ch.13

Kintetsu World Express is an organization that consolidates shipments from several industrial firms into more efficient lot sizes so that they can be more efficiently transported. What type of transportation company is Kintetsu World Express?

A freight forwarder

What is a primary difference between an industrial distributor and a manufacturers' agent?

A manufacturers' agent does not acquire title nor usually take possession of the products whereas an industrial distributor does.

Who or what determine(s) under what circumstances channel management practices violate the principle that the public is best served by protecting competition and free trade and therefore must be restricted?

Courts and regulatory agencies

Which of the following types of distribution allow distribution and consumption to occur at the same time?

Digital distribution

Select the greatest advantage of horizontal channel integration.

Efficiencies in advertising, marketing research, and purchasing are increased.

What two modes of transportation are used when containers are shipped by piggyback?

Railroads and trucks

Which of the following describes a disadvantage of using industrial distributors?

They are unlikely to handle bulky items or items that are slow sellers.

When channel members are linked by legal agreements that specify each member's rights and responsibilities, ____ exists.

a contractual VMS

Which of the following is likely to employ a longer marketing channel with more intermediaries?

Canned peas

Jake attends a seminar on just-in-time inventory management. Excited about the idea, he returns to his office at Riverdale Auto Supply to start designing such an inventory system. Which of the following steps must Jake take as he institutes this change?

Increase order frequency

_ involves developing and maintaining adequate assortments of products to meet customers' needs.

Inventory management

STT is a manufacturer of very large blades used in energy-producing wind turbines. What is most likely the most expensive logistics function associated with the STT product?

Transportation of the product

Tasha is responsible for the freight transportation of products sold by Lincoln Biochem, a producer of cooking oils sold to large institutions. Because Tasha needs to schedule freight transportation with the mode that provides the most flexible schedules and routes, which of the following should she use?

Trucks

Starbucks has an agreement with PepsiCo through which Pepsi distributes Starbucks' coffee drink, Frappuccino, to grocery stores and other retail outlets. This is an example of

a strategic channel alliance.

In a corporate VMS,

all stages of the marketing channel are combined.

Two technologies that are significantly improving supply chain management are

blockchain and artificial intelligence.

Bethlehem Steel wants to install technology into its logistics management system that will enable it to gain efficiency and accuracy in inventory tracking, stocking, and electronic notifications. Bethlehem Steel is most likely using

radio frequency identification.

Tying agreements occur when a

supplier furnishes a product to a channel member with the stipulation that the channel member must purchase other products as well.

The notion of logistics is

the activities used to move products from producers to end users.

The best way to reduce overall logistics costs is to

use a total-cost approach to analyze and evaluate the entire system

Disney sells apparel, cookie jars, puzzles, photo albums, and other items featuring its popular cartoon characters directly through its own retail outlets. This is an example of

vertical channel integration.

Hernandez Wholesale Plumbing has seen its sales in the Southeast triple in the past two years. Materials handling director Beverly Picard announces plans to the board for an Atlanta facility that will combine shipments received from Hernandez's 25 suppliers for nearly immediate shipment to plumbing stores and contractors in the region. This new facility would be best classified as which of the following?

Distribution center

Suppose that Faust Distributing has been told that it cannot carry the beers made by Anheuser-Busch because it also carries the products of the competitor, Miller Brewing. Faust is then told that it must drop the Miller brands in order to carry the Anheuser-Busch products. If this were true, Anheuser-Busch would be engaging in which of the following channel management practices?

Exclusive dealing

You are the head of supply chain management at a large manufacturing company in the Midwestern United States. You just returned from a series of workshops on how technology is being deployed by different companies around the world to improve their supply chain management activities. You are excited about the prospect of increasing the use of technology in your firm. Which one of the following reasons would you use to convince your firm's CEO to invest more money in technology for supply chain management?

It will create a more effective process for matching inventory needs to manufacturing requirements.

What links producers to consumers through the purchase and reselling of products or contractual agreements?

Marketing intermediaries

Which of the following is the physical treatment of tangible goods, supplies, and resources?

Materials handling

Product and target market characteristics usually determine the type of coverage a product receives. For which of the following products is selective distribution most appropriate?

Organic foods

Refer to Scenario 13.1. Which of the following is most likely the primary factor Kelly Rose, Inc. used when selecting the marketing channel for its Costura Moderno brand?

Product attributes

What function of logistics enables companies to compensate for dissimilar production and consumption rates and stabilize prices and availability of seasonal items?

Warehousing

Compass Minerals needs to transport 20 tons of salt from Baton Rouge, Louisiana, to St. Louis, Missouri. Which of the following methods would be the cheapest for transporting this cargo?

Waterways

Huy Fong Foods markets a Sriracha sauce for household use to supermarkets through grocery wholesalers. It markets a Sriracha sauce for institutional use through industrial distributors and food brokers. Huy Fong is using

a multichannel distribution.

When a single channel member manages an integrated marketing channel to achieve low-cost, effective distribution for satisfying target markets, ____ exists.

a vertical marketing system

Adam is the head of a company that produces computer software for production scheduling. The firm is small and presently does not generate enough volume to justify hiring a sales force. The firm is probably using ____ to maintain contact with the firms using its products.

agents

A producer is not likely to receive ____ from an industrial distributor.

aggressive promotion of its brand

A public warehouse is a

business that leases storage space and related facilities for distribution to other firms.

Under Armour maintains a good deal of control over how its products are promoted, displayed, and sold. Because of this control, Under Armour would be appropriately described as the channel

captain.

A single leader who controls and organizes a marketing channel is called a

channel captain.

Marketing channel members are likely to experience misunderstandings, frustration, and poorly coordinated strategies as a result of

channel conflict caused by inefficient communication between channel members.

When one company in a marketing channel has the ability to influence another member's goal achievement, the company has

channel power.

Overall channel goals and individual channel member goals cannot be achieved together without

cooperation.

H&M, which produces and retails clothing products in a coordinated channel, is an example of a(n)

corporate vertical marketing system.

An important goal of logistics is maintaining or reducing costs while reducing

cycle time.

The main objective of logistics should be to

decrease costs while increasing customer satisfaction.

A marketing channel is defined as a group of individuals and organizations that

directs the flow of products from producers to customers.

A commonly used computerized means of integrating order processing with production, inventory, accounting, and transportation is

electronic data interchange.

Companies that sell products with high profit margins are more likely to use _______________. Companies selling products whose sales are directly related to product availability will most likely use ______________.

exclusive distribution; intensive distribution

To expand the number of its retail outlets in the Washington, D.C. area, Whole Foods bought out a small chain of organic food stores in northern Virginia. This type of integration is called

horizontal.

If a retailer is reviewing its inventory and notices that the order lead time for one of the products it stocks has increased, the retailer should

increase its reorder point.

Aaron 's company buys machine tools from large producers and sells them to several Midwestern manufacturing companies. The company Aaron works for carries inventories of the tools, which reduces capital requirements for the producers. Aaron's company is an example of a(n) ____ in a distribution channel.

industrial distributor

Paper towels and trash-can bags are most likely distributed through ____ and ____.

intensive distribution; multichannel distribution

Trip is a transportation coordinator for Volvo Cars US. In order to move a large order of vehicles from a plant in Sweden to Chicago, he is planning to use both waterways and railroads. The combining and coordinating of these two modes of transportation in order to take advantage of benefits offered by each of the different types of carriers is called

intermodal transportation.

If Samsung decides to make changes in its marketing channels, the strategic significance is that channel decisions are

long-term commitments.

Higher costs in one functional area of a logistics system may be necessary to achieve

lower costs in another.

The objective of inventory management is to minimize inventory costs while

maintaining an adequate supply of goods to satisfy customers.

An independent businessperson who is paid a commission to sell complementary products of different producers in an assigned territory without actually taking title of the merchandise is a(n)

manufacturers' agent.

Dell makes its computers available through its own stores, its website, and some major retailers. This is an example of

multichannel distribution.

Eliminating a wholesaler from a marketing channel will

not eliminate the functions performed by that wholesaler.

Although there is no single method for resolving conflict, partnerships can be reestablished if the role of each channel member is clearly defined and followed and channel members agree

on means of coordinating channels.

Wagreens drug stores prefer to receive refills of prescriptions through a phone-based system where customers can directly key in the information about the drug. By receiving orders in this manner rather than through a paper-based system or by a phone conversation with a pharmacy employee, Walgreens has been able to save time and money on

order entry.

As her Internet quilt and bed linen business grew, Carrie could no longer perform all the distribution activities, so she hired a shipper and an information technology firm to assist with these functions. Carrie is using ____ for logistics for her business.

outsourcing

If a firm decides to contract its logistics functions to third parties that have no managerial authority within the marketing channel, it is using

outsourcing.

Comfort-Tech management learns that last month's production run of heaters at its Dubuque plant is defective and announces a recall of the specific models produced. To handle the large number of products it expects to receive for replacement of the defective thermostats, Comfort-Tech will probably need to add a ____ to its distribution network.

public warehouse

The supply chain begins with______________ and ends with_________________.

raw materials; customers

Using a freight forwarder usually

reduces transit time.

When Jemma buys organic produce for her household using a channel with just one intermediary, that intermediary is classified as a

retailer.

Reza is concerned about not having enough air conditioning units in inventory during June, July, and August so he keeps extra inventory to guard against stockouts during this critical period. Reza is keeping

safety stock.

When Merrell introduced its Chameleon hiking shoes, they were distributed through REI, Dick's, Bass Pro Shops, and a few other retailers. The Merrell Chameleon hiking shoe was most likely distributed through the _____ of distribution.

selective level

Fragile products that require special handling are more likely to be distributed through

shorter channels.

The coordination of all the activities involved with the flow and transformation of supplies, products, and information throughout the supply chain to the ultimate consumer is called

supply chain management.

Possession utility is best described as

the customer having access to the product to use now or store and use later.

Multichannel distribution is characterized as

the use of a variety of marketing channels to ensure maximum distribution.

The main reason a manufacturer will prohibit intermediaries from selling its products outside designated sales territories is to

tighten its control over distribution of its products.

You are meeting with the new CEO of your company to discuss marketing channel strategies. You are delighted to learn that the CEO actually understands the importance of marketing channels in a firm's sales success. The CEO tells you that his primary concern is that the chosen marketing channel facilitates the firm's ability to make products available when customers want them, and in locations where they want them. He leaves it to you to decide on the appropriate marketing channel. Given his primary concern you should make sure the channel you choose is capable of creating lots of

time and place utility

Granite Springs wants to ship its bottled water with the most flexible schedules and routes of all transportation modes. Granite Springs should use ____ as its transportation mode.

trucks

WCO Logistics uses _____ technology to track containers through its distribution center in Sacramento, California. Each container has a special tag on it that allows hundreds of containers to be scanned simultaneously, improving the throughput of containers through the center.

RFID

Because of the significant investment many companies have in the products they sell to customers, they must develop and maintain adequate varieties of products to meet their customers' needs. This is called

inventory management.

Oscar is in charge of ensuring the successful transportation and storage of his company's products. He monitors the products from the time they leave the factory to when they are dropped off at retailers and purchased by customers. Oscar's job title would most likely be

logistics manager.

Assuming everything else is equal, the most cost-efficient way for ConocoPhillips to transport crude oil from remote oil drilling sites in central Alaska to shipping terminals on the Alaskan coast would be

pipelines.

Tarek's job requires that he spend significant time identifying optimal sources for the raw materials and other products his manufacturing company requires. He needs to find sources that are sustainable and come from countries that do not have human rights issues. He is also involved in negotiating and transacting exchanges for these raw materials and other products. He has recently been tasked with identifying ways to recycle or reuse materials once his firm no longer needs them. Tarek's job title would most likely be

procurement manager.

Which of the following includes activities such as manufacturing, research, sales, advertising, and shipping, as well as involving all entities that facilitate product distribution?

Supply chain management