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Scenario 13.1
Use the following to answer the questions.
Liz Claiborne, Inc. markets several different brands, under their own Claiborne name label, as well as others. Their
primary brands, such as Liz Claiborne, Liz & Co, and DKNY, are sold to wholesalers. These brands are then available
through retail department stores such as Kohl’s and Macy’s. Their wholesale-based brands division is positioned as
customer-focused and cost-efficient. Their premium brands division includes labels such as Kate Spade, Juicy Couture,
and Mexx. These premium brands are sold through stores that the Claiborne company owns.
147. Refer to Scenario 13.1. Liz Claiborne, Inc. uses which type of channel of distribution for its premium brands?
a. A short, direct channel
b. A long, direct channel
c. Dual distribution
d. Horizontal integration
e. Intensive distribution
148. A set of approaches used to integrate the functions of operations management, logistics management, supply
management, and marketing channel management so products are produced and distributed in the right quantities, to the
right locations, and at the right time is called
a. supply chain management.
b. vertical channel integration.
c. industrial management.
d. industrial distribution.
e. marketing management.
149. Exclusive distribution:
a. is suitable for products consumed over a long period of time.
b. is desirable when a special effort is important.
c. is appropriate for convenience products.
d. is not suitable for infrequently purchased products.
e. is appropriate for shopping products.
150. When one company in a marketing channel has the ability to influence another member’s goal achievement, the
company has
a. channel control.
b. channel power.
c. marketing leadership.
d. a channel captain.
e. distributive influence.
151. River City, Inc. is an independent business that takes title to products and carries inventories. River City, Inc. is most
likely a(n)
a. industrial distributor.
b. intermediary.
c. agency.
d. wholesaler.
e. producer.
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152. You have spent the last twenty years of your career in various marketing channel management roles with a variety of
companies. One of things you have learned is that channel conflict can be very destructive to all members of the
marketing channel. Which of the following actions would you take to ensure that channel conflict does not occur in your
current role?
a. Encourage each member of the channel to act in its self-interest.
b. Make sure the channel handles a diversified set of competing products.
c. Minimize the level of communication amongst members of the channel so conflicts do not get started.
d. Establish clearly-defined roles and responsibilities for each member of the channel.
e. Maintain loosely-defined roles and responsibilities for each member of the channel so each feels like they have
some independent decision-making ability.
153. Which of the following is an advantage of using an industrial distributor?
a. These firms are easy to control because they work directly for the producers.
b. Inventory holding costs are minimized because they can store inventory very cheaply.
c. They are closer geographically to all of the producers’ customers.
d. They possess a high level of technical knowledge about their products.
e. They help reduce a producer’s financial burdens by extending credit to customers.
154. A single leader who controls and organizes a marketing channel is called a
a. channel champion.
b. distribution leader.
c. marketing maverick.
d. channel captain.
e. lead distributor.
155. The driving force behind marketing channel decisions should be
a. convenience.
b. cost reduction.
c. environmental concerns.
d. customer satisfaction.
e. quality.
156. Marketing channels create four types of utility for consumers including
a. place, time, possession, and form.
b. location, form, availability, and suitability.
c. form, time, location, and promotion.
d. marketer, retailer, wholesaler, and producer.
e. position, price, possession, and place.
157. Peabody Garden Supply is trying to optimize its method of getting products to customers. It has added electronic
ordering systems for customers and improved the training process for workers in the warehouse who make the products
ready for shipment. The improvements Peabody has made are to its
a. materials handling
b. logistics
c. order processing
d. inventory management
e. warehousing
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158. Cassie and Julian both are buying new iPhones this week. Cassie goes to the Apple store because she wants to
actually see the phone before she makes a final decision. Julian knows that he does not need to see the phone, because he
just wants to update from his older version. Cassie is purchasing her phone through_____, while Julian is purchasing his
through ___.
a. an indirect-marketing channel; the most efficient channel of distribution.
b. the most common type of marketing channel; an indirect channel.
c. a retailer; a direct-marketing channel.
d. a business-to-business channel; a direct-marketing channel.
e. a retail channel; an indirect-marketing channel
159. The result of an inventory stockout usually results in ___.
a. an increase in inventory costs.
b. an increase in lost sales.
c. an increase in net profit.
d. an increase in loyal customers.
e. a decrease in prices.
160. Possession utility is best described as
a. products being available in places where the customers wish to purchase them.
b. the customer having access to the product to use now or store and use later.
c. having a company’s products available when a customer needs them.
d. being able to legally own a product despite restrictions on trade.
e. getting the products to the consumers in as short of time as possible for ownership.
161. The supply chain begins with______________ and ends with_________________.
a. employees, products
b. marketing, sales
c. production, inventory
d. strategy, implementation
e. raw materials, customers
162. Logistics Plus is an organization that consolidates shipments from several industrial firms into more efficient lot
sizes so that they can be more efficiently transported. What type of transportation company is Logistics Plus?
a. A freight forwarder
b. A forwarding agency
c. A transport consolidator
d. A specialty transportation company
e. An Intermodal shipping company
163. 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
a. dual distribution.
b. industrial distribution.
c. strategic channel alliance.
d. supply chain management.
e. an unethical marketing channel.
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164. When three buyers purchase the products of three producers, nine transactions are required. If one intermediary
serves both producers and buyers, the number of possible transactions is
a. fifteen.
b. five.
c. eighteen.
d. six.
e. twenty.
165. Paper towels and trash-can bags are most likely to be distributed through ____ and ____.
a. selective distribution; multiple channels
b. intensive; dual distribution
c. strategic channel alliances; intensive
d. exclusive; a single channel
e. dual distribution; convenience channels
166. Air-Tech management learns that last month’s production run of heaters at its Newark plant is defective and
announces a recall of the specific models produced. To handle the large number of products it expects to receive for
replacement of the defective thermostats, Air-Tech will probably need to add a ____ to its distribution network.
a. distribution center
b. private warehouse
c. dispatching shipment system
d. public warehouse
e. materials handling system
167. Aaron attends a seminar on just-in-time inventory management. Excited about the idea, he returns to his office at
Atlanta Auto Supply to start designing such an inventory system. Which of the following steps must Aaron take as he
institutes this change?
a. Increase safety stock
b. Raise the reorder point
c. Reduce customer service standard
d. Increase order frequency
e. Reduce estimates of inventory turnover rate
168. Suppose that Jackson Distributing has been told that it cannot carry the beers made by Anheuser-Busch because it
also carries the products of the competitor, Miller Brewing. Jackson is then told that it must drop the Miller brands in
order to carry the Anheuser-Busch products. If this were true, Anheuser-Busch would be engaging in which of the
following channel management practices?
a. Exclusive dealing
b. Dual distribution
c. Tying contacts
d. Refusal to deal
e. Restricted sales territories
169. In a corporate VMS,
a. customers are excluded.
b. marketing channel members are linked by legal agreements.
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c. marketing channel members are independent.
d. all stages of the marketing channel are combined.
e. there is dual ownership among channel members.
170. 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
a. waterways.
b. intermodal transportation.
c. tanker trucks.
d. railroads.
e. pipelines.
171. 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.
a. railroads
b. waterways
c. pipelines
d. trucks
e. airways
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.
172. Refer to Scenario 13.2. When Clint suggested that Star consider purchasing a paper shredding business and then offer
the service to its large and small business customers, he was suggesting a method called ____, where Star would be the
____.
a. horizontal integration; channel manager
b. horizontal integration; channel captain
c. vertical integration; channel captain
d. outsourcing; channel manager
e. outsourcing; channel captain
173. 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, Dreft, and Cheer. If this were to occur, Procter &
Gamble would be engaging in which of the following channel management practices?
a. Exclusive dealing
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b. Dual distribution
c. Tying agreement
d. Refusal to deal
e. Restricted sales territories
174. A producer is not likely to receive ____ from an industrial distributor.
a. selling activities in local markets
b. market information about consumers
c. aggressive promotion of its brand
d. reduced capital requirements
e. a reduced financial burden from customers
175. The main reason a manufacturer will prohibit intermediaries from selling its products outside designated sales
territories is to
a. tighten its control over distribution of its products.
b. discourage competition from other manufacturers.
c. incorporate selective distribution.
d. contain distribution costs.
e. punish intermediaries for past behavior.
176. Expensive, high-quality products that are purchased infrequently often reach consumers through
a. selective distribution.
b. highly-selective distribution.
c. sole-source retailers.
d. complex marketing channels.
e. exclusive distribution.
177. Order handling involves all of the following activities except that the
a. credit department approves the purchase.
b. order is transmitted to the warehouse.
c. availability of product is verified.
d. warehouse is instructed to fill the order.
e. customer places a purchase order.
178. For which of the following products would exclusive distribution be most appropriate?
a. Gasoline
b. Rolls Royce automobile
c. Ray-Ban sunglasses
d. Louis Vitton luggage
e. Harley-Davidson motorcycle
179. The United States Postal Service works hard to get priority mail from the sender to the recipient as quickly as
possible in order to compete with companies such as UPS and FedEx. The postal service is competing with UPS and
FedEx in terms of ___.
a. cycle time.
b. order processing.
c. turn-around time.
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d. shipping time.
e. transportation.
180. As her Internet quilt and bed linen business grew, Danielle could no longer perform all the distribution activities, so
she hired a shipper and an information technology firm to assist with these functions. Danielle is using ____ for physical
distribution for her business.
a. producers
b. wholesalers
c. retailers
d. selling agents
e. outsourcing
181. Which mode of transportation hauls more freight than any other?
a. Railroads
b. Waterways
c. Pipelines
d. Trucks
e. Airways
182. What is a primary difference between an industrial distributor and a manufacturers’ agent?
a. A manufacturers’ agent does not acquire title nor usually take possession of the products whereas an industrial
distributor does.
b. A manufacturers’ agent is employed by the manufacturers while an industrial distributor is independent.
c. An industrial distributor is employed by the manufacturers while a manufacturers’ agent is independent.
d. A manufacturers’ agent rarely adds any value to the marketing channel while an industrial distributor reduces
costs significantly.
e. An industrial distributor does not form relationships with customers for repeat business whereas a key asset of a
manufacturers’ agent is his knowledge of his customers.
183. When Amazon.com introduced its Kindle FireHD, it was available through Amazon.com, Staples office supplies
store, and a few other retailers. The Kindle FireHD was most likely distributed through the _____ of distribution.
a. selective level
b. extensive level
c. intensive level
d. exclusive level
e. agent form
184. The marketing channel of producer-retailer-consumer is most likely to be used by producers of which of the
following products?
a. KitchenAid appliances
b. Tobacco
c. Automobiles
d. Apples and oranges
e. Wedding photographs
185. Kawasaki places several motorcycles in “pods” in order to load them efficiently using forklifts. This system of
materials handling is called
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a. warehousing.
b. containerization.
c. group storage.
d. unit loading.
e. mechanized handling.
186. Large retailers such as J.C. Penney’s and Target are most likely to participate in which of the following channels?
a. Producer, industrial distributors, retailers, consumers
b. Producer, consumers
c. Producer, wholesalers, retailers, consumers
d. Producer, retailers, consumers
e. Producer, agents, wholesalers, retailers, consumers
187. Which of the following describes a disadvantage of using industrial distributors?
a. Industrial distributors possess considerable market information.
b. Their marketing exchange relationships are very focused.
c. They are unlikely to handle bulky items or items that are slow sellers.
d. Industrial distributors sell specific brands aggressively.
e. Industrial distributors acquire title to the products and take possession.
188. 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
a. horizontal integration.
b. vertical integration.
c. multilevel integration.
d. retail integration.
e. merchandising integration.
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.
189. Refer to Scenario 13.2. Clint’s suggestion for the uniform rental service was either picking up and delivering the
uniforms themselves, or contracting this to a third party. If Star decides to pick up and deliver the uniforms with its own
trucks, this is an example of a(n) ____ channel. If Star contracts this action to a third party, it is called ____.
a. long; industrial distribution
b. direct; industrial distribution
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c. long; outsourcing
d. direct; outsourcing
e. exclusive; outsourcing
Scenario 13.1
Use the following to answer the questions.
Liz Claiborne, Inc. markets several different brands, under their own Claiborne name label, as well as others. Their
primary brands, such as Liz Claiborne, Liz & Co, and DKNY, are sold to wholesalers. These brands are then available
through retail department stores such as Kohl’s and Macy’s. Their wholesale-based brands division is positioned as
customer-focused and cost-efficient. Their premium brands division includes labels such as Kate Spade, Juicy Couture,
and Mexx. These premium brands are sold through stores that the Claiborne company owns.
190. Refer to Scenario 13.1. The Liz & Co brand is sold only at J.C. Penney’s. This is an example of ____ distribution.
a. selective
b. routine
c. horizontal
d. intensive
e. exclusive
191. 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.
a. railroad
b. pipeline
c. airway
d. truck
e. waterway
192. You are the head of supply-chain management at a large manufacturing company in the Midwestern United States.
You just returned from a series of workshops on how technology is being deployed by different companies around the
world to improve their supply-chain management activities. You are excited about the prospect of increasing the use of
technology in your firm. Which one of the following reasons would you use to convince your firm’s CEO to invest more
money in technology for supply-chain management?
a. It will eliminate product defects in the manufacturing process.
b. It will eliminate errors in financial reporting in the accounting department.
c. It will significantly reduce marketing costs.
d. It will increase the sales force’s success rate in winning new customers.
e. It will create a more effective process for matching inventory needs to manufacturing requirements.
193. When Zappos, Inc., an online marketer of shoes, accessories, and clothing, contracts out the physical distribution task
to third parties such as UPS, this arrangement is called ____. This is due to the fact that UPS does not have managerial
authority within the Zappos marketing channel.
a. illegal.
b. logistics.
c. warehousing.
d. wholesaling.
e. outsourcing.
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194. Durable goods such as television sets and appliances generally reach their target markets through ____; goods such
as car batteries and tires generally reach their target markets through _____.
a. intensive distribution; intensive distribution
b. exclusive distribution; intensive distribution
c. selective distribution; exclusive distribution
d. selective distribution; intensive distribution
e. selective distribution; selective distribution
195. All of the following products are likely to use the producer-retailer-consumer marketing channel except for _____
a. Pharmaceutical drugs
b. U-Pick farm produce
c. Amazon Kindle Fire
d. Designer wedding gowns
e. Microbrew beers
196. 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)
a. sole intermediary.
b. manufacturers’ agent.
c. producers’ broker.
d. industrial distributor.
e. channel facilitator.
197. What links producers to consumers through the purchase and reselling of products or contractual agreements?
a. Marketing intermediaries
b. Distributors
c. Suppliers
d. Middle marketers
e. Marketing channels
198. When Sophie buys organic produce for her household using a channel with only one intermediary, that intermediary
is classified as a
a. retailer.
b. wholesaler.
c. broker.
d. functional middleman.
e. producer.
199. Madison is responsible for the freight transportation of products sold by Richland Tech, a producer of cooking oils
sold to large institutions. Since Madison needs to schedule freight transportation with the mode that provides the most
flexible schedules and routes, which of the following should she use?
a. Trucks
b. Waterways
c. Warehousing
d. Pipelines
e. Railroads
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200. A commonly used computerized means of integrating order processing with production, inventory, accounting, and
transportation is
a. web-based inventory management.
b. just-in-time.
c. electronic data interchange.
d. universal product codes.
e. activity based management.
201. 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.
a. intensive
b. exclusive
c. horizontal
d. priority
e. selective
202. Vertical channel integration
a. results in two or more different management teams for each member of the channel.
b. is made possible when a large corporation divests itself of smaller subsidiaries.
c. is a shift back to the conventional channel of distribution.
d. combines institutions at the same level of operation.
e. is made possible by purchasing the operations of a link in the channel.
203. Brooklyn International Foods is an importer of food products from Europe. For its latest shipment, it did not have
enough cash to immediately pay the customs duties and taxes. As a result, the imports were placed in _____ until the
payment could be made.
a. field public warehouse
b. secured warehouse
c. bonded storage
d. private warehouse
e. public warehouse
204. ____ adds time and place utility to a product by moving it from where it is made to where it is purchased and used.
a. Warehousing
b. Containerization
c. Distribution
d. Materials handling
e. Transportation
205. Freight transportation companies that offer several different shipment methods are called
a. megacarriers.
b. intermodal transporters.
c. freight forwarders.
d. shipping experts.
e. superfreighters.
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206. Sales are most likely to have a direct relationship to product availability for products that use ____ distribution.
a. selective
b. dual
c. intensive
d. extensive
e. exclusive
207. Piggyback, fishyback, and birdyback are terms usually associated with gaining efficiency in shipping through
a. transit time.
b. warehousing.
c. packaging.
d. containerization.
e. lot sizes.
208. When shopping for products, business customers often prefer to deal with _____, while consumers typically buy
from _____.
a. manufacturers or channel intermediaries; retailers
b. channel captains; stores
c. online retailers; brick-and-mortar retailers
d. retailers; online retailers
e. large retailers; small retailers
209. Subway sells its food items through company-owned stores and through franchises. Subway uses ____ as a channel
strategy.
a. channel extension
b. intermediary exclusion
c. broker utilization
d. dual distribution
e. channel diversification
210. What function of physical distribution enables companies to compensate for dissimilar production and consumption
rates and stabilize prices and availability of seasonal items?
a. Materials handling
b. Warehousing
c. Transportation
d. Inventory management
e. Order processing
211. The best way to reduce overall distribution costs is to
a. use a total-cost approach to analyze and evaluate the entire system.
b. minimize the costs associated with materials handling and transportation.
c. reduce the number of distribution functions that are necessary.
d. find the cheapest price for each function and use them to create the system.
e. lower the service standards that the company has.
212. In a simple economy of five producers and five consumers, there would be ____ transactions possible without an
intermediary and ____ transactions possible with one intermediary.
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a. ten; twenty-five
b. thirty; ten
c. twenty-five; fifteen
d. sixteen; eight
e. twenty-five; ten
213. _______________ involves developing and maintaining adequate assortments of products to meet customers’ needs.
a. Inventory management
b. Materials handling
c. Warehousing
d. Order management
e. Logistics
214. The major levels of intensity at which a company can choose to distribute its products are ____ distribution.
a. vertical and horizontal
b. cooperative, conflicting, and integrated
c. intensive, extensive, and exclusive
d. selective, cooperative, and conflicting
e. exclusive, selective, and intensive
215. The Limited, which produces and retails clothing products in a coordinated channel, is an example of a(n)
a. administered vertical marketing system.
b. conventional marketing channel.
c. channel network.
d. contractual marketing channel.
e. corporate vertical marketing system.
216. What is the reorder point if the usage rate is 10 units per day, the order lead time is five days, and the safety stock is
30?
a. 50
b. 150
c. 80
d. 200
e. 400
217. 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.
a. direct distributor
b. manufacturers’ agent
c. industrial distributor
d. producers’ agent
e. wholesalers’ agent
218. Having products available when customers want them creates _________________.
a. possession utility
b. place utility
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c. time utility
d. form utility
e. feature utility
219. Walgreen’s drug stores prefer to receive refills of prescriptions through a phone-based system where customers can
directly key in the information about the drug. By receiving orders in this manner rather than through a paper-based
system or by a phone conversation with a pharmacy employee, Walgreen’s has been able to save time and money on
a. electronic data interchange.
b. order entry.
c. inventory management.
d. order delivery.
e. materials handling.
220. Which of the following is the most commonly used channel for distributing business products?
a. Producer, agents, industrial distributors, organizational buyers
b. Producer, industrial distributors, organizational buyers
c. Producer, agents, organizational buyers
d. Producer, organizational buyers
e. Industrial distributors, organizational buyers
221. Which of the following products will most likely use the shortest distribution channel?
a. cereal
b. DVDs
c. fresh strawberries
d. toy cars
e. chewing gum
222. The reasons a vertically integrated channel can be more effective against competition is because of all of the
following except
a. the consolidation of power.
b. tightly controlled and bureaucratic management style.
c. the ability to inhibit competitors.
d. the sharing of responsibilities and information.
e. increased bargaining power.
223. GNC sells vitamins and other products related to health and nutrition through franchises located in malls and
shopping centers around the world. If GNC makes an agreement with Target to sell its private-label GNC vitamins in
Target retail locations, this would likely lead to
a. horizontal channel integration
b. vertical channel integration
c. channel cooperation
d. channel leadership
e. channel conflict
224. Rovio, the parent company of the popular Angry Birds app, made several marketing mix decisions that were
considered to be part of its distribution. Which of the following was not a decision that relates to distribution?
a. downloads of the game Angry Birds
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b. the sale of t-shirts and stuffed birds and pigs through its website
c. the sale of Halloween costumes through Amazon
d. the opening of retail stores in Finland and China
e. the licensing of the Angry Birds to producers of t-shirts and costumes
225. Using only some of the available outlets to distribute a product is called
a. selective distribution.
b. intensive distribution.
c. channel conflict.
d. vertical channel integration.
e. exclusive distribution.
226. A manufacturer has decided to improve its inventory management by maintaining low inventory levels and waiting
to purchase materials until right before they are needed in production. This inventory management technique is called
a. just-in-time (JIT).
b. time management.
c. inventory minimization.
d. economic order quantity.
e. reorder point maximization.
227. When a single channel member manages an integrated marketing channel to achieve low-cost, efficient distribution
for satisfying target markets, ____ exists.
a. a vertical marketing system
b. horizontal channel integration
c. channel power
d. channel cooperation
e. extensive distribution
228. What are the three primary tasks of order processing?
a. Order receipt, order delivery, order follow-up
b. Order handling, inventory management, order delivery
c. Materials handling, warehousing, order delivery
d. Order handling, order entry, order delivery
e. Order receipt, order checking, order delivery
229. All of the following are concepts used in a just-in-time inventory management system except
a. supplies arrive just as they are needed.
b. safety stock is kept to reduce stockouts.
c. much waste is eliminated.
d. purchases are made in small quantities.
e. purchases are made frequently.
230. 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?
a. Intensive
b. Selective
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c. Targeted
d. Exclusive
e. Premier
231. What is the primary determinant in deciding how materials will be handled?
a. Unit loading
b. Containerization
c. Customer preference
d. Cost reduction
e. Product characteristics
232. When considering the best channel to use, all of the following are true with regard to larger firms except they
a. can use an extensive product mix as a competitive tool.
b. may be better able to negotiate better deals with vendors or other channel members.
c. may have more distribution centers.
d. may have the resources to develop their own sales force.
e. may be better suited to serve customers in a particular region.
233. Order processing is defined as
a. the receipt and transmission of sales order information.
b. the second stage in a physical distribution system.
c. the four main tasks.
d. the same as order handling.
e. electronic processing of information.
234. Josh is a vice-president for 20th Century Fox, a movie production company. He has the responsibility for managing
the firm’s marketing channels and its relationships with its marketing intermediaries. As a manager of its marketing
intermediaries, part of Josh’s role is to
a. link movie wholesalers to other wholesalers.
b. link film producers to other middlemen.
c. always oversee the sale of movies to retailers.
d. maintain quality of the movie product.
e. engage in short-term commitments to the least expensive channel member.
235. A goal of physical distribution is to reduce ____ or how long it takes to complete a process.
a. time standards
b. processing time
c. production
d. throughput measure
e. cycle time
236. The supply chain includes
a. producers, wholesalers, and retailers.
b. suppliers, producers, intermediaries, and customers.
c. suppliers and suppliers’ suppliers.
d. all entities that facilitate product distribution.
e. buyers, seller, marketing intermediaries, and agents.
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237. Many companies use more than one marketing channel to distribute their products to the same target market, a tactic
called
a. multiple channeling.
b. strategic channel alliance.
c. intensive distribution.
d. dual distribution.
e. market splitting.
238. Dual distribution is characterized as
a. illegal under the Robinson-Patman Act.
b. distribution channels that typically carry exclusive products, such as Rolex watches.
c. marketing environments that are highly competitive.
d. manufacturers that forbid an intermediary to carry products of competing producers.
e. distribution of one manufacturer’s product through two or more different channel structures.
239. Which of the following physical distribution functions involves design and operation of facilities for storing goods?
a. Order processing
b. Materials handling
c. Transportation
d. Warehousing
e. Inventory management
240. Greg is a physical distribution manager. He is currently developing and maintaining assortments of products that are
adequate for customer demand. In which stage in the physical distribution system is Greg currently involved?
a. Order processing
b. Materials handling
c. Inventory management
d. Transportation
e. Warehousing
241. Without wholesalers and other intermediaries,
a. most products would be much less expensive because fewer companies would be handling the product.
b. products would be cheaper because the functions of intermediaries would be eliminated.
c. products would likely be more expensive due to the use of less efficient channel members.
d. products would never be able to make it to the ultimate consumer at any price without passing through
intermediaries.
e. many products would be more expensive because retailers would expect more profit.
242. Eliminating a wholesaler from a marketing channel will
a. cut costs and lower prices.
b. not eliminate the functions performed by that wholesaler.
c. eliminate the functions performed by that wholesaler.
d. lead to lower costs but higher prices.
e. reduce channel conflict.
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243. Netflix sells its movie services using its website while Red Box sells its movie services using vending machines.
From a customer’s point of view, Netflix is using ____ and Red Box is using ___.
a. a direct marketing channel; a slightly shorter channel.
b. a direct-marketing channel; an agent.
c. an Internet wholesalers; a retailers.
d. an Internet wholesaler; a slightly longer channel.
e. a direct-marketing channel; a type of retailer.
244. If Purina forced Kroger’s grocery chain to place all of its products in the stores’ most favorable locations, it would be
a. demonstrating sound channel leadership.
b. insisting on exclusive exposure.
c. exercising channel power.
d. minimizing channel conflict.
e. creating a coordinate system.
245. The Diamond Salt Company needs to transport 20 tons of salt from Baton Rouge, Louisiana, to Cincinnati, Ohio.
Which of the following methods would be the cheapest for transporting this cargo?
a. Pipelines
b. Waterways
c. Trucks
d. Airways
e. Railroads
246. 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.
a. operations
b. supply
c. distribution
d. product
e. logistics
247. When produce companies such as Dole Bananas bypass wholesalers and sell directly to retailers, it is likely to _____
a. create channel conflict between Dole and these wholesalers.
b. increase cooperation between Dole and the wholesalers.
c. show that Dole is integrating its channel intermediaries.
d. create horizontal integration between channel members.
e. increase the vertical integration of the channel intermediaries.
248. 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
a. channel leadership.
b. channel cooperation.
c. channel conflict.
d. horizontal channel integration.
e. vertical channel integration.