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249. In the distribution channel for Domino’s Pizza, channel members are linked by legal agreements that spell out the
obligations and rights of each member. This is an example of a(n) ____ vertical marketing system.
a. contractual
b. administered
c. corporate
d. negotiated
e. institutional
250. Select the greatest advantage of horizontal channel integration.
a. The flexibility of the channel is decreased.
b. The markets are more heterogeneous.
c. The expanded number of units is coordinated.
d. Efficiencies in advertising, marketing research, and purchasing are increased.
e. Planning and research are increased to cope with increased competition.
251. Tying agreements occur when a
a. producer distributes the same product through two or more different channels.
b. manufacturer forbids an intermediary to carry products of competing manufacturers.
c. supplier furnishes a product to a channel member with the stipulation that the channel member must purchase
other products as well.
d. producer refuses to deal to channel members that seem unethical or illegitimate.
e. manufacturer prohibits intermediaries from selling its products outside designated sales territories.
252. NYK Logistics uses _____ technology to track containers through its distribution center in Long Beach, CA. Each
container has a special tag on it, that allows hundreds of containers to be scanned simultaneously, improving the
throughput of containers through the center.
a. containerization
b. UV
c. LED
d. RFID
e. barcode
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.
253. Refer to Scenario 13.1. If Liz Claiborne were to distribute their Kate Spade brand through its company-owned stores
and through wholesalers, to major department stores, then Liz Claiborne would be using ____ distribution.
a. intensive
b. vertical
c. horizontal
d. dual
e. exclusive
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254. In which of the following situations is dual distribution likely to be determined illegal?
a. A manufacturer sells its product online and through independent and company-owned retail outlets.
b. A manufacturer opens its own retail outlets across the country and sells its entire line of products.
c. A producer uses company outlets to dominate independent retailers that carry its products.
d. A producer sells its products both to wholesalers who deal with small and medium-sized retailers and directly to
retailers.
e. A producer charges higher prices at its company-owned retail outlets than independent retailers charge for the
same products.
255. An arrangement where a producer forbids an intermediary to carry products made by competing manufacturers is
called
a. exclusive distribution.
b. a tying agreement.
c. refusal to deal.
d. contractual VMS.
e. exclusive dealing.
256. Starbucks has an agreement with Pepsi Co. through which Pepsi distributes Starbucks’ coffee drink, Frappucino, to
grocery stores and other retail outlets. This is an example of
a. a strategic channel alliance.
b. exclusive distribution.
c. dual distribution.
d. horizontal channel integration.
e. channel leadership.
257. Under what circumstances is selective distribution a desirable level of market coverage?
258. What advantages do industrial distributors offer? What are some of the disadvantages of using industrial distributors?
259. List the three major levels of market coverage and define each of them.
260. Name and define the four types of utility created by marketing channels.
261. How do marketing channels increase efficiency in exchange situations?
262. How do marketing channel decisions influence the rest of the marketing mix?
263. Identify the various transportation modes and describe in detail two modes of transportation.
264. What is a marketing intermediary, and what are the activities that marketing intermediaries perform?
265. What are the key tasks in supply chain management? How does each of these facilitate supply chain management?
266. Describe the three forms of vertical marketing systems.
267. Discuss channel cooperation and conflict. How might each one affect distribution channel functions?
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268. Wholesalers are often criticized for being inefficient and for causing consumers to pay higher prices than they would
if there were no wholesalers. Discuss.
269. Compare and contrast horizontal and vertical channel integration.
270. Explain how electronic data interchange (EDI) and just-in-time (JIT) inventory management might be used in
combination to improve physical distribution effectiveness and efficiency.
271. Discuss the importance of order processing in the physical distribution system.
272. What is supply chain management? List the activities involved in it.
273. Why is the choice of warehouse facilities an important strategic consideration?
274. Explain the legal ramifications of attempts to control distribution functions.
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Answer Key
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