Chapter 15 Mktg 351

What is a primary difference between an industrial distributor and a manufacturers' agent?

A manufacturers' agent does not acquire title nor usually take possession of the products whereas an industrial distributor does.

The marketing channel of producer to retailer to consumer is most likely to be used by producersof which of the following products?

Automobiles

Where do supply chains start?

Customers

Caruthers Paint Manufacturing Company buys the chemicals it needs for producing its products from a chemical producer, Roth Chemicals.In this instance, the chemicals are being distributed to Caruthers through which of the following types of channels?

Direct distribution

Select the greatestadvantage of horizontal channel integration

Efficiencies in advertising, marketing research, and purchasing are increased

Honey Farms is a maker of fine chocolates. The company's latest product, Fudge-Dipped Strawberries, is the premier product in its Fudge-Dipped line. The product is very expensive and targeted to upscale consumers. Which form of distribution would Honey Farms be likely to use for its new product?

Exclusive

Which of the following describes a disadvantage of using industrial distributors?

They are unlikely to handle bulky items or items that are slow sellers

Starbucks has an agreement with Pepsi Co. through which Pepsi distributes Starbucks' coffee drink, Frappucino, to grocery stores and other retail outlets. This is an example of

a strategic channel alliance

When a single channel member manages an integrated marketing channel to achieve low-cost, efficient distribution for satisfying target markets, ______ exists

a vertical marketing system

In an administered vertical marketing system (VMS), interorganizational relationships are

achieved by informal coordination

Rob Stevens is the head of a company that produces computer software for production scheduling. The firm is small and presently does not generate enough volume to justify hiring a sales force.The firm is probably using ___________ to maintain contact with the firms using its products.

agents

A producer is not likely to receive _____ from an industrial distributor

aggressive promotion of its brand

Goodyear allows companies like Sears and Discount Tire to distribute and discount its tires. This action significantly increases the possibility of channel ___________ with independent Goodyear dealers

conflict

When produce companies such as Dole Tomatoes bypass wholesalers and sell directly to retailers, it is likely to create channel ___________ between Dole and these wholesalers

conflict

Vertical channel integration

is made possible by purchasing the operations of a link in the channel

Because Coke is such a popular product and the company is so powerful, Coca-Cola is in a position to exert considerable control over channel structures and the way Coke is marketed. This is an illustration of channel ___________ in the distribution channel.

leadership

After direct-marketing, the next slightly longer marketing channel adds a(n)

retailer

In an administered VMS, informal coordination brings about a high level of interorganizational management. Nonetheless

the channel members remain autonomous

Possession utilityis best described as

the customer having access to the product to use now or store and use later

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

Product packaging

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

Rolls Royce automobile

Select Comfort, a producer of adjustable air mattresses, sells most of its products through direct mail sales and Internetsales.This channel would be classified as

direct-marketing

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

exclusive distribution

Marketing channels create three types of utility for consumersincluding

place, time, and possession

Product and target market characteristics usually determine the type of coverage a product receives. For which of the following products is selective distribution most appropriate?

Panasonic stereos

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

Screws

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

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

When channel members are linked by legal agreements that specify each member's rights and responsibilities, _______ exists

a contractual VMS

Customers who purchase computer laptops from manufacturer websites are acquiring products through

a direct-marketing channel

A single leader who controls and organizes a marketing channel is called a

channel captain

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

cooperation.

The Limited, which produces and retails clothing products in a coordinated channel, is an example of a(n)

corporate vertical marketing system

Many producers selling on the Internet are using

direct-marketing channels

Many companies use more than one marketing channel to distribute their products to the same target market,a tactic called

dual distribution

An independent business that takes title to products and carries inventoriesis a(n)

industrial distributor

Most marketing channels have marketing intermediaries. A marketing intermediary's role is to

link producers to other middlemen or to consumers

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

twenty-five; ten

When Benetton, the Italian sportswear designer and manufacturer, decided to open its own specialty shops to sell its merchandise, the firm was engaging in

vertical channel integration.

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

Marketing intermediaries

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

Producer, organizational buyers

Large retailers such as J.C. Penney's and Target are most likely to participate in which of the following channels?

Producer, retailers, consumers

Manufacturers of convenience products such as chewing gum reach customers through thousands of retailers. What marketing channel are these manufacturers most likelyto use?

Producer, wholesaler, retailer, consumer

Nationally distributed consumer convenience products are most likelydistributed through which of the following channels?

Producer, wholesalers, retailers, consumers

A channel that includes both a manufacturers' agent and an industrial distributor is appropriate under which of the following circumstances?

When the marketer wishes to enter a new geographic market but does not wish to expand the existing sales force

The supply chain includes

all entities that facilitate product distribution

Nike maintains a good deal of control over how its products are promoted, displayed, and sold. Because of this control, Nike would be appropriately described as the channel

captain

If a wholesaler continually emphasizes and promotes one company's products over a competing company's products, _____ is likely to result

channel conflict

Marketing channel members are likely to experience misunderstandings, frustration, and poorly coordinated strategies as a result of

channel conflict caused by inefficient communication between channel members

When one company in a marketing channel has the ability to influence another member's goal achievement, the company has

channel power

In the distribution channel for Domino's Pizza, channel members are linked by legal agreements that spell out the obligations and rights of each member. This is an example of a(n) ___________ vertical marketing system

contractual

The Wicks 'N Sticks candle and gift marketing organization has a(n) ___________ vertical marketing system arrangement with its franchised retail store operations

contractual

The Home Depot is trying to reduce transportation, information management, and administrative costs. Toaccomplish this goal, channel members need to

cooperate and accommodate one another's needs

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

customer relationships

The driving force behind marketing channel decisions should be

customer satisfaction

A channel of distribution is defined as a group of individuals and organizations that

directs the flow of products from producers to customers

Del Monte markets ketchup for household use to supermarkets through grocery wholesalers. It markets ketchup for institutional use through industrial distributors and food brokers.Del Monte is using

dual distribution

Gateway Computer makes computers available through its own stores, its toll-free telephone line, and a website. This is an example of

dual distribution.

The three major levels of intensity at which a company can choose to distribute its products are _____ distribution.

exclusive, selective, and intensive

If Ralston Purina forced Kroger's grocery chain to place all of its products in the stores' most favorable locations, it would be

exercising channel power.

Organizational buyers are especially partial to direct marketing channels when

expensive and/or complex equipment is involved

To expand the number of its retail outlets in the Washington, D.C., area, the Dress Barn bought out a small chain of women's apparel stores in northern Virginia. This type of integration is called

horizontal

Jeff Wood's company buys machine tools from large producers and sells them to several Midwestern manufacturing companies. The company Jeff works for carries inventories of the tools, which reduces capital requirements for the producers. Jeff's company is an example of a(n) ___________ in a distribution channel.

industrial distributor

Producers of convenience products such as soft drinks, toothpaste, and breath mintsare most likelyto use _____ distribution

intensive

Sales are most likelyto have a direct relationship to product availability for products that use _____ distribution.

intensive

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

intensive

Candy bars and chewing gum are most likelyto be distributed through _____ and _____.

intensive; dual distribution

If Nokia decides to make changes in its marketing channels, the strategic significance is that channel decisions are

long-term commitments

An independent businessperson who is paid a commission to sell complementary products of different producers in an assigned territory without actually taking title of the merchandiseis a(n)

manufacturers' agent

A group of organizations and individuals that directs the flow of products from producers to the ultimate consumers is called a

marketing channel

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

may be better suited to serve customers in a particular region

Eliminating a wholesalerfrom a marketing channel will

not eliminate the functions performed by that wholesaler

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

producer-to-business buyer

Few supermarkets would try to replace a national brand of baby food with their own brand. Assuming that this is true, we have a good example of channel leadership by

producers

Consumers receive the benefits of place utility when

products are available in locations where consumers want to buy them

Without wholesalers and other intermediaries

products would likely be more expensive due to the use of less efficient channel members

When Sophie buys organic produce for her household using a channel with only one intermediary, that intermediary is classified as a

retailer

In marketing a new line of nursery furniture for infants and small children, the Fisher Company will most likely use___________ distribution for the products.

selective

Durable goods such as television sets and DVD players generally reach their target marketsthrough

selective distribution

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

selective distribution

Fragile products that require special handling are more likely to be distributed through

shorter channels

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

six

Long-term partnerships among channel members working together to reduce inefficiencies, costs, and redundancies in the entire marketing channel is called

supply chain management

Wal-Mart 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

supply chain management

Channel decisions are important to marketersmostly because

they involve long-term commitments and affect customer accessibility

The reasons a vertically integrated channel can be more effective against competition is because of all of the following except

tightly controlled and bureaucratic management style.

Having products available when the customer wants themis called

time utility

Bennetton, a leading manufacturer of knitwear in Italy, expanded its operations to include retail outlets in the United States and South America. This type of integration is called

vertical

Warner Bros. sells cookie jars, puzzles, photo albums, and other items featuring its popular cartoon characters directly through its own retail outlets. This is an example of

vertical channel integration