Chapter 15 Study Plan Questions
Drew owns a small business in town. He specializes in only two categories of products, to which he owns the titles. He sells products to other local businesses for operational use rather than to retailers for resale or to final consumers. Drew's business can best be described as a(n) _____. A. distributor B. department store C. retailer D. agent E. broker
A. Distributor (Distributors are merchant wholesalers that sell products to organizational customers for internal operations or the production of other goods, rather than to retailers for resale.)
If a marketer wants to reach a broad audience and doesn't need extensive support from retailers, what type of intermediary would be most appropriate? A. Mass-market intermediary B. Disintermediation C. Merchant wholesaler D. Drop shipper E. Trading partner
A. Mass-market intermediary (The ideal distribution mixl—number and type of intermediaries—varies widely from industry to industry and even from company to company within the same industry. When manufacturers want to reach a broad audience, and their products don't require extensive support from retailers, these mass-market intermediaries make perfect sense.)
Which term defines all of the activities involved in getting products from producers to consumers, such as predicting consumer demand, handling orders, controlling inventory, and product transportation? A. Physical distribution B. Inventory control C. Order processing D. Logistics E. Marketing systems
A. Physical Distribution (Physical distribution represents all of the activities required to move finished products from the producer to the consumer, including forecasting, processing orders, inventory control, and transportation.)
Which of the following describes when companies attempt to customize consumer purchasing experiences by creating apps that suggest items based on past purchases or even subscription services to repurchase items automatically in the hopes that repeat business and customer loyalty will be established? A. Retail theater B. Disintermediation C. Multichannel retailing D. Intensive distribution E. Wheel of retailing
A. Retail Theater (Retail theater is the addition of entertainment or education aspects to the retail experience and attempts to engage consumers in ways that foster brand loyalty and repeat business.)
When retailers receive payments from producers in exchange for carrying their products, what is it called? A. Slotting allowance B. Positioning C. Bandwidth D. Targeting E. Competitive edging
A. Slotting Allowance (Channel capacity is at such a premium that retailers can demand payments from producers in exchange for carrying their products for an agreed-upon length of time, called "slotting allowances." )
Tom owns a convenience store in a small town. Tom primarily sells products to the town's people for their personal use. Tom can best be described as a(n) _______. A. retailer B. wholesaler C. broker D. agent E. distributor
A. retailer (Retailers are intermediaries that sell goods and services to individuals for their own personal use.)
Which of the following trends includes many of the tasks traditionally done by supply chain management? A.Integrated logistics management B. Industry consolidation C.Unbundling of services D.Disintermediation E.Strategic sourcing
A.Integrated logistics management (Third-party logistics (3PL) firms continue to take over a wide range of tasks in supply chain management, including not only traditional wholesaling activities but also order fulfillment, product repair, customer service, and other functions. These 3PL firms have been growing rapidly in recent years, as more companies look to offload supply chain functions in order to focus on core business activities and to minimize the costs and risks of investing in transportation systems.)
Josie owns a shop in her hometown that offers only a limited number of product categories, but she does carry a large selection of sizes, colors, and styles of those products. She is said to be an expert when it comes to her products. Which type of store does Josie own? A. Department store B. Discount store C. Specialty store D. Off-price retail store E. Online retail store
C. Specialty Stores (A specialty store carries only a particular type of goods, often with deep selection in those specific categories.)
When determining the number of wholesalers or retailers that will carry a product, a manufacturer must first determine what? A. Channel conflict B. The appropriate level of market coverage C. Marketing systems D. Economic power E. Exclusive distribution rights
B. Appropriate level of Market Coverage (The appropriate market coverage—the number of wholesalers or retailers that will carry a product—depends on several factors in the marketing strategy. Producers need to choose the optimum number of outlets carefully to balance cost and market coverage and then continue to monitor market conditions to maintain a healthy balance.)
When producers, customers, or intermediaries replace an existing wholesaler with a new and more efficient one dash- even another manufacturer dash- it is called ______. A. channel conflict B. disintermediation C. the wheel of retailing D. multichannel retailing E. selective distribution
B. Disintermediation (Disintermediation is the replacement of intermediaries by producers, customers, or other intermediaries when those other parties can perform channel functions more effectively or efficiently. As e-commerce continues to disrupt old ways of doing business, some observers have predicted the widespread disintermediation of wholesalers, meaning their functions as intermediaries would be taken over by manufacturers on the upstream end or by customers (retailers and other organizational buyers) on the downstream end.)
Which of the following own, but do not take possession, of the goods they handle? A. Merchant wholesalers B. Drop shippers C. Rack jobbers D. Agents E. Manufacturer's representatives
B. Drop shippers (Natural resources such as lumber, grain, and coal are usually marketed through a class of limited-service wholesalers called "drop shippers," which take ownership, but not physical possession, of the goods they handle.)
Remy is a producer of high-end jewelry. In order to appear elite to consumers, he only makes his products available at one specific retailer that also has a reputation for being high-class and fashionable. This retailer obtains the rights to Remy's products and is the only one permitted to sell them to consumers. Which market coverage strategy does Remy utilize? A. Intensive distribution B. Exclusive distribution C. Multichannel retailing D. Physical distribution E. Selective distribution
B. Exclusive Distribution (Exclusive distribution is a market coverage strategy that gives intermediaries exclusive rights to sell a product in a specific geographic area.)
________ is a market coverage approach that involves organizations making their products available in several places at one time. A. Selective distribution B. Intensive distribution C. Physical distribution D. Multichannel retailing E. Exclusive distribution
B. Intensive Distribution (Intensive distribution is a market coverage strategy that tries to place a product in as many outlets as possible. Examples include printer paper and pens.)
Which of the following activities is a step in the planning of logistics? A. Checking the customer's credit B. Optimizing levels of service C. Billing the customer D. Arranging shipping E. Making appropriate accounting entries
B. Optimizing levels of service (Optimizing levels of service requires achieving a competitive level of customer service at the lowest total cost. Doing so requires trade-offs because as the level of service improves, the cost of distribution usually increases.)
Which channel for consumer goods would be best if creators of products wanted to opt out of selling directly to consumers and instead chose to sell their products to an intermediary who then in turn would resell those products to customers? A. Producer to broker to wholesaler to retailer to consumer B. Producer to retailer to consumer C. Producer to wholesaler to retailer to consumer D. Producer to agent to consumer E. Producer to consumer
B. Producer to retailer to consumer (The producer-to-retailer-to-consumer channel involves producers selling products to retailers because they don't want to be involved in consumer sales. The retailers then resell the products to consumers. )
Which of the following is an effort to communicate with consumers while they are in a retail setting? A. Rack jobbing B. Shopper marketing C. Distribution strategy D. E-commerce E. Wheel of retailing
B. Shopper Market (The term "shopper marketing," or "in-store marketing," refers to communication efforts directed at consumers while they are in the retail setting. These efforts can range from printed signs to in-store video screens to smartphone apps that help shoppers find products or stores in a mall, for example.)
Which of the following involves both managerial conclusions and calculated numbers based on past sales data to develop estimates for upcoming sales? A. Order processing B. Selective distribution C. Forecasting D. Logistics E. Intermodal transporting
C. Forecasting (Forecasting involves acquiring estimates of demand by calculating historical data and projecting future sales. This is based on both hard numbers and managerial judgements.)
Tina works at a manufacturing company. Her job is to obtain customer information, complete credit checks for customers looking to purchase products, and then officially record completed sales into the system, where she also updates the bookkeeping records to account for those sales. Which of the following describes Tina's job? A. Intermodal transporting B. Intensive distribution C. Order processing D. Forecasting E. Logistics
C. Order Processing (Order processing includes the functions involved in receiving and filling customer orders such as credit checks, recording sales, accounting entries, arranging for shipment, and adjusting inventory records.)
To increase control over pricing, promotion, service, and delivery, which type of distribution channel might be most effective? A. Producer to retailer to consumer B. Producer to agent to wholesaler to retailer to consumer C. Producer to consumer D. Producer to wholesaler to retailer to consumer E. Producer to broker to retailer to consumer
C. Producer to consumer (Producers that sell directly to consumers through catalogs, telemarketing, infomercials, and the Internet are using the shortest, simplest distribution channel. By selling directly to consumers, a firm gains more control over pricing, promotion, service, and delivery. Although this approach eliminates payments or discounts to channel members, it also forces producers to handle distribution functions such as storing inventory and delivering products.)
LMN International, an intermediary, usually sells its products to government agencies and educational institutions but will occasionally sell its products to other companies, who in turn create new products and resell them into the market. LMN is a(n) ______. A. agent B. department store C. wholesaler D. broker E. retailer
C. Wholesaler (Wholesalers are intermediaries that sell products to other intermediaries or to organizations. The customers of wholesalers either resell the products or use them to make products of their own.)
How does a wholesaler or retailer create time utility for a customer? A. By providing all needed items in one location B. By arranging for the transferring of products C. By providing promotional and sales support D. By saving the time of contacting each manufacturer to arrange the purchase of goods E. By gathering an assortment of goods
D. By saving the time of contacting each manufacturer to arrange the purchase of goods (Wholesalers and retailers create time utility for customers saving customers the time of having to contact each manufacturer to purchase a good.)
Riya's company has just developed a new convenience product for consumer purchase. Many of the company's products are only sold at certain retail chains; however, Riya's manager thinks this product should be available online and in as many retail stores possible. The market coverage strategy for which Riya's company should opt in this case is called _______. A. e-commerce B. exclusive distribution C. physical distribution D. intensive distribution E. selective distribution
D. Intensive Distribution (Intensive distribution is a market coverage strategy that tries to place a product in as many outlets as possible. Examples include paper and pens, which are available virtually everywhere.)
Which of the following balances the amount of goods on hand with orders? A. Forecasting B. Logistics C. Order processing D. Inventory control E. Warehousing
D. Inventory Control (Inventory and sales are seldom in perfect balance. For instance, many firms like to keep a ready supply of finished goods on hand so orders can be filled orders as soon as they arrive. The objective of inventory control is to resolve these issues. Inventory managers decide how much product to keep on hand and when to replenish the supply of goods in inventory. They also decide how to allocate products to customers if orders exceed supply.)
The planning and movement of goods and services through the supply chain is called what? A. Order processing B. Forecasting C. Supply chain management D. Logistics E. Physical distribution
D. Logistics (Physical distribution might not be the most glamorous aspect of business, but it is one of the most critical. Logistics is the planning and movement of goods and information throughout the supply chain. As managers try to squeeze cost efficiencies and competitive advantages everywhere they can, logistics has taken on key strategic importance for many companies.)
Which distribution function of wholesalers and retailers involves acquiring data regarding consumer purchases, including the frequency of purchases, the amount spent on items, and product preferences? A.Facilitating transactions and customer support B.Matching buyers and sellers C.Gathering assortments of goods D.Providing market information E.Providing promotional and sales support
D. Providing market information
When capacity limits within the channel force producers to compete for intermediaries, how do producers gain the attention of intermediaries? A. E-commerce B. Industry consolidation C. Wheel of retailing D. Slotting allowances E. Rack jobbing
D. Slotting allowances (Because of these capacity limitations in the channel, producers often compete for the attention and resources of intermediaries. In some industries, channel capacity is at such a premium that retailers can demand payments from producers in exchange for carrying their products for an agreed-upon length of time, called "slotting allowances.")
Which of the following is the primary function of distribution channels? A. To attract end users B. To limit distribution costs C. To limit competition D. To deliver value to customers E. To increase demand
D. To deliver value to customers (The primary function of distribution channels is delivering value to customers, so channel strategy decisions should start with customer needs and expectations. For instance, how do customers want and expect to purchase your product?)
As a(n) ______, James's main job is to find buyers for the products that certain companies are selling. He never actually takes title to the products he attempts to sell, but acts more like a middleman for consumers and producers. A. retailer B. wholesaler C. distributor D. merchant wholesaler E. agent
E. Agent (Agents are independent wholesalers that do not take title to the goods they distribute and may or may not take possession of those goods. Their primary role is to bring buyers and sellers together.)
When developing distribution strategy decisions, with what should the decision-making process start? A. Product support needs B. Retail outlet type C. Product type D. Distribution methods E. Customer needs
E. Customer Needs (The primary function of distribution channels is delivering value to customers, so channel strategy decisions should start with customer needs and expectations. By understanding these needs and expectations, producers can work backward, from their final customers back to their production facilities, to determine the right mix of channel features and functions.)
Which of the following terms describes an arrangement of various businesses and networks that assist in the movement and promotion of products and services that a company utilizes to reach consumers? A. Wheel of retailing B. Marketing system C. Distribution strategy D. Retail theater E. Distribution mix
E. Distribution Mix (A distribution mix is a combination of intermediaries and channels a producer uses to reach target customers. The ideal distribution mix—number and type of intermediaries—varies widely from industry to industry and even from company to company within the same industry. For example, Black & Decker distributes its power tools through hundreds of hardware stores and home centers such as Lowe's and Home Depot along with a wide range of online retailers.)
Which of the following refers to an organization's overall plan to move its products to purchasers? A. Disintermediation B. Marketing channel C. Multichannel retailing D. Distribution channel E. Distribution strategy
E. Distribution Strategy (An organization's distribution strategy, or overall plan for moving products to buyers, plays a major role in the firm's success.)
Half Price, Inc., a retail chain, has been the cheapest option for consumers. Because Half Price, Inc. is able to sell its products at such low prices, competition has been nonexistent for years. Recently, Half Price, Inc. has expanded its product range, which resulted in some price increase. Cost-conscious consumers have noticed the increase and have started to shop at local Dollar Store chains instead. Which of the following describes this scenario? A. Disintermediation B. Multichannel retailing C. Channel conflict D. Selective distribution E. Wheel of retailing
E. Wheel of Retailing (The wheel of retailing is an evolutionary process by which stores that feature low prices gradually upgrade until they no longer appeal to price-sensitive shoppers and are replaced by a new generation of leaner, low-price competitors. An example is Wal-Mart, which now has to compete with Dollar General and Family Dollar for the lowest prices.)
Companies and individuals that sell products and services to other companies and individuals for organizational use to create their own products or to resell to consumers are known as _____. A. Retailers B.brokers C.distributors D.agents E. wholesalers
E. wholesalers (Wholesalers are intermediaries that sell products to other intermediaries or to organizations. The customers of wholesalers either resell the products or use them to make products of their own.)