MKTG 301 ch 12
17) All of the institutions in a channel are connected by flows, including physical flow, flow of ownership, payment flow, information flow, and ________ flow. A) promotion B) acquisition C) customer D) return product E) by-product
Answer: A
25) An advantage of a vertical marketing system (VMS) is that it acts as a ________ system. A) unified B) creative C) modern D) customer-driven E) task-driven
Answer: A
127) How do channel members add value to a marketing system? Answer: Intermediaries reduce the amount of work that must be done by both producers and consumers. They transform the assortment of products made by producers into the assortment wanted by consumers. They buy large quantities from many producers and break them down into the smaller quantities and broader assortments wanted by consumers. Intermediaries help to match supply and demand. Channel members add value by bridging the major time, place, and possession gaps that separate goods and services from those who would use them.
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36) Due in a large part to advances in technology, ________ is a major trend whereby product and service producers are bypassing intermediaries and going directly to final buyers, or radically new types of channel intermediaries are emerging to displace traditional ones. A) the vertical marketing system B) the corporate marketing system C) disintermediation D) the corporate merger E) the hostile takeover Answer: C 37) The four major steps of designing a channel system are analyzing consumer needs, setting channel objectives, ________, and evaluating the alternatives. A) establishing a budget B) identifying major channel alternatives C) seeking regulatory approval D) seeking legal advice E) measuring objectives Answer: B
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50) It is most common for international marketers to ________ their channel strategies for each country. A) extend B) adapt C) restrict D) seek approval for E) eliminate Answer: B
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52) A company should think of its intermediaries as both its ________ and ________. A) competitors; partners B) customers; partners C) competitors; marketers D) customers; employees E) competitors; customers Answer: B 53) Most companies practice strong PRM to forge long-term relationships with channel members. What does PRM stand for? A) primary relationship management B) potential relationship management C) perennial relationship management D) partner relationship management E) personnel roster maintenance Answer: D
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Miller Meat Company contracts with several Midwestern farmers to raise beef and pork for its meat processing center. To guarantee freshness, Miller Meat Company relies on a vast distribution network. For delivery to local grocers in Indiana, Miller Meat uses its own fleet of refrigerated trucks; delivery to these Indiana grocers constitutes 65 percent of Miller Meat's business. For deliveries in Illinois, Wisconsin, and points directly west of the Mississippi River, Miller Meat Company contracts with a refrigerated fleet that specializes in expediting smaller shipments. For faster delivery during peak times, Miller Meat Company often uses its own trucks to deliver to the expedited fleet's consolidation point from its distribution warehouse in Indiana. During the holiday season, however, several specialty distributors contract with Miller Meat Company to package specialty meats in gift boxes, then ship them directly to the recipients. For these specialty shipments within Indiana, Illinois, and Wisconsin, Miller uses its normal delivery mode. For all other specialty shipments, Miller ships from its distribution warehouse via air, then contracts with expedited carriers in various cities to deliver to the recipients.
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29) The most common type of contractual relationship in business is the ________. A) franchise organization B) administered marketing system C) conventional marketing channel D) corporate VMS E) horizontal marketing system
Answer: A
4) When suppliers, distributors, and customers partner with each other to improve the performance of the entire system, they are participating in a ________. A) value delivery network B) channel of distribution C) supply chain D) demand chain E) conventional distribution channel
Answer: A
45) An intensive distribution strategy is most suitable for which consumer product category? A) convenience products B) unsought goods C) shopping products D) luxury products E) supplies
Answer: A
46) Sometimes a producer chooses only a few dealers in a territory to distribute its products or services. Generally these dealers are given a right to ________ distribution. A) exclusive B) selective C) intensive D) administered E) corporate
Answer: A
51) China and India each contain more than one billion people. However, companies can access only a small percentage of these potential markets due to ________. A) inadequate distribution systems B) indifference toward Western products C) high regional taxes D) the religious caste system E) insurmountable language barriers
Answer: A
67) Through the use of ________, or "smart tag" technology, a company is able to locate a product's exact position within the supply chain. A) RFID B) PRM C) VMS D) IT E) 3PL
Answer: A
7) Producers benefit from using intermediaries because they ________. A) offer greater efficiency in making goods available to target markets B) bring a fresh point of view to strategy development C) eliminate risk D) are generally backlogged with orders E) refuse to store products for longer than a few days
Answer: A
71) Lancaster Box Company wants to provide better customer service while trimming distribution costs through teamwork, both inside the company and among all the marketing channel organizations. Lancaster Box is thinking of ________. A) integrated logistics management B) vendor-managed inventory C) customer relationship management D) third-party logistics E) disintermediation
Answer: A
77) Which of the following is NOT a marketing intermediary? A) the supplier of the raw materials used to make glass windows B) the distributor who sells stained glass windows C) the wholesaler who buys the stained glass window from its creator D) the showroom that displays glass windows for customers to see E) the manufacturers' agent who sells the stained glass windows
Answer: A
81) Staples Office Supply opened an online store that created competition with many of its dealers. The corporate office created a(n) ________ conflict. A) vertical B) conventional channel C) logistics D) horizontal E) intermediation
Answer: A
87) Which product will most likely be exclusively distributed? A) BMW cars B) Levi's blue jeans C) Bazooka bubble gum D) Prairie Farms yogurt E) Coca-Cola
Answer: A
88) Tiffany & Co jewelry can only be found in a limited number of intermediaries. This is an example of ________ distribution. A) exclusive B) intensive C) quality D) high-end E) independent
Answer: A
89) Max Samuelson is a high-end fashion designer who markets his clothing lines through a limited number of highly reputable retailers. Max uses ________. A) exclusive distribution B) exclusive dealing C) exclusive territorial agreements D) full-line forcing E) tying agreements
Answer: A
92) Grayville Rock and Gravel, located in a seaport town, sells rock, gravel, and sand to local markets. It has just been awarded a contract with a company 500 miles down the coast. Management should consider switching from truck to ________ transport. A) water B) rail C) pipeline D) air E) none of the above
Answer: A
93) Which of the following modes of transportation would most likely be used to quickly haul lettuce from California where it was grown to markets in Nevada? A) trucks B) piggyback C) air D) pipeline E) water
Answer: A
96) What type of utility does warehousing provide to consumers by holding onto products until consumers need them? A) time B) ownership C) production D) form E) packaging
Answer: A
11) Which of the following is NOT a key function that intermediaries play in helping to fulfill a completed transaction? A) physical distribution B) promotion C) financing D) risk taking E) storing goods
Answer: B
12) In a(n) ________ channel, the same member both produces and distributes a product or service. A) tiered B) direct C) horizontal D) vertical E) exclusive
Answer: B
15) To a producer of goods, a greater number of channel levels means ________ and greater channel complexity. A) less distance between producer and end consumer B) less control C) fewer potential ideas D) higher taxes E) fewer channel partners
Answer: B
18) A distribution channel is more than a collection of firms connected by various flows; it is a(n) ________ in which people and companies interact to accomplish individual, company, and channel goals. A) added value chain B) complex behavioral system C) corporate marketing system D) vertical marketing system E) multichannel system
Answer: B
19) An advantage of a channel of distribution over selling direct to consumers is that each channel member plays a(n) ________ in the channel. A) time-saving part B) specialized role C) decisional role D) informational role E) disciplinary role
Answer: B
2) ________ the manufacturer or service provider is the set of firms that supply the raw materials, components, parts, information, finances, and expertise needed to create a product or service. A) Downstream from B) Upstream from C) Disintermediated from D) Horizontal to E) Parallel with
Answer: B
20) Joanie Calvert is experiencing a disagreement with intermediaries in the channel over who should do what and for what rewards. Joanie is experiencing ________. A) a tying disagreement B) channel conflict C) channel disintermediation D) third-party logistics E) channel intermediation
Answer: B
21) ________ conflict, which occurs between different levels of the same channel, is more common than ________ conflict, which occurs among firms at the same level of the channel. A) Horizontal; vertical B) Vertical; horizontal C) Contractual; corporate D) Corporate; franchise E) Wholesaler; retailer
Answer: B
23) A conventional distribution channel consists of one or more ________ producers, wholesalers, and retailers. A) product-related B) independent C) contract D) estranged E) merchant
Answer: B
24) A channel consisting of one or more separate producers, wholesalers, or retailers that seek to maximize their own profit-even at the expense of profits for the channel as a whole-is a(n) ________. A) vertical marketing system B) conventional distribution channel C) independent channel allocation D) corporate VMS E) administered vertical marketing system
Answer: B
26) A corporate VMS has the advantage of controlling the entire distribution chain through ________. A) a profit-maximizing strategic plan B) single ownership C) mass distribution D) contracts among separate members E) franchise agreements
Answer: B
3) Another term for the supply chain that suggests a sense and respond view of the market is ________. A) supply and demand chain B) demand chain C) channel of distribution D) distribution channel E) physical distribution
Answer: B
30) Leadership in which type of marketing system is assumed not through common ownership or contractual ties but through the size and power of one or a few dominant channel members? A) horizontal marketing system B) administered VMS C) corporate VMS D) multichannel distribution system E) conventional marketing channel
Answer: B
31) In a ________, two or more companies at one level join together to develop a new marketing opportunity. A) franchise B) horizontal marketing system C) corporate VMS D) multichannel distribution system E) conventional distribution channel
Answer: B
35) Which of the following is the most likely disadvantage of adding new channels in a multichannel distribution system? A) decreasing understanding of complex markets B) decreasing control over the system C) fewer opportunities for franchising D) increasing disintermediation E) reducing conflict among channel members
Answer: B
38) Which of the following should be the first step in designing a marketing channel? A) identifying channel objectives B) identifying what consumers want from the channel C) analyzing channel alternatives D) evaluating intermediaries E) exploring international opportunities
Answer: B
43) Which type of product might require a more direct marketing channel to avoid delays and too much handling? A) lower-priced products B) perishable products C) high-priced products D) products in their maturity stage E) products in their decline stage
Answer: B
44) When determining the number of channel members to use at each level, three strategies are available: intensive, exclusive, and ________ distribution. A) multichannel B) selective C) international D) direct E) extensive
Answer: B
47) Which type of distribution is used when the producer wants more than one, but fewer than all, of the intermediaries who are willing to carry its products? A) exclusive B) selective C) intensive D) administered E) corporate
Answer: B
48) When establishing the responsibilities of channel members, the producer establishes a list price, sets discounts for intermediaries, and defines each channel member's ________. A) sales limits B) territory C) legal rights D) customers E) mission
Answer: B
55) Sometimes a seller requires its dealers to abstain from handling competitors' products in an arrangement called ________. A) exclusive distribution B) exclusive dealing C) selective distribution D) exclusive pricing E) disintermediation
Answer: B
59) Marketing logistics involves which of the following distribution flows? A) outbound and inbound only B) outbound, inbound, and reverse C) inbound and reverse only D) outbound and reverse only E) outbound only
Answer: B
61) ________ logistics concerns the methods consumers use to send products to a producer for return or repair. A) Inbound B) Reverse C) Outbound D) Vertical E) Horizontal
Answer: B
63) Which of the following innovations has created opportunities for significant gains in distribution efficiency? A) tying agreements B) Web-based logistics systems C) customer relationship management D) contractual vertical marketing systems E) storage warehouses
Answer: B
64) The goal of marketing logistics should be to provide a ________ level of customer service at the least cost. A) maximum B) targeted C) moderate D) minimum E) noncompetitive
Answer: B
66) To reduce inventory management costs, many companies use a system called ________, which involves carrying only small inventories of parts or merchandise, often only enough for a few days of operation. A) reduction-inventory management B) just-in-time logistics C) limited inventory logistics D) supply chain management E) economic order quantity
Answer: B
70) Using ________, retailers can share real-time data on sales and current inventory levels with suppliers who take responsibility for ordering and delivering products to retailers, thereby saving time and money. A) dual distribution modes B) continuous inventory replenishment systems C) an Intranet D) intensive distribution E) integrated distribution
Answer: B
8) Intermediaries play an important role in matching ________. A) dealer with customer B) supply and demand C) product to region D) manufacturer to product E) information and promotion
Answer: B
83) Which of the following is an example of a multichannel distribution system? A) Walmart locating to several countries B) JC Penney's catalog and retail store sales C) Avon's door-to-door distribution D) Starbuck's location inside of book stores E) a hotel providing guest privileges at a health spa across the street
Answer: B
85) When Netflix began delivering DVDs directly to customers through the mail instead of using a brick-and-mortar system, Netflix was following the trend of ________. A) indirect marketing B) disintermediation C) a franchise system D) exclusive distribution E) selective distribution
Answer: B
90) Fresh Direct, an online grocer delivering to homes and offices in and around New York City, recently switched its entire fleet to biodiesel trucks. These trucks run on used cooking oil rather than gas, drastically reducing the company's carbon dioxide footprint. Fresh Direct has developed a(n) ________. A) indirect marketing channel B) green supply chain C) tying agreement D) intermodal transportation system E) exclusive dealing system
Answer: B
91) Jewels for the Rich and Famous sells very exclusive jewelry with a minimum price of $25,000 to customers around the world. Speed of delivery to distant markets is a must. Management should consider using ________ as its main carrier. A) rail B) air C) truck D) the Internet E) water
Answer: B
97) A manufacturer that uses a third-party logistics provider to fulfill all of its logistics need is using a(n) ________. A) direct marketing channel B) conventional distribution channel C) corporate vertical marketing system D) horizontal marketing system E) franchise organization
Answer: B
98) Which of the following is one of Miller Meat Company's upstream partners? A) local grocers in Indiana who sell the company's products B) Midwestern farmers who raise beef and pork for the meat processing center C) the refrigerated fleet that expedites small shipments D) air carriers that take Miller's specialty shipments E) recipients of Miller's gift boxes
Answer: B
99) Management at a chain of Indiana grocery stores with a long history of purchasing products from Miller Meat is unhappy with the timing of deliveries. In fact, the grocery store's management is considering switching to another meat supplier who will delivery more frequently. This is an example of a(n) ________ conflict. A) independent channel B) vertical C) horizontal D) intermodal E) conventional
Answer: B
22) Historically, ________ have lacked the leadership to assign member roles and manage conflict. A) corporate vertical marketing systems B) contractual vertical marketing systems C) conventional distribution channels D) administered vertical marketing systems E) conventional vertical marketing systems
Answer: C
27) Which of the following are the three major types of vertical marketing systems? A) corporate, contractual, and chain B) contractual, corporate, and independent C) contractual, corporate, and administered D) administered, independent, and franchised E) contractual, corporate, and task
Answer: C
32) Which of the following is an example of a manufacturer-sponsored retailer franchise system? A) fast-food restaurants such as McDonald's and Burger King B) Starbucks operating within Target stores C) Ford and its network of independent franchised dealers D) licensed bottlers that bottle and sell Coca-Cola to retailers E) motels such as Holiday Inn and Ramada Inn
Answer: C
34) As marketing manager for Globe Imports and Exports, you want to start reaping the benefits of a multichannel distribution system. You will likely enjoy all of the following EXCEPT which one? A) expanded sales B) expanded market coverage C) selling at a higher gross margin D) opportunities to tailor products and services to the needs of diverse segments E) A and C
Answer: C
39) To increase a channel's service level, the channel must provide a greater assortment of products, more add-on services, or ________. A) lower prices B) fewer middlemen C) faster delivery D) more competition E) less follow-up
Answer: C
40) Companies should state their channel objectives in terms of targeted levels of ________. A) co-op advertising B) efficiency C) customer service D) conflict reduction E) profitability
Answer: C
41) When a company is identifying its major channel alternatives, it should consider its choices in terms of ________ of intermediaries. A) size, power, and profitability B) power, cooperativeness, and location C) types, number, and responsibilities D) capacity, creativity, profitability E) types, breadth, depth
Answer: C
49) When a company compares the likely sales, costs, and profitability of different channel alternatives, it is using ________ criteria to evaluate its channel options. A) selective B) adaptive C) economic D) control E) distribution
Answer: C
5) Most producers today sell their goods directly to ________. A) final users B) final users and marketing members C) intermediaries D) warehouses E) third-party logistics providers
Answer: C
56) Exclusive dealing is legal as long as it does not ________ or tend to create a monopoly and as long as both parties enter into the agreement ________. A) substantially lessen competition; coercively B) restrict trade; for a cause C) substantially lessen competition; voluntarily D) interfere with competitors; forcefully E) create a smaller market; permanently
Answer: C
6) From the economic system's point of view, the role of marketing intermediaries is to transform the assortment of products made by producers into the assortment of products wanted by ________. A) channel members B) distributors C) consumers D) manufacturers E) marketers
Answer: C
60) ________ logistics controls the movement of products from points of production to consumers. A) Inbound B) Reverse C) Outbound D) Vertical E) Horizontal
Answer: C
62) Which of the following is NOT an area of responsibility for a logistics manager? A) information systems B) warehousing C) promotions D) inventory E) purchasing
Answer: C
65) The difference between distribution centers and storage warehouses is that distribution centers are designed to ________. A) store goods for longer periods B) hold larger volumes C) move goods rather than just store them D) primarily be owned by the manufacturer E) be automated
Answer: C
68) Which of the following transportation modes is used for digital products? A) trucks B) rail C) the Internet D) air E) ship
Answer: C
72) Which of the following best states the goal of integrated supply chain management? A) to stabilize costs B) to increase services with minimal cost through teamwork C) to harmonize all of the company's logistics decisions D) to eliminate conflict and increase cooperation among channel members E) to ensure consistent services with minimal costs
Answer: C
73) When Home Depot allows key suppliers to use its stores as a testing ground for new merchandising programs, it is conducting a(n) ________. A) integrated logistics system B) partnership management system C) shared project D) third-party project E) cross-functional, cross-company team
Answer: C
79) Steve's Physco Skates sells its products to Walmart, who then sells them to the consumer. This is an example of a(n) ________. A) direct marketing channel B) producer channel C) indirect marketing channel D) retailer channel E) corporate vertical marketing system
Answer: C
9) Channel members add value by bridging the major gaps of ________ that separate goods and services from those who would use them. A) time, need, and form B) place, possession, and form C) time, place, and possession D) place, time, and need E) place, need, and distribution
Answer: C
1) Which of the following is NOT a typical supply chain member? A) resellers B) customers C) intermediaries D) government agencies E) raw materials supplier
Answer: D
10) Which of the following is NOT a key function that intermediaries play in completing transactions? A) promotion B) information C) matching D) risk taking E) negotiation
Answer: D
100) In using air transportation and then expedited truck carriers to deliver specialty items to customers outside of a designated delivery range, Miller Meats is using ________. A) all of its supply chain B) all of its value delivery network C) direct marketing channels D) intermodal transportation E) a horizontal marketing system
Answer: D
13) In marketing terms, we say that the number of intermediary levels indicates the ________ of a channel. A) depth B) complexity C) involvement D) length E) width
Answer: D
28) A distinguishing feature of a contractual VMS is that coordination and conflict management among the independent members of the channel are attained through ________. A) agents and brokers B) unspoken partnerships C) limited liability incorporation D) contractual agreements E) natural competitive forces
Answer: D
42) Which product will most likely be intensively distributed? A) Olympus digital cameras B) BMW cars C) Guess blue jeans D) Coca-Cola E) Nike running shoes
Answer: D
57) A producer of a strong brand that agrees to sell its brand to a dealer only if the dealer will take some or all of the rest of the line is using ________. A) exclusive distribution B) exclusive dealing C) intensive distribution D) a tying agreement E) disintermediation Answer: D 58) Marketing logistics involves getting the right product to the right customer in the right place at the right time. Which one of the following is NOT included in this process? A) planning the physical flow of goods and services B) implementing the plan for the flow of goods and services C) controlling the physical flow of goods, services, and information D) gathering customer's ideas for new products E) planning the flow of logistics information to meet customer requirements at a profit
Answer: D
69) In the proper order, identify the correct terms for these intermodal transportation combinations: rail and truck, water and truck, water and rail. A) fishyback; airtruck; trainship B) piggyback; airtruck; fishyback C) trainship; fishyback; piggyback D) piggyback; fishyback; trainship E) piggyback, fishyback; birdyback
Answer: D
74) Today, a growing number of firms now outsource some or all of their logistics to ________. A) cross-functional teams B) disintermediaries C) horizontal channel members D) third-party logistics providers E) competitors
Answer: D
75) UPS Supply Chain Solutions, which handles all of its clients' "grunt work" associated with logistics, is an example of ________. A) integrated logistics management B) a distribution center C) selective distribution D) a third-party logistics provider E) a cross-functional, cross-company team
Answer: D
76) Proud Pets, a producer of clothing and accessories for pets, has recently partnered with a regional chain of pet stores. Which of the following would Proud Pets be LEAST likely to expect from its new channel member? A) promoting its products through advertising B) assembling and packaging its products for final sale C) distributing relevant marketing research information D) identifying raw materials and other productive inputs E) negotiating on its products' prices
Answer: D
78) Which of the following is the best example of a direct channel? A) J&L Manufacturing Company sells drapery hardware to The Home Depot's Design Center, and the Design Center then sells it to consumers. B) Family Dollar Store sells modeling clay to school-age children. C) A wholesaler sells candy to convenience stores, who then sell it to store patrons. D) Farmer Mintz sells corn to the Hughes household, who will eat it for supper. E) A farmer in Columbia sells flowers to an international broker, who makes sure the flowers reach consumers in the United States.
Answer: D
80) When two Taco Bell restaurants have a disagreement over who should be able to sell in quantity at a discount to the local high school band, they are in a ________ conflict. A) vertical B) conventional channel C) logistics D) horizontal E) functional
Answer: D
86) Chewing gum is stocked in many outlets in the same market or community; in fact, it is placed in as many outlets as possible. This is an example of ________ distribution. A) exclusive B) selective C) multichannel D) intensive E) disintermediated
Answer: D
94) Which type of vertical marketing system (VMS) gives an organization more control over both production and resale of its products, while at the same time increasing the organization's capital investment and its fixed costs? A) administered B) contractual C) conventional D) corporate E) horizontal
Answer: D
95) Why is it important for manufacturers to be sensitive to the needs of their dealers? A) Dealers have few legal rights. B) Manufacturers have few legal rights. C) Dealers can easily be replaced by third-party logistics providers. D) Dealer support is essential to creating value for the customer. E) Manufacturers cannot break commitments to channel.
Answer: D
14) At minimum, a marketing channel consists of a producer and a(n) ________. A) wholesaler B) agent C) broker D) intermediary E) customer
Answer: E
16) Which of the following is an example of a complete business-to-business channel? A) producer to retailer to consumer B) producer to wholesaler to retailer to consumer C) producer to sales branch D) business distributor to business customer E) producer to distributor to business customer
Answer: E
33) When McDonald's offers its products inside of a Walmart store, it is using a(n) ________. A) conventional distribution channel B) corporate VMS C) contractual VMS D) administered VMS E) horizontal marketing system
Answer: E
54) Caterpillar, the famous heavy equipment manufacturer, has a reputation for working in harmony with its worldwide distribution network of independent dealers. Caterpillar has shared its successes with its dealers and protected its dealers during difficult economic times. This is an example of ________. A) intensive distribution B) integrated logistics management C) disintermediation D) 3PL E) PRM
Answer: E
82) Which of the following is an example of horizontal channel conflict? A) managers of two separate Holiday Inns disagreeing over what constitutes poor service B) United Airlines competing with Northwest Airlines for customers C) disgruntled factory workers complaining about a small pay raise D) the BMW dealership in Fort Wayne complaining that the BMW dealership in Indianapolis is situated too close E) A and D
Answer: E
84) Blockbuster offers DVD rentals through its Total Access online rental service and through its bricks-and-mortar stores. This is an example of a(n)________. A) contractual VMS B) administered VMS C) horizontal marketing system D) conventional distribution channel E) multichannel distribution system
Answer: E
126) Explain why value delivery network is a more relevant expression to use than the term supply chain or demand chain.
Answer: Supply chain takes a make-and-sell view of the business, using materials and other inputs as the starting point for market planning instead of the needs of target customers. Demand chain takes a sense-and-respond view, starting with the needs of target customers and planning a chain of resources and activities with the goal of creating customer value. However, a demand chain is a step-by-step, linear view of purchase-production-consumption activities. This does not allow for the flexibility made possible by the Internet and other technologies. Value delivery network is more appropriate because it is made up of the company, suppliers, distributors, and ultimately customers who partner with each other to improve the performance of the entire system.
