Chapter 5 Retailing

A(n)_______ vertical marketing channel exists when one of the members takes the initiative to manage the channel. a. administered b. allocated c. conventional d. concentrated e. concentric

A

When all possible retailers are used in a trading area, the channel strategy is termed: a. exclusive. b. intensive. c. selective. d. partial coverage. e. pull coverage.

B

A(n) _____ is a type of contractual vertical marketing channel that is actually a form of licensing. a. retailer-owned cooperative b. conventional marketing channel c. franchise d. wholesaler-sponsored voluntary group e. independent retailer

C

Although there are exceptions, as a general rule _____ distribution is associated with _____ goods. a. intensive; shopping b. intensive; specialty c. selective; specialty d. selective; shopping e. selective; convenience

D

The eight marketing functions are buying, selling, storing, transporting, information gathering, financing, risk taking, and: a. managing. b. product development. c. facilitating. d. designing. e. sorting.

E

The major facilitating institution involved in storage is the: a. private warehouse. b. in-transit warehouse. c. demand collection channel. d. contract warehouse. e. public warehouse.

E

There are actually three strategy decisions to be made when designing an efficient and competitive supply chain: supply chain length, width, and: a. convenience. b. depth. c. organization. d. type. e. control.

E

Each of the following is a marketing function that retailers perform EXCEPT: a. pricing. b. information gathering. c. selling. d. financing. e. storing.

A

Exclusive distribution: a. means only one retailer is used in the trading area. b. means that a smaller number of retailers are used to reach the target market. c. means that all possible retailers are used to reach the target market. d. is associated with the distribution of convenience goods. e. is associated with shopping goods.

A

Facilitating institutions may best be described as specialists that: a. while not taking title, still perform marketing functions for supply chain members. b. create new markets for the manufacturer. c. serve as the supply chain leaders. d. perform functions supply chain members cannot legally perform. e. eliminate conflict from the supply chain.

A

Marketing institutions are classified into two categories: a. those that take title to the goods and those that do not. b. those that are paid a flat fee and those that work on commission. c. those that take possession and those that do not. d. those that are profitable and those that are not. e. those with high margin and those with low margin.

A

The major difference between primary marketing institutions and facilitating marketing institutions is that facilitating members: a. do not take title to the goods. b. are paid only a percentage of profits made. c. take title to the goods. d. perform all eight functions in all channels situations. e. are always paid by the manufacturer.

A

TrueValue, Ace, and Handy Hardware are all examples of a(n): a. retailer-owned cooperative. b. contractual vertical marketing system. c. wholesaler-sponsored voluntary group. d. independent retailer. e. franchisee.

A

Vertical marketing channels are typically classified into the following three categories: a. contractual, administered, and corporate. b. cooperatives, owned, and voluntary. c. wholesaler-sponsored, retailer-sponsored, and franchised. d. vertical, horizontal, and interfaced. e. facilitating, primary, and conventional.

A

A(n) _____ supply chain is the channel that results once independent channel members are added between the manufacturer and the consumer. a. direct b. indirect c. localized d. undiverted e. limited

B

Although there are exceptions, as a general rule _____ distribution is associated with _____ goods. a. intensive; shopping b. intensive; convenience c. selective; specialty d. selective; luxury e. selective; convenience

B

An attempt by a wholesaler to preserve a market for its products by strengthening the retailers that it sells to is an example of what type of channel arrangement? a. Retailer-owned cooperative b. Wholesaler-sponsored voluntary group c. Corporate system d. Retail-sponsored marketing system e. Franchised retail program

B

Retailers frequently use _____ for short-term loans to fund working-capital requirements. a. commercial banks b. factors c. e-tailing brokers d. stock and commodity exchanges e. venture-capital firms

B

Sylvan Learning, The UPS Store, AAMCO Transmissions, H&R Block, and Lawn Doctor are examples of what kind of vertical marketing channel? a. Wholesaler-sponsored voluntary group b. Contractual channel system c. Administered system d. Retailer-owned cooperative e. Conventional marketing system

B

The supply chain, or channel, is affected by five external forces: consumer behavior, the legal and ethical environment, the socioeconomic environment, the technological environment, and: a. the natural or physical environment. b. competitive behavior. c. personal relationships. d. channel function management. e. new government regulations.

B

Vertical marketing channels attempt to: a. increase channel effectiveness but not channel efficiency. b. minimize the suboptimization of the channel. c. increase channel efficiency while minimizing channel effectiveness. d. maximize the suboptimization of the channel. e. coordinate activities among retailers.

B

Which of the following external forces does NOT have a major influence on the supply chain? a. Technological environment b. Employee morale c. Legal environment d. Consumers e. Behavior of competitors

B

A _____ is defined as a set of institutions that moves goods from the point of production to the point of consumption. a. retail system b. transporter c. supply chain d. franchisee e. value chain

C

A supply chain in which each member is loosely aligned with the others is a(n): a. modified channel. b. unadministered channel. c. conventional marketing channel. d. corporate marketing channel. e. contractual marketing channel.

C

A(n) ______occurs when the manufacturers sell their goods directly to the final consumer. a. supply chain width b. selective distribution channel c. direct supply chain d. exclusive distribution channel e. indirect supply chain

C

Items for which are frequently purchased and the consumer is not willing to spend a great deal of effort to purchase are known as: a. shopping goods. b. industrial goods. c. convenience goods. d. raw materials. e. specialty goods.

C

Selective distribution: a. means that all possible retailers are used to reach the target market. b. means only one retailer is used in the trading area. c. means that a smaller number of retailers are used to reach the target market. d. is associated with the distribution of convenience goods. e. is identified with specialty goods.

C

The three concepts of interorganizational management that a retail executive needs to understand are dependency, _____, and conflict. a. trouble-shooting b. interorganizational transfers c. power d. chain of command e. personalities

C

There are three types of primary marketing institutions: manufacturers, retailers and: a. transporters. b. agents/brokers. c. wholesalers. d. advertisers. e. warehouses.

C

Concerning the "supply chain," which of the following statements is true? a. Supply chains are so closely associated with high prices that many retailers are dropping out of supply chains and performing the functions themselves. b. Most supply chains will disappear within the next decade, as all merchandise will soon be purchased directly from manufacturers. c. Supply chains do not aid the retailer in providing possession, form, or place utility, for the final consumer. d. Profits sufficient for survival and growth will be difficult for a retailer to achieve without being part of an efficient, effective supply chain. e. Supply chains seldom change over time.

D

Identify the incorrect statement about the conventional marketing channel. a. It is historically predominant in the United States. b. It is a sloppy and inefficient method of conducting business. c. It fosters intense negotiations within each pair of institutions in the supply chain. d. Its members are able to divide the marketing functions among all the participants. e. It has been on the decline in the United States since the early 1950s.

D

What type of vertical marketing channel has a well established authority structure? a. Franchise system b. Contractual vertical marketing system c. Conventional marketing system d. Corporate vertical marketing systems e. Wholesaler-sponsored voluntary group

D

Which one of the following institutions involved in a supply chain would take title to the goods it is dealing with? a. Trucking company b. Insurance company c. Market researcher d. Retailer e. Public warehouse

D

_____ are primarily used by retailers starting a new operation or format. a. Factors b. Merchant banks c. Stock and commodity exchanges d. Venture-capital firms e. Insurance firms

D

_____ involves breaking down heterogeneous materials or product into more homogenous groups. a. Organizing b. Classifying c. Synthesizing d. Sorting e. Grouping

D

Although there are exceptions, as a general rule _____ distribution is associated with _____ goods. a. intensive; shopping b. selective; convenience c. selective; specialty d. exclusive; shopping e. exclusive; specialty

E

Identify the correct statement about quick response (QR) systems. a. They are developed by conventional channel members. b. They are also known as SKU systems. c. These systems are different despite the similar names adopted by various retail industries. d. They are designed to obtain real-time information on consumers' actions by capturing ECR data at point-of-purchase terminals. e. The information obtained is used to develop new or modified products, manage channel-wide inventory levels, and lower total channel costs.

E

Usually high-prestige branded products that the consumer expressly seeks out, such as Rolex watches, are known as: a. shopping goods. b. industrial goods. c. convenience goods. d. raw materials. e. specialty goods.

E