MKT 300 Chapter 14 Mindtap
What is the reorder point if the usage rate is 20 units per day, the order lead time is eight days, and the safety stock is 60?
220
In a simple economy of 3 producers and 10 consumers, there would be ____ possible transactions without an intermediary. With one intermediary, the number of possible transactions would be ____.
30,13
In which of the following situations is dual distribution likely to be determined illegal?
A manufacturer's outlet store undercuts its independent retailers' prices for the same products.
If a retailer is reviewing its inventory and notices that the usage rate for one of the products it stocks has decreased, the retailer should
decrease its reorder point
If Kellogg's is forcing its retailers to place its cereals in prime locations on the shelves so that customers can see them easier than the competition, it would be
demonstrating channel power
Sales are most likely to have a direct relationship to product availability for products that use ____ distribution.
intensive
When Coke Zero was added to the line of Coca-Cola products, it most likely was introduced using _____ distribution.
intensive
WalMart has begun requiring that its suppliers add _____ to their shipments. The shipments can then be tracked using radio waves to help WalMart and its suppliers make the supply chain more efficient.
RFID tags
A private warehouse is a
a company-operated facility for storing and shipping products
Rosie and John both are buying textbooks for the class. Rosie prefers the online option and purchases her copy of the textbook from the publisher's Web site. John likes the feel of the book in his hands and buys a print copy from his college bookstore. Rosie is purchasing her book through_____, while John is purchasing his through _____.
a direct marketing channel; a retailer
Customers receive the benefits of form utility from an intermediary when
a retailer offers to add a monogram to a product
Fiat Chrysler has an agreement with GAC Group, a Chinese automobile manufacturer, to produce Jeeps in China to be sold to Chinese customers. This agreement gives Fiat Chrysler access to the Chinese market without having to pay import tariffs on cars produced in the United States and sold in China. This is an example of
a strategic channel alliance
Dan is the president of a small firm that builds office furniture. His company is still fairly small and has not hired a sales staff yet. Dan's firm likely is using _____ to maintain contact with the companies that buy its furniture.
agents
FedEx provides overnight shipping of packages across the United States. If a customer in San Francisco wants a package to be delivered to Atlanta the following morning, speed is very important and the customer is willing to pay a higher price for the speed. FedEx would most likely use _____ for transporting the overnight package from San Francisco to Atlanta.
airplanes
The primary difference between a manufacturers' agent and an industrial distributor is that
an agent does not take title of a product, but a distributor does take title.
When considering the best channel to use, the following are true about smaller firms, except that they
are likely to have a large number of distribution centers
When a firm has an inventory stockout, it can result in
brand switching among customers
Horizontal channel integration
can be done by merging two retailers
Which of the following products will most likely use the longest distribution channel?
canned vegetables
Large manufacturers such as Procter & Gamble are typically able to have control over how their products are promoted and sold in different retail outlets. Due to this control, Procter & Gamble is likely a channel
captain
A grocery store that sells both Annie's Homegrown Organic Macaroni & Cheese and Horizon Organic Macaroni & Cheese has been giving Annie's products better locations on the shelves and promoting them more in stores than Horizon's products. If this continues, _____ is likely to result.
channel conflict
IMA Wholesalers is a distributor of car repair parts and supplies, selling to both retailers and auto repair service businesses. Recently, IMA has been promoting the Pennzoil brand of oil over the Quaker State brand of oil by offering larger discounts to the channel members. If IMA continues to do this, ____ is likely to result.
channel conflict
Snap-on Tools uses a franchise model to sell shop equipment products to customers. When Snap-on opened an online Web site that sold tools directly to consumers, this likely caused _____ with franchisees, which would likely increase if Snap-on reaches an agreement to sell through Home Depot as well.
channel conflict
The Mini Roadster is manufactured in England. For cars sold in the United States, they are placed into large boxes that are 8-feet wide, 8-feet high, and 10- to 40-feet long. This way, they can be stacked and shipped on ships and barges across the Atlantic Ocean. This process is referred to as
containerization
Subway, a fast-food sandwich restaurant, has channel members that are connected using legal agreements that spell out the rights and responsibilities of each member. This is an example of a(n) _____ vertical marketing system.
contractual
In-N-Out Burger is a fast-food hamburger chain headquartered in California that owns and operates every location, resisting franchising any new locations. By owning every location and not franchising, In-N-Out operates a(n) _____ and has no plans of adopting a(n) _____.
corporate VMS; Contractual VMS
McDonald's has a multichannel distribution system in which it operates its own locations and has franchise agreements with other locations. Operating its own locations is a(n) _____, while the franchises represent a(n) _____.
corporate VMS; contractual VMS
Old Navy sells its clothing directly to consumers through its own retail outlets. This is an example of a(n) _______.
corporate vertical marketing system
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
Jackie works for a custom bicycle manufacturer and is analyzing the order fulfillment process. She wants to shorten the time between receiving an order online and having the order picked up by UPS while maintaining customer service and cost. Jackie is focusing on improving her company's _____ as a way of increasing customer satisfaction.
cycle time
Sonia is planning a trip to Belize. She is looking for places to stay through the online rental service Airbnb. After comparing many different places, she decides on where she wants to stay and books her lodging. Airbnb is able to use ____________________ that allows distribution and ____________________ to occur simultaneously.
digital distribution; consumption
A medical supply wholesaler has seen growth in its business recently and has decided to open a new facility designed for moving the products being sold. It will combine shipments received from manufacturers and ship them to medical facilities almost immediately. This new facility would be best classified as which of the following?
distribution center
Gap allows shoppers to buy its clothing through its stores or through its Web site gap.com. This is an example of
dual distribution
The Gap sells its clothing through its company-owned stores and through its own Web site. The Gap uses _____ as a channel strategy.
dual distribution
When dealing with large grocery stores, Nestle sells its Gerber baby foods directly to retailers. For smaller grocery stores, however, Gerber baby food is sold to wholesalers who in turn sell it to the stores. Nestle is using
dual distribution
Companies have been using computer technology to integrate order processing with production, inventory, accounting, and transportation in a system referred to as
electronic data interchange
Pnina Tornai is a wedding dress designer targeting upscale brides. Her wedding dresses have been worn by celebrities and featured in television programs. Which form of distribution would Pnina Tornai most likely use for her wedding gowns?
exclusive
An arrangement where a producer forbids an intermediary to carry products made by competing manufacturers is called _________.
exclusive dealing
JD's Diner offers Coca-Cola products to its customers. They have an agreement with Coca-Cola that they are not allowed to carry products from PepsiCo or any other competitor. Coca-Cola is engaging in which of the following channel management practices?
exclusive dealing
Supply chain management combines two or more stages of the marketing channel under one management.
false
The end result of eliminating marketing intermediaries is a cost benefit.
false
The reorder point is computed by multiplying the service standard by the order lead time.
false
Richland Technologies produces smartphone accessories. In order to have enough capital to manufacture its latest batch of accessories, Richland Technologies secured a loan with its inventory as collateral. Instead of moving the collateral to a warehouse, the bank making the loan hired a company to set up a _____ to provide security over the collateral at Richland Technologies' facility.
field public warehouse
A firm that consolidates shipments from many smaller firms into efficient lot sizes is known as a
freight forwarder
When Disney merged with Pixar, the merger gave Disney the ability to produce animated films more efficiently. This is an example of
horizontal channel integration
Using horizontal channel integration allows a firm to
increase efficiency and develop economies of scale in advertising and other marketing functions.
Grainger is an industrial supply company selling equipment from manufacturers and selling the equipment to manufacturing companies. Grainger takes title and carries inventory of the products it sells. Grainger is an example of a(n) _______.
industrial distributor
Courtney is a transportation coordinator for Nike. She has a large shipment of shoes arriving from plants in Asia and plans on using waterways, railroads, and trucks to transport the containers. Using these different transportation methods will allow Nike to take advantage of the benefits offered by each type of carrier. Using different types of carrier is referred to as
intermodal transportation
JanSport offers a line of backpacks in a variety of styles and sizes. The company needs to make sure that it has an adequate assortment of backpacks available to meet customer demand as part of the ____ stage of physical distribution.
inventory management
The Internet may increase resentment between intermediaries and manufacturers because
it allows manufacturers to create a direct channel that competes with retailers
Alicia is a product manager for a computer manufacturer and has decided to improve their inventory management. She is working with suppliers to wait to purchase materials just right before they are needed in production so that she can keep the levels of inventory low. She is suggesting a(n) ____ approach.
just-in-time
Business consumers frequently buy _____, while consumers typically buy _____.
large quantities; limited quantities
Sony Pictures Television, the production company behind the television show Breaking Bad, made several marketing mix decisions that were related to distribution. All of the following are distribution decisions, except
leasing a billboard in Times Square to feature the star of the show
Pierre runs a grocery store and is working with his suppliers in the planning and implementation of the flow of products from the manufacturer to his store. The goal is to make the transportation and storage of products more efficient and effective. He is engaging in _____ management.
logistics
For which of the following products is exclusive distribution most appropriate?
luxury cars
Place utility is best described as
making the product available in locations where customers wish to purchase it.
Product managers for Green Giant are meeting to discuss ways so that they can improve the packaging of their frozen foods to reduce damage and make loading and transportation more efficient. This is an attempt to improve
materials handling
Freight transportation companies that have the ability to transport products in many different ways including ships, rails, trucks, and air service are known as
megacarriers
Select Comfort, a producer of adjustable air mattresses, sells its products through retail chains, direct mail sales, and on its website. This is an example of __________.
multichannel distribution
If a small retailer is in a marketing channel that contains only the producer, the retailer, and the customer, which of the following is most likely being sold by the retailer?
new college textbooks
Precision Equipment is updating the way it ships its products. Specifically, it is improving _____ by adding electronic ordering to its system, adding automated machines to move items in the warehouse, and partnering with UPS to ensure priority shipping with the carrier.
order processing
Taco Bell has developed a smartphone app that allows customers to place orders by their phones rather than by speaking to an employee at the store. Customers can choose whether to pick up their food in the drive-thru lane or inside the restaurant. The app has given Taco Bell the opportunity to improve its
order processing
Becky has started a company selling homemade cookies online. As the company has grown, Becky has decided to hire a third party to handle her physical distribution tasks so that she can focus on serving existing customers and attracting new ones. She has been using _____ for physical distribution of the cookies.
outsourcing
Brandon works for Redwood Enterprises in Washington State. As the furniture company expands beyond the Pacific Northwest, Brandon has been asked to find a warehouse to lease in California to serve the company's new markets. This warehouse will be a _____ and will only store furniture manufactured by Redwood Enterprises to be distributed in California and the Southwestern United States.
private warehouse
Mercury Toy Store has two types of warehouses that it uses. The first is a _____ that it operates and uses exclusively to store inventory year-round. In the months leading up to Christmas, when the company knows the demand for toys will increase, it gets a short-term lease on a _____ that helps it store the excess inventory it will need during the Christmas shopping season.
private warehouse; public warehouse
Kraft sells its macaroni and cheese through thousands of retailers across the country. Which of the following marketing channel structures is Kraft most likely to use?
producer, wholesaler, retailer, consumer
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, wholesaler, retailer, consumer
Caterpillar manufactures bulldozers and other large construction equipment that it sells directly to construction companies. This is an example of a _____ channel.
producer-buyer
Halloween Center is a specialty costume store that operates a retail location from late August through early November. The company needs some warehouse space to store its costumes. Because of the seasonality of its operations, they are most likely looking to lease a
public warehouse
Cook Right Pans has two types of warehouses that it uses. The first is a _____ that it leases to store excess inventory during times when its production output is greater than the demand for its pots and pans. The second is a _____ that is used to coordinate the shipping of completed products and is designed for quickly shipping products rather than for storage.
public warehouse; distribution center
Inditex, the parent company of fast-fashion retailer Zara, is an expert at using technology to track items. For instance, Zara has small bits of this technology attached to its fashion products' security tags. This technology uses signals to keep track of inventory and inform the retailer when more products need to be ordered. It also helps with shipment tracking. This technology is called _______.
radio frequency identification
Jeep wants to transport new vehicles from its plant in Toledo, Ohio, to the dealers in Southern California. Which of the following methods would be the cheapest for transporting this cargo?
railroads
The courts have held ___________________ a restraint of trade among intermediaries handling the same brands. However, courts have often adopted conflicting positions in regard to this issue and believe it can promote competition under certain circumstances.
restricted sales territories
When manufacturers such as Microsoft, Sony, and Bose bypass retailers by opening up their own retail locations, it is likely to
result in channel conflict between the manufacturers and the retailers
Laurie bought herself a new jacket using a marketing channel that has only one intermediary. That intermediary is classified as a
retailer
Anne-Marie is the manager of a department store. She has read predictions that the coming winter is going to be very cold and is concerned that there will be a lot of demand for winter coats. To help avoid stockouts, she is keeping
safety stock
General Electric sells its home appliances through a network of dealers and only a few large retailers. It most likely distributes using _____ distribution.
selective
The Fisher-Price company produces toys and baby-related products. For the introduction of its line of nursery furniture for infants and small children, the Fisher Company will most likely use ____ distribution for the products.
selective
Gucci sells its handbags through its company-owned stores and through a handful of high-end department store chains like Neiman Marcus and Saks Fifth Avenue. Gucci is using _____ and _____ distribution.
selective; dual
Perishable products such as dairy or produce are more likely to be distributed through
shorter channels
Which of the following describes a disadvantage of using an industrial distributor?
since they are independent firms, they may be difficult to control
After appearing on a national talk show to discuss her line of bracelets and rings, Natalie expected sales volume to increase. Unfortunately, the sales volume was higher than expected and her company had $250,000 in lost sales because it did not have enough inventory. The $250,000 represents which of the following inventory management costs?
stockout
Exclusive distribution is_____________.
suitable for products consumed over a long period of time
Carly works at Kellogg's and is on a team developing a new breakfast cereal. She is currently trying to contact different companies who can provide the specific ingredients and equipment needed to make the cereal. She will work with the procurement department to reach an agreement with the companies selected to provide the ingredients and equipment. She is currently engaging in _____ management.
supply
Retailers work with their suppliers to coordinate operations to meet customer needs, acquire products that their customers demand, and facilitate the movement of products from the suppliers to their stores. When doing all these activities, the retailer is engaging in
supply-chain management
Walmart 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
When four buyers purchase the products of 6 producers, 24 transactions are required. If one intermediary serves both producers and buyers, the number of possible transactions is
ten
A channel that includes both a manufacturers' agent and an industrial distributor is appropriate under which of the following circumstances?
the producer wants to cover a large geographic area, but has no sales force
Which of the following describes an advantage of using industrial distributors?
they can perform needed selling activities in local markets at a relatively low cost
Which of the following statements about restricted sales territories is not true?
they restrict the amount of competing products available in an area
Marketing channels create four types of utility for consumers. These are
time, place, possession, and form
A wholesaler of produce wants to create a shipping plan for a variety of fruits and vegetables. The managers of the wholesaler want to use _____ because it has the most flexible schedules and routes of all transportation modes.
trucks
A discount house can store and transport merchandise that is purchased directly from the producer, thus eliminating the need for a wholesaler. This is an example of vertical channel integration.
true
A manufacturer may try to prohibit intermediaries from selling its products outside designated sales territories to tighten control over distribution of its products.
true
Selective distribution is desirable when customer service from a channel member is important.
true
Redlands Distributing wants to carry Tide detergent products, made by Procter & Gamble. P&G agrees, but only if the supplier also purchases P&G's entire line of detergents such as Gain and Cheer. If this were to occur, Procter & Gamble would be engaging in which of the following channel management practices?
tying agreement
When launching its Dove Men+Care line of men's skin care products, Unilever told its distributors that they had to carry the new line if they still wanted to carry the rest of the Dove line of products. They would have been engaging in which of the following channel management practices?
tying agreements
Benetton, a leading manufacturer of knitwear in Italy, expanded its operations to include retail outlets in the United States and South America. This type of channel is called ________.
vertical integration
Which two modes of transportation are used when containers are shipped by fishyback?
water carriers and trucks
Eliminating wholesalers from marketing channels
would likely increase prices consumers pay
