called e-tailing, is a type of shopping available to consumers with access to the Internet.
Which of the following statements about a retailer's promotion strategy is true? a. The design of the promotion strategy would be done separately from the creation of the retailing mix. b. The goal of a retail store's promotion mix is to position the store in consumers' minds. c. Most advertising for retailers is carried out at the national level. d. Retailers find direct mail marketing inefficient. e. Retail promotion strategy does not include public relations activities.
ANSWER: b RATIONALE: Promotion is part of the retailing mix and includes advertising, public relations and publicity, and sales promotions. Most advertising for retailers is carried out at the local level. Retailers have been very successful with direct marketing.
Retailers such as Dillard's and Sears are responding to consumer needs by changing product mixes, hours of operation, locations, and prices. These stores are changing aspects of their: a. merchandising groupings. b. retailing mixes. c. product offerings. d. retail trade areas. e. store positioning strategies.
ANSWER: b RATIONALE: Retailers are altering several aspects of the six Ps of the retailing mix. See Exhibi
You are responsible for physical distribution of your company's service and should focus on: a. ensuring the intangibility of the service so that physical distribution becomes a less important factor. b. minimizing wait times, managing service capacity, improving service delivery, and establishing channel-wide network coherence. c. making sure production and consumption are simultaneous. d. setting quality standards, choosing faster transportation modes, and using safety stock. e. customer-oriented order processing and inventory control.
ANSWER: b RATIONALE: Service industries are customer oriented and must manage intangible services by minimizing wait times, managing service capacity, improving service delivery, and establishing channel-wide network coherence.
James wants to open a small store that caters to the model railroad hobbyist. The store would sell model trains, scenery, accessories, and books on the subject of model railroading. Which of the following types of stores would most likely support an effective launch of his business idea? a. An off-price retailer b. A specialty store c. A full-discount store d. A general store e. A warehouse club
ANSWER: b RATIONALE: Specialty stores specialize in a given type of merchandise
Retail establishments are generally classified according to all of the following EXCEPT: a. ownership b. level of sales c. level of service d. price e. product assortment
ANSWER: b RATIONALE: The four elements used to classify retail establishments are its ownership, level of service, product assortment, and price.
The party in a franchise relationship that is an individual or business granted the right to sell another party's product is called the: a. franchisor b. franchisee c. receiver d. renter e. owner/operator
ANSWER: b RATIONALE: The franchisee sells the franchisor's products.
The _____ of retail stores is a key factor in their success; the goal is to use all space in the store effectively, including aisles, displays, and even nonselling areas. a. merchandise density b. layout c. target strategy d. merchandise mix e. promotional strategy
ANSWER: b RATIONALE: The layout of retail stores is described here.
A _____ is an off-price retailer that is owned and operated by a manufacturer and carries one line of merchandise--its own. a. mass merchandiser b. factory outlet c. wholesale club d. discount store e. bargain basement store
ANSWER: b RATIONALE: This describes a factory outlet.
_____ distribution is achieved by screening dealers to eliminate all but a few in any single geographic area. Shopping goods and some specialty products that consumers are willing to search for are sold this way. a. Intensive b. Selective c. Exclusive d. Dual e. Controlled
ANSWER: b RATIONALE: This is a description of selective distribution.
_____ uses complex mathematical models to help retailers make better product mix decisions. a. Inbound telemarketing b. Data mining c. Blogs d. Spamming e. Online auctions
ANSWER: b RATIONALE: This is the definition of data mining.
_____ are retailers that compete on the basis of low prices, high turnover, and high volume. a. Convenience outlets b. Discount stores c. General stores d. Department stores e. Specialty stores
ANSWER: b RATIONALE: This is the definition of discount stores. Convenience stores are miniature supermarkets, carrying only a limited line of high-turnover convenience goods.
_____ is defined as all activities directly related to the sale of goods and services to the ultimate consumer for personal, nonbusiness use or consumption. a. Wholesaling b. Retailing c. Business d. Franchising e. Distribution
ANSWER: b RATIONALE: This is the definition of retailing.
Maggie Moo's has decided that consumers will drive out of their way for the store's yummy ice cream offerings. The owner needs to keep his overhead costs (such as rent) low and wants to avoid locating near competitors. For a location, Maggie Moo's should open in a: a. factory outlet. b. strip center. c. freestanding store. d. shopping center. e. regional mall.
ANSWER: c RATIONALE: A freestanding store has the advantage of low site costs and will be a benefit if consumers are willing to seek it out.
Selfridges is the second-largest department store in Great Britain. It works with House of Frasier, one of its competitors, to reduce operating costs by sharing channels of distribution to ship goods from 1,500-plus suppliers. Selfridges and House of Frasier are engaged in: a. vertical conflict b. an integrated supply chain c. a strategic channel alliance d. an information-based distribution channel e. a distribution cooperative
ANSWER: c RATIONALE: A strategic channel alliance is a cooperative agreement between businesses to use each other's already established distribution channels.
_____ are intermediaries who facilitate the sales of a product from producer to end user by representing retailers, wholesalers, or manufacturers and providing little input as to the terms of the sale. a. Marketing facilitators b. Channel cooperatives c. Agents and brokers d. Merchant wholesalers e. Channel functionaries
ANSWER: c RATIONALE: Agents and brokers simply facilitate the sale of a product from producer to end user.
Domino's pizza, Hyatt Corporation, and Wendy's are all examples of _____ because the franchisee buys the right to use the franchisor's approach to doing business. a. product and trade name franchisors b. redistributor franchisors c. business format franchisors d. licensed franchisors e. relationship franchisors
ANSWER: c RATIONALE: Business format franchising is an ongoing relationship between a franchisor and a franchisee in which the franchisor sells a franchisee the rights to use a format or approach to doing business.
Which of the following statements about specialty stores is true? a. Specialty stores find it easy to compete on price with big-box stores. b. Customers at specialty stores are not concerned with the distinctiveness of the merchandise or the store's physical appearance. c. Customers of specialty stores usually consider price to be secondary. d. Specialty stores are ineffective test markets. e. A typical specialty store carries a wider assortment of specialty merchandise than department stores.
ANSWER: c RATIONALE: Customers usually consider price to be of secondary importance in their selection of a specialty store. Customers at specialty stores are very concerned with the distinctiveness of the merchandise or the store's physical appearance. Specialty stores provide a lowrisk testing ground for new products. A typical specialty store carries a narrower assortment of specialty merchandise than department stores.
Canesta Company has developed a virtual keyboard out of light to be used with cell phones and PDAs. The product beams an image of a keyboard on a desk, allowing the user to type on the image. The words are picked up by the user's digital device. When introduced to the market, the device will sell for less than $50. If, in choosing its channel, Canesta is most concerned about its lack of financial, managerial, and marketing resources to support the product's introduction, then its choice of channels will largely be influenced by: a. factors of ownership. b. market factors. c. producer factors. d. product factors. e. internal environmental characteristics.
ANSWER: c RATIONALE: Financial, managerial, and marketing issues are producer factors.
Channel conflict: a. always has an adverse effect on the members of the channel b. is not caused by ideological differences, because such differences would prevent the members from ever operating as a channel c. is often caused by an inability of some channel members to keep up with the changing times d. can appear as either internal or external e. does not occur when multiple distribution channels are used
ANSWER: c RATIONALE: In a broad context, channel conflict can be good for a channel. It is sometimes caused by ideological differences. It appears as vertical or horizontal.
The newest generation of shopping centers is the: a. regional mall. b. shopping business district. c. lifestyle center. d. franchised center. e. strip mall.
ANSWER: c RATIONALE: Lifestyle centers are open-air shopping centers targeted to upper-income shoppers with an aversion to "the mall."
Nontraditional channel arrangements: a. tend to make a firm's product seem the same as the competition. b. usually broaden a brand's coverage. c. can give a producer serving a niche market a way to gain market access without having to establish channel intermediaries. d. are not usually useful for larger firms. e. All of the above are true.
ANSWER: c RATIONALE: Nontraditional channel arrangements can give a producer serving a niche market a way to gain market access without having to establish channel intermediaries
DeBeers sells most of the diamonds it produces to industry. The company controls over 90 percent of the market and has great power over its distributors. In its marketing channel, DeBeers would be considered a: a. channel authority. b. channel member. c. channel captain. d. channel gatekeeper. e. power broker.
ANSWER: c RATIONALE: The channel captain is a member of a marketing channel that exercises authority and power over the activities of other channel members. DeBeers has control over delivery, inventory, and so on.
The first task of developing a retail strategy is to: a. create a buying organization. b. decide what to buy. c. define the target market. d. create a promotional strategy. e. define the pricing policies.
ANSWER: c RATIONALE: The target market's wants and needs form the foundation for a successful retail strategy
Which type of retail ownership is owned and operated by an individual but is licensed by a larger supporting organization? a. Independent retailer b. Chain store c. Franchise d. Cooperative e. Secondary retailer
ANSWER: c RATIONALE: This describes a franchise.
_____ carry a limited line of high-turnover, high-priced goods and resemble miniature supermarkets. These selfservice stores are typically located near residential areas and are open long hours, seven days a week. a. Specialty stores b. Wholesale stores c. Convenience stores d. Factory outlets e. General stores
ANSWER: c RATIONALE: This describes convenience stores.
Channel conflict that occurs between different levels in a marketing channel is referred to as: a. horizontal conflict b. primary conflict c. vertical conflict d. secondary conflict e. parallel conflict
ANSWER: c RATIONALE: This describes vertical conflict, which typically occurs between the manufacturer and wholesaler or between the manufacturer and retailer.
_____ is the joint effort of all channel members to create a channel that serves customers and creates a competitive advantage. a. Selective partnering b. Direct distribution c. Channel partnering d. Intensive integration e. Closed channel distribution
ANSWER: c RATIONALE: This is the definition of channel partnering, which is also called channel cooperation.
Which level of distribution intensity is the most restrictive and entails establishing only one or a few dealers within a given geographic area? a. Selective b. Intensive c. Exclusive d. Dual e. Premium
ANSWER: c RATIONALE: This is the definition of exclusive distribution.
A(n) _____ is a continuing relationship in which an individual or business grants business rights to operate or sell a product to another individual or business. a. leasing contract b. alliance for profit c. brokered partnership d. franchise e. countertrade
ANSWER: d RATIONALE: A franchise is a continuing relationship in which a franchiser grants to a franchisee the business rights to operate or sell a product.
Kayak.com is a company that allows customers to efficiently search databases to find the best airline and hotel deals all over the Web. Kayak does not make bookings but rather provides recommendations for the best travel plans. Travel providers pay Kayak a commission when customers click through to their sites. Kayak.com, travelers, the airlines, and the hotels are all part of a: a. facilitating agency b. marketing mix intermediary c. selective promotion channel d. marketing channel or channel of distribution e. transportation channel or channel of movement
ANSWER: d RATIONALE: A marketing channel is a business structure of interdependent organizations that reaches from the point of product origin to the consumer.
Prices are usually higher in convenience stores than in supermarkets because convenience stores offer: a. more specialty goods b. a wider variety of products c. a higher level of customer services d. better location, longer hours, and faster service e. higher-quality goods
ANSWER: d RATIONALE: Convenience stores carry a limited amount of high-turnover, high-priced goods and resemble miniature supermarkets. Customers patronize these stores because of convenience.
Vutek manufactures printing machines used to print high-resolution graphics for billboards, bus cards, banners, and posters. For distribution, you would expect Vutek to use a: a. network of facilitating agents b. horizontally integrated channel c. reciprocal channel d. direct channel e. vertical marketing system
ANSWER: d RATIONALE: Direct channels are typical in business and industrial markets.
_____ refers to the techniques used to get consumers to buy from their home. Those techniques include direct mail, catalogs and mail-order, telemarketing, and electronic retailing. a. Nonstore vending b. In-home retailing c. Franchising d. Direct marketing e. Direct retailing
ANSWER: d RATIONALE: Direct marketing includes techniques, such as catalogs and telemarketing, to get consumers to make a purchase from their home, office, or other nonretail setting.
Caterpillar, the manufacturer of tractors and other earthmoving equipment, has an extremely high market share, which means customers seek the dealers out regardless of where they are. There are approximately 50 Caterpillar dealers in the United States--one in each state. From this information, you can surmise that Caterpillar uses _____ distribution. a. selective b. premium c. intensive d. exclusive e. inclusive
ANSWER: d RATIONALE: Exclusive distribution, the most restrictive form of distribution, entails establishing one or a few dealers within a given geographic area. Because buyers need to be willing to search or travel to acquire the product, this form of distribution is limited to consumer specialty goods, a few shopping goods, and major industrial equipment.
Large retailers such as Target and Walmart and sellers of shopping goods such as automobiles and furniture often use _____ for their locations. a. remote, rural locations b. office complexes c. factory outlets d. freestanding stores e. regional malls
ANSWER: d RATIONALE: Freestanding stores are often used by large retailers.
All of the following are factors in creating a store's atmosphere EXCEPT: a. employee type and density. b. fixture type and density. c. sound. d. price. e. odors.
ANSWER: d RATIONALE: Influential factors in creating a store's atmosphere include employee type and density, merchandise type and density, fixture type and density, sound, odors, and visual factors.
The Halloween Super Store is only open from September until November, usually in an otherwise vacant store. This is an example of a: a. temp store. b. m-commerce. c. convenience retailing. d. pop-up shop. e. flash sale site.
ANSWER: d RATIONALE: Pop-up shops are temporary shops that allow a flexible location without a long-term commitment
Serenity is a manufacturer of outdoor fountains that are popular in gardens. Even though fountains represent a product category that does not sell yearround due to inclement weather, Serenity's sales remain steady all year because it sells to wholesale distributors that stock the product. Serenity sells to wholesale distributors that perform _____ functions for the manufacturer. a. financial b. transactional c. facilitating d. logistical e. promotional
ANSWER: d RATIONALE: Storing for later sale to retailers is a logistical function.
A retail operation that has a 90,000-square-foot facility and houses a florist, baker, bank, craft shop, photo finisher, dry cleaner, and pharmacy under the same roof as grocery and household items would be called a: a. membership warehouse club. b. wholesale outlet. c. factory outlet. d. supercenter. e. mass merchandiser
ANSWER: d RATIONALE: Supercenters offer an array of products and services, as well as groceries.
The major characteristic that is used to differentiate among types of intermediaries is whether they: a. install exchange barriers such as location, time, and quantity b. create specialization of labor c. create economies of scale d. take title to the products they sell e. raise profit margins for independent middlemen
ANSWER: d RATIONALE: Taking title means they own the merchandise and control the terms of the sale.
_____ considerations affecting the wholesaler choice include how often a product is purchased and how long a customer is willing to wait to receive the product. a. Market b. Transactional c. Product d. Buyer e. Logistic
ANSWER: d RATIONALE: The question describes buyer considerations.
Which of the following are examples of facilitating functions performed by wholesaling intermediaries? a. Sorting and storing b. Risk taking and promotion c. Assorting, accumulating, grading, and allocating d. Researching and financing e. Financial management and storing
ANSWER: d RATIONALE: The third basic channel function, facilitating, includes research and financing.
A _____ is a set of interdependent organizations that eases the transfer of ownership as products move from producer to business user or consumer. a. facilitating agency or place member b. marketing mix intermediary c. selective distribution channel d. marketing channel or channel of distribution e. transportation channel or channel of movement
ANSWER: d RATIONALE: This is the definition of a marketing channel, also called the channel of distribution.
Which type of retail store specializes in a given type of merchandise? a. An independent store b. A department store c. A discount store d. A specialty store e. A first-level store
ANSWER: d RATIONALE: This is the definition of a specialty store.
The number of different varieties of fishing lures carried by the Angler's Store refers to the store's: a. supply standard. b. complete retail offering. c. retail mix. d. volume. e. assortment depth.
ANSWER: e RATIONALE: Breadth and depth refers to product assortment.
Housing several departments under one roof, a _____ carries a wide variety of shopping and specialty goods, including apparel, cosmetics, housewares, electronics, and sometimes furniture. a. supermarket b. specialty store c. convenience store d. super club e. department store
ANSWER: e RATIONALE: Department stores house several departments under one roof.
Each department in a department store is usually treated as a different _____ center and central management sets broad policies about the types of merchandise carried and prices. a. franchise b. financial c. comptroller d. human resources e. buying
ANSWER: e RATIONALE: Each department in a department store is treated as a separate buying center
One of the earliest, largest, and most famous examples of vertical integration was the Carnegie Steel Company. The company controlled not only the mills where the steel was manufactured but also the mines where the iron ore was extracted, the coal mines that supplied the coal, the ships that transported the iron ore, and the railroads that transported the coal to the factory. Carnegie Steel had a(n) _____ channel relationship. a. arm'slength b. functional c. cooperative d. co-opetitive e. integrated
ANSWER: e RATIONALE: Integrated relationships are tightly connected, with linked processes across and between firm boundaries and high levels of trust and commitment.
Chewing gum and soft drinks are sold in grocery stores, service stations, convenience stores, drugstores, discount stores, and motel vending machines. This is a an example of a(n) _____ distribution strategy. a. exclusive b. reciprocal c. selective d. horizontal e. intensive
ANSWER: e RATIONALE: Intensive distribution is distribution aimed at maximum market coverage. It is used for many convenience goods that need to be available in every outlet where the potential customer might want to buy them.
A _____ channel is commonly used for low-cost consumer items that are frequently purchased, such as candy, cigarettes, and magazines. a. retailer b. agent/broker c. industrial distributor d. producer e. wholesaler
ANSWER: e RATIONALE: Manufacturers sell their products to wholesalers in large quantities; the wholesalers then break the large quantities into smaller quantities to satisfy individual retailer orders.
Telemarketing can consist of either unsolicited _____ sales calls, or _____ sales calls, which allow companies to receive orders through toll-free telephone numbers. a. order placement; lead generation b. push strategy; pull strategy c. systematic; synergistic d. qualifying; finalizing e. outbound; inbound
ANSWER: e RATIONALE: Outbound telemarketing is generally used for unsolicited selling, while inbound calls are from customers placing orders.
Transactional channel functions include all of the following activities EXCEPT: a. explaining product benefits b. making buyers aware of existing products c. explaining product features, advantages, and benefits d. contacting and communicating with prospective buyers e. physically distributing and sorting products
ANSWER: e RATIONALE: Physically distributing and sorting products is not a transactional channel function.
Canesta Company has developed a virtual keyboard out of light to be used with cell phones and PDAs. The product beams an image of a keyboard on a desk, allowing the user to type on the image. The words are picked up by the user's digital device. When introduced to the market, the device will sell for less than $50. What level of distribution intensity should the company use? a. Exclusive b. Controlled c. Extensive d. Reciprocal e. Selective
ANSWER: e RATIONALE: Screening dealers will promote a quality image for the product. Price is also a factor in its level of distribution intensity. It is not a convenience good.
Whenever a customer opens an account at First Southern National Bank, a teller or account representative asks the customer whether he or she needs a CD, online banking, or other services. In other words, the account representative engages in: a. interactive selling. b. bait and switch. c. trading up. d. customer relationship retailing. e. suggestion selling.
ANSWER: e RATIONALE: Suggestion selling seeks to broaden customers' original purchase with related items
Fairway is a chain of retail outlets in Iowa, Minnesota, Nebraska, and Illinois that are described as large, departmentalized, self-service stores that specialize in food and limited nonfood items. Fairway stores are: a. off-price retailers b. discount stores c. wholesale clubs d. convenience stores e. supermarkets
ANSWER: e RATIONALE: The key factors are the emphasis on food and the size of the stores.
The only way that Jim Keeler in New Mexico can get a box of Carolyn Popwell's Festive Holiday Truffles from Washington is to order it through the mail. Popwell, who makes the candy by hand, uses a(n) _____ exclusively. a. exclusive distribution system b. conventional channel c. vertical marketing system d. reciprocal channel e. direct channel
ANSWER: e RATIONALE: The manufacturer sells directly to the consumer.
_____ is the retailing strategy of offering consumers very limited service and carrying a broad assortment of wellknown, nationally branded "hard goods." a. Specialty store positioning b. Merchandise positioning c. M-store retailing d. The wheel of retailing e. Full-line discounting
ANSWER: e RATIONALE: This describes full-line discounters.
_____ sell a limited selection of brand name appliances, household items, and groceries, usually in bulk on a cashand- carry basis to members only. a. Super outlets b. Factory outlets c. Wholesale discounters d. Off-price discount retailers e. Warehouse membership clubs
ANSWER: e RATIONALE: This describes warehouse membership clubs.
_____ shows how much the retailer makes as a percentage of sales after the cost of goods sold is subtracted. a. Net income b. Retained earnings c. Profitability d. Net equity e. Gross margin
ANSWER: e RATIONALE: This is the definition of gross margin.
Honda uses just-in-time manufacturing to build its Odyssey minivans. Five companies that make component parts for the Honda Odyssey relocated to Alabama and states bordering Alabama when Honda announced plans to build a new Odyssey manufacturing plant in Alabama. This relocation in order to provide efficient delivery of goods indicates that Honda is a: a. channel captain b. horizontal integrator c. distribution champion d. distribution ombudsman e. demand maverick
ANSWER: a RATIONALE: A channel captain exercises authority and power over the other channel members.
The capacity of a particular marketing channel member to control or influence the behavior of other channel members is known as: a. channel power. b. channel conflict. c. channel control. d. channel dominance. e. channel inversion.
ANSWER: a RATIONALE: Channel power is a channel members' ability to control or influence the behavior of other channel members.
A Target store is an example of a(n): a. merchant wholesaler b. retailer c. broker d. agent e. exporter
ANSWER: b RATIONALE: Retailers are firms that sell mainly to consumers.
One of the new developments in retailing is mcommerce. The "m" in mcommerce stands for: a. motivated b. multimedia c. marketing d. managed e. mobile
ANSWER: e RATIONALE: Mcommerce, or "mobile" ecommerce enables consumers using wireless mobile devices to connect to the Internet and shop.
