marketing ch. 14

The dominant leader of a marketing channel or a supply channel

Channel Captain

Suppose you roast coffee and sell it to Maximum Markets. You have a good relationship with Maximum Markets and have relied on them for many years to display your coffees in its stores. Your marketing chain has been relatively short, going from you (the producer) to the reseller (Maximum Markets) to the end consumer. However, you recently received an offer to sell your coffee in other retail stores, some that compete directly with Maximum Markets. You also would like to start selling directly through your website. You decide to provide discounts for coffee sold online. Integrating more channel members and selling to customers directly is likely to cause _______________ with Maximum Markets.

Channel Conflicts

The ability of one channel member to influence another member's goal achievement

Channel Power

The decisions and activities that make products available to customers when and where they want to purchase them

Distribution

Large, centralized warehouses that focus on moving rather than storing goods

Distribution Centers

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

Electronic Data Interchange (EDI)

A situation in which a manufacturer forbids an intermediary from carrying products of competing manufacturers

Exclusive Dealing

Using a single outlet in a fairly large geographic area to distribute a product

Exclusive Distribution

Supply chain management combines two or more stages of the marketing channel under one management. True False

False (Vertical channel integration combines two or more stages of the channel under one management. Supply chain management (SCM) refers to 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.)

Organizations that consolidate shipments from several firms into efficient lot sizes

Freight Forwarders

Combining organizations at the same level of operation under one management

Horizontal Channel Integration

An independent business organization that takes title to industrial products and carries inventories

Industrial Distributor

Using all available outlets to distribute a product

Intensive Distribution

Two or more transportation modes used in combination

Intermodal Transportation

Developing and maintaining adequate assortments of products to meet customers' needs

Inventory Management

An inventory management approach in which supplies arrive just when needed for production or resale

Just-in-Time (JIT)

Managing the efficient and effective flow of materials, products, and information from the point of origin to consumption

Logistics Management

A group of individuals and organizations that direct the flow of products from producers to customers within the supply chain

Marketing Channel

Middlemen that link producers to other intermediaries or ultimate consumers through contractual arrangements or through the purchase and resale of products

Marketing Intermediaries

Physical handling of tangible goods, supplies, and resources

Materials Handling

Freight transportation firms that provide several modes of shipment

Megacarriers

The use of a variety of marketing channels to ensure maximum distribution

Multichannel Distribution

Managing activities from production to final delivery through system-wide coordination

Operations Management

The receipt and transmission of sales order information

Order Processing

Company-operated facilities for storing and shipping their own products

Private Warehouses

Processes to obtain resources to create value through sourcing, purchasing, and recycling, including materials and information

Procurement

Redbox places its vending machines in easy-to-reach areas around pharmacies, grocery stores, discount stores, and more. Most customers of Redbox purchase video and game rentals around dinnertime, so the fact that many of the machines are located close to grocery stores is a strategic move that benefits both Redbox and the store. Redbox manages its selection by keeping track of what movies are being ordered frequently at that location. The individual kiosks inform the company about past purchases, and the company can adjust the availability of DVDs or Blu-rays based on this information. Customers can also reserve movies online. Redbox launched a streaming service called Redbox On Demand to compete with Netflix. George is in charge of working with movie studios and third-party distributors to purchase DVDs and Blu-ray discs to be made available through the kiosks. His only responsibility is to procure the movies and games for the different kiosks. Purchasing specifically falls under ______________

Procurement

Storage space and related logistics facilities that can be leased by companies

Public Warehouses

The act of negotiating and executing transactions to buy and sell goods, materials, and services

Purchasing

Using tags and readers that use radio waves to identify and track tagged materials

Radio Frequency Identification (RFID)

Converting waste into reusable material, reprocessing, reclaiming, or reusing supplies and final products

Recycling

Using only some available outlets in an area to distribute a product

Selective Distribution

The process of determining what materials a firm needs, where those materials come from, and how they impact marketing integrity

Sourcing

An agreement whereby the products of one organization are distributed through the marketing channels of another

Strategic Channel Alliance

All the organizations and activities involved with the flow and transformation of products from raw materials through to the end customer

Supply Chain

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

Supply Chain Management (SCM)

The movement of products from where they are made to intermediaries and end users

Transportation

_____________ is the most expensive logistics function.

Transportation

A manufacturer may try to prohibit intermediaries from selling its products outside designated sales territories to tighten control over distribution of its products. True False

True

Firms that 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 (3PL) Firms

Combining two or more stages of the marketing channel under one management

Vertical Channel Integration

A marketing channel managed by a single channel member to achieve efficient, low-cost distribution aimed at satisfying target market customers

Vertical Marketing System (VMS)

The design and operation of facilities for storing and moving goods

Warehousing

Procurement involves the processes to obtain resources to create value through sourcing, purchasing, and recycling including materials and information. a. True b. False

a. True

Which of the following would most likely use intensive distribution? a. Sony b. Kimberly-Clark c. Prada d. Dell e. Rolex

b. Kimberly-Clark

Sales are most likely to have a direct relationship to product availability for products that use _______ distribution. a. exclusive b. intensive c. selective d. multichannel

b. intensive

The time needed to complete a process

Cycle Time

Selective distribution is desirable when customer service from a channel member is important. True False

True

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 are dedicated to selling only one brand. c. Industrial distributors work on commission and do not take title of products. d. They have limited ability to provide customers with parts or repair services quickly.

a. Since they are independent firms, they may be difficult to control.

After appearing on a national talk show to discuss her line of bracelets and rings, Natalie expected sales volume to increase. Unfortunately, the sales volume was higher than expected and her company had $250,000 in lost sales because it did not have enough inventory. The $250,000 represents which of the following inventory management costs? a. Stockout b. Carrying c. Shortage d. Safety stock

a. Stockout

Alicia is a product manager for a computer manufacturer and has decided to improve its inventory management. She is working with suppliers to wait to purchase materials just right before they are needed in production so that she can keep the levels of inventory low. She is suggesting a(n) _______ approach. a. just-in-time (JIT) b. ordering minimization c. inventory reduction d. safety stock

a. just-in-time (JIT)

Gucci sells its handbags through its company-owned stores and through a handful of high-end department store chains like Neiman Marcus and Saks Fifth Avenue. Gucci is using _______ distribution. a. selective b. intensive c. exclusive d. full-market

a. selective

JD's Diner offers Coca-Cola products to its customers. They have an agreement with Coca-Cola that they are not allowed to carry products from PepsiCo or any other competitor. Coca-Cola is engaging in which of the following channel management practices? a. Tying agreements b. Refusal to deal c. Exclusive dealing d. Restricted sales territories

c. Exclusive dealing

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. retailers b. wholesalers c. agents d. brokers

c. 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.)

An arrangement under which a producer forbids an intermediary to carry products made by competing manufacturers is called _______. a. exclusive distribution b. refusal to deal c. exclusive dealing d. a tying agreement

c. exclusive dealing

JanSport offers a line of backpacks in a variety of styles and sizes. The company needs to make sure that it has an adequate assortment of backpacks available to meet customer demand as part of the _______ stage of logistics. a. materials handling b. transportation c. inventory management d. warehousing

c. inventory management

A manufacturer has the legal right to refuse to do business with a channel member unless _______. a. the supplier is the only firm able to provide products of a certain quality b. competition is promoted among dealers handling different brands c. the channel member resists policies that are anticompetitive or in restraint of trade d. the intermediary is free to carry competing products as well e. dealers and customers in a given market have access to similar products

c. the channel member resists policies that are anticompetitive or in restraint of trade

Ryder describes itself as a firm "that delivers outstanding execution from deep expertise in your industry. Our proven supply chain management and transportation solutions, LEAN guiding principles and an established network across NAFTA and Asia help us customize the right solution to meet your business' needs." Due to its specialized expertise, many firms outsource its logistics activities to Ryder. Ryder is most likely a(n) _______. a. industrial distributor b. manufacturers' agent c. third-party logistics (3PL) firm d. distribution center

c. third-party logistics (3PL) firm

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

c. time, place, possession, and form

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. an indirect marketing channel; a retailer b. a retailer; a wholesaler c. a direct marketing channel; a wholesaler d. a direct marketing channel; a retailer

d. a direct marketing channel; a retailer

Customers receive the benefits of form utility from an intermediary when _______. a. the product is preassembled in the manufacturer's packaging b. the consumer is preapproved for purchase and does not have to complete paperwork c. the retailer has many locations available to purchase a desired product 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. Having the product preassembled in the manufacturer's packaging is form utility, but not provided by the intermediary.)

When a firm has an inventory stockout, it can result in _______. a. increased risk of damage to inventory b. higher materials handling costs c. increased warehousing costs d. brand switching among customers

d. brand switching among customers

A grocery store that sells both Annie's Homegrown Organic Macaroni & Cheese and Horizon Organic Macaroni & Cheese has been giving Annie's products better locations on the shelves and promoting them more in stores than Horizon's products. If this continues, _______ is likely to result. a. dual distribution b. vertical channel integration c. horizontal channel integration d. channel conflict

d. channel conflict (One reason that channel conflict may arise is if an intermediary such as a retailer overemphasizes one brand over another. In this case, the grocery store is emphasizing Annie's products more than Horizon's products.)

General Electric sells its home appliances through a network of dealers and only a few large retailers. It most likely distributes using _______ distribution. a. exclusive b. dealer c. intensive d. selective

d. selective

Retailers work with their suppliers to coordinate operations to meet customer needs, acquire products that their customers demand, and facilitate the movement of products from the suppliers to their stores. When doing all these activities, the retailer is engaging in _______. a. intensive distribution b. horizontal channel integration c. materials handling d. supply chain management

d. supply chain management (These activities are part of supply chain management. Supply chain management is 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.)

Which market coverage is often used to motivate retailers to provide adequate service? a. Intermediate distribution b. Intensive distribution c. Extensive distribution d. Exclusive distribution e. Selective distribution

e. Selective distribution

When a producer, wholesaler, or retailer has the ability to influence another channel member's goal achievement, it _______. a. is horizontally integrated b. is a channel captain c. is vertically integrated d. is multichannel distribution e. has channel power

e. has channel power

Delivering content through the internet to a computer or other device

Digital Distribution

An agreement in which a supplier furnishes a product to a channel member with the stipulation that the channel member must purchase other products as well

Tying Agreement

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; 13 b. 30; 10 c. 10; 30 d. 13; 30

a. 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).)

_______ systems exploit the information in supply chain partners' information systems and make it available for easy reference. a. Customer relationship management b. Logistics management c. Strategic channel alliance d. Procurement e. Channel captain

a. Customer relationship management

A medical supply wholesaler has seen growth in its business recently and has decided to open a new facility designed for moving the products being sold. It will combine shipments received from manufacturers and ship them to medical facilities almost immediately. This new facility would be best classified as which of the following? a. Distribution center b. Private warehouse c. Bonded warehouse d. Public warehouse

a. Distribution center

For which of the following products is selective distribution most appropriate? a. Keurig coffee makers b. Luxury watches c. Porsche cars d. Snickers candy bars

a. Keurig coffee makers

When you buy a new backpack from LLBean.com, which of the following consumer marketing channels are you using? a. Producer to consumer b. Producer to wholesaler to retailer to consumer c. Producer to agent to wholesaler to retailer to consumer d. Producer to retailer to consumer e. Producer to industrial distribution to consumer

a. Producer to consumer

Jeep wants to transport new vehicles from its plant in Toledo, Ohio, to the dealers in Southern California. Which of the following methods would be the cheapest for transporting this cargo? a. Railroads b. Trucks c. Airplanes d. Birdyback

a. Railroads

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

a. They can perform needed selling activities in local markets at a relatively low cost.

Which of the following statements about restricted sales territories is NOT true? a. They restrict the amount of competing products available in an area. b. They are often favored by intermediaries because they minimize competition. c. Courts have found that they can promote competition among dealers with different brands. d. They allow manufacturers to tighten control over product distribution.

a. They restrict the amount of competing products available in an area.

Refusal to deal is legal as long as suppliers do not refuse to deal with intermediaries simply because they resist policies that are anticompetitive. a. True b. False

a. True

Supply chain management includes procurement, logistics management, and operations management activities. a. True b. False

a. True

Walmart is most likely to be a channel captain in the supply chain. a. True b. False

a. True

Which of the following provides time utility by enabling firms to compensate for dissimilar production and consumption rates? a. Warehousing b. Inventory management c. Materials handling d. Order processing e. Transportation

a. Warehousing

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. a strategic channel alliance b. tying agreements c. horizontal channel integration d. dual distribution

a. 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.)

FedEx provides overnight shipping of packages across the United States. If a customer in San Francisco wants a package to be delivered to Atlanta the following morning, speed is very important, and the customer is willing to pay a higher price for the speed. FedEx would most likely use _______ for transporting the overnight package from San Francisco to Atlanta. a. airplanes b. waterways c. pipelines d. trucks

a. airplanes

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

a. are likely to have a large number of distribution centers

If Kellogg's is forcing its retailers to place its cereals in prime locations on the shelves so that customers can see them easier than the competition, it would be _______. a. demonstrating channel power b. integrating the channel vertically c. integrating the channel horizontally d. leading channel cooperation

a. demonstrating channel power

Fila Sports Oceania is a subsidiary of an Italian company that owns apparel rights for certain teams in the Australian Football League. Fila introduced a policy in which retailers could not feature Fila products in the same stores as other licensed products from its rivals. The Australian Competition and Consumer Commission ruled this as anticompetitive. Fila was most likely forcing its retailers into _______. a. exclusive dealing b. restricted sales territories c. refusal to deal agreements d. full-line forcing e. tying agreements

a. exclusive dealing

Pierre runs a grocery store and is working with his suppliers in the planning and implementation of the flow of products from the manufacturer to his store. The goal is to make the transportation and storage of products more efficient and effective. He is engaging in _______. a. logistics management b. procurement c. channel management d. operations management

a. logistics management

Mallory loves her job. She sells complementary products of several producers in assigned territories and is compensated through commissions. Mallory is highly effective at selling these products and is able to earn a high income from commissions. The best part is she never actually owns the products she sells. She acts more as a salesperson. Mallory is most likely a(n) _______. a. manufacturer's agent b. industrial distributor c. megacarrier d. wholesaler e. logistics manager

a. manufacturer's agent

The use of a variety of marketing channels to ensure maximum distribution is best called _______. a. multichannel distribution b. supply chain alliances c. channel integration d. logistics e. digital distribution

a. multichannel distribution

Gap, an American clothing retailer, has come under fire recently for its use of manufacturing facilities in Myanmar. The UN has investigated the Myanmar government's crimes against Rohingya Muslims in Myanmar's Rakhine state saying it is a human rights catastrophe. Gap's continuation of clothing production in a country accused of crimes against humanity concerns _______. a. operations management b. purchasing c. distribution management d. logistics management

a. operations management (Operations management is concerned with managing activities from production to final delivery through system-wide coordination. As the most public and visible aspect of the supply chain, operations management decisions can involve fair trade, working conditions, and child labor concerns.)

Precision Equipment is updating the way it ships its products. Specifically, it is improving _______ by adding electronic ordering to its system, adding automated machines to move items in the warehouse, and partnering with UPS to ensure priority shipping with the carrier. a. order processing b. logistics c. inventory management d. warehousing

a. order processing (Precision Equipment is improving its order processing system, which includes three main tasks: order entry, order handling, and order delivery. Electronic ordering improves the order entry process, the machines improve order handling, and the partnership with UPS improves order delivery.)

Brandon works for Redwood Enterprises in Washington State. As the furniture company expands beyond the Pacific Northwest, Brandon has been asked to find a warehouse to lease in California to serve the company's new markets. This warehouse will be a _______ and will only store furniture manufactured by Redwood Enterprises to be distributed in California and the Southwestern United States. a. private warehouse b. distribution center c. bonded warehouse d. public warehouse

a. private warehouse

Walmart has begun requiring that its suppliers add _______ to their shipments. The shipments can then be tracked using radio waves to help Walmart and its suppliers make the supply chain more efficient. a. radio frequency identification (RFID) tags b. LED trackers c. mobile scanners d. UV chips

a. radio frequency identification (RFID) tags (Radio frequency identification (RFID) tags allow firms to use radio waves to track tagged materials. The technology has broad applications, including tracking inventory, paying for goods and services, asset management, and data collection.)

Walmart is working with its suppliers, using tools such as electronic billing, purchase order verification, and bar code technology, to integrate data used to improve overall performance. This is an example of _______. a. supply chain management b. a horizontal marketing system c. channel conflict d. a vertical marketing system

a. supply chain management

BSNF Logistics is a third-party organization that companies can use to help with their logistics needs. BSNF claims that it has strong capabilities in land, air, water, and rail services. It creates customized solutions to meet a variety of logistics needs for its customers. BSNF Logistics maintains that it has strong expertise in core logistics activities and can often perform these activities more efficiently. BSNF is most likely a(n) _______. a. third-party logistics firm b. megacarrier c. industrial distributor d. wholesaler e. manufacturer's agent

a. third-party logistics firm

Benetton, a leading manufacturer of knitwear in Italy, expanded its operations to include retail outlets in the United States and South America. This type of channel is called _______. a. vertical integration b. horizontal integration c. retail integration d. multilevel integration

a. vertical integration

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

a. would likely increase prices consumers pay

Which of the following is most likely to use exclusive distribution? a. Apple iPad b. Boeing 777 Freighter c. Microsoft Office Suite d. Ford vehicles e. Nespresso coffee machines

b. Boeing 777 Freighter

Which of the following levels of market coverage is most appropriate for products that have a high replacement rate, require almost no service, and are bought based on price cues? a. Physical distribution b. Intensive distribution c. Exclusive distribution d. Selective distribution e. Digital distribution

b. Intensive distribution

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. Power tools b. New college textbooks c. Haircut d. Potato chips

b. New college textbooks

Which of the following levels of market coverage is desirable when a special effort, such as customer service from a channel member, is important to customers? a. Multichannel distribution b. Selective distribution c. Exclusive distribution d. Digital distribution e. Intensive distribution

b. Selective distribution

Which of the following is most likely to use the channel where the good goes from producer to retailer to end consumer? a. Sysco b. Target c. Hershey d. Caterpillar e. Netflix

b. Target

Which of the following have special expertise in core physical distribution activities such as warehousing, transportation, inventory management, and information technology and can often perform these activities more efficiently? a. Freight forwarders b. Third-party logistics firms c. Channel captains d. Corporate VMS e. Megacarriers

b. Third-party logistics firms

Redlands Distributing wants to carry Tide detergent products, made by Procter & Gamble (P&G). P&G agrees, but only if the supplier also purchases P&G's entire line of detergents such as Gain and Cheer. If this were to occur, Procter & Gamble would be engaging in which of the following channel management practices? a. Exclusive dealing b. Tying agreement c. Refusal to deal d. Multichannel distribution

b. Tying agreement

ACME Corp. sells hammers and other tools to Blue's Hardware Store. Suppose that ACME, which is the only supplier of a specific type of hammer that Blue's sells, informs Blue's that it will have to purchase certain other products from ACME if it wants to continue receiving the hammers. Blue's is dismayed because these other products are costly. It has no need for these products. ACME is attempting to get Blue's to enter into _______. a. a vertical integration partnership b. a tying agreement c. restricted sales territories d. a refusal to deal e. exclusive dealing

b. a tying agreement

Horizontal channel integration _______. a. results in coordination of activities in a distribution channel by a single member b. can be done by merging two retailers c. is a result of legal agreements such as those used for franchise locations d. makes it more difficult to achieve economies of scale

b. can be done by merging two retailers

Large manufacturers such as Procter & Gamble are typically able to have control over how its products are promoted and sold in different retail outlets. Due to this control, Procter & Gamble is likely a channel _______. a. dominator b. captain c. priority d. developer

b. captain

Subway, a fast-food sandwich restaurant, has channel members that are connected using legal agreements that spell out the rights and responsibilities of each member. This is an example of a(n) _______ vertical marketing system (VMS). a. fast food b. contractual c. corporate d. legal

b. contractual

In-N-Out Burger is a fast-food hamburger chain headquartered in California that owns and operates every location, resisting franchising any new locations. By owning every location and not franchising, In-N-Out operates a(n) _______ and has no plans of adopting a(n) _______. a. corporate VMS; administered VMS b. corporate VMS; contractual VMS c. administered VMS; corporate VMS d. contractual VMS; corporate VMS

b. corporate VMS; contractual VMS (A corporate VMS is when the distribution channel is entirely owned by a single company, which is In-N-Out's distribution policy. By not opening any franchise locations, In-N-Out is not a contractual VMS, in which legal agreements spell out each member's rights and responsibilities.)

In any one large metropolitan area, there is usually just one Ferrari luxury sports car dealer. This best illustrates _______. a. intensive distribution b. exclusive distribution c. multichannel distribution d. digital distribution e. selective distribution

b. exclusive distribution

When Disney merged with Pixar, the merger gave Disney the ability to produce animated films more efficiently. This is an example of _______. a. an administered vertical marketing system (VMS) b. horizontal channel integration c. vertical channel integration d. a corporate vertical marketing system (VMS)

b. horizontal channel integration

Grainger specializes in products that are used to maintain, repair, and operate facilities (MRO products). Grainger takes title to products and carries inventories. It also offers services such as inventory management and support. Grainger is most likely a(n) _______. a. channel captain b. industrial distributor c. megacarrier d. private warehouse e. third-party logistics firm

b. industrial distributor

FX Productions, one of the production companies behind the television show Atlanta, made several marketing mix decisions that were related to distribution. All of the following are distribution decisions, except _______. a. selling merchandise through its official website b. leasing a billboard in Times Square to feature the star of the show c. making the show available for streaming on Netflix, Amazon, Hulu or other streaming services d. airing Atlanta on FX

b. leasing a billboard in Times Square to feature the star of the show

Product managers for Green Giant are meeting to discuss ways so that they can improve the packaging of their frozen foods to reduce damage and make loading and transportation more efficient. This is an attempt to improve _______. a. warehousing b. materials handling c. inventory management d. order processing

b. materials handling

Freight transportation companies that have the ability to transport products in many different ways including ships, rails, trucks, and air service are known as _______. a. freight forwarders b. megacarriers c. shipping experts d. air-land-sea carriers

b. megacarriers

Becky has started a company selling homemade cookies online. As the company has grown, Becky has decided to hire a third party to handle her logistics tasks so that she can focus on serving existing customers and attracting new ones. She has been using _______ for logistics of the cookies. a. wholesalers b. outsourcing c. order processors d. retailers

b. outsourcing (Outsourcing is the contracting of tasks to a third party. She has outsourced the logistics tasks to firms that have special expertise in the area of shipping, so she can free up resources for other tasks.)

Mercury Toy Store has two types of warehouses that it uses. The first is a _______ that it operates and uses exclusively to store inventory year-round. In the months leading up to the holiday season, when the company knows the demand for toys will increase, it gets a short-term lease on a _______ that helps it store the excess inventory it will need during the holiday shopping season. a. private warehouse; distribution center b. private warehouse; public warehouse c. primary warehouse; secondary warehouse d. main warehouse; leased warehouse

b. private warehouse; public warehouse

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-distributor-buyer b. producer-buyer c. producer-agent-buyer d. producer-distributor-buyer

b. producer-buyer

The courts have held _______ to be a restraint of trade among intermediaries handling the same brands. However, courts have often adopted conflicting positions in regard to this issue and believe it can promote competition under certain circumstances. a. tying agreements b. restricted sales territories c. exclusive dealing d. refusal to deal

b. restricted sales territories (Over the years, the courts have adopted conflicting positions in regard to restricted sales territories. Although the courts have deemed restricted sales territories a restraint of trade among intermediaries handling the same brands (except for small or newly established companies), they have also held that exclusive territories can actually promote competition among dealers handling different brands.)

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

b. retailer

All of the following are examples of procurement, except _______. a. recycling b. retrieving c. sourcing d. purchasing

b. retrieving

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

b. shorter channels

Ethan Allen, a U.S. furniture company, is careful to use hardwoods that naturally regenerate through seeding and sprouting. When procuring wood for furniture, Ethan Allen is largely concerned with _______. a. recycling b. sourcing c. purchasing d. acquiring

b. sourcing (Sourcing is concerned not only with what materials a firm needs, but where those come from. Ethan Allen considers what impact they are having on the environment when they source hardwoods for furniture.)

Exclusive distribution is _______. a. desirable when a special effort is important b. suitable for products consumed over a long period of time c. not suitable for infrequently purchased products d. appropriate for convenience products

b. suitable for products consumed over a long period of time

Supply chain management should begin with a focus on _______. a. the producer b. the customer c. the marketing channel d. the government regulator e. the seller

b. the customer

What type of market coverage is Redbox most likely to use? a. Intermediate distribution b. Exclusive distribution c. Intensive distribution d. Extensive distribution e. Selective distribution

c. Intensive distribution

Redbox kiosks keep track of what movies are being ordered frequently at that location. The individual kiosks inform the company about past purchases, and the company can adjust the availability of DVDs or Blu-rays its uses to supply the kiosks based on this information. These activities most likely fall under which of the following? a. Materials handling b. Warehousing c. Inventory management d. Order processing e. Transportation

c. Inventory management

For which of the following products is exclusive distribution most appropriate? a. Computers b. Smartphones c. Luxury cars d. Hair dryers

c. Luxury cars

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 and consumer b. Producer, wholesaler, and consumer c. Producer, wholesaler, retailer, and consumer d. Producer, retailer, and consumer

c. Producer, wholesaler, retailer, and consumer

Suppliers may use _______ to get rid of slow-moving inventory, while a franchiser may use them to maintain quality control and protect the franchiser's reputation a. Exclusive dealing b. Refusal to deal c. Tying agreements d. Restricted sales territories e. Warehousing

c. Tying agreements

When launching its Dove Men+Care line of men's skin care products, Unilever told its distributors that they had to carry the new line if they still wanted to carry the rest of the Dove line of products. They would have been engaging in which of the following channel management practices? a. Dual distribution b. Refusal to deal c. Tying agreements d. Restricted sales territories

c. Tying agreements

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

c. an agent does not take title of a product, but a distributor does take title

IMA Wholesalers is a distributor of car repair parts and supplies, selling to both retailers and auto repair service businesses. Recently, IMA has been promoting the Pennzoil brand of oil over the Quaker State brand of oil by offering larger discounts to the channel members. If IMA continues to do this, _______ is likely to result. a. channel disintegration b. horizontal channel integration c. channel conflict d. vertical channel integration

c. channel conflict (Channel conflicts arise when intermediaries overemphasize competing products or diversify into product lines traditionally handled by other intermediaries. IMA is promoting one brand over another, which is likely to lead to channel conflict.)

The Mini Roadster is manufactured in England. For cars sold in the United States, they are placed into large boxes that are 8-feet wide, 8-feet high, and 10- to 40-feet long. This way, they can be stacked and shipped on ships and barges across the Atlantic Ocean. This process is referred to as _______. a. piggybacking b. unit loading c. containerization d. warehousing

c. containerization

All members of the supply chain should determine their position in the chain, identify their partners and their roles, and establish partnerships whose focus is _______. a. shifting costs to suppliers b. maximizing technology implementation c. customer relationships d. maximizing costs

c. customer relationships

Jackie works for a custom bicycle manufacturer and is analyzing the order fulfillment process. She wants to shorten the time between receiving an order online and having the order picked up by UPS while maintaining customer service and cost. Jackie is focusing on improving her company's _______ as a way of increasing customer satisfaction. a. shipping time b. fulfillment time c. cycle time d. turnaround time

c. cycle time

Companies have been using computer technology to integrate order processing with production, inventory, accounting, and transportation in a system referred to as _______. a. just-in-time (JIT) delivery b. inventory management c. electronic data interchange (EDI) d. expected data input

c. electronic data interchange (EDI)

Richland Technologies produces smartphone accessories. In order to have enough capital to manufacture its latest batch of accessories, Richland Technologies secured a loan with its inventory as collateral. Instead of moving the collateral to a warehouse, the bank making the loan hired a company to set up a _______ to provide security over the collateral at Richland Technologies' facility. a. public warehouse b. private warehouse c. field public warehouse d. secured warehouse

c. field public warehouse (Many public warehouses furnish security for products used as collateral for a loan. A field public warehouse is established by the public warehouse at the owner's inventory location. In this example, the field public warehouse was established at Richland Technologies' facility to protect the inventory used as collateral.)

A firm that consolidates shipments from many smaller firms into efficient lot sizes is known as a _______. a. freight consolidator b. logistics optimization engineer c. freight forwarder d. megacarriers

c. freight forwarder

In 2015, Heinz and Kraft Foods merged into one company. This is most likely an example of _______. a. multichannel distribution b. vertical channel integration c. horizontal channel integration d. strategic channel alliance e. logistics

c. horizontal channel integration

If PetSmart began to acquire very successful local pet stores, this would be an example of _______. a. multichannel integration b. digital integration c. horizontal integration d. channel power e. vertical integration

c. horizontal integration

Using horizontal channel integration allows a firm to _______. a. use contractual agreements to open franchise locations b. better communicate with other members of the distribution channel c. increase efficiency and develop economies of scale in advertising and other marketing functions d. combine all stages of the distribution channel under a single company's ownership

c. increase efficiency and develop economies of scale in advertising and other marketing functions

Courtney is a transportation coordinator for Nike. She has a large shipment of shoes arriving from plants in Asia and plans on using waterways, railroads, and trucks to transport the containers. Using these different transportation methods will allow Nike to take advantage of the benefits offered by each type of carrier. Using different types of carrier is referred to as _______. a. freight forwarding b. cost-based transportation c. intermodal transportation d. container shipping

c. intermodal transportation

The internet may increase resentment between intermediaries and manufacturers because _______. a. role expectations posted on a manufacturer's website are unclear to intermediaries b. communication between the manufacturers and intermediaries is more open and clear c. it allows manufacturers to create a direct channel that competes with retailers d. it makes it easier for the manufacturers to take the role of channel captain

c. it allows manufacturers to create a direct channel that competes with retailers

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

c. making the product available in locations where customers wish to purchase it

Taco Bell developed a smartphone app that allows customers to place orders by their phones rather than by speaking to an employee at the store. Customers can choose whether to pick up their food in the drive-thru lane or inside the restaurant. The app has given Taco Bell the opportunity to improve its _______. a. warehousing b. transportation c. order processing d. materials handling

c. order processing

Carly works at Kellogg's and is on a team developing a new breakfast cereal. She is currently trying to contact different companies who can provide the specific ingredients and equipment needed to make the cereal. She will work with the procurement department to reach an agreement with the companies selected to provide the ingredients and equipment. She is currently engaging in _______. a. logistics management b. sourcing c. procurement d. purchasing

c. procurement (Carly is engaging in procurement, sometimes called supply management. Procurement involves the processes used to obtain resources to create value through sourcing, purchasing, and recycling, including materials and information.)

Cook Right Pans has two types of warehouses that it uses. The first is a _______ that it leases to store excess inventory during times when its production output is greater than the demand for its pots and pans. The second is a _______ that is used to coordinate the shipping of completed products and is designed for quickly shipping products rather than for storage. a. preassembly warehouse; postproduction warehouse b. private warehouse; public warehouse c. public warehouse; distribution center d. private warehouse; distribution center

c. public warehouse; distribution center

Inditex, the parent company of fast-fashion retailer Zara, is an expert at using technology to track items. For instance, Zara has small bits of this technology attached to its fashion products' security tags. This technology uses signals to keep track of inventory and inform the retailer when more products need to be ordered. It also helps with shipment tracking. This technology is called _______. a. electronic data interchange (EDI) b. digital distribution c. radio frequency identification (RFID) d. vertical marketing system (VMS)

c. radio frequency identification (RFID)

When manufacturers such as Microsoft, Sony, and Bose bypass retailers by opening up their own retail locations, it is likely to _______. a. lead to increased channel cooperation between the retailers and the manufacturers b. increase the communication between the various channel members c. result in channel conflict between the manufacturers and the retailers d. make horizontal channel integration more likely

c. result in channel conflict between the manufacturers and the retailers (Manufacturers bypassing retailers is likely to result in channel conflict between the manufacturer and those retailers. This is because the manufacturer's retail location is a new direct competitor to the existing independent retail locations.)

Anne-Marie is the manager of a department store. She has read predictions that the coming winter is going to be very cold and is concerned that there will be a lot of demand for winter coats. To help avoid stockouts, she is keeping _______. a. private warehouses b. just-in-time inventory c. safety stock d. excess inventory

c. safety stock (The extra inventory she is keeping on hand is referred to as safety stock. It is designed to protect against above-average usage rates and/or longer-than-expected lead times.)

The Fisher-Price company produces toys and baby-related products. For the introduction of its line of nursery furniture for infants and small children, the Fisher Company will most likely use _______ distribution for the products. a. intensive b. horizontal c. selective d. exclusive

c. selective

A wholesaler of produce wants to create a shipping plan for a variety of fruits and vegetables. The managers of the wholesaler want to use _______ because it has the most flexible schedules and routes of all transportation modes. a. pipelines b. waterways c. trucks d. airplanes

c. trucks

When the Quaker Oats Company manufactures its Quaker Chewy Bars, it places several boxes of the bars into larger shipping boxes that are then stacked onto pallets. These pallets can then be easily moved around using forklifts in a process called _______. a. piggybacking b. warehousing c. unit loading d. containerization

c. unit loading

In addition to producing the popular iPhone and iPad, Apple also helps design the components as well as the processors. It also owns its own retail stores. Apple therefore operates in the hardware, software, services, and retail industries. This is an example of _______. a. channel leadership b. horizontal channel integration c. vertical channel integration d. channel cooperation e. channel conflict

c. vertical channel integration

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. 4 b. 12 c. 18 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).)

What is the reorder point if the usage rate is 20 units per day, the order lead time is 8 days, and the safety stock is 60? a. 88 b. 500 c. 1,208 d. 220

d. 220 (The reorder point = (Order lead time × Usage rate) + Safety stock. In this example, (8 × 20) + 60 = 220.)

In which of the following situations is dual distribution likely to be determined illegal? a. A retailer's prices at its stores undercut a manufacturer's own prices. b. A manufacturer sells its products exclusively through its own website and its own retail stores. c. A manufacturer sells its products exclusively online through its own website and an independent website. d. A manufacturer's outlet store undercuts its independent retailers' prices for the same products.

d. A manufacturer's outlet store undercuts its independent retailers' prices for the same products. (Courts do not consider dual distribution when it allows for competition. A retailer undercutting a manufacturer allows for competition. However, if a manufacturer severely undercuts its independent retailers' prices on the same products, this could be determined to be illegal.)

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

d. 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.)

Pnina Tornai is a wedding dress designer targeting upscale brides. Her wedding dresses have been worn by celebrities and featured in television programs. Which form of distribution would Pnina Tornai most likely use for her wedding gowns? a. Dealer b. Selective c. Intensive d. Exclusive

d. Exclusive

Consider that Redbox locates its kiosks close to shopping centers where customers can pick up a movie while out shopping for food or other supplies. Based upon this, what type of utility do Redbox's kiosks offer to consumers? a. Form utility b. Time utility c. Cost utility d. Place utility e. Possession utility

d. Place utility

Which of the following business marketing channels is most likely to be used? a. Producer to industrial distributor to retailer to customer b. Producer to industrial distributor to customer c. Producer to manufacturer's agent to customer d. Producer to customer e. Producer to agent to industrial distributor to customer

d. Producer to customer

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 and consumer b. Producer, wholesaler, agent, retailer, and consumer c. Producer, retailer, and consumer d. Producer, wholesaler, retailer, and consumer

d. Producer, wholesaler, retailer, and consumer

Which of the following is often favored by intermediaries? a. Full-line forcing b. Exclusive dealing c. Tying agreements d. Restricted sales territories e. Refusal to deal

d. Restricted sales territories

Which of the following integrates the functions of operations management, logistics management, procurement, and marketing channel management so that products are produced and distributed in the right quantities, to the right locations, and at the right times? a. Logistics b. Channel integration c. Third-party logistics d. Supply chain management e. Multichannel distribution

d. Supply chain management

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 manufacturer's product is expensive with a lot of specific technical detail. c. The product being sold is relatively inexpensive and easy-to-use. d. The producer wants to cover a large geographic area but has no sales force.

d. The producer wants to cover a large geographic area but has no sales force.

Which two modes of transportation are used when containers are shipped by fishyback? a. Pipelines and railroads b. Water carriers and pipelines c. Water carriers and railroads d. Water carriers and trucks

d. Water carriers and trucks

Snap-on Tools uses a franchise model to sell shop equipment products to customers. When Snap-on developed a website that sold tools directly to consumers, this likely caused _______ with franchisees, which would likely increase if Snap-on reaches an agreement to sell through Home Depot as well. a. channel cooperation b. horizontal channel integration c. channel leadership d. channel conflict

d. channel conflict (Channel conflict occurs when members of a channel disagree about the distribution of a product. Conflict can arise when a firm opens a direct online channel to customers, bypassing existing intermediaries. Conflict can also arise for a producer that has traditionally used a franchise model broadens its retailer base to include other retail outlets.)

A private warehouse is a _______. a. facility specially designed for rapid flow of products b. business that leases storage space to other firms c. company that offers storage and transportation services d. company-operated facility for storing and shipping products

d. company-operated facility for storing and shipping products

The most popular type of vertical marketing system is the _______. a. horizontal VMS b. administered VMS c. vertical VMS d. contractual VMS e. corporate VMS

d. contractual VMS

McDonald's has a multichannel distribution system in which it operates its own locations and has franchise agreements with other locations. Operating its own locations is a(n) _______, while the franchises represent a(n) _______. a. contractual VMS; corporate VMS b. administered VMS; contractual VMS c. corporate VMS; administered VMS d. corporate VMS; contractual VMS

d. corporate VMS; contractual VMS (A corporate VMS combines all stages of the marketing channel, from producers to consumers, under a single owner. Because it owns some of its own restaurants, McDonald's is using a corporate VMS. A contractual VMS is the most popular type of vertical marketing system. Franchise organizations, such as McDonald's and KFC, are contractual VMSs.)

Old Navy sells its clothing directly to consumers through its own retail outlets. This is an example of a(n) _______. a. dual distribution system. b. contractual vertical marketing system. c. administered vertical marketing system. d. corporate vertical marketing system.

d. corporate vertical marketing system (One type of vertical channel integration is the corporate vertical marketing system in which all levels of distribution, from manufacturers to retailers, are under a single owner.)

If a retailer is reviewing its inventory and notices that the usage rate for one of the products it stocks has decreased, the retailer should _______. a. increase the amount of safety stock b. decrease safety stock c. increase the order lead time of the product d. decrease its reorder point

d. decrease its reorder point

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; purchasing b. multichannel distribution; electronic data interchange c. just in time distribution; consumption 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.)

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

d. dual distribution

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. a strategic channel alliance b. industrial distributors c. agents 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. Here, Gerber is being sold both directly to retailers and through intermediaries. A strategic channel alliance is an agreement where the products of one organization are distributed through the marketing channels of another.)

The Gap sells its clothing through its company-owned stores and through its own website. The Gap uses _______ as a channel strategy. a. tying agreements b. refusal to deal c. exclusive dealing d. dual distribution

d. dual distribution (The Gap is using dual distribution. In dual distribution, the company uses two o more marketing channels to distribute the same products to the same target market. For the Gap, shoppers can buy the same product either in store or online.)

When Coke Zero was added to the line of Coca-Cola products, it most likely was introduced using _______ distribution. a. exclusive b. full-market c. selective d. intensive

d. intensive (Coke Zero was most likely introduced using intensive distribution. Intensive distribution is done using all available outlets to distribute a product.)

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

d. large quantities; limited quantities

In 2013, UPS had a major _______ fail when the company was unable to deliver thousands of packages scheduled for December 24th delivery until after the Christmas holiday. The company stated that "demand was higher than forecast" as an explanation. Further, the company didn't notify customers until the end of the day on the 24th that their packages would not arrive on time. a. sourcing management b. procurement c. supply chain d. logistics management

d. logistics management (Logistics management involves planning, implementing, and controlling the efficient and effective flow and storage of products and information. Logistics management involves physical distribution and sharing of information to suppliers, customers, and amongst themselves within the managing firm.)

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. logistics c. direct marketing d. multichannel distribution

d. multichannel distribution

David is reviewing proposals from different shipping companies to see whether he can improve _______ of his company's products. a. order entry b. order accuracy c. order handling d. order delivery

d. order delivery (This occurs once the order has been assembled and packed for shipment. During order delivery, the customer is sent an invoice, inventory records are adjusted, and the order is delivered.)

Halloween Center is a specialty costume store that operates a retail location from late August through early November. The company needs some warehouse space to store its costumes. Because of the seasonality of its operations, they are most likely looking to lease a _______. a. bonded warehouse b. private warehouse c. temporary warehouse d. public warehouse

d. public warehouse

Disneyland Railroad trains use biodiesel made with used cooking oil that comes from Disney hotels and restaurants. Disneyland is obtaining the fuel through _______. a. purchasing b. sourcing c. acquiring d. recycling

d. recycling

Hulu enables consumers to watch select TV shows whenever they want instead of when they are broadcast. This illustrates _______. a. place utility b. form utility c. technological utility d. time utility e. possession utility

d. time utility

Dell Computer and Harley Davidson are well known for their use of the just-in time (JIT) approach. To which of the following physical distribution activities does the JIT approach belong? a. Transportation b. Materials handling c. Warehousing d. Order processing e. Inventory management

e. Inventory management

Electronic data interchange (EDI) is most effective for which type of logistics activity? a. Materials handling b. Warehousing c. Inventory management d. Transportation e. Order processing

e. Order processing

Jake is looking for a way to transport low-sulfur coal. He would like to choose a transportation mode that will get his product to its destination in a reasonable time period. He also needs the transportation mode he chooses to carry large quantities of this coal, but he would like to keep costs down. Which mode of transportation should Jake use? a. Pipeline b. Waterway c. Truck d. Airplane e. Railroad

e. Railroad