Marketing Chapter 16.1

In a(n) __________ marketing channel, none of the participants have any control over the others.

E. conventional

All of the following are advantages of using a distribution center except

E. customers know they are dealing with a more sophisticated and financially well-off operation if the firm uses a distribution center.

Having no intermediaries between the buyer and seller is a defining characteristic of a(n) _______ marketing channel.

E. direct

Each time a politician or celebrity writes a book, bookstores can expect at least some customers to want the book, but whether or not it will become a best-seller is less certain. The bookstore's primary inventory management challenge is

E. having enough books to satisfy customer demands versus the cost of having the inventory.

Because Walmart has vast information about the consumer goods market, it might exert ___________ power over P&G by providing or withholding important market information.

E. information

When supply chain members view their goals and ultimate success as intricately linked, or ________, they develop deeper long-term relationships.

E. interdependent

In a vertical marketing system, if the system is _______, the less likely conflict will occur.

E. more formal

With more frequent shipments associated with quick response (QR) systems, a retailer is

E. more likely to have what customers want.

In a corporate vertical marketing system,

E. participants—such as warehouses, transportation companies, and retail outlets—are typically owned by a parent company to ensure harmonious relations throughout the supply chain.

In vendor-managed inventory systems,

E. retailers send sales information to the manufacturer.

Shorter lead times allow retailers

E. to reduce the needed level of inventories.

The Stanley company wants Home Depot to carry all its tools but not the tools of its competitors so that Stanley can maximize its sales. But Home Depot carries a mix of tool brands so it can maximize the sales in its tool category. This misalignment of goals will likely lead to a ________ channel conflict.

E. vertical

Some retailers require their suppliers to ship merchandise ___________, thus eliminating the time and expense associated with ticketing and marking.

A. floor-ready

When Cynthia's Boutique receives dresses, they already have price tags and are on hangers. Cynthia's Boutique receives __________ merchandise.

A. floor-ready

A(n) _______ is used in the shipment of products directly to customers.

A. fulfillment center

A recent innovation by Amazon, the Vendor Flex program, seeks to lower overall transportation costs but also creates new forms of channel conflict with competitors. As a partner in the Vendor Flex program, P&G agreed to allow Amazon to build fulfillment centers within P&G's own warehouses, thus helping to eliminate some of the costs of transporting P&G's products to Amazon's fulfillment centers. Believing that the program was giving its competitor Amazon an unfair advantage, Target reacted vigorously, moving all P&G products from prominent end-cap positions in its stores to less prestigious and less visible locations. Target also stopped using P&G as its primary source of advice for planning merchandising strategies within each category. This is an example of ____________ channel conflict.

A. horizontal

In a(n) _______ marketing channel, one or more intermediaries work with manufacturers to provide goods and services to customers.

A. indirect

Students of marketing often overlook or underestimate the importance of place in the marketing mix simply because

A. it happens behind the scenes.

While JIT systems have many benefits, they

A. make the logistics function more complicated.

Felicia had just taken over her family's business after spending ten years in the marketing department of a large corporation. She met with a representative from one of her firm's biggest customers, who told her, "We should think about how we can make the pie bigger rather than fighting over the size of the slices." She had expected a more cutthroat approach rather than this call for a

A. partnering relationship.

A(n) __________ is a document used by a forklift driver indicating how much of each item to get from specific storage areas.

A. pick ticket

Naomi knows she has to order her store's Christmas holiday merchandise in April to ensure delivery before the holiday season. Naomi is concerned with the supply chain management goal of

A. providing products at the right time.

Walmart may have _________ power if a supplier desperately wants to be associated with Walmart, because being known as an important Walmart supplier enables that supplier to attract other retailers' business.

A. referent

When Walmart promises to purchase larger quantities if a manufacturer will lower its wholesale price, it is exhibiting ________ power.

A. reward

TT TOYS manufactures toys. The company recently started buying paint for its toys from a Chinese firm. This Chinese company is part of TT Toys'

A. supply chain.

One of the benefits of EDI is that it can reduce lead time, which is

A. the time between the decision to place an order and the receipt of the merchandise.

All of the following statements about distribution centers are true except

A. they enable retailers to carry less merchandise in individual stores.

A(n) __________ is a supply chain whose members act like a unified system.

A. vertical marketing system

Which of the following is true regarding the ticketing and marking process?

B. It is more efficient for a retailer to perform these activities at a distribution center than in its stores.

In a retail supply chain, the ________ records the purchase information and electronically sends it to the corporate office.

B. POS terminal

Yesterday, Lorinda overheard a surprisingly unpleasant encounter between the manager of the hardware store where she works and a sales rep who sells a well-known line of tools. The rep insisted that his tools should be more prominently displayed and that a better assortment would mean more sales. The manager had other plans and told him so, and the conversation turned into a loud argument. What Lorinda observed was an example of

B. channel conflict.

A ________ is a facility for the receipt, storage, and redistribution of goods to company stores.

B. distribution center

Typically, manufacturers and retailers exchange business documents through a(n) __________ system, the computer-to-computer exchange of business documents from a retailer to a vendor and back.

B. electronic data interchange

Flora is frustrated with her company's supply chain management information system. She wants to be able to receive sales data, initiate purchase orders, send and receive invoices, and receive returned merchandise documentation. Flora needs a(n)

B. electronic data interchange system.

In a(n) __________ marketing channel, several independent members each attempt to satisfy their own objectives and maximize their profits, often at the expense of the other members.

B. independent

H&M has adopted the inventory management system that delivers less merchandise on a more frequent basis than in traditional inventory systems. The firm gets the merchandise just in time for it to be used in the manufacture of another product or for sale when the customer wants it. This is an example of a ___________ inventory system.

B. quick response (QR)

Because manufacturers with JIT systems produce merchandise closer to the time of sale, they can

B. reduce inventories needed to satisfy retailers' demand.

When Joe's Chicken Shack wants chicken delivered in smaller batches more frequently, it offers its distributors an incentive in the form of special bonuses to change their schedules. Joe's demonstrates which kind of power?

B. reward

Walmart needs P&G to satisfy its customers, and P&G recognizes that if it can keep Walmart happy, it will have more than enough business for years to come. Walmart and P&G recognize that it is in their common interest to be

B. strategic partners.

In marketing's four Ps, place refers to all activities required to get

B. the right product to the right customer when that customer wants it.

Getting merchandise floor-ready entails

B. ticketing and marking.

Leona is the logistics manager for the Barnes & Noble bookstore chain. She is weighing the many benefits of the company's JIT system, but will need to consider that just-in-time inventory management systems increase _______ costs.

B. transportation

Roland has just received notification from a vendor that his clothing merchandise order has been processed and dispatched. Roland has just received a(n)

C. advanced shipping notice.

Today, when a customer orders merchandise from an online vendor, the vendor usually sends an immediate order confirmation message by e-mail. Usually within a day or two, a second message arrives stating that the order is in the mail. This second message is a type of

C. advanced shipping notice.

All of the following are required to build a successful strategic relationship except

C. creation of a joint venture.

In a __________ distribution center, merchandise moves from vendors' trucks to retailers' delivery trucks in a matter of hours.

C. cross-docking

All of the following are activities carried on in a distribution center except

C. distributing paychecks and pay stubs for retail employees.

Marketing channels and supply chains comprise various buying entities that form relationships with one another. The basic motivating factor in these interactions is

C. each party wants something from the others.

A local furniture store buys furniture from various manufacturers and resells the furniture to its customers. What type of marketing channel does this represent?

C. indirect

At the BMW plant in Spartanburg, South Carolina, rather than use a typical order-to-delivery process, it has suppliers deliver parts every four hours when the plant is in operation. BMW uses a ______ inventory control system.

C. just-in-time (JIT)

Forever 21 has adopted an inventory system that reduces the amount of time between the recognition that an order needs to be placed and the arrival of the needed merchandise at the seller's store, available for sale. This increases product availability and lowers inventory investment. These benefits are attributed to the _______ system.

C. just-in-time (JIT)

After installing an electronic data interchange, Carmella's gift shop was able to reduce _______, the amount of time between the recognition that an order needs to be placed and the arrival of the needed merchandise.

C. lead time

The amount of time between the recognition that an order needs to be placed and the arrival of the needed merchandise at the seller's store to be available for sale is referred to as

C. lead time.

Which element of the marketing mix specifically deals with supply chain management?

C. place

When Costco sells to consumers directly, it acts as a _______; when it sells to other businesses, such as a restaurant owner, it acts as a _______.

C. retailer; wholesaler

A distribution center is typically operated by

C. retailers, manufacturers, or distribution specialists.

When a customer purchases a smartphone at Best Buy, all of the following information flows in the supply chain are started except

C. the purchase is added to the customer's purchasing habit records.

In an administered vertical marketing system,

C. there is no common ownership, and the dominant member has significant power to impose its ideas and objectives.

The local auto supply store gets merchandise delivered to it by its manufacturers as soon as it has a need, reducing stockouts with minimal inventory. This demonstrates the concept of

C. vendor-managed inventory.

Franchising is the most common type of contractual _______ marketing system.

C. vertical

A ___________ program is a promotional strategy that encourages people to pass along a marketing message to other potential consumers.

C. virtual marketing

__________ is when vendors ship merchandise prepackaged in the quantity required for each store to the distribution center.

D. Cross-docking

Because of its size and relative power, Walmart can easily impose controls on small manufacturers, such as PenAgain, but with large, powerful suppliers such as P&G, the control is more balanced between parties. Walmart's various marketing channel relationships offer examples of different forms of a(n) ______________ marketing system.

D. administered vertical

Especially in the fashion industry where styles and trends change rapidly, a quick response system can

D. align deliveries more closely with actual sales.

If a firm declared that it wanted to develop a strategic relationship, but was unwilling to commit funds or any effort to make it succeed, there would be an obvious lack of

D. credible commitments.

In addition to merchandise and payments, information flows throughout a supply chain. All of the following statements are a good characterization of the flow of information in a supply chain except

D. customers will send and receive information from stores and manufacturers.

Trisha makes purses out of old blue jeans and sells them to customers at local craft fairs. What type of marketing channel does this represent?

D. direct

After installing a(n) _______ in its JIT system, Chocolate Tree (a retail chocolate store) was able to reduce lead time for merchandise orders.

D. electronic data interchange system

Colin has just received a delivery from the company's distribution center. He opens the containers and finds the popcorn and snacks are all bar-coded and priced and the package includes an end-of-the-aisle display rack. Colin has received a(n) __________ shipment.

D. floor-ready

Manufacturers trying to implement a just-in-time delivery system need to start with

D. knowledge of customer demand.

Stores like Home Depot and Costco act as wholesalers when they

D. sell to contractors or restaurant owners.

Steven managed an auto parts store in the 1990s. At that time, stockouts—failure to have the parts auto mechanics needed to do their work that day—increased the likelihood of the mechanics becoming customers of competing auto supply stores. To avoid this problem and keep his business customers, Steven most likely

D. stockpiled inventory, adding to the cost of providing auto parts.

Although conflict is likely to occur in any marketing channel, it is generally more pronounced when

D. the the channel members are independent entities.

Radio frequency identification tags are

D. tiny computer chips that transmit information about a container's contents.

Walmart's customers have come to expect to find P&G products in stores, and P&G depends on Walmart to purchase a good portion of its output to sell to its own customers. This scenario represents the first phase of a

D. vertical marketing system.

Dawn works for a firm that buys products directly from the manufacturer and resells them to retailers, who then sell the products to consumers. Dawn works for a

D. wholesaler.

Sophie made pies and sold them from her food truck to local businesses. This is an example of a(n)

A. direct marketing channel.

When her company's dry goods deliveries were late for the third time, Melissa withheld payment from her supplier until it was back on schedule. This is an example of ________ power.

A. coercive

A(n) __________ is a 13-digit code retailers can use to track inventory.

A. UPC

Ted is glad his company finally converted to an RFID system. Now, he no longer needs to go through all the new goods to make sure what they ordered was what they received. Ted is responsible for __________ in his company.

A. checking