MKTG - Chapter 10

Which of the following is true of RFID or "smart tag" technology

"Smart shelves" can tell when it is time to reorder and can place orders automatically.

The authors suggest that the term "supply chain" may be too limited because it takes a "make-and-sell" view of the business. They believe the term ________ is more appropriate because it suggests a "sense-and-respond" view of the market

"demand chain"

Which of the following is a cost-effective mode for shipping large amounts of bulk products — coal, sand, minerals, and forest products — over long distances?

) railroads

Kevin Pinker is a freelance computer programmer who writes computer algorithms for companies such as SoftStar and BlueHill. SoftStar and BlueHill use these algorithms to make specific programs based on online market research. These programs are then sold to the online retailer, Abundon, which then sells them to individual consumers and businesses. Which of the following is a marketing intermediary in this chain?

Abundon

Which of the following is true of logistics?

Companies can gain a powerful competitive advantage by using improved logistics to enhance customer service or lower prices.

_______ is a practice whereby a producer agrees to sell a brand to a dealer only if the dealer agrees to sell some or all of the rest of the producer's merchandise.

Full-line forcing

Which of the following is true of an exclusive dealing arrangement between a producer and a dealer?

It does not allow other producers to sell to that dealer.

Which of the following is true of a conventional distribution channel?

It has each channel member acting as a separate business unit trying to maximize its own profits.

Which of the following is true of a vertical marketing system?

It has one channel member owning all the other channel members or has contracts with all other channel members.

Which of the following is true of an intensive distribution strategy

It strives to make products available where and when consumers want them.

The USA Cotton Growers Cooperative sells unfinished cotton to The Weaving Experts who refine the raw material for sale to The Sheet Factory. It's then used in the manufacturing process of 300, 400, and 500 thread count bed sheet sets. The Sheet Factory distributes their products through a number of wholesalers, including Linen Traders. Linen Traders then resells the bed sheet sets to retailer Bedding Plus who markets the products to consumers. Which of the following represents a marketing intermediary transaction?

Linen Traders selling to Bedding Plus

________ are sets of interdependent organizations that help make the product or service of a company available for use by consumers or business users

Marketing channels

________ involves combining two or more systems of transportation to move products.

Multimodal transportation

________ distribution typically allows manufacturers to develop good working relationships with intermediaries and expect a better-than-average selling effort. It also gives producers good market coverage with more control and less cost than intensive distribution.

Selective

Which of the following is a difference between storage warehouses and distribution centers?

Storage warehouses store goods for moderate to long periods, while distribution centers are used to move goods rather than just store them.

Which of the following is an advantage of exclusive dealing between a seller and a dealer?

The seller's distinctive position is reinforced through customer service and the dealer obtains steady support from the seller.

Which of the following is an example of a horizontal conflict in a distribution channel?

a Ford car dealer complaining that another Ford dealer is underpricing the same models

Performance Inc. sells its newest athletic shoe styles to The Sneaker Store and distributes dated or slightly defective merchandise through Sports Discounters. Performance Inc.'s main competitor is Topnotch Manufacturers. Performance Inc. also markets its products through the company Web site. They decide to offer a short-term online promotion to encourage consumers to buy their newest athletic shoes, promoting a 20 percent discount off current retail prices. In such a distribution channel, which of the following would be considered a vertical conflict?

a conflict between Performance Inc. and The Sneaker Store

Jupiter Steel is the chief provider of metals to Greystone Motors. Greystone Motors has two models of cars — one for commercial and regular consumers and another for professional car racing teams. Greystone Motors has designated dealers to sell its commercial cars to consumers, while racing cars are sold directly to the racing teams. In such a distribution channel, which of the following would be considered a horizontal conflict?

a conflict between two Greystone Motors car dealerships

Java Jane's first coffeehouse was very successful due to the unique flavors, on-site baked goods, and inviting ambiance. The owner, Jane Phillips, decided to franchise her operation when she was approached by several interested investors. Which type of marketing system has Java Jane's most likely adopted?

a contractual marketing system

Luccia's is a restaurant based in Illinois that exclusively sells Italian food. Luccia's sells the rights to its recipes to a British firm, Clover Trading, which then opens an outlet in London under the Luccia's brand name. Which kind of channel arrangement does Luccia's most likely have with Clover Trading?

a contractual vertical marketing system

In which of the following situations is a producer guaranteed full control over product sales?

a direct marketing channel

Which of the following would be considered an upstream partner in a company's supply chain?

a firm that provides technical expertise in the production of a product

In a(n) ________ marketing system, leadership over production and distribution is assumed through the size and power of one or a few dominant channel members.

administered vertical

Sonic Shack, an audio equipment retailer, signs an agreement with PineWire, a renowned electronics company, to sell PineWire products. The deal requires Sonic Shack to provide PineWire products with superior displays, shelf space, and promotion compared to competing products. Sonic agrees to these terms as PineWire products command a huge share in the market. Which of the following types of channel arrangements do PineWire and Sonic Shack most likely have?

administered vertical marketing system

Which type of channel arrangement is a retailer like Home Depot likely to follow?

administered vertical marketing system

Which mode of transportation is best for carrying perishable goods to distant markets?

air carriers

More than 80 percent of McDonald's restaurants worldwide are owned and operated by franchisees. This illustrates a(n) ________ marketing system

contractual vertical

Integrating the entire distribution chain — from its own design and manufacturing operations to distribution through its own managed stores — has turned Spanish clothing chain Zara into the world's fastest-growing fast-fashion retailer. This is an example of a(n) ________ marketing system.

corporate vertical

Producers use marketing intermediaries because they ________.

create greater efficiency in making goods available to target markets

Vertical conflicts in distribution channels are conflicts that occur between ________.

different levels of the same channel

Mary Kay Cosmetics and Amway sell their products through home and office sales parties, online Web sites, and social media. Both companies use a(n) ________ channel to distribute their offerings.

direct

Changes in technology and the explosive growth of direct and online marketing are having a profound impact on the nature and design of marketing channels. One major trend is toward ________ insofar as product or service producers cut out intermediaries and go directly to final buyers or when radically new types of channel intermediaries displace traditional ones.

disintermediation

For over 10 years, Erudite, a publishing and educational company that produces college textbooks, has been selling its books online through studysmart.com, a popular online retailer that sells textbooks published by different companies. Recently, Erudite stopped selling its books through studysmart.com and set up its own Web site to sell its books. This change in channel organization is called ________.

disintermediation

High-end luxury brands like Bentley for cars, Louis Vuitton for handbags, and Rolex for watches use ________ distribution, giving a limited number of dealers the sole right to sell products in a specified geographic territory.

exclusive

Bateman Gray Motors sells the cars it produces using dedicated dealers who only sell Bateman Gray's products at their outlets. What kind of marketing strategy has Bateman Gray adopted with its car dealers?

exclusive dealing

Many athletic stadiums enter into contractual agreements with national beverage companies and food franchises to distribute only their brand-name products at the respective venues. This is an example of ________.

exclusive dealing

When a seller requires that only certain dealers carry its products, its strategy is known as ________.

exclusive distribution

A multichannel marketing system is one in which a producer sells to multiple markets using the same distributional channel.

false

An administered vertical marketing system integrates successive stages of production and distribution under single ownership.

false

Direct marketing is the longest distribution channel between a producer and consumer.

false

Full-line forcing is considered an illegal arrangement that violates the Clayton Act.

false

Historically, conventional distribution channels have provided channel leadership and have had the power to assign roles and manage conflict.

false

In an administered VMS, the producer assumes the leadership position in a distribution channel by default.

false

Inbound logistics involves managing the flow of products from an intermediary to a customer.

false

Intensive distribution occurs when only one intermediary is used by a producer to sell all its products.

false

Introducing intermediaries into a distribution chain increases the number of direct channel transactions between a manufacturer and its customers.

false

Most producers sell their goods directly to final users.

false

The franchise organization is an example of a corporate vertical marketing system.

false

The goal of any logistics system should be to maximize sales, not profits.

false

Brandy's, a national candy store chain, decides to open both a coffee house and ice cream shop within their stores to create a multi-faceted experience for shoppers. The company decides to enter into deals with two well-known retailers — The Beanery and Creamy Creations. As stipulated in their respective contracts, The Beanery and Creamy Creations cannot enter into the same type of agreement with any other candy retailers. All three companies will enjoy greater sales, and ultimately profits, from the arrangement. This is most likely an example of a(n) ________ marketing system.

horizontal

A channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity is referred to as a(n) ________.

horizontal marketing system

Moving products and materials from suppliers to the factory is known as ________ logistics.

inbound

All the institutions in a channel are connected by several types of flows. When a retailer conveys to a wholesaler that a new line of hip-hop clothing is not selling, this is an example of ________.

information flow

Producers of convenience products and common raw materials typically seek ________ distribution — a strategy in which they stock their products in as many outlets as possible

intensive

In a logistics system, minimizing distribution costs most likely involves ________.

large shipping lots

Rage, a leading motor vehicle manufacturer, introduces a new superbike model. It invites proposals from independent dealers who are willing to set up exclusive showrooms that only sell Rage's superbikes. Chosen dealers will sell and service the superbikes, and Rage will oversee national advertising. This is most likely an example of a(n) ________.

manufacturer-sponsored retailer franchise system

Selective distribution is a strategy in which ________.

more than one, but fewer than all, willing intermediaries are used by a seller

Victoria's Closet, a manufacturer of bohemian-style clothing and accessories, sells its products through its online Web site, a catalogue, and specialty boutiques that target women. Which kind of channel arrangement does Victoria's Closet employ to distribute its products?

multichannel distribution system

The use of both rail and trucks for transporting goods is called ________.

piggybacking

Outbound logistics refers to moving ________.

products from the factory to resellers and ultimately to customers

In a just-in-time logistics system, ________.

retailers carry small inventories of merchandise to last for only a few days

When Toyota announces a product recall on its Camry model due to a faulty igniter, they are using ________ to coordinate with dealers and car owners.

reverse logistics

Managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers is known as ________.

supply chain management

A firm that uses direct marketing would most likely sell its products through ________.

the company Web site

Which of the following applies to a marketing intermediary who buys brand name toothpaste from 10 different manufacturers, consolidates offerings, and then resells the various brands to 500 supermarkets in Florida?

transform the assortments of products made by producers into the assortments wanted by consumers

Which of the following is most efficient for short hauls of high-value merchandise and is highly flexible in its routing and time schedules?

trucks

) Exclusive dealing that creates a monopoly comes under the scope of the Clayton Act of 1914.

true

A horizontal marketing system can develop between a company and its competitor.

true

A vertical marketing system consists of producers, wholesalers, and retailers acting as a unified system.

true

An independent logistics provider that performs all of the functions required to get a client's product to market is known as a third-party logistics (3PL) provider.

true

Companies selling perishable products generally prefer direct marketing, which minimizes delays.

true

Customer-centered logistics starts with the marketplace and works backward to the factory.

true

Disintermediation occurs when product or service producers cut out intermediaries and sell directly to final buyers.

true

From a producer's point of view, a greater number of levels in a supply chain means less control and greater channel complexity.

true

In exclusive dealing, a producer may agree not to sell to other dealers in a given area.

true

Marketing channel design calls for analyzing consumer needs, setting channel objectives, identifying major channel alternatives, and evaluating those alternatives.

true

Marketing logistics involves getting the right product to the right customer in the right place at the right time profitably.

true

Supply chain management involves managing both upstream and downstream value-added flows of materials.

true

With a vendor-managed inventory system, the supplier takes full responsibility for managing inventories and deliveries.

true

A ________ is made up of a company, its suppliers, distributors, and, ultimately, customers who "partner" with each other to improve the performance of the entire system.

value delivery network

Under ________, a customer shares real-time data on sales and current inventory levels with a supplier, and the supplier then takes full responsibility for managing inventories and deliveries.

vendor-managed inventory systems

A ________ consists of producers, wholesalers, and retailers acting as a unified system. The system can be dominated by any one of the interdependent members.

vertical marketing system

A(n) ________ is considered a marketing intermediary.

wholesaler