Chapter 14 - Marketing Channels & Supply-Chain Management

Which of the following is an example of a downstream firm in an organization's supply chain?

A retail chain that sells the organization's products *In ensuring an efficient supply chain, downstream firms are responsible for delivery of a product and after-market services to the ultimate customers.*

Which of the following best describes the logistics management function in supply-chain management?

All activities designed to move a product through the marketing channel to the end user, including warehousing and inventory management *Logistics management involves all activities designed to move a product through the marketing channel to the end user, including warehousing and inventory management.*

Which of the following characteristics is typical of consumers?

Consumers generally buy limited quantity of a product from retailers. *Consumers, unlike business customers, generally buy limited quantities of a product, purchase from retailers, and often do not mind limited customer service.*

Which of the following forms of a vertical marketing system (VMS) combines all stages of a marketing channel, from producers to consumers, under a single owner?

Corporate VMS *In an administered VMS, although individual channel members maintain autonomy, one channel member dominates the VMS so that distribution decisions take the whole system into account.*

Which of the following is characteristic of an administered vertical marketing system?

Domination of distribution systems by one of the channel members

Which of the following statements best describes a disadvantage of industrial distributors?

Industrial distributors are less likely to handle bulky items, or items that need specialized facilities. *Industrial distributors incur expenses from maintaining inventories and are less likely to handle bulky or slow-selling items, or items that need specialized facilities or extraordinary selling efforts.*

Which of the following physical distribution functions involves developing and maintaining an adequate assortment of products to meet customers' needs?

Inventory management

Which of the following supply chain activities refers to the total set of managerial activities used by an organization to transform resource inputs into products, services, or both?

Operations management

A food manufacturing company that manufactures processed foods is trying to increase sales of its products by making them available in all general and convenience stores rather than just in supermarkets and large department stores. What type of utility is the company trying to create in this case?

Place utility *Place utility is created by making products available in locations where customers wish to purchase them.*

Which of the following is an example of a contractual vertical marketing system?

Retail-sponsored cooperatives that own and operate their own wholesalers

Which of the following is a disadvantage of using manufacturers' agents in the distribution of business products?

They are often reluctant to spend time following up with customers after a sale. *Manufacturers' agents are often reluctant to spend time following up with customers after a sale, putting forth special selling efforts, or providing sellers with market information because they are not compensated for these activities and they reduce the amount of productive selling time.*

_____ brings most or all stages of a marketing channel under common control or ownership and can help speed the rate at which goods move through the marketing channel.

Vertical integration *Vertical integration brings most or all stages of a marketing channel under common control or ownership. It can help speed the rate at which goods move through the marketing channel.*

Under which of the following circumstances do courts rule tying agreements as illegal?

When a supplier tries to move weaker products along with more popular items *Courts accept tying agreements when a supplier is the only firm able to provide products of a certain quantity, when an intermediary is free to carry competing products as well, and when a company has just entered the market. Most other tying agreements are considered illegal.*

The use of industrial distributors as a part of the distribution channel for business products is most effective when:

a product is needed on demand to avoid high losses. *Industrial distributors can be most effective when a product has broad market appeal, is easily stocked and serviced, is sold in small quantities, and is needed on demand to avoid high losses.*

An exclusive distribution strategy is best suited for products that:

are consumed over a long period of time *Exclusive distribution is suitable for products purchased infrequently, consumed over a long period of time, or that require a high level of customer service or information.*

Possession utility is created when:

customers have access to products to use or to store for future use.

Dell laptops and desktops are some of the most favored computer products both in and outside the United States. The firm sells to individual buyers directly while offering the option of customizing their computers to suit customer requirements. It also markets its laptop and desktop range through company-owned stores as well as retail outlets such as Best Buy. This distribution strategy used by Dell through multiple marketing channels is known as:

dual distribution *Dual distribution is the use of two or more marketing channels to distribute the same products to the same target market.*

When a manufacturer forbids an intermediary to carry products of competing manufacturers, the arrangement is known as _____.

exclusive dealing

Which of the following product categories can be marketed through a selective distribution strategy?

laptops *Selective distribution is appropriate for shopping products, which include durable goods, that consumers are willing to spend more time to compare prices, designs, styles, and other features.*

A(n) _____ is an independent businessperson who sells complementary products of several producers in assigned territories and is compensated through commissions without acquiring title to the products.

manufacturers' agent *A manufacturers' agent is an independent businessperson who sells complementary products of several producers in assigned territories and is compensated through commissions without acquiring title to the products.*

The contracting of physical distribution tasks to third parties who do not have managerial authority within the marketing channel is known as _____.

outsourcing *In the context of distribution, outsourcing is the contracting of physical distribution tasks to third parties who do not have managerial authority within the marketing channel.*

Form utility is created when:

products are assembled, prepared, or otherwise refined to suit individual customer needs.

The inventory level that signals the need to place a new order is known as the _____.

reorder point *To determine when to order, a marketer calculates the reorder point: the inventory level that signals the need to place a new order.*

Which of the following products is most likely to be distributed through intensive distribution?

soft drinks *Intensive distribution uses all available outlets for distributing a product. Intensive distribution is appropriate for products that have a high replacement rate, require almost no service, and are bought based on price cues.*

Which of the following modes of transportation is the cheapest and best suited for transporting heavy, low-value, non-perishable goods such as chemicals, motor vehicles, and agricultural implements?

waterways *Waterways are the cheapest method of shipping heavy, low-value, nonperishable goods. Water carriers offer considerable capacity.*