Marketing principles ch.14
An agreement in which the products of one organization are distributed through the marketing channel of another organization is called
a strategic channel alliance
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
The marketing channel of producer to retailer to consumer is most likely to be used by producers of which of the following products? -chewing gum -tobacco -automobiles -hardware -saltine crackers
automobiles
Garcia Wholesale Plumbing has seen its sales in the Southeast triple in the past two years. Materials handling director Barb Peterson announces plans to the board for an Atlanta facility that will combine shipments received from Garcia's 25 suppliers for nearly immediate shipment to plumbing stores and contractors in the region. This new facility would be best classified as which of the following?
distribution center
Which of the following organizations consolidates shipments from several firms into more efficient lot sizes?
freight forwarder
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
Which of the following is the most commonly used channel for distributing business products? -Producer, agents, industrial distributors, organizational buyers -Producer, industrial distributors, organizational buyers -Producer, agents, organizational buyers -Producer, organizational buyers - Industrial distributors, organizational buyers
-Producer, organizational buyers
the supply chain includes -producers, wholesalers, and retailers. -suppliers, producers, intermediaries, and customers. -suppliers and suppliers' suppliers. -all entities that facilitate product distribution. -buyers, seller, marketing intermediaries, and agents.
-all entities that facilitate product distribution.
In which of the following situations is dual distribution likely to be determined illegal?
A producer uses company outlets to dominate independent retailers that carry its products.
Which of the following describes a disadvantage of using industrial distributors?
They are unlikely to handle bulky items or items that are slow sellers.
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
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
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. wholesalers brokers agents merchants retailers
agents
A producer is not likely to receive _____ from an industrial distributor.
aggressive promotion of its brand
Kolder Inc. is using a new just-in-time inventory management system that requires ordering smaller quantities of parts more frequently. The success of its business depends significantly on receiving these parts very quickly, so like many other companies using just-in-time, Kolder Inc. is relying more on the ____ mode of transportation despite its expense
airway
Industrial distributors are increasingly carrying more _____ products. convenience business consumer expensive bulky
business
A public warehouse is a
business that leases storage space and related facilities for distribution to other firms.
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
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
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
Piggyback, fishyback, and birdyback are terms usually associated with gaining efficiency in shipping through
containerization
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
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 systems
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 shifting costs to suppliers. maximizing costs. maximizing technology implementation. cooperation with competitors. customer relationships.
customer relationships
The driving force behind marketing channel decisions should be convenience. cost reduction. environmental concerns. customer satisfaction. quality.
customer satisfaction
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 Comfort, a producer of adjustable air mattresses, sells most of its products through direct mail sales and Internet sales. This channel would be classified as direct distribution. producer, retailer, consumer. telemarketing. direct-marketing. indirect marketing.
direct marketing
a channel of distribution is defined as a group of individuals and organizations that:
directs the flow of products from producers to customers
Dual distribution is characterized as
distribution of one manufacturer's product through two or more different channel structures.
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
Many companies use more than one marketing channel to distribute their products to the same target market, a tactic called multiple channeling. strategic channel alliance. intensive distribution. dual distribution. market splitting.
dual distribution
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
When only one outlet in a relatively large geographic area is used to distribute a product that is consumed over a long period of time, a(n) ___________ channel arrangement is developed. inclusive general exclusive selective physical
exclusive
Expensive, high-quality products that are purchased infrequently often reach consumers through
exclusive 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
An independent business that takes title to products and carries inventories is a(n)
industrial distributor
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 mints are most likely to use _____ distribution.
intensive
Sales are most likely to 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 likely to be distributed through _____ and _____.
intensive; dual distribution
Most marketing channels have marketing intermediaries. A marketing intermediary's role is to link wholesalers to other wholesalers. link producers to other middlemen or to consumers. always sell products to wholesalers. not take title to products. always sell products to retailers.
link producers to other middlemen or to consumers
If Nokia decides to make changes in its marketing channels, the strategic significance is that channel decisions are
long term commitments
What is a primary difference between an industrial distributor and a manufacturers' agent?
manufacturers' agent does not acquire title nor usually take possession of the products whereas an industrial distributor does.
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 merchandise is a(n) sole intermediary. manufacturers' agent. producers' broker. industrial distributor. channel facilitator.
manufacturing agent
What links producers to consumers through the purchase and reselling of products or contractual agreements?
marketing intermediaries
When considering the best channel to use, all of the following are true with regard to larger firms except they
may be better suited to serve customers in a particular region.
Freight transportation companies that offer several different shipment methods are called
megacarriers
Eliminating a wholesaler from a marketing channel will
not eliminate the functions performed by that wholesaler
Assuming everything else equal, the most cost-efficient way for British Petroleum to transport crude oil from remote oil drilling sites in central Alaska to shipping terminals on the Alaskan coast would be
pipelines
Marketing channels create three types of utility for consumers including
place, time, and possession
When companies operate their own facilities for storing and shipping products, these facilities are known as
private warehouses
Steelcase, Inc. markets furniture directly to businesses. This is an example of a(n) _________ channel.
producer to business buyer
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 likely to use?
producer, wholesalers, retailers, consumers
Nationally distributed consumer convenience products are most likely distributed through which of the following channels?
producer, wholesalers, retailers, consumers
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 wholesalers. producers. retailers. agents. brokers.
producers
Which of the following is least likely to be a factor affecting the selection of marketing channels?
product packaging
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.
Which mode of transportation hauls more freight than any other?
railroads
What two modes of transportation are used when containers are shipped by piggyback?
railroads and trucks
Using a freight forwarder usually
reduces transit time
The elimination of marketing intermediaries
requires that the services they provide be performed by someone else in the marketing channel.
After direct-marketing, the next slightly longer marketing channel adds a(n) retailer. producer. wholesaler. agent. consumer.
retailer
when Sophie buys organic produce for her household using a channel with only one intermediary, that intermediary is classified as a retailer. producer. wholesaler. agent. consumer.
retailer
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 longer channels. shorter channels. Channel D. Channel H. exclusive outlets.
shorter channels
Long-term partnerships among channel members working together to reduce inefficiencies, costs, and redundancies in the entire marketing channel is called -supply chain management. -vertical channel integration. -industrial management. -industrial distribution. -marketing management.
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. a vertical marketing system. a horizontal marketing system. channel conflict. dual distribution.
supply chain management
In an administered VMS, informal coordination brings about a high level of interorganizational management. Nonetheless,
the channel members remain autonomous
possession utility us best describes as:
the customer having access to the product to use now or store and use later.
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 them is called
time utility
What is the most expensive physical distribution function?
transportation
Magnetic Springs wants to ship its bottled water with the most flexible schedules and routes of all transportation modes. Magnetic Springs should use ___________ as its transportation mode.
trucks
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 horizontal. vertical. multilevel. retail. merchandising
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
The Diamond Salt Company needs to transport 20 tons of salt from Baton Rouge, Louisiana, to Cincinnati. Which of the following methods would be the cheapest for transporting this cargo?
waterways
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 conflict leadership dominance cooperation negotiation
leadership
Channel decisions are important to marketers mostly because
`they involve long-term commitments and affect customer accessibility
vertical channel integration -results in two or more different management teams for each member of the channel. -is made possible when a large corporation divests itself of smaller subsidiaries. -is a shift back to the conventional channel of distribution. -combines institutions at the same level of operation. -is made possible by purchasing the operations of a link in the channel.
-is made possible by purchasing the operations of a link in the channel.
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.
The Home Depot is trying to reduce transportation, information management, and administrative costs. To accomplish this goal, channel members need to -work independently. -avoid cooperation due to antitrust considerations. -work with competitors and share information. -increase competition among channel members. -cooperate and accommodate one another's needs.
-cooperate and accommodate one another's needs.
A single leader who controls and organizes a marketing channel is called a channel champion. distribution leader. marketing maverick. channel captain. lead distributor.
channel captain
Which major mode of freight transportation provides the most flexible schedules and routes?
trucks
If a wholesaler continually emphasizes and promotes one company's products over a competing company's products, _____ is likely to result.
channel conflict
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
where do supply chain start? -raw material -suppliers - customers -producers -retailers
customers
many producers selling on the internet are using several intermediaries. complex marketing channels. Internet wholesalers, retailers, and agents. supply chain channels. direct-marketing channels.
direct marketing channels
Ralph Lauren sells Polo products through department stores as well as in its own specialty shops. The designer uses ___________ as a channel strategy. channel extension intermediary exclusion broker utilization dual distribution channel diversification
dual distribution
For which of the following products would exclusive distribution be most appropriate?
rolls royce automobile
In marketing a new line of nursery furniture for infants and small children, the Fisher Company will most likely use ___________ distribution for the products. -intensive -exclusive -horizontal -priority -selective
selective
Durable goods such as television sets and DVD players generally reach their target markets through
selective distribution
