Ch 14.2 & 14.3

Perishable products such as dairy or produce are more likely to be distributed through _______. a.shorter channels b.longer channels c.direct channels d.exclusive distribution

a. shorter channels Perishable products are more likely to be distributed through shorter channels. Shorter channels mean that there will be less handling of the products and therefore the products will reach shelves quickly.

If a small retailer is in a marketing channel that contains only the producer, the retailer, and the customer, which of the following is most likely being sold by the retailer? a.New college textbooks b.Haircut c.Power tools d.Potato chips

a.New college textbooks The small retailer is most likely a college bookstore selling new college textbooks. The potato chips, and power tools most likely were bought through a wholesaler or other intermediary. The haircut moves directly from the producer to the customer.

Which of the following describes a disadvantage of using an industrial distributor? a.Since they are independent firms, they may be difficult to control. b.They have limited ability to provide customers with parts or repair services quickly. c.Industrial distributors work on commission and do not take title of products. d.They are dedicated to selling only one brand.

a.Since they are independent firms, they may be difficult to control. Of the statements listed, the disadvantage of using an industrial distributor is that they are independent firms and may be difficult for a manufacturer to control.

Rosie and John both are buying textbooks for the class. Rosie prefers the online option and purchases her copy of the textbook from the publisher's website. John likes the feel of the book in his hands and buys a print copy from his college bookstore. Rosie is purchasing her book through _______, while John is purchasing his through _______. a.a direct marketing channel; a retailer b.a direct marketing channel; a wholesaler c.a retailer; a wholesaler d.an indirect marketing channel; a retailer

a.a direct marketing channel; a retailer The publisher's website is a direct channel. In this case, Rosie is purchasing the book directly from the publisher, which is the producer of the book. John is buying the textbook through a retailer.

The primary difference between a manufacturers' agent and an industrial distributor is that _______. a.an agent does not take title of a product, but a distributor does take title b.an agent is employed as part of the producer's sales staff, but a distributor is not employed c.an agent deals with multiple manufacturers and a distributor sells one manufacturer's product exclusively d.an agent is typically unskilled and does not have technical knowledge while employees of an industrial distributor are highly trained

a.an agent does not take title of a product, but a distributor does take title The main difference between an agent and a distributor is that an agent does not take title of a product, but a distributor does.

American Eagle allows shoppers to buy its clothing through its stores or through its website, ae.com. This is an example of _______. a.dual distribution b.tying agreements c.horizontal channel integration d.vertical integration

a.dual distribution Dual distribution occurs when a firm uses two or more marketing channels to distribute the same products to the same target market. Gap selling its clothing both online and in stores is an example of dual distribution.

Laurie bought herself a new jacket using a marketing channel that has only one intermediary. That intermediary is classified as a _______. a.retailer b.wholesaler c.broker d.industrial distributor

a.retailer If a marketing channel for consumer products has only one intermediary, that intermediary is a retailer.

Eliminating wholesalers from marketing channels _______. a.would likely increase prices consumers pay b.increases the efficiency of marketing channels c.eliminates the functions performed by wholesalers d.would likely decrease prices consumers pay

a.would likely increase prices consumers pay If wholesalers are eliminated, the functions performed by wholesalers would still need to be performed. Manufacturers and retailers would likely not perform these functions as efficiently as wholesalers, resulting in higher prices paid by consumers.

Kraft sells its macaroni and cheese through thousands of retailers across the country. Which of the following marketing channel structures is Kraft most likely to use? a.Producer, wholesaler, and consumer b.Producer, wholesaler, retailer, and consumer c.Producer and consumer d.Producer, retailer, and consumer

b.Producer, wholesaler, retailer, and consumer Because of the complexities in dealing with thousands of retailers, Kraft is most likely to use wholesalers to interact with retailers. The structure of the channel is producer, wholesaler, retailer, and consumer.

A channel that includes both a manufacturers' agent and an industrial distributor is appropriate under which of the following circumstances? a.The manufacturer's sales force is available to assist the agents and distributors. b.The producer wants to cover a large geographic area but has no sales force. c.The product being sold is relatively inexpensive and easy-to-use. d.The manufacturer's product is expensive with a lot of specific technical detail.

b.The producer wants to cover a large geographic area but has no sales force. A channel with both a manufacturers' agent and an industrial distributor is appropriate when the manufacturer wants to cover a large geographic area. This may be the case if the company cannot afford a sales force or if the product sold is very seasonal.

Fiat Chrysler has an agreement with GAC Group, a Chinese automobile manufacturer, to produce Jeeps in China to be sold to Chinese customers. This agreement gives Fiat Chrysler access to the Chinese market without having to pay import tariffs on cars produced in the United States and sold in China. This is an example of _______. a.horizontal channel integration b.a strategic channel alliance c.dual distribution d.tying agreements

b.a strategic channel alliance This is an example of a strategic channel alliance. The agreement gives Fiat access to GAC's distribution network in China and allows the cars to be sold in China at a lower price due to the reduced import tariffs.

Dan is the president of a small firm that builds office furniture. His company is still fairly small and has not hired a sales staff yet. Dan's firm likely is using _______ to maintain contact with the companies that buy its furniture. a.wholesalers b.agents c.retailers d.brokers

b.agents His firm is likely using agents. Agents may be an economical alternative to a firm that does not have the resources to hire its own sales staff.

Grainger is an industrial supply company selling equipment from manufacturers and selling the equipment to manufacturing companies. Grainger takes title and carries inventory of the products it sells. Grainger is an example of a(n) _______. a.broker b.industrial distributor c.wholesaler d.manufacturer's agent

b.industrial distributor By selling equipment to other companies while taking title and carrying inventory, Grainger is an industrial distributor.

Business consumers frequently buy _______, while consumers typically buy _______. a.new products; used products b.large quantities; limited quantities c.on credit; with cash d.through catalogs; online or in-store

b.large quantities; limited quantities Business consumers frequently buy in large quantities. Consumers generally buy limited quantities of a product. For example, if a consumer wants to buy pens, he or she might buy a pack of five pens; however, a business might buy dozens of pens for the office staff.

Place utility is best described as _______. a.not running out of a product in any location where it is sold b.making the product available in locations where customers wish to purchase it c.having the product available in as many locations as possible to make it easy to find d.having the product available in as few locations as possible to increase brand exclusivity

b.making the product available in locations where customers wish to purchase it Place utility is making the product available in locations where customers wish to purchase it.

Select Comfort, a producer of adjustable air mattresses, sells its products through retail chains, direct mail sales, and on its website. This is an example of _______. a.materials handling b.multichannel distribution c.direct marketing d.logistics

b.multichannel distribution Multichannel distribution is the use of a variety of marketing channels to ensure maximum distribution.

Marketing channels create four types of utility for consumers. These are _______. a.value, expectations, form, and distribution b.time, place, possession, and form c.logistics, transportation, warehousing, and order processing d.ownership, location, ease of use, and purchasing

b.time, place, possession, and form The four types of utility distribution channels create are time (having a product available when the consumer wants it), place (making it available where the consumer wants to buy it), possession (consumer has access to the product to use or to store for future use), and form (assembling, preparing, or somehow refining the product to suit customer needs).

In a simple economy of 3 producers and 10 consumers, there would be _______ possible transactions without an intermediary. With one intermediary, the number of possible transactions would be _______. a.30; 10 b.10; 30 c.30; 13 d.13; 30

c.30; 13 Without an intermediary, there would be 30 possible transactions (# producers x # consumers = 3 x 10 = 30). With a single intermediary, there would be 13 possible transactions (# producers + # consumers = 3 + 10 = 13).

Which of the following products will most likely use the longest distribution channel? a.Milk b.Automobiles c.Canned vegetables d.Fine china

c.Canned vegetables Less expensive, standardized products with long shelf lives can go through longer channels with many intermediaries. Complex and expensive items (automobiles), perishable products (milk), and fragile products (fine china) are likely to have shorter distribution channels. Therefore, canned vegetables most likely have the longest distribution channel.

Which of the following describes an advantage of using industrial distributors? a.They are focused only on the producer's products and do not sell any competing products. b.They usually possess considerable specialized knowledge to sell technical products. c.They can perform needed selling activities in local markets at a relatively low cost. d.They are part of a corporate vertical marketing system and under the same management.

c.They can perform needed selling activities in local markets at a relatively low cost. Of the statements listed, the advantage of using industrial distributors is that they can perform needed selling activities in local markets at a relatively low cost.

When considering the best channel to use, the following are true about smaller firms, except that they _______. a.may not be able to maintain a large inventory b.may consider including channel members that can extend credit c.are likely to have a large number of distribution centers d.may be in a strong position to cater to customers in a particular area

c.are likely to have a large number of distribution centers Smaller firms are not likely to have a large number of distribution centers. When considering the best channel to use, smaller firms may be in a strong position to cater to customers in a particular area and may not have the resources to develop their own sales force, ship products long distances, maintain a large inventory, or extend credit. They may want to consider including channel members that can provide these services to customers.

Caterpillar manufactures bulldozers and other large construction equipment that it sells directly to construction companies. This is an example of a _______ channel. a.producer-agent-buyer b.producer-agent-distributor-buyer c.producer-buyer d.producer-distributor-buyer

c.producer-buyer Since Caterpillar sells directly to construction companies, the only two members of the distribution channel are the producer and the buyer. This is common in business markets when selling expensive equipment.

When 4 buyers purchase the products of 6 producers, 24 transactions are required. If one intermediary serves both producers and buyers, the number of possible transactions is _______. a.12 b.18 c.4 d.10

d.10 Without an intermediary, there would be 24 possible transactions (# producers x # consumers = 4 x 6 = 24). When one intermediary serves both producers and buyers, the number of possible transactions is 10 (# producers + # consumers = 4 + 6 = 10).

Manufacturers of convenience products such as chewing gum reach customers through thousands of retailers. What marketing channel are these manufacturers most likely to use? a.Producer, wholesaler, agent, retailer, and consumer b.Producer, retailer, and consumer c.Producer and consumer d.Producer, wholesaler, retailer, and consumer

d.Producer, wholesaler, retailer, and consumer Gum is a convenience good. Producer to wholesaler to retailer to consumer is a practical option for producers that sell to hundreds of thousands of customers through thousands of retailers.

Customers receive the benefits of form utility from an intermediary when _______. a.the consumer is pre-approved for purchase and does not have to complete paperwork b.the retailer has many locations available to purchase a desired product c.the product is preassembled in the manufacturer's packaging d.a retailer offers to add a monogram to a product

d.a retailer offers to add a monogram to a product Form utility from an intermediary is when the intermediary assembles, prepares, or otherwise refines the product to suit individual consumer needs. The retailer offering to add a monogram is an example of an intermediary providing form utility.

Sonia is planning a trip to Belize. She is looking for places to stay through the online rental service Airbnb. After comparing many different places, she decides on where she wants to stay and books her lodging. Airbnb is able to use _______ that allows distribution and _______ to occur simultaneously. a.multichannel distribution; electronic data interchange b.just in time distribution; consumption c.multichannel distribution; purchasing d.digital distribution; consumption

d.digital distribution; consumption Digital distribution involves delivering content through the internet to a computer or other device. For example, when you watch a TV show on Netflix or Hulu or listen to music on Pandora or Spotify, those networks stream the content to your device so that you can consume them at the same time.

When dealing with large grocery stores, Nestlé sells its Gerber baby foods directly to retailers. For smaller grocery stores, however, Gerber baby food is sold to wholesalers who in turn sell it to the stores. Nestlé is using _______. a.industrial distributors b.agents c.a strategic channel alliance d.dual distribution

d.dual distribution Dual distribution occurs when a firm uses two or more marketing channels to distribute the same products to the same target market.

The end result of eliminating marketing intermediaries is a cost benefit. True False

False Critics who suggest that eliminating wholesalers will lower prices for customers fail to recognize that this would not eliminate the need for the services the wholesalers provide. Although wholesalers can be eliminated, their functions cannot. Other channel members would have to perform those functions, perhaps not as efficiently, and customers still would have to pay for them. In the end, customers might end up paying a great deal more for products, because prices would reflect the costs of an inefficient distribution channel.