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Indicate whether the statement is true or false.
1. Sometimes a marketing channel is quite simple and short, perhaps running directly from a producer to the final user or
consumer.
a. True
b. False
2. Conflicts with the retailer may develop if the dealer decides to place too much emphasis on competing product lines.
a. True
b. False
3. On-time deliveries may give a firm a competitive edge.
a. True
b. False
4. Freight forwarders are companies that offer several shipment methods, including rail, truck, and air service.
a. True
b. False
5. Specialty products that require service information and are consumed over a long period of time are likely to be
distributed on an exclusive basis.
a. True
b. False
6. Materials handling is important in efficient warehouse operations but has little to do with customers’ ultimate
satisfaction with a product.
a. True
b. False
7. Unit loading is grouping one or more boxes on a skid.
a. True
b. False
8. Intensive distribution is appropriate for shopping products.
a. True
b. False
9. Drawing together the processes and functions of two or more stages of the channel under one management is horizontal
integration.
a. True
b. False
10. When higher-priced or technically complex business products are involved, business customers prefer to deal directly
with producers rather than through intermediaries.
a. True
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b. False
11. Marketers of complex and expensive products such as automobiles will likely employ long channels with many
knowledgeable intermediaries.
a. True
b. False
12. The cost of a business product may affect the distribution channel selected for it.
a. True
b. False
13. Exclusive dealing occurs when a supplier stipulates that a channel member must purchase additional products besides
the one it wants.
a. True
b. False
14. Pipelines are not one of the major transportation modes for moving goods between cities in the United States.
a. True
b. False
15. The main objectives of physical distribution are decreasing costs while increasing customer service.
a. True
b. False
16. Private warehouses are usually leased or purchased when a firm believes its warehouse needs are so stable that it can
make a long-term commitment to fixed facilities.
a. True
b. False
17. Full-line forcing requires that channel members purchase the supplier’s entire line to obtain any of the products.
a. True
b. False
18. Cost, speed, load flexibility, dependability, frequency, and accessibility are considered when choosing a transportation
mode.
a. True
b. False
19. Public warehouses do not furnish security for products being used as collateral for loans.
a. True
b. False
20. The purpose of a marketing channel is to make products available at the right time at the right place in the right
quantities.
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a. True
b. False
21. Safety stock helps protect an organization against stockouts.
a. True
b. False
22. Firms that desire to convey an exclusive image for their products may wish to limit the number of outlets available.
a. True
b. False
23. Place utility is created by the customer having access to the product to use or store for future use.
a. True
b. False
24. In vertical integration, control is expanded to two or more successive links of production or distribution.
a. True
b. False
25. Marketing intermediaries bridge the gap between suppliers (or producers) and buyers (or consumers).
a. True
b. False
26. Dual distribution involves the use of two or more marketing channels for distributing the same products to the same
target market.
a. True
b. False
27. Public warehouses are business organizations whose primary activity is providing storage and related physical
distribution facilities on a rental basis to government organizations.
a. True
b. False
28. Order processing can be manual or electronic.
a. True
b. False
29. Like manufacturers’ agents, industrial distributors do not take title to products or carry inventories.
a. True
b. False
30. Supply chain management includes only producers, wholesalers, retailers, and customers.
a. True
b. False
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31. Franchising is typical of the administered vertical marketing system.
a. True
b. False
32. Bonded storage means that goods will not be released until U.S. customs duties or federal or state taxes or other fees
are paid.
a. True
b. False
33. Agents are used in business channels for standardized products and in situations in which information-gathering and
selling functions are important.
a. True
b. False
34. Marketing intermediaries are marketing institutions, such as retailers and wholesalers, which perform marketing
functions necessary to direct products to customers.
a. True
b. False
35. Convenience products usually are distributed intensively because sales of these products tend to have a direct
relationship to availability.
a. True
b. False
36. The shortest possible distribution channel would be producer to retailer to consumer.
a. True
b. False
37. Rail transportation is the fastest yet most expensive form of shipping.
a. True
b. False
38. Small firms are more likely to be in a position to have more distribution centers that may reduce delivery times to
customers.
a. True
b. False
39. Transportation is the least expensive physical distribution function.
a. True
b. False
40. A producer that sells similar products through different channels under different brand names is engaging in dual
distribution.
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a. True
b. False
41. Only producers can be channel captains.
a. True
b. False
42. Because of its speed, electronic order processing provides greater flexibility than manual processing in unique
situations.
a. True
b. False
43. 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.
a. True
b. False
44. Selective distribution is desirable when customer service from a channel member is important.
a. True
b. False
45. A manufacturer may try to prohibit intermediaries from selling its products outside designated sales territories to
tighten control over distribution of its products.
a. True
b. False
46. During order entry, a customer’s credit rating is checked by the credit department.
a. True
b. False
47. The services or responsibilities provided by some intermediaries can be eliminated effectively without causing an
increase in the services or responsibilities provided by other intermediaries.
a. True
b. False
48. Warehousing involves designing and operating facilities to store and move goods.
a. True
b. False
49. It is usually easier to change marketing channels than to change prices or promotion.
a. True
b. False
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50. Both a manufacturers’ agent and an industrial distributor may be used when the organizational marketer wishes to
cover a larger geographic area but does not maintain a sales force.
a. True
b. False
51. A marketing channel is not the same thing as a distribution channel.
a. True
b. False
52. Because costs for small shipments (under 500 pounds) are sharply higher than costs for full loads in railroad cars and
trucks, firms share costs and services by consolidating shipments.
a. True
b. False
53. Industrial distributors and their agents are typical types of intermediaries found in channels for consumer products.
a. True
b. False
54. It is rare for a channel member to manage the physical distribution of goods for all supply chain members involved in
exchanges.
a. True
b. False
55. Inventory management involves developing and maintaining adequate assortments of products to meet customers’
needs.
a. True
b. False
56. The reorder point is computed by multiplying the service standard by the order lead time.
a. True
b. False
57. Some marketing channels are organized and controlled by a single leader.
a. True
b. False
58. Retailers are frequently found in business product channels.
a. True
b. False
59. Business customers prefer to deal with producers through intermediaries and thus eliminate much of the burden of
sorting out details.
a. True
b. False
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60. The reorder point can be calculated by multiplying the usage rate by the order lead time and then adding in the number
of safety stock.
a. True
b. False
61. The use of a freight forwarder that consolidates shipments from several organizations into efficient lot sizes usually
increases transit time and sometimes raises shipping costs.
a. True
b. False
62. Marketing intermediaries can reduce the cost of exchanges.
a. True
b. False
63. Long-term commitments usually characterize the relationships among channel members.
a. True
b. False
64. Channel power is an ability related to influence goals of other channel members.
a. True
b. False
65. Producers do not engage in horizontal integration.
a. True
b. False
66. Inventory decisions seldom have a strong impact on physical distribution costs and on the level of customer service
provided.
a. True
b. False
67. Channel conflict is necessary to facilitate efficient performance within the channel.
a. True
b. False
68. Marketing intermediaries never establish pricing policies and terms of sale.
a. True
b. False
69. The end result of eliminating marketing intermediaries is a cost benefit.
a. True
b. False
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70. Refusal-to-deal arrangements involve a manufacturer that forbids an intermediary to carry products of competing
manufacturers.
a. True
b. False
71. Distribution decisions have little influence on the rest of the marketing mix.
a. True
b. False
72. Supply chain management combines two or more stages of the marketing channel under one management.
a. True
b. False
73. The success or failure of a competitor’s marketing channel may encourage or dissuade an organization from
considering a similar approach.
a. True
b. False
74. Marketing channels create several types of utility including time, place, possession, and form.
a. True
b. False
75. Agents are seldom used in channels for consumer products.
a. True
b. False
76. Product availability is dependent on transportation functions.
a. True
b. False
77. Whereas the marketing channel is a group of interrelated organizations that directs products to customers, physical
distribution deals with physical movement and storage of products both within and among intermediaries.
a. True
b. False
78. Buyers’ behavior is unimportant to channel members.
a. True
b. False
79. The overall safety stock, or inventory needed to prevent a stockout, depends on the general level of prices.
a. True
b. False
80. Supply chains start with the producer.
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a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
81. Select Comfort, a producer of adjustable air mattresses, sells most of its products through direct mail sales and on its
website. This channel would be classified as
a. direct distribution.
b. producer, retailer, consumer.
c. telemarketing.
d. direct-marketing.
e. indirect marketing.
82. 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?
a. Gasoline
b. Jaguar automobiles
c. Skippy peanut butter
d. Laundry detergent
e. Organic foods
83. Johnson Controls hires a consultant to assess its materials handling procedures. The consultant recommends the
implementation of ____ if they want easier movement of items between internal destinations in the warehouse.
a. unit loading
b. piggybacking
c. containerization
d. inventory management
e. priority transportation
84. When Busch Light Beer was introduced as part of the Anheuser-Busch product line, the company most likely used
____ distribution.
a. horizontal
b. intensive
c. selective
d. agent
e. exclusive
85. Channel decisions are important to marketers mostly because
a. they are relatively flexible to change quickly.
b. consumers value reasonable prices delivered through marketing channels.
c. they dictate what promotional strategies companies should use.
d. many businesses are marketing intermediaries.
e. they involve long-term commitments and affect customer accessibility.
86. Anya, sales manager for Pacific Lumber, tells Ricardo, the firm’s inventory manager, that the firm’s failure to have
adequate supplies of pressure-treated lumber on hand has cost the firm $175,000 in lost sales. This figure represents which
of the following inventory management costs?
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a. Carrying
b. Replenishment
c. Stockout
d. Safety stock
e. Reorder
87. An important goal of physical distribution is reducing the time it takes to complete
a. inventory management.
b. outsourcing evaluation.
c. electronic data interchange.
d. order processing.
e. cycle time.
88. McDonald’s has a dual 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) _____.
a. contractual VMS; corporate VMS
b. corporate VMS; contractual VMS
c. administered VMS; contractual VMS
d. corporate VMS; administered VMS
e. administered VMS; corporate VMS
89. You are meeting with the new CEO of your company to discuss marketing channel strategies. You are delighted to
learn that the CEO actually understands the importance of marketing channels in a firm’s sales success. The CEO tells
you that his primary concern is that the chosen marketing channel facilitates the firm’s ability to make products available
when customers want them, and in locations where they want them. He leaves it to you to decide on the appropriate
marketing channel. Given his primary concern you should make sure the channel you choose is capable of creating lots of
_______________.
a. time and possession utility
b. place and feature utility
c. time and place utility
d. form and possession utility
e. feature and time utility
90. Overall channel goals and individual channel member goals cannot be achieved together without
a. conflict.
b. captains.
c. leadership.
d. cooperation.
e. tying agreements.
91. A public warehouse is a
a. business that leases storage space and related facilities for distribution to other firms.
b. large, centralized warehouse that focuses on moving rather than storing goods.
c. company that provides a complete array of logistical services for businesses.
d. company-operated facility for storing and shipping products.
e. warehouse used to store the personal property of many different customers.
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92. Marketing channel members are likely to experience misunderstandings, frustration, and poorly coordinated strategies
as a result of
a. channel conflict caused by inefficient communication between channel members.
b. open communication among the channel members.
c. methods of channel coordination designed to reduce ambiguity.
d. negotiating territorial issues among regional distributors of a product.
e. allowing one member of the channel to take the role of channel captain.
93. Eric is concerned about not having enough air conditioning units in inventory during June, July, and August so he
keeps extra inventory to guard against stockouts during this critical period. Eric is keeping
a. short order lead times.
b. just-in-time inventory.
c. a controlled usage rate.
d. safety stock.
e. excessive inventory.
94. 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
a. intermediary.
b. captain.
c. allocator.
d. terminator.
e. price leader.
95. If a retailer is reviewing its inventory and notices that the order lead time for one of the products it stocks has
increased, the retailer should
a. decrease its reorder point
b. increase its reorder point
c. eliminate safety stock
d. increase the amount of safety stock
e. increase the usage rate of the product
96. Which of the following is most likely to be a product stocked solely by an industrial distributor?
a. Tires
b. Wind turbines
c. Roofing nails
d. Kitchen countertops
e. Office supplies
97. If Nokia decides to make changes in its marketing channels, the strategic significance is that channel decisions are
a. long-term commitments.
b. short-term commitments.
c. easier to change than prices.
d. easier to change than promotion.
e. impossible to change.
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98. Revlon, a maker of cosmetics and skin-care products, is effectively involved in the management of its supply chain. It
coordinates activities with both its suppliers and its distributors in order to produce and deliver products that its customers
demand. Which of the following statements is most likely to be true about the impact of Revlon’s supply-chain
management?
a. Revlon demonstrates a product firm orientation which increases its competitiveness.
b. Revlon demonstrates a market firm orientation which increases its competitiveness.
c. Revlon demonstrates a sales firm orientation which increases its competitiveness.
d. Revlon’s supply-chain management overlaps with all of the firm’s marketing functions but not its financial
functions.
e. Revlon’s primary objective is to maximize efficiency in its supply-chain.
99. In an administered vertical marketing system (VMS), interorganizational relationships are
a. achieved by informal coordination.
b. formalized through contracts.
c. combined under the ownership of a single organization.
d. guided by legal agreements.
e. achieved by clearly defining the obligations and rights of all channel members.
100. To expand the number of its retail outlets in the Washington, D.C. area, Whole Foods bought out a small chain of
organic food stores in northern Virginia. This type of integration is called
a. vertical.
b. retail.
c. horizontal.
d. backward.
e. forward.
101. 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
a. shifting costs to suppliers.
b. maximizing costs.
c. maximizing technology implementation.
d. cooperation with competitors.
e. customer relationships.
102. Refer to Scenario 13.1. Which of the following is most likely the primary factor Liz Claiborne, Inc. used when
selecting the marketing channel for its Juicy Couture brand?
a. characteristics of the intermediaries
b. product attributes
c. type of organization
d. marketing environmental forces
e. competition
103. Which of the following is least likely to be a factor affecting the selection of marketing channels?
a. Customer characteristics
b. Product attributes
c. Product packaging
d. Competition
e. Environmental forces
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104. Dell Computers is a nationally recognized manufacturer of computers for the small business and home markets. If
Dell were to order one of its wholesalers not to carry any computer products other than those made by Dell, this
arrangement would be called
a. a tying contract.
b. refusal to deal.
c. a restricted sales territory.
d. a restricted channel.
e. exclusive dealing.
105. What two modes of transportation are used when containers are shipped by piggyback?
a. Railroads and airways
b. Trucks and airways
c. Pipelines and trucks
d. Waterways and railroads
e. Railroads and trucks
106. Physical distribution activities may be performed by a producer, wholesaler, retailer or
a. not performed at all.
b. the customer.
c. investors in any of the previous three.
d. solely through technology.
e. they may be outsourced.
107. At the annual managers’ planning conference, Jackie Conrad asks the other managers to consider her proposal to
increase the quantity of inventory to a five-week supply in order to increase the percentage of completely filled customer
orders from 85 percent to 90 percent. She states that she is willing to trade off the ____ incurred for the positive effect of
better customer service.
a. lower response time
b. higher warehousing costs
c. higher transportation costs
d. higher order processing costs
e. higher performance levels
108. Fragile products that require special handling are more likely to be distributed through
a. longer channels.
b. shorter channels.
c. direct channels.
d. strategic alliances.
e. exclusive outlets.
109. Manufacturers of convenience products such as chewing gum reach customers through thousands of retailers. What
marketing channel are these manufacturers most likely to use?
a. Producer, consumer
b. Producer, wholesaler, retailer, consumer
c. Producer, wholesaler, agent, retailer, consumer
d. Producer, retailer, consumer
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e. Retailer, consumer
110. Consumers receive the benefits of place utility when
a. they have to travel excessively to obtain products they want.
b. retailers remain open 24 hours a day.
c. they can stock up on products they need but not use them right away.
d. they make purchases with credit and debit cards.
e. products are available in locations where consumers want to buy them.
111. Order processing, inventory management, materials handling, warehousing, and transportation are the activities that
define
a. wholesaling.
b. retailing.
c. physical distribution.
d. channel management.
e. drop shipping.
112. Luke is a transportation coordinator for Volkswagen of North America. In order to move a large order of vehicles
from a plant in Germany to Chicago, he is planning to use both waterways and railroads. The combining and coordinating
of these two modes of transportation in order to take advantage of benefits offered by each of the different types of
carriers is called
a. Intermodal transportation.
b. Transportation piggybacking.
c. Containerized movement.
d. Efficiency transportation
e. Freight forwarding.
113. If a microchip in a computer at the Pentagon failed, which method of transportation would be most appropriate to use
to replace the chip immediately if one could get the new chip only from New York City?
a. Government vehicle
b. Airway
c. Waterway
d. Truck
e. Railroad
114. 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.
a. channel disintegration
b. vertical channel integration
c. horizontal channel integration
d. channel conflict
e. a tying arrangement
Scenario 13.2
Use the following to answer the questions.
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Star Supplies, Inc. manufactures commercial-grade floor cleaners, such as vacuums and floor polishers. The firm has
recently begun manufacturing other janitorial-related product lines, such as paper products and chemical cleaners. Star
Supplies distributes its products in two ways. It sells its vacuum, floor polisher, and janitorial supply products to an
independent business that takes title to the products and then sells them to various small businesses throughout the region.
Also, Star has a list of large businesses that it distributes to directly, on an as-needed basis. These businesses keep very
little inventory and purchase janitorial supplies in small quantities. Recently, Star has decided to add two new service
product lines–paper shredding and a uniform rental service. Clint Rodriguez, the marketing manager, is conducting a
meeting to discuss the ways in which Star can strategically manage these new businesses. Star has the choice of marketing
the paper shredding service to their large business clients, by picking up the paper as they drop off the other janitorial
supplies, or they can buy a small paper shredding business and market to both large and small business customers. With
regard to the uniform rental service, Star can either pick up and deliver the uniforms to the small businesses themselves,
or contract that out to a third party.
115. Refer to Scenario 13.2. Currently, Star is using the ____ approach to distributing its janitorial supplies to its large
customers.
a. intensive
b. just-in-time
c. segmented
d. outsourcing
e. exclusive
116. Morgan Steel Company leases a warehouse in Jacksonville, Alabama to serve Deep South markets that were large
enough and stable enough to make a long-term commitment to fixed facilities. This is a
a. flexible warehouse.
b. dispatching center.
c. distribution center.
d. private warehouse.
e. public warehouse.
117. Using a freight forwarder usually
a. is not economical for a small firm.
b. increases transit time and shipping costs.
c. increases transit time and sometimes lowers shipping costs.
d. lowers shipping costs for a large firm.
e. reduces transit time.
118. The order-processing task that involves verifying product availability, checking prices and customer credit ratings,
and filling orders is
a. warehousing.
b. order handling.
c. information processing.
d. materials handling.
e. order entry.
119. Organizational buyers are especially partial to direct marketing channels when
a. they buy cheap materials in large quantities.
b. they try a new product for the first time.
c. they are filling an order for a very important customer.
d. a modified rebuy type of decision is involved.
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e. expensive and/or complex equipment is involved.
120. Supplier ABC requires all its channel members to purchase all of its products in order to be able to purchase any of
its products. This is an example of ____________________.
a. a tying agreement
b. a buying agreement
c. channel stuffing
d. exclusive dealing
e. full-line forcing
Scenario 13.2
Use the following to answer the questions.
Star Supplies, Inc. manufactures commercial-grade floor cleaners, such as vacuums and floor polishers. The firm has
recently begun manufacturing other janitorial-related product lines, such as paper products and chemical cleaners. Star
Supplies distributes its products in two ways. It sells its vacuum, floor polisher, and janitorial supply products to an
independent business that takes title to the products and then sells them to various small businesses throughout the region.
Also, Star has a list of large businesses that it distributes to directly, on an as-needed basis. These businesses keep very
little inventory and purchase janitorial supplies in small quantities. Recently, Star has decided to add two new service
product lines–paper shredding and a uniform rental service. Clint Rodriguez, the marketing manager, is conducting a
meeting to discuss the ways in which Star can strategically manage these new businesses. Star has the choice of marketing
the paper shredding service to their large business clients, by picking up the paper as they drop off the other janitorial
supplies, or they can buy a small paper shredding business and market to both large and small business customers. With
regard to the uniform rental service, Star can either pick up and deliver the uniforms to the small businesses themselves,
or contract that out to a third party.
121. Refer to Scenario 13.2. Star Supplies, Inc. is most likely using which of the following to market its vacuum, floor
polisher, and janitorial supplies to its small business customers?
a. Wholesalers
b. Retailers
c. Merchants
d. Industrial distributors
e. Manufacturers’ agents
122. Supply chains for durable goods typically begin at _____ and end at _____.
a. Raw materials; the retailer
b. Suppliers; the retailer
c. Raw materials; the customer
d. Suppliers; the customer
e. Retailers; the customer
123. Apple makes its computers available through its own stores, its website, and some major retailers. This is an example
of
a. dual distribution.
b. vertical integration.
c. horizontal integration.
d. tying agreements.
e. exclusive dealing.
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124. 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.
a. public warehouse; distribution center
b. private warehouse; public warehouse
c. preassembly warehouse; postproduction warehouse
d. private warehouse; distribution center
e. materials warehouse; finished products warehouse
125. 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?
a. Industrial distributor
b. Direct distribution
c. Retail
d. Wholesaler-sponsored
e. Producer
126. ClearChem is a producer of chemicals used in car detailing and painting. Because of the volatility of their chemical
products when exposed to dirt and heat, ClearChem operates its own facilities for storing and shipping its products.
ClearChem’s facilities are most likely known as
a. distribution centers.
b. product storehouses.
c. public warehouses.
d. megawarehouses.
e. private warehouses.
127. Fansteel manufactures parts used in jet engines, which it sells to companies such as Boeing. When shipping products
to Boeing, Fansteel seals the parts in 8′ × 8′ × 40′ boxes for shipping to decrease loss and damage. This method of
materials handling is
a. unit loading.
b. containerization.
c. freight forwarding.
d. unitized shipping.
e. bonded packaging.
128. If a firm decides to contract its physical distribution functions to third parties that have no managerial authority
within the marketing channel, it is using
a. outsourcing.
b. sole-sourcing.
c. logistics.
d. wholesaling.
e. distribution services.
129. A marketing channel is defined as a group of individuals and organizations that
a. consumes about one-half of every dollar spent on products in the United States.
b. directs the flow of products from producers to customers.
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c. links producers to other marketing intermediaries.
d. takes title to products and resells them.
e. manages transportation and warehousing functions.
130. The main objective of physical distribution should be to
a. decrease costs while increasing market coverage.
b. increase service and market coverage.
c. decrease costs while increasing service.
d. increase market coverage and channel power.
e. balance costs and market coverage.
131. Your firm is launching a new product that everyone believes is going to be a blockbuster. Everyone is geared up to
make this product launch the most successful in the firm’s history. Your boss instructs you to make sure the product gets
the highest intensity of market coverage the firm can support. To achieve this, you will implement which of the following
distribution strategies?
a. Intensive distribution
b. Comprehensive distribution
c. Selective distribution
d. Exclusive distribution
e. Progressive distribution
132. According to the text, physical distribution cost tradeoffs enable firms to
a. resolve pricing conflicts among channel partners.
b. minimize risk during test marketing of new products.
c. reduce costs of all distribution functions simultaneously.
d. resolve pricing conflicts within industry sectors.
e. utilize resources for greatest cost-effectiveness.
133. WTA is a manufacturer of very large blades used in energy-reducing wind turbines. What is most likely the most
expensive physical distribution function associated with the WTA product?
a. Warehousing of the product.
b. Order processing for each blade.
c. Inventory management of the product.
d. Transportation of the product.
e. Materials handling of the product.
134. The notion of physical distribution is
a. speed of delivery.
b. used only by manufacturers.
c. the movement of products from producers to end users.
d. primarily the wholesaler’s responsibility.
e. an assessment of distribution costs.
135. A channel that includes both a manufacturers’ agent and an industrial distributor is appropriate under which of the
following circumstances?
a. When the firm wants specialized personnel to follow up the work of the sales force
b. When the marketer wishes to enter a new geographic market but does not wish to expand the existing sales force
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c. When only one or two channels of distribution are available for products
d. When the sales force is large and the marketer is thinking of cutting it down
e. When customers are highly concentrated in one geographic area
136. Steelcase, Inc. markets furniture directly to businesses. This is an example of a(n) ____ channel.
a. producer-to-business buyer
b. producer-to-industrial-distributor-to-business buyer
c. producer-to-agent-to-business buyer
d. equipment
e. consumer
137. 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?
a. Sales office
b. Public warehouse
c. Field public warehouse
d. Distribution center
e. Bonded warehouse
138. 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.
a. wholesalers
b. brokers
c. agents
d. merchants
e. retailers
139. In an administered VMS, informal coordination brings about a high level of interorganizational management.
Nonetheless,
a. decision making does not take into account the goals of the system.
b. the channel members do not remain autonomous.
c. the decision making is not coordinated.
d. the channel members remain autonomous.
e. the goals of the individual firms are not congruent with the goals of the system.
140. 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.
a. understanding
b. power
c. leadership
d. communication
e. conflict
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141. Managers and consultants at Colgate-Palmolive are meeting to discuss better ways to package its products to reduce
damage and make loading more efficient. The primary function they are trying to improve is
a. warehousing.
b. inventory management.
c. materials handling.
d. cycle time.
e. containerization.
142. After direct-marketing, the next slightly longer marketing channel adds a(n)
a. retailer.
b. producer.
c. wholesaler.
d. agent.
e. consumer.
143. 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
a. supply chain management.
b. a vertical marketing system.
c. a horizontal marketing system.
d. channel conflict.
e. dual distribution.
144. Because of the significant investment many companies have in the products they sell to customers, they must
develop and maintain adequate varieties of products to meet their customers’ needs. This is called
a. just-in-time.
b. order processing.
c. inventory management.
d. merchandise stocking.
e. logistical management.
145. When channel members are linked by legal agreements that specify each member’s rights and responsibilities, ____
exists.
a. horizontal channel integration
b. an administered VMS
c. a corporate VMS
d. a channel captain
e. a contractual VMS
146. Nathan is trying to decide which shipping company to use to transport his custom-made furniture to customers.
Nathan is facing a decision about
a. order entry.
b. order completion.
c. just-in-time.
d. order handling.
e. order delivery.