Marketing Ch. 13

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

aggressive promotion of its brand

Expensive, high-quality products that are purchased infrequently often reach consumers through

exclusive distribution.

When Bud Light Orange Beer was introduced as part of the Anheuser-Busch product line, the company most likely used ____ distribution.

intensive

Having products available when customers want them creates

time utility.

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

warehousing

In a simple economy of five producers and five consumers, there would be ____ transactions possible without an intermediary and ____ transactions possible with one intermediary.

25; 10

When three buyers purchase the products of three producers, nine transactions are required. If one intermediary serves both producers and buyers, the number of possible transactions is

6

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

Which of the following involves planning, implementing, and controlling the efficient and effective flow and storage of products and information from the point of origin to consumption to meet customers' needs and wants?

Logistics management

What is typically the primary determinant in deciding how materials will be handled?

Product characteristics

____ adds time and place utility to a product by moving it from where it is made to where it is purchased and used.

Transportation

All of the following products are likely to use the producer-retailer-consumer marketing channel except for

U-Pick farm produce.

Piggyback, fishyback, and birdyback are terms usually associated with gaining efficiency in shipping through

containerization.

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

corporate vertical marketing system.

The driving force behind marketing channel decisions should be

customer satisfaction.

A goal of logistics is to reduce ____ or how long it takes to complete a process.

cycle time

The main objective of logistics should be to

decrease costs while increasing customer satisfaction.

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

At the annual managers' planning conference, Deanna Riker asks the other managers to consider her proposal to increase the quantity of inventory to a five-week supply in order to increase the percentage of completely filled customer orders from 85% to 90%. She states that she is willing to trade off the ____ incurred for the positive effect of better customer service.

higher warehousing costs

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.

Vertical channel integration

is made possible by purchasing the operations of a channel member.

Refer to Scenario 13.2. Currently, Star is using the ____ approach to distributing its janitorial supplies to its large customers.

just-in-time

Order processing, inventory management, materials handling, warehousing, and transportation are the activities that define

logistics.

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.

Managers and consultants at Unilever are meeting to discuss better ways to package its products to reduce damage and make loading more efficient. The primary function they are trying to improve is

materials handling.

When considering the best channel to use, all of the following are true with regard to larger firms except they

may be better suited to serve customers in a particular region.

Freight transportation companies that offer several different shipment methods are called

megacarriers.

Companies are increasingly using _______ to respond to changing consumer preferences to be able to buy a product wherever and whenever they desire.

multichannel distribution

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.

The order-processing task that involves verifying product availability, checking prices and customer credit ratings, and filling orders is

order handling.

Archer Tractor & Fence Supply is trying to optimize its method of getting products to customers. It has added electronic ordering systems for customers and improved the training process for workers in the warehouse who make the products ready for shipment. The improvements Archer has made are to its

order processing.

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

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

Marketing channels create four types of utility for consumers including

place, time, possession, and form.

Mecklin Steel Company leases a warehouse in Birmingham, Alabama, to serve Deep South markets that are large enough and stable enough to make a long-term commitment to fixed facilities. This is a

private warehouse.

Currently, the courts must evaluate the _______ in establishing restricted territories and the overall effect of doing so on the market.

producer's intent

Woodworks, Inc. markets furniture directly to businesses. This is an example of a(n) ____ channel.

producer-to-business buyer

Consumers receive the benefits of place utility when

products are available in locations where consumers want to buy them.

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

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.

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.

Using only some of the available outlets to distribute a product is called

selective distribution.

Durable goods such as appliances generally reach their target markets through ____; goods such as automobile tires generally reach their target markets through _____.

selective distribution; selective distribution

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

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.

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

The best way to reduce overall logistics costs is to

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

Alibaba is a Chinese e-commerce firm similar to Amazon.com in the United States. It has increased its power and global influence with strong leadership from its founder, including knowing when to acquire other organizations. For instance, in addition to acting as a platform for buyers to purchase products, it also acquired firms in the delivery and payments industries so it would have more control over the entire process. Alibaba's acquisitions are an example of

vertical channel integration.

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.

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

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

Marketing intermediaries

For which of the following products would exclusive distribution be most appropriate?

Rolls Royce automobile

Refer to Scenario 13.1. Kelly Rose, Inc. uses which type of channel of distribution for its premium brands?

A short, direct channel

If a microchip in a computer at the Pentagon failed, which method of transportation would be most appropriate to use to replace the chip immediately if one could get the new chip only from New York City?

Airway

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

Canned peas

____ may stabilize supply, reduce costs, and increase channel member coordination.

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

Select the greatest advantage of horizontal channel integration.

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

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

Which of the following is most likely to be a product stocked solely by an industrial distributor?

Industrial glues and adhesives

Wesley is a logistics manager. He is currently developing and maintaining assortments of products that are adequate for customer demand. In which stage in the logistics system is Wesley currently involved?

Inventory management

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

Inventory management

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?

Marketing environmental forces

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

Which of the following is the most commonly used channel for distributing business products?

Producer, organizational buyers

Large retailers such as Macy's and Kohl's are most likely to participate in which of the following channels?

Producer, retailers, consumers

Which of the following is least likely to be a factor affecting the selection of marketing channels?

Product packaging

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

Miles, sales manager for Enterprise Lumber, tells Julian, the firm's inventory manager, that the firm's failure to have adequate supplies of pressure-treated lumber on hand has cost the firm $175,000 in lost sales. This figure represents which of the following inventory management costs?

Stockout

Which of the following exists when the products of one firm are distributed through the marketing channels of another?

Strategic channel alliance

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

Which of the following is an advantage of using an industrial distributor?

They help reduce a producer's financial burdens by extending credit to customers.

______________ have special expertise in core logistics activities such as warehousing, transportation, inventory management, and information technology and can often perform these activities more efficiently.

Third-party logistics firms

Which of the following logistics functions involves design and operation of facilities for storing goods?

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

The courts generally accept tying agreements when the supplier is the only firm able to provide products of a certain quality, when the intermediary is free to carry competing products as well, and when

a company has just entered the market.

Cassy and James both are buying new iPhones this week. Cassy goes to the Apple store because she wants to actually see the phone before she makes a final decision. James knows that he does not need to see the phone, because he just wants to update from his older version. He simply orders it online. Cassy is purchasing her phone through_____, while James is purchasing his through ___.

a retailer; a direct-marketing channel

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

Kashmir Inc. is using a new just-in-time inventory management system that requires ordering smaller quantities of parts more frequently. The success of its business depends significantly on receiving these parts very quickly, so like many other companies using just-in-time, Kashmir Inc. is relying more on the ____ mode of transportation despite its expense.

airway

An inventory stockout usually results in

an increase in lost sales.

To achieve the desired intensity of market coverage, distribution must correspond to

behavior patterns of buyers.

Two technologies that are significantly improving supply chain management are

blockchain and artificial intelligence.

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.

Traditionally, Lamme's Candies has used direct sellers to distribute its products. However, it recently made the decision to allow customers to purchase candles directly from its website as well. This decision is likely to create ____________ with its independent distributors.

channel conflict

To prevent channel conflict, producers or other channel members may do all of the following except

combine reseller markets.

Firestone allows companies like Walmart and Discount Tire to distribute and discount its tires. This action significantly increases the possibility of channel ____ with independent Firestone dealers.

conflict

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

cooperation

Order handling involves all of the following activities except that the

customer places a purchase order.

Pandora and Spotify allow users to listen to music through the Internet or other device. Pandora and Spotify are engaging in

digital distribution.

Refer to Scenario 13.2. Clint's suggestion for the uniform rental service was either picking up and delivering the uniforms themselves, or contracting this to a third party. If Star decides to pick up and deliver the uniforms with its own trucks, this is an example of a(n) ____ channel. If Star contracts this action to a third party, it is called ____.

direct; outsourcing

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

electronic data interchange.

Order processing is defined as

the receipt and transmission of sales order information.

Channel decisions are important to marketers mostly because

they involve long-term commitments and affect customer accessibility.

Information technology enhances the ______ of the supply chain, allowing all marketing channel members to track the movement of items throughout the supply chain and improve customer service.

transparency