107. A retailer engaged in direct marketing would probably select television home shopping over online retailing to sell a
new kitchen device because of:
a. lower costs of selling.
b. easier financial transactions.
c. a superior ability to demonstrate the product.
d. a superior ability to offer the product at a lower price.
e. a decreased cycle time.
108. Which of the following is the most popular type of product sold through television home shopping?
a. Electronics
b. Clothing
c. Jewelry
d. Shoes
e. Cosmetics
Chapter 14 – Retailing, Direct Marketing, and Wholesaling
109. Kelly Cramer sees a lovely pair of earrings on a television network and calls a toll-free number to order them,
paying with her credit card. This is an example of _____.
a. online retailing
b. television home shopping
c. telemarketing
d. direct-response marketing
e. catalog marketing
110. BradaccessesOverstock.com’ssiteontheInternetandpurchasesabusinesslaptopcase.Thisisanexampleof
_____.
a. direct-selling
b. catalog retailing
c. direct-response marketing
d. online retailing
e. home shopping
Chapter 14 – Retailing, Direct Marketing, and Wholesaling
111. The marketing of products to ultimate consumers through face-to-face sales presentations either at home or the
workplace is known as _____.
a. direct marketing
b. direct-response marketing
c. telemarketing
d. strategic selling
e. direct selling
112. Which of the following is a potential disadvantage of direct selling?
a. Commissions for salespeople are usually low.
b. Some customers view direct selling negatively.
c. Personal attention tends to be lacking.
d. Product demonstrations are difficult in this type of selling.
e. Consumers must go out of their way to purchase the product.
Chapter 14 – Retailing, Direct Marketing, and Wholesaling
113. With respect to retailing, what is the “party plan”?
a. A sales representative has a party at her home to demonstrate products to a group of friends and associates.
b. A party is set up in a formal setting to demonstrate a product and provides free samples of the product to all
in attendance.
c. An individual is asked to tell two friends about a product, who are in turn each asked to tell two friends, etc.
until a sufficient number of people are reached.
d. A store has a special sale that resembles a party, and those who come are asked to buy the featured
products.
e. A consumer acts as a host and invites friends to view merchandise in a group setting, where a salesperson
demonstrates the products.
114. Alison asks ten of her friends over to her home to learn about exciting new cosmetic products. A salesperson from
Angel Products makes a presentation and takes the women’s orders. This is an example of _____.
a. a party plan
b. telemarketing
c. a warehouse club
d. direct marketing
e. a catalog showroom
Chapter 14 – Retailing, Direct Marketing, and Wholesaling
115. The primary advantage of automatic vending as a form of retailing is that:
a. it offers a low-cost, personal method of selling products.
b. it provides continuous service to consumers.
c. since vending machines must be serviced frequently, the products they sell are always fresh.
d. vending machines require very few repairs.
e. it eliminates the need for sales personnel.
116. Redbox, ProActiv, and Clinique all sell their products through automatic vending, which is:
a. a type of nonstore retailing.
b. a specialty line retailer.
c. not considered a form of retailing.
d. a type of direct selling.
e. a form of franchising.
Chapter 14 – Retailing, Direct Marketing, and Wholesaling
117. Tupperware, Sarah Coventry, Amway, and Avon sell products outside the confines of retail facilities. They are
_____ retailers.
a. discount
b. traditional
c. specialty
d. non-store
e. pop-up
118. While on their family vacation, the Millers realize they left their camera at home. They purchase a disposable
camera at an amusement park using their credit card, but never interact with a person. Which type of retailing did
this transaction most likely involve?
a. Franchising
b. Online retailing
c. Direct-response marketing
d. Automatic vending
e. Machine marketing
Chapter 14 – Retailing, Direct Marketing, and Wholesaling
119. An arrangement in which a supplier grants a dealer the right to sell products in exchange for some type of
consideration is _____.
a. selling products on consignment
b. retailing
c. wholesaling
d. licensing
e. franchising
120. If Victor decides to buy a franchise, he will most likely have to supply:
a. management know-how and equipment.
b. buildings and marketing assistance.
c. marketing assistance and management know-how.
d. equipment and management expertise.
e. labor and a percentage of total sales.
Chapter 14 – Retailing, Direct Marketing, and Wholesaling
121. Malcolm Lewis has come up with the idea of a system for picking up people’s cars while they are at work, washing
and waxing them, and returning them for a fee. Having been a big success in his home city, Malcolm plans to
expand his operation into other cities. The service described here seems best suited to _____.
a. party-plan retailing
b. franchising
c. vending
d. corporate chain retailing
e. off-price retailing
122. Kevin is talking with Peter about purchasing a Wendy’s franchise. Peter tells Kevin that one of the major
advantages of franchising for him to consider is the:
a. higher start-up costs.
b. greater freedom it provides.
c. individuality it offers.
d. higher success rate for franchises.
e. gross margin it provides.
Chapter 14 – Retailing, Direct Marketing, and Wholesaling
123. Which of the following is not one of the basic types of franchising arrangements?
a. A producer franchising a number of stores to sell a particular brand of product
b. A wholesaler franchising a number of producers
c. A producer franchising a number of wholesalers to sell to retailers
d. The franchising of brand names, techniques, procedures, or services
e. All of these are basic types of franchising.
124. Which of the following is not an advantage of franchising for a franchisee?
a. A franchisee can capitalize on the business experience of others.
b. When problems arise, a franchisee can obtain guidance and advice from a franchiser.
c. Franchised outlets are usually more successful than independently owned businesses with respect to long-
term survival.
d. A franchisee can participate in national promotional campaigns sponsored by a franchiser.
e. A franchisee gains fast and selective product distribution without incurring the high cost of constructing and
operating its own outlets.
Chapter 14 – Retailing, Direct Marketing, and Wholesaling
125. In franchising, which of the following is not a benefit that a franchiser gains?
a. A franchiser can gain more rapid product distribution.
b. A franchiser can acquire capital more quickly for expanding production.
c. A franchiser gains more control over how franchisees operate establishments.
d. A franchiser benefits from the fact that franchisees tend to be highly motivated to succeed, which in turn
leads to higher sales and higher royalties.
e. All of these are benefits for a franchiser.
126. Which of the following best describes wholesalers?
a. Organizations that buy products from producers and sell them to retailers
b. Individuals or organizations that purchase products and then resell them to other businesses and consumers
c. Organizations or individuals who buy products for resale to government, reseller, producer, and institutional
users
d. Organizations or entities that buy products from government, reseller, and producers and sell them to
customers in bulk
e. Companies that make products that have a general appeal and are resold to retailers for a profit
Chapter 14 – Retailing, Direct Marketing, and Wholesaling
127. Which of the following is true about wholesaling?
a. Wholesaling activities must be performed during distribution of all goods, whether or not a wholesaling
institution is involved.
b. Warehouses are necessary in order for the wholesaling function to be completed.
c. Only wholesaling establishments can perform wholesaling activities.
d. Wholesaling is an inefficient process that should be eliminated from the marketing channel.
e. The biggest problem with the wholesaling process is that inefficient wholesalers can thrive, at the expense of
consumers.
128. The primary function of most wholesalers is to:
a. reducearetailer’swarehousingexpenses.
b. support manufacturers by assisting with marketing strategy, especially the distribution component.
c. provide information system tracking of inventory for the ultimate consumer.
d. perform physical distribution of products from manufacturers to retailers.
e. understand the businesses of the manufacturers.
Chapter 14 – Retailing, Direct Marketing, and Wholesaling
129. By using Johnson Wholesale Co. for its distribution needs, Apex Production has a distinct competitive advantage
because the services performed by Johnson allow Apex to:
a. provide quality merchandise to consumers.
b. focus on increasing production capacity.
c. focus on increasing working capital.
d. reduce manufacturing costs to retailers.
e. keep track of market developments.
130. Which of the following services would a wholesaler least likely provide to a manufacturer?
a. Assume the risks of selling to poor credit customers
b. Look for and coordinate supply sources
c. Pay the costs of transporting goods
d. Provide up-to-date information on market developments
e. Serve as an extension of the manufacturer’s sales force
Chapter 14 – Retailing, Direct Marketing, and Wholesaling
131. Which of the following is not a factor used to classify wholesalers?
a. Whether a wholesaler is owned by a producer
b. Whether a wholesaler takes title to the products it handles
c. The range of services offered by a wholesaler
d. The price range of the products carried by a wholesaler
e. The breadth and depth of the product lines carried by a wholesaler
132. Wholesalers frequently help retailers with developing a marketing strategy, especially as it relates to the _____
component of the marketing mix.
a. distribution
b. promotion
c. product
d. price
e. channel
Chapter 14 – Retailing, Direct Marketing, and Wholesaling
133. By buying in large quantities and delivering to customers in smaller lots, a wholesaler may perform all of the
following physical distribution activities except:
a. inventory planning.
b. transportation.
c. materials handling.
d. unit pricing.
e. communication.
134. With respect to inventory, wholesalers can help retailers with all of the following except _____.
a. selection
b. storage
c. inventory control
d. transportation
e. production
Chapter 14 – Retailing, Direct Marketing, and Wholesaling
135. A merchant wholesaler:
a. performs a limited number of services in exchange for a commission.
b. takes title to goods, assumes risk associated with ownership, and buys and resells products.
c. takes title and possession of goods and sells only to retailers.
d. does not take title or possession of goods but facilitates exchanges between any parties.
e. deals exclusively with business products.
136. Walmart has its own fleet of trucks and works directly with producers to take care of the ordering, delivery, and
handling of goods. In addition, Walmart works directly with suppliers through its advanced system of inventory
control and data processing. Walmart is:
a. able to eliminate many of the functions typically performed by wholesalers.
b. performing many of the critical functions of wholesalers through its own system.
c. successfully using wholesalers to run its venerable chain of discount stores.
d. using information technology to eliminate the need to perform typical wholesale functions.
e. vertically integrated in order to produce and distribute all products itself.
Chapter 14 – Retailing, Direct Marketing, and Wholesaling
137. Sherri McRae wants to establish a fashion wholesaling firm. Because of the risks involved in the rapid
obsolescence of high-fashion items, Sherri does not want to establish an organization in which she has title to the
garments. Which of the following types of wholesale establishments has she ruled out?
a. Merchant wholesaler
b. Agent
c. Broker
d. Functional middleman
e. Commission merchant
138. Martin owns and operates a wholesale hardware business that supplies small hardware parts to various
manufacturers in the area. He takes title to the hardware and assumes all risks associated with ownership. Martin
is a _____.
a. commission merchant
b. merchant wholesaler
c. wholesaler agent
d. broker
e. sales branch
Chapter 14 – Retailing, Direct Marketing, and Wholesaling
139. Merchant wholesalers can be divided into two basic categories:
a. general merchandise and general-line.
b. rack jobbers and cash-and-carry.
c. commission and fee-based.
d. goods and services.
e. full-service and limited service.
140. Cigarette manufacturer Philip Morris uses the services of Universal Corporation, the world’s largest buyer and
processor of leaf tobacco, which provides financing for its customers. This means that Universal is a _____.
a. cash-and-carry wholesaler
b. general merchandise wholesaler
c. limited-service wholesaler
d. rack jobber
e. full-service wholesaler
Chapter 14 – Retailing, Direct Marketing, and Wholesaling
141. Customers rely on _____ for product availability, breaking larger quantities into smaller ones, technical advice and
service, financial assistance, and suitable assortments.
a. full-line retailers
b. limited-service wholesalers
c. full-service wholesalers
d. commission merchants
e. cash-and-carry wholesalers
142. If a retailer needed help with store design and training sales personnel, it would most likely use the services of a
_____.
a. full-service wholesaler
b. full-price wholesaler
c. mail-order wholesaler
d. cash-and-carry wholesaler
e. technical wholesaler
Chapter 14 – Retailing, Direct Marketing, and Wholesaling
143. A wholesaler that carries a wide product mix but offers only limited depth within product lines is known as a
_____.
a. specialty-line wholesaler
b. limited-service wholesaler
c. rack jobber
d. general merchandise wholesaler
e. general-line wholesaler
144. All of the following are examples of full-service wholesalers except:
a. general merchandise wholesalers.
b. mail-order wholesalers.
c. rack jobbers.
d. general-line wholesalers.
e. specialty-line wholesalers.
Chapter 14 – Retailing, Direct Marketing, and Wholesaling
145. Which of the following is a full-service merchant wholesaler?
a. Cash-and-carry wholesaler
b. General merchandise wholesaler
c. Drop shipper
d. Mail-order wholesaler
e. Truck wholesaler
146. Brad operates a wholesale company that specializes in providing a wide variety of services to its customers, which
are all restaurants. He carries a wide assortment of restaurant equipment and cookware. Brad’s business is a
_____.
a. general merchandise wholesaler
b. rack jobber
c. general-line wholesaler
d. specialty-line wholesaler
e. limited-service wholesaler
Chapter 14 – Retailing, Direct Marketing, and Wholesaling