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Class:
Date:
chapter 14
Indicate whether the statement is true or false.
1. A merchant wholesaler is an independently owned wholesaler that takes title to the goods.
a.
True
b.
False
2. When a producer grants exclusive rights to a wholesaler or retailer to sell its products in a specific geographic
region it practices intensive distribution.
a.
True
b.
False
3. Business products tend to move through longer marketing channels than consumer products.
a.
True
b.
False
4. A distribution warehouse holds goods for moderate to long periods in an attempt to balance supply and
demand for producers and purchasers.
a.
True
b.
False
5. Marketers usually adopt a dual distribution strategy either to maximize their firm’s coverage in the
marketplace or to increase the cost effectiveness of the firm’s marketing effort.
a.
True
b.
False
6. The term industrial distributor commonly refers to intermediaries in the business market that take title to the
goods.
a.
True
b.
False
7. Common carriers move freight via all modes of transport.
a.
True
b.
False
8. Changing channel strategies can produce conflicts between established intermediaries and the new channels
for the product.
a.
True
b.
False
9. Simple Foods, a breakfast cereal brand, has two wholesalers supplying to almost 100 retailers in California.
Conflicts arising between the retailers and wholesalers within California will be referred to as horizontal
conflicts.
a.
True
b.
False
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10. Closed sales territories are exclusive geographic selling region of a distributor.
a.
True
b.
False
11. The biggest advantage of a physical distribution system is that its components are independent and hence, a
decision in one area is unlikely to affect the functioning of the other components.
a.
True
b.
False
12. Railroads control the largest share of the freight business in the United States as measured by ton-miles.
a.
True
b.
False
13. The traditional channel for consumer goods proceeds from producer to wholesaler to retailer to user.
a.
True
b.
False
14. In transportation, a class rate is the standard rate for a specific commodity moving between any pair of
destinations.
a.
True
b.
False
15. Pipelines can accommodate shipments of a large number of products.
a.
True
b.
False
16. The dominant and controlling member of a marketing channel is called the channel captain.
a.
True
b.
False
17. Horizontal territorial restrictions result from agreements between retailers or wholesalers to avoid
competition among sellers of products from the same producer.
a.
True
b.
False
18. The strategy of selective distribution involves distributing a product through a limited number of channels.
a.
True
b.
False
19. Gray goods are products manufactured abroad under license from a U.S. firm and then sold in the U.S.
market in competition with that firm’s own domestic output.
a.
True
b.
False
20. Selective distribution helps marketers reduce total marketing costs while establishing strong working
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relationships within the channel.
a.
True
b.
False
21. The U.S. Supreme Court has ruled that horizontal territorial restrictions may meet legal criteria in certain
cases but it has consistently declared vertical territorial restrictions to be illegal.
a.
True
b.
False
22. Legal provisions against pollution and conservation laws have increased the importance of reverse channels.
a.
True
b.
False
23. If producers set up closed sales territories that substantially decrease competition, then it is in violation of
the Federal Trade Commission Act and provisions of the Sherman and Clayton Acts.
a.
True
b.
False
24. Shippers that transport goods via water carriers incur very low costs compared with the rates for other
transportation modes.
a.
True
b.
False
25. A value-added service is a basic service that customers normally receive and expect.
a.
True
b.
False
26. Producers and dealers whose sales volumes represent a substantial percentage of total sales in the market
area will be guilty of violating the Clayton Act if they enter into exclusive dealing agreements.
a.
True
b.
False
27. An agent, who connects small companies with the consumers, always takes possession of the goods as well
as the title.
a.
True
b.
False
28. When a beverage company acquires a water purification plant, it is an example of backward integration of
distribution channels.
a.
True
b.
False
29. One of the functions of marketing channels is to facilitate searches by both buyers and sellers.
a.
True
b.
False
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30. In piggyback operations, highway trailers and containers ride on railroad flatcars, thus combining the long-
haul capacity of the train with the door-to-door flexibility of the truck.
a.
True
b.
False
31. Standardized modular shipping containers maximize savings by limiting loading, unloading, and other
handling.
a.
True
b.
False
32. Unitizing combines as many packages as possible into each load that moves within or outside a facility.
a.
True
b.
False
33. Freight forwarders act as transportation intermediaries, consolidating shipments to gain lower rates for their
customers.
a.
True
b.
False
34. Direct selling is an important option for goods requiring extensive demonstrations in persuading customers
to buy.
a.
True
b.
False
35. The complete sequence of suppliers and activities that contribute to the creation and delivery of goods and
services is known as the supply chain.
a.
True
b.
False
36. Relatively standardized items that are also nonperishable and products with low unit costs pass through
comparatively long channels of distribution.
a.
True
b.
False
37. The term “suboptimization” refers to a condition that results when individual operations achieve their
objectives but interfere with progress toward broader organizational goals.
a.
True
b.
False
38. NikSnak, a popular potato wafers brand, is most likely to use an exclusive distribution strategy.
a.
True
b.
False
39. Dual distribution is the movement of products through more than one channel to reach the firm’s target
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market.
a.
True
b.
False
40. Freight carriers often charge class rates as a reward for either regular business or a large shipment.
a.
True
b.
False
41. An example of vertical conflict within the clothing industry would be when a firm such as Jones, New York
decides to sell its line of women's blazers directly to consumers via their website, as opposed to distributing
them via its usual wholesale channels.
a.
True
b.
False
42. Merle Norman, a cosmetics manufacturer, sells its products exclusively through its own retail stores. This is
an example of forward integration of distribution channels.
a.
True
b.
False
43. Unit trains run back and forth between single loading points and single destinations to deliver a commodity.
a.
True
b.
False
44. The channel captain is the key channel member to create cooperative relationships among members of the
channel and avoid channel conflict.
a.
True
b.
False
45. A business product with large unit sales, for which transportation accounts for only a small percentage of the
total cost, is usually distributed using the producer-agent-business user channel.
a.
True
b.
False
46. Tandy Corporation has its own distribution network that transports its products to its own retail stores. This
is an example of a corporate marketing system.
a.
True
b.
False
47. The simplest and shortest marketing channel is a direct channel.
a.
True
b.
False
48. Distributors adjust for discrepancies in the market’s assortment of goods and services via a process known
as suboptimization.
a.
True
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b.
False
49. Common carriers operate under much looser regulations than contract carriers.
a.
True
b.
False
50. Designers of a physical distribution system begin by establishing acceptable levels of customer service.
a.
True
b.
False
51. Marketing channels increase the number of marketplace contacts necessary to make a sale.
a.
True
b.
False
52. Large facilities offer economies of scale in facilities and materials handling systems; per-unit costs for these
systems decrease as volume increases.
a.
True
b.
False
53. Common carriers cannot conduct their operations without permission from the appropriate regulatory
authority.
a.
True
b.
False
54. In exclusive distribution, producers and retailers cooperate closely in decisions concerning advertising and
promotion, inventory carried by the retailers, and prices.
a.
True
b.
False
55. Customer service standards state the goals and define acceptable performance for the quality of service that
a firm expects to deliver to its customers.
a.
True
b.
False
56. High sales volume spreads selling costs over a large number of items, generating adequate returns from
direct sales.
a.
True
b.
False
57. Manufacturers of specialty or luxury goods limit the number of retailers that can carry their products.
a.
True
b.
False
58. An enterprise resource planning (ERP) system is a software system that consolidates data from among a
firm’s various business units.
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a.
True
b.
False
59. The terms “transportation” and “physical distribution” can be used interchangeably because these terms
carry the same meaning.
a.
True
b.
False
60. Exclusive distribution allows greater market coverage than any other distribution strategy.
a.
True
b.
False
61. Supply chain management refers to the control of the activities of purchasing, processing, and delivery
through which raw materials are transformed into products and made available to final consumers.
a.
True
b.
False
62. Physical distribution refers to a broad range of activities aimed at efficient movement of finished goods from
the end of the production line to the consumer.
a.
True
b.
False
63. A storage warehouse assembles and redistributes goods, keeping them moving as much as possible.
a.
True
b.
False
64. A marketing channel is an organized system of marketing institutions and their interrelationships that
enhances the physical flow and ownership of products from producer to consumer or business user.
a.
True
b.
False
65. Service firms market primarily through long distribution channels.
a.
True
b.
False
66. Horizontal conflict causes problem between different types of marketing intermediaries that handle similar
products.
a.
True
b.
False
67. A wholesaler is an intermediary that takes title to the goods it handles and then distributes these goods to
retailers, other distributors, or sometimes end consumers.
a.
True
b.
False
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68. The first thing to do in selecting a marketing channel is to determine which type of channel will best meet
both the seller's objectives and the distribution needs of customers.
a.
True
b.
False
69. Water carriers continue to control the largest share of the freight business as measured by ton-miles.
a.
True
b.
False
70. A marketing intermediary is an organization that operates between producers and consumers or business
users.
a.
True
b.
False
71. Transportation and delivery expenses typically account for 25 percent of the cost of a product.
a.
True
b.
False
72. When a producer decides to advertise products on its website and sell them online, while continuing to
distribute products to its current retailer customer base, the decision is likely to result in horizontal channel
conflict.
a.
True
b.
False
73. Piggyback service is the most widely used form of intermodal coordination.
a.
True
b.
False
74. Not-for-profit organizations tend to distribute their products through long, multi-level channels using
wholesalers as intermediaries.
a.
True
b.
False
75. Product recalls and repairs are handled through reverse channels.
a.
True
b.
False
76. A third-party (contract) logistics firm is a company that specializes in handling logistics activities for other
firms.
a.
True
b.
False
77. A wholesaler-sponsored voluntary chain allows retailers to save on advertising costs.
a.
True
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b.
False
78. Lands’ End products are sold through catalogs, the Internet, and Sears retail stores. The Lands’ End brand
practices dual distribution.
a.
True
b.
False
79. Logistics is the process of coordinating the flow of information, goods, and services among members of the
distribution channel.
a.
True
b.
False
80. Motor carriers concentrate on shipping raw materials while railroads typically haul bulk shipments of
manufactured products.
a.
True
b.
False
81. The supply chain begins with the movement of finished products through the marketing channel to
customers.
a.
True
b.
False
82. A multimodal firm provides intermodal service through external transportation resources.
a.
True
b.
False
83. A meat packing unit’s downstream management would oversee storage and warehousing of meat as well as
the transportation of the meat to its plant where it is processed and packed.
a.
True
b.
False
Indicate the answer choice that best completes the statement or answers the question.
84. Which of the following factors is most likely to be associated with a short marketing channel?
a.
The products require little or no technical knowledge and servicing.
b.
Manufacturer lacks adequate resources to perform channel functions.
c.
The products are perishable.
d.
Manufacturer serves a geographically dispersed potential trade area.
85. Which of the following modes of transportation controls the largest share of the freight business as measured
by ton-miles?
a.
Railroads
b.
Water carriers
c.
Motor carriers
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d.
Pipelines
86. A&S Corp. regularly ships its products to its warehouses. The company ships three truckloads of
merchandise biweekly using the services of the same trucking company. The trucking company on its part
provides A&S Corp. a subsidized rate because it gets regular business from A&S Corp. The discounted rate
thus charged is called a _____ rate.
a.
special
b.
flat
c.
spot
d.
class
87. You handle transportation issues for a chain of department stores selling clothing, furniture, and home lighting
fixtures. The primary mode of transport you rely on is:
a.
Railroads
b.
Motor carriers
c.
Water carriers
d.
Air freight
e.
Common carriers
88. Which of the following is true of contract carriers?
a.
They provide transportation services as for-hire carriers to the general public.
b.
They operate under much stricter regulations than common carriers.
c.
They provide transportation services solely for internally generated freight and are privately owned.
d.
They establish agreements with individual customers and operate exclusively for particular
industries.
89. The U.S. Supreme Court has ruled that closed sales territories may meet the legal criteria if:
a.
the restriction agreement is between wholesalers.
b.
the restriction is a horizontal territorial restriction.
c.
the restriction decreases competition.
d.
the restriction is a vertical territorial restriction.
90. Which mode of transportation is very slow in speed, is low cost and offers very high levels of flexibility in
handling?
a.
water
b.
pipeline
c.
air
d.
truck
91. International water carriers operate with oceangoing, deep-water ships. How will this mode of freight
transportation be affected by expansion of the Panama Canal?
a.
Shippers will incur lower costs compared with the rates for other transportation modes.
b.
Larger-sized ships will be able to pass through the all-water route from Asia to the Atlantic Coast of
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the United States.
c.
Ships that operate on the Great Lakes transporting iron ore from Minnesota will be able to use this
route.
d.
Large ships that carry "reefers" will come under closer scrutiny by foreign officials unfamiliar with
this term.
e.
Competition will be created in port cities along the Atlantic Coast since the amount of freight coming
through the canal will be limited.
92. Your first job was with a business supplier. Then you moved to a not-for-profit organization. In terms of channel
lengths, you've worked primarily with ____ channels.
a.
Long
b.
Short
c.
Intermediary
d.
Retail
e.
Wholesale
93. Controlling part of the supply chain that involves raw materials, inbound logistics, and warehouse and
storage facilities constitutes _____.
a.
horizontal integration
b.
upstream management
c.
forward integration
d.
reverse management
94. Sysco Foods provides thousands of food service products to restaurants, hotels, hospitals, and schools.
Sysco purchases their products from manufacturers such as Hormel and then markets them to their business
customers. Sysco Foods is known as a(n):
a.
wholesaler
b.
retailer
c.
producer
d.
logistics specialist
95. A VMS that achieves channel coordination when a dominant channel member exercises its power is called
a(n) _____ marketing system.
a.
corporate
b.
community
c.
administered
d.
contractual
96. Which of the following is true regarding franchises?
a.
franchise owners are typically required to pay a royalty on sales
b.
a franchise owner is not affected by poor strategic decisions of the franchise brand
c.
a franchise is a type of administered marketing system
d.
franchising is declining in popularity
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97. Lakeview Industries contracts with Marine Motor Distributors to sell their newly patented outboard engine.
In exchange for exclusive dealership rights, Marine Motor has agreed to carry the full line of boating
accessories offered by Lakeview. This arrangement can be described as an example of:
a.
a tying agreement.
b.
predatory pricing.
c.
a closed sales territory.
d.
mass merchandising.
98. Which of the following best represents a set of activities that move production inputs and other goods within
factories, warehouses, and transportation terminals?
a.
Materials handling system
b.
Order processing system
c.
Vendor-managed inventory system
d.
Package tracking system
99. An arrangement that requires a marketing intermediary to carry items other than those they want to sell is
known as a(n) _____.
a.
contractual collusion
b.
tying agreement
c.
closed sales territorial restriction
d.
exclusive dealership agreement
100. Which of the following is true of pipelines as a transportation alternative?
a.
They provide the most efficient way for moving bulky commodities over long distances.
b.
They control the largest share of the freight business as measured by ton-miles.
c.
They can accommodate shipments of only a small number of products.
d.
They represent the fastest method of transportation of products especially crude oil.
101. DHL is one of the top companies specializing in handling logistics activities to other firms especially in the
international sector. For example, DHL was under contract to assist Prestige Distributors to transport a
container ship of French wine to the United States and provided its expertise to ensure transportation from each
wine maker to the port as well as managed all export duties. In this case, DHL is operating as a(n):
a.
third-party logistics firm
b.
upstream management contractor
c.
downstream management contractor
d.
administered logistics provider
102. Lush, a cosmetics company that makes handmade beauty products, gives its customers a free item when
they return used Lush containers. This offer is aimed at promoting recycling of the containers. The channel used
by the consumers to return used containers is referred to as a:
a.
primary channel.
b.
reverse channel.
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c.
rudimentary channel.
d.
reserve channel.
103. Businesses must manage logistics in order to maximize customer value. What are three methods for
managing logistics?
a.
manage raw materials; inbound logistics; warehousing
b.
upstream management; RFID technology; warehousing
c.
logistical cost control; third-party logistics firms; enterprise resource planning (ERP) systems
d.
logistical cost control; RFID technology; enterprise resource planning (ERP) systems
e.
downstream management; upstream management; logistical cost control
104. A standard rate for a specific commodity moving between any pair of destinations is known as a _____
rate.
a.
going
b.
class
c.
special
d.
repo
105. Which of the following products is most likely to have a long distribution channel?
a.
Mining equipments
b.
Bars of soap
c.
Dairy products
d.
Drinks sold in a vending machine
106. You are considering the purchase of a McDonald's franchise. If the sale goes through, you will be involved in a
marketing system known as a:
a.
Contractual VMS
b.
Franchisor-sponsored VMS
c.
Voluntary chain
d.
Corporate marketing system
e.
None of the above
107. KitchenAid has established an electronic storefront so that its customers can purchase mixers and
accessories from its website. This establishment of electronic storefront is likely to result in a _____ conflict
between KitchenAid and its retailers.
a.
vertical
b.
horizontal
c.
exclusive
d.
tangential
108. Which of the following functions as a manufacturer’s representative?
a.
An industrial distributor
b.
A broker
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c.
A wholesaler
d.
A retailer
109. Slurry pipelines are typically used for the transportation of:
a.
jet fuel.
b.
natural gas.
c.
coal.
d.
kerosene.
110. Brighton Jewelry is a manufacturer of fashionable jewelry and accessories for women such as wallets,
purses, and belts. Their products are sold in specialty retail outlets as well as Brighton's own specialty stores
which feature all of its products. By operating and managing their own retail outlets, Brighton is using _____
integration.
a.
forward
b.
backward
c.
horizontal
d.
multi-channel
111. Conflicts resulting from disagreements among channel members at the same level, such as two or more
wholesalers or two or more retailers, or among marketing intermediaries of the same type are called _____
conflicts.
a.
exclusive
b.
vertical
c.
horizontal
d.
cross-channel
112. Frito Lay is owned by Pepsi and has a variety of billion dollar brands such as Doritos, Cheetos, Lays, and
Ruffles. These famous snack brands are available in a wide variety of sizes at almost every store location and
vending center - from gas stations, to dollar stores, grocery stores, drug stores and super centers. Which level of
distribution intensity does Frito Lay utilize?
a.
intensive
b.
exclusive
c.
selective
d.
cooperative
113. Controlling part of the supply chain that involves finished product storage, outbound logistics, marketing
and sales, and customer service constitutes _____.
a.
reverse management
b.
horizontal integration
c.
downstream management
d.
backward integration
114. Which of the following factors is a characteristic of a long marketing channel?
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a.
Manufacturers with broad product lines
b.
Durable and inexpensive products
c.
Marketers with a small and concentrated market
d.
Manufacturers that cater to large orders of their products
115. The traditional channel for consumer goods proceeds from producer to:
a.
the ultimate consumer or user.
b.
agent to wholesaler to consumer.
c.
agent to the ultimate user.
d.
wholesaler to retailer to user.
116. Walmart is the largest retailer in the world and is known for being very demanding with its suppliers.
Walmart exerts control over its suppliers due to its large size and buying capacity and manufacturers often
acquiesce to the demands made by Walmart. Walmart is an example of a channel _______.
a.
captain
b.
intermediary
c.
sponsor
d.
leader
117. Advertising in which the manufacturer pays a percentage of the retailer’s advertising expenditures and the
retailer prominently displays the firm’s products is known as _____ advertising.
a.
affinity
b.
cooperative
c.
sustainable
d.
community
118. Which of the following categories of organizations is most likely to have the longest distribution channel?
a.
Firms producing B2B products
b.
Not-for-profit organizations
c.
Firms producing nonperishable consumer goods
d.
Service firms
119. Distributors adjust for discrepancies in the market’s assortment of goods and services through a process
known as _____.
a.
benchmarking
b.
sorting
c.
diffusing
d.
social referencing
120. Delacruz Trade Bindery is a family-owned business with two locations—one in the Mid-Atlantic and one
in the southern United States. Delacruz has been in business now for ten years, and the business has grown to
include clients all along the East Coast. For the last five years, Dave Delacruz, Jr. has been in charge of
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purchasing, inventory control, and shipping, all of which have gotten complex beyond Pop Delacruz's ability.
But this fall, however, Dave Jr. is headed to graduate school out of state. What resource may be available to Pop
Delacruz to help him manage his supply chain? Select the best answer from the choices below.
a.
third-party logistics (3PL) firm
b.
office manager
c.
RFID technology
d.
marketing representative
e.
customer service representative
121. Products manufactured under license from a U.S. firm and then sold in the U.S. market in competition with
that firm’s own domestic output are called _____ goods.
a.
deficient
b.
subsidized
c.
gray
d.
exempt
122. Most consumers purchase products from retailers, but a marketer considers many factors when deciding
which marketing channel to use. Which statement below identifies the four major factors in selecting a
marketing channel?
a.
Product marketing decisions are based on the combined income level of the targeted consumer
household.
b.
Product marketing decisions are based on the competition's incursion into an organization's market
share.
c.
Product marketing decisions are based on the marketplace, the product, the organization itself, and
the competition.
d.
Product marketing decisions are based on the type of product offered.
e.
Product marketing decisions are based on whether an organization operates domestically or
internationally.
123. AAA Insurance Company specializes in property and casualty insurance for individuals such as automobile
and home insurance. The company has their own branch offices across the United States with representatives
who only market AAA insurance policies. In addition, consumers can get quotes and purchase via the AAA
web portal. AAA Insurance also works with independent insurance agents as a way to maximize their coverage
in the marketplace. AAA insurance is utilizing ______.
a.
dual distribution
b.
reverse channels
c.
captive channel system
d.
direct channel
124. Sherwin-Williams sells the paint it manufactures through its company-owned retail paint stores. The
company operates its entire marketing channel. The marketing system used by Sherwin-Williams is a(n) _____
marketing system.
a.
corporate
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b.
community
c.
administered
d.
contractual
125. Which of the following modes of transportation is the costliest?
a.
Railroads
b.
Air freight
c.
Water freight
d.
Pipelines
126. In your new job, you will be responsible for upstream management of the firm's supply chain. This means you will
be managing all of the following except:
a.
Outbound logistics
b.
Inbound logistics
c.
Raw materials
d.
Warehouse facilities
e.
Storage facilities
127. Jesse would never have thought that his own trademarked children's toys would be flooding a parallel
market and competing against him. Now he needs to contact his attorney to see what remedy he has in order to
mitigate his damages. What kind of marketing channel conflict is Jesse experiencing?
Select the best answer from the choices below.
a.
horizontal conflict
b.
dual conflict
c.
marketing channel conflict
d.
gray market conflict
e.
vertical conflict
128. When a manufacturer of toys uses its own fleet of trucks for transporting its products to retail stores, it is
using _____ carriers.
a.
contract
b.
common
c.
regional
d.
private
129. A type of intermodal service where motor carriers pick-up local shipments and deliver them to local
destinations where they are then transported to airports near these locations is known as
a.
birdyback service
b.
fishyback service
c.
piggyback service
d.
horseeyback service
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130. Which of the following is a marketing intermediary who may or may not take possession of the goods but
never takes title?
a.
Agent
b.
Wholesaler
c.
Retailer
d.
Industrial distributor
131. Which of the following terms represents businesses that provide transportation services as for-hire carriers
to the general public?
a.
Common carriers
b.
Contract carriers
c.
Private carriers
d.
Independent carriers
132. The supply chain begins with:
a.
the manufacturing or production activities.
b.
the manufacturer seeking new markets for their products.
c.
the movement of finished products through the marketing channel to customers.
d.
the raw material inputs for the manufacturing process.
133. Sales of Kathleen's baked goods have begun to increase dramatically. She is selling online, but many
customers in her core region are asking about local outlets where they can make immediate purchases. Kathleen
has no desire to open and operate a retail outlet herself, but she also does not want her product sold beside a
generic cookie in a supermarket. What type of distribution will Kathleen investigate for her premium baked
goods?
a.
intensive distribution
b.
extensive distribution
c.
direct distribution
d.
selective distribution
e.
exclusive distribution
134. Which of the following is a form of intermodal coordination where motor carriers deliver shipments to air
carriers who transport them between airports, and then turn them over to motor carriers for local delivery?
a.
Fishyback service
b.
Piggyback service
c.
Horseback service
d.
Birdyback service
135. A direct channel is the simplest and shortest marketing channel, but most channels involve at least one
intermediary. Which statement below describes a marketing intermediary?
a.
Intermediaries develop networks of independent representatives who sell directly to consumers.
b.
Wholesalers and retailers are both marketing intermediaries.
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c.
Marketing intermediaries do not take title to the goods they handle.
d.
Service firms market primarily through long intermediary channels.
e.
Marketing through an intermediary is usually inefficient, expensive, and time-consuming.
136. Deborah relies on direct selling to market her jewelry designs. She uses all of the following approaches and tools
except:
a.
The Internet
b.
Direct mail
c.
Independent representatives
d.
Retailers
e.
Party plans
137. A(n) _____ is an intermediary that takes title to the goods it handles and then distributes these goods to
retailers, other distributors, or sometimes end consumers.
a.
agent
b.
wholesaler
c.
broker
d.
drop shipper
138. Which of the following distribution strategy seeks to distribute a product through a single wholesaler or
retailer in a specific geographic region?
a.
Exclusive distribution
b.
Associative distribution
c.
Selective distribution
d.
Intensive distribution
139. When the same branded product is carried in competing retail pharmacies, discount houses, department
stores, and convenience stores, the marketing channel conflict that can result is referred to as:
a.
cross-channel conflict.
b.
vertical conflict.
c.
exclusive conflict.
d.
horizontal conflict.
140. Which of the following is true of private carriers?
a.
They do not offer services for hire.
b.
The government regulates their rates and services.
c.
They offer their services to the general public.
d.
The ICC has banned them from operating as common carriers.
141. Which of the following terms represents transporters that provide service solely for internally generated
freight?
a.
Common carriers
b.
Contract carriers
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c.
Private carriers
d.
Regional carriers
142. The process through which a firm attempts to control downstream distribution is called _____ integration.
a.
balanced
b.
horizontal
c.
forward
d.
associative
143. Alva, a fashion house specializing in designer bags, sells its products only through a limited number of
boutiques worldwide. This is an example of:
a.
intensive distribution.
b.
associative distribution.
c.
selective distribution.
d.
discriminative distribution.
144. A VMS that coordinates channel activities through formal agreements among participants is called a(n)
_____ marketing system.
a.
corporate
b.
community
c.
administered
d.
contractual
145. Bubble, a company that manufactures gums and candies, distributes its products through all possible
channels. One can pick up a Bubble’s product from just about anywhere—department stores, general stores,
convenience stores, and even local pharmacies. Which of the following distribution strategy is being employed
by Bubble?
a.
Exclusive distribution
b.
Associative distribution
c.
Selective distribution
d.
Intensive distribution
146. Tim works for an ice-cream manufacturer. Tim’s department handles the supplies of dairy, nuts, and
sweeteners that go into the daily production. In addition, they make sure that the suppliers give them good
quality products at an optimal price as the freshness of these products ensures the quality of the company’s ice
cream. Tim is most likely involved with:
a.
horizontal integration.
b.
upstream management.
c.
forward integration.
d.
reverse management.
147. Which of the following is a condition that results when individual operations achieve their objectives but
interfere with progress toward broader organizational goals?
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a.
Optimism bias
b.
Suboptimization
c.
Framing problem
d.
Horizontal conflict
148. Which of the following is the most widely used form of intermodal coordination?
a.
Horseback service
b.
Fishyback service
c.
Birdyback service
d.
Piggyback service
149. Which of the following modes of transportation has the lowest transport cost?
a.
Railroads
b.
Water carriers
c.
Air freight
d.
Trucks
150. Freight carriers are classified as common carriers, contract carriers, and private carriers. Which of the
transactions below was completed using a contract carrier?
a.
An artisan sells her wares online and ships them via a for-hire carrier.
b.
A food manufacturing company ships snacks, soft drinks, and bottled water to convenience stores.
c.
A company ships merchandise from its warehouses to its retail outlets nationwide in its own fleet of
trucks.
d.
A motor carrier transports automobiles in intrastate, interstate, and foreign commerce.
e.
A major appliance retailer delivers a refrigerator, range, and microwave oven suite to a customer's
home.
151. Which of the following types of services involves an intermodal coordination system between motor
carriers and water carriers?
a.
Birdyback service
b.
Piggyback service
c.
Fishyback service
d.
Horseback service
152. Channels designed to return goods to their producers are called _____ channels.
a.
reserve
b.
direct
c.
primary
d.
reverse
153. When a logistics manager combines several unitized loads into a single, well-protected load for shipment, it
is called:
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a.
suboptimization.
b.
consolidation.
c.
containerization.
d.
palletization.
154. Which of the following is true of the role of distribution channels in a firm’s marketing strategy?
a.
They complicate the exchange process by increasing the number of marketplace contacts necessary to
make a sale.
b.
They lead to discrepancies in the market’s assortment of goods and services between the producers
and the buyers.
c.
They standardize exchange transactions by setting expectations for products including the transfer
process itself.
d.
They deter the buyers’ search for specific goods to fill their needs, as well as the sellers’ attempt to
learn what buyers want.
155. Which of the following offers the fastest mode of transportation?
a.
Water freight
b.
Pipelines
c.
Air freight
d.
Railroads
156. Order processing is an important component of the physical distribution system. What are four major
activities involved in order processing?
a.
credit check; replenish inventory; report a stockout; make accounting entries
b.
locate the order; unitize the order; containerize the order; ship the order
c.
break-bulk the order; record the sale; ship the order; adjust inventory records
d.
make accounting entries; ship the order; report a stockout; break-bulk the order
e.
credit check; record the sale; make accounting entries; ship order and adjust inventory records
157. Which of the following best represents the complete sequence of suppliers and activities that contribute to
creating and delivery of merchandise?
a.
Supply chain
b.
Warehousing
c.
Direct channeling
d.
Materials handling system
158. New technology is being utilized by retail operations to reduce the amount of time to track inventory and
record shipments. Companies such as Target and Walmart now require suppliers to attach a tiny chip with
identification information to pallets and cases of products. This technology is called:
a.
RFID
b.
ERP
c.
3PL
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d.
PCHIP
159. The management at Vision, a company that specializes in high-end eyewear, was dissatisfied with the
performance of the marketing intermediaries’ in promoting its products. The company decided to sell its
products only through standalone, exclusive boutiques owned and maintained by Vision. This is an example of:
a.
forward integration.
b.
associative integration.
c.
balanced integration.
d.
horizontal integration.
160. Which of the following distribution strategies seeks to distribute a product through all available channels in
a trade area?
a.
Exclusive distribution
b.
Associative distribution
c.
Selective distribution
d.
Intensive distribution
161. When choosing a distribution strategy, manufacturers also focus on developing and maintaining
relationships with those in their marketing channels. What is this concept called? Select the best answer from
the choices below.
a.
channel management
b.
channel coordination
c.
channel commitment
d.
channel conflict
e.
channel cooperation
162. Best Transport Solutions provides trucking services to various furniture manufacturers. The regular rate
that Best Transport would charge for moving furniture from a company’s warehouse to a specific retail store is
referred to as the _____ rate.
a.
going
b.
special
c.
class
d.
repo
163. Your first exposure to channel conflict came when you decided to offer your handmade soap through your own
website in addition to the skin care boutiques that carry it. The retailers lost no time complaining to your sales
representatives. You were involved in ________conflict.
a.
Vertical
b.
Horizontal
c.
Gray market
d.
Legal
e.
Positioning
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164. Which of the following modes of transportation ranks highest in terms of availability in different locations?
a.
Motor carriers
b.
Railroads
c.
Water freight
d.
Pipelines
165. Which of the following modes of transportation offers the most flexibility in handling?
a.
Pipelines
b.
Air freight
c.
Water freight
d.
Motor carriers
166. An intermodal coordination system between motor carriers and water carriers is known as
a.
fishyback service
b.
piggyback service
c.
birdyback service
d.
horseyback service
167. A franchise is a type of contractual marketing system in which:
a.
a wholesaler develops a line of private brands to be stocked by the retailers.
b.
a wholesaler or dealer agrees to meet the operating requirements of a manufacturer.
c.
a group of retailers establish a shared wholesaling operation to help them compete with chains.
d.
a dominant channel member exercises its power to achieve channel coordination.
168. A planned channel system designed to improve distribution efficiency and cost-effectiveness by integrating
various functions throughout the distribution chain is called a(n) _____ marketing system.
a.
intensive
b.
associative
c.
integrative
d.
vertical
169. Bremer Jewelry has two locations in Illinois within 60 miles of each other and is the only jewelry store to
carry the Hearts on Fire diamond jewelry line. Bremer has negotiated with Hearts on Fire to be the only retailer
within a 150-mile radius of both store locations and believes that this arrangement provides a competitive
advantage to the store. What type of distribution does Bremer Jewelry have with Hearts on Fire?
a.
exclusive distribution
b.
closed territory
c.
selective distribution
d.
intensive distribution
170. Each mode of transportation has its own unique characteristics, and logistics managers select the best
options for their specific transportation needs. For this particular job, you decide that your products should be
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transported via a combination of the three major modes of transportation that control the largest share of the
freight business. How will you be transporting your products?
a.
Rail carriers; motor carriers; water carriers
b.
Water carriers; motor carriers; pipelines
c.
Air carriers; rail carriers; motor carriers
d.
Motor carriers; pipelines; air carriers
e.
Rail carriers; motor carriers; pipelines
171. The number of intermediaries through which a manufacturer distributes its goods in a particular market is
referred to as _____.
a.
distribution probability
b.
distribution inertia
c.
distribution intensity
d.
distribution utility
172. Your small retail outlet prides itself on selling environment-friendly premium coffee products. You
purchase your beans from roasters who sell only fair trade-certified, Rainforest Alliance-certified, and organic-
certified coffees. In fact, you are part of a co-op that assists small farmers through the certification process with
grants and education. What vertical marketing process are you employing in distributing your products to your
customers?
a.
vertical conflict
b.
forward integration
c.
horizontal conflict
d.
backward integration
e.
functional integration
173. Direct selling is a marketing channel that moves goods directly from producer to the:
a.
retail storage warehouse.
b.
channel captain.
c.
marketing intermediary.
d.
ultimate consumer or business purchaser.
174. How has the general shift from a manufacturing economy to a service economy in the United States
affected physical distribution?
a.
Customers require more flexible—yet reliable—transportation service.
b.
A very high percentage of the transportation industry’s revenues is represented by the traditional high
volume shipments.
c.
The number of large shipments is growing much faster than the number of smaller shipments.
d.
The various elements of physical distribution have become independent of decisions made in other
areas.
175. The logistics manager of a major manufacturer is aware that there is a lack of communication and
coordination among the physical distribution departments that he is overseeing. Specifically, the materials
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handlers are lobbying upper management for a packaging system that would make their department more
efficient; but it would increase costs for other departments exponentially because of the adjustments they would
need to make to accommodate the new packaging system. There is certainly room for discussion on the matter
for the future but, for now, the manager has to ward off a problem that threatens to be serious. What is the
manager's concern?
a.
logistics
b.
cost control
c.
underachievement
d.
inventory control
e.
suboptimization
176. A fast-food giant invests in potato farms in the Midwest in order to stabilize its raw material prices. This is
an example of:
a.
situational integration.
b.
backward integration.
c.
balanced integration.
d.
horizontal integration.
177. When a major distributor of beauty supplies went out of business, you were able to acquire large amounts
of combs, brushes, hairpins, and other accessories that you sell in your small chain of four stores. You will be
restocking your stores with this merchandise for the next nine months. What kind of warehouse facility will you
use for your inventory?
a.
cold-storage warehouse
b.
distribution warehouse
c.
automated warehouse
d.
storage warehouse
e.
consolidation warehouse
178. _____ refers to the movement of products through more than one channel to reach the firm’s target market.
a.
Direct channeling
b.
Dual distribution
c.
Selective channeling
d.
Exclusive distribution
179. Which of the following marketing intermediaries will most economically cover the markets for products
sold in small units?
a.
A manufacturer’s representative
b.
A drop shipper
c.
A merchant wholesaler
d.
A broker
180. ABC Corp., a mining equipment manufacturer, provides loaders and feeder breakers for Ground Works, a
mining company. ABC Corp. regularly sends information on new products as well as on upgrades for old
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products to the management in Ground Works. ABC Corp relies on _____ to sell its products.
a.
direct channels
b.
industrial distributors
c.
manufacturer’s representatives
d.
franchisers
181. _____ typically have a long marketing channel.
a.
Standardized products
b.
Perishable products
c.
Complex products
d.
Expensive products
182. John works for an ice-cream manufacturer. His department focuses on keeping the finished products fresh
as well as ensuring that they reach the retailers on time as the products are highly perishable. In addition, his
department decides on which flavors of ice cream should be sent to which retailers in various trade areas. John
is most likely involved with:
a.
reverse management.
b.
horizontal integration.
c.
downstream management.
d.
backward integration.
183. Intermodal operation in which highway trailers and containers ride on railroad flatcars, thereby combining
the long-haul capacity of the train with the door-to-door flexibility of the truck is called a _____ service.
a.
piggyback
b.
birdyback
c.
fishyback
d.
horseback
184. Now that you're working in a physical distribution capacity, you need to understand the differences among freight
carriers. Primarily, your company delivers its goods via FedEx, UPS, and the United States Postal Service. These carriers
have the following properties in common:
a.
They are government-owned.
b.
They are common carriers.
c.
They are private carriers.
d.
They are contract carriers.
e.
They observe no rate or service regulations.
185. Birky Trucking is a family-owned trucking company serving the agriculture industry in the Midwest. They
have a fleet of 8 trucks and establish contracts with individual farmers or manufacturing companies who
contract with farmers such as Libby's and DelMonte. Birky Trucking does not offer their services to the general
public and are classified as _____ carriers.
a.
contract
b.
private
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c.
common
d.
over-the-road
186. The movement of goods and services from producers to customers is called _____.
a.
distribution
b.
promotion
c.
production
d.
valuation
187. Which of the following modes of transportation is typically associated with high frequency of shipment?
a.
Pipelines
b.
Railroads
c.
Water freight
d.
Air freight
188. The management at Granger Industries is evaluating their distribution system to determine if cost-cutting
measures will impact performance. Ralph, an employee with experience in the implementation of total quality
management programs, suggests that the company should consider synergies between elements of the
distribution system instead of judging each activity on its own merits. Ralph is trying to avoid:
a.
polarization.
b.
suboptimization.
c.
the optimism bias.
d.
the framing problem.
189. Clarke’s, a popular and high-end brand of men’s formalwear, has just five main distributors to cater to the
five zones in the country: north, south, east, west, and central. According to the information given in this case,
Clarke’s uses:
a.
closed sales territories.
b.
contractual collusion.
c.
tying agreements.
d.
intensive distribution.
190. The process through which a manufacturer attempts to gain greater control over inputs in its production
process, such as raw materials, is called _____ integration.
a.
balanced
b.
horizontal
c.
synergic
d.
backward
191. A vertical marketing system (VMS) in which a single owner operates the entire marketing channel is called
a(n) _____ marketing system.
a.
corporate
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b.
administered
c.
contractual
d.
community
192. Peach, a cosmetic company, sells its products only through some independent representatives. To buy a
Peach product, customers will have to contact a representative and place an order for the products they need.
This information indicates that Peach:
a.
uses a direct selling strategy.
b.
relies on channel captains to sell its products.
c.
employs category managers to sell its products.
d.
uses truck jobbers to sell its products.
193. The owners of an organic restaurant have purchased the farm that supplies their fresh herbs and vegetables. This is an
example of which type of vertical marketing system or process?
a.
A contractual marketing system
b.
Backward integration
c.
Forward integration
d.
Cooperative integration
e.
A purchase-based marketing system
194. The basic antidote to channel conflict is effective cooperation among channel members. Who among the
following is primarily responsible for providing the leadership necessary to achieve this kind of cooperation?
a.
Vertical leader
b.
Channel captain
c.
Channel navigator
d.
Horizontal leader
195. You are conducting a business startup workshop sponsored by the Small Business Administration. The
workshop attendees are all aspiring business owners who are excited yet fearful about the prospect of starting
their own businesses. Earlier in the workshop, you asked the attendees to complete a questionnaire about their
major concerns in starting a new business. The majority of the respondents indicated their biggest concern is
lack of business experience.
Based on this concern, which of the following business strategies is most appropriate for these workshop
attendees?
a.
start their business as a full-service wholesaler
b.
start their business as a franchisee
c.
start their business as a mail-order wholesaler
d.
start their business as a merchant wholesaler
e.
start their business as a franchiser
196. In addition to traditional drug stores, Dr Scholl’s foot care company sells its products through convenience
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stores as well as through telemarketing to podiatrists. Which of the following is being employed by Dr Scholl’s
foot care company to sell its products?
a.
A reverse channel
b.
Exclusive distribution
c.
A direct channel
d.
Dual distribution
197. The dominant and controlling member of a marketing channel is known as a:
a.
vertical lead.
b.
horizontal lead.
c.
channel captain.
d.
channel navigator.
198. Your company's leathergoods are very well received in the marketplace. But you still have not been able to
resolve the issue of packaging. These bags and briefcases have to be packaged substantially so your customer
receives a flawless product, but you have to come up with a solution that will allow the consumer to recycle all
that packaging in some way. You decide to solicit suggestions from the staff on how to either implement a
recycling program or devise some other packaging methodology that is environmentally friendly. What
marketing channel are you managing? Select the best answer from the choices below.
a.
reverse channel
b.
dual channel
c.
logistic channel
d.
distribution channel
e.
direct channel
199. Which of the following modes of transportation provides the most efficient way for moving bulky
commodities over long distances?
a.
Railroads
b.
Motor carriers
c.
Water carriers
d.
Pipelines
200. Which of the following distribution strategies seeks to distribute a product through a limited number of
channels?
a.
Discriminative distribution
b.
Associative distribution
c.
Selective distribution
d.
Intensive distribution
Indicate one or more answer choices that best complete the statement or answer the question.
201. There are many clothing retailers in Ida's city, but she sells her line of sweaters in only about a dozen boutiques. Ida's
approach to distribution intensity yields the following benefit(s):
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a.
Cooperative advertising opportunities
b.
Exclusivity
c.
Compliance with Ida's rules for displaying her sweaters
d.
Maximum convenience for Ida's customers
e.
All of the above
202. Dan must choose how many warehouses to use and where to locate them for his automotive supply firm. His
decision will be influenced by all of the following considerations except:
a.
How customer service will be affected
b.
Intermodal operations
c.
Materials handling costs
d.
Delivery costs
e.
Intermodal coordination
Match each item with the correct statement below.
a.
distribution channel
b.
forward integration
c.
logistics
d.
dual distribution
e.
direct selling
f.
intensive distribution
g.
selective distribution
h.
exclusive distribution
i.
tying agreement
j.
backward integration
k.
administered marketing system
l.
corporate marketing system
m.
contractual marketing system
n.
private carriers
o.
materials handling system
p.
franchise
q.
common carriers
r.
upstream management
s.
suboptimization
t.
downstream management
203. An organized system of marketing institutions that enhances the physical flow of goods and services, along
with ownership title, from producer to consumer or business user is called a(n) _____.
204. The term _____ refers to the process of coordinating the flow of information, goods, and services among
members of the marketing channel.
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205. _____ is a marketing strategy in which a producer on its own establishes sales contact with its product’s
final users.
206. _____ refers to the movement of products through more than one channel to reach the firm’s target market.
207. Distribution of a product through all available channels is called _____.
208. Distribution of a product through a limited number of channels is called _____.
209. Distribution of a product through a single wholesaler or retailer in a specific geographic region is called
_____.
210. An arrangement that requires a marketing intermediary to carry items other than those they want to sell is
called a(n) _____.
211. The process through which a firm attempts to control downstream distribution is called _____.
212. The process through which a manufacturer attempts to gain greater control over inputs in its production
process is called _____.
213. A VMS in which a single owner operates the entire marketing channel is called a(n) _____.
214. A VMS that achieves channel coordination when a dominant channel member exercises its power is called
a(n) _____.
215. A VMS that coordinates channel activities through formal agreements among participants is called a(n)
_____.
216. A contractual arrangement in which a wholesaler or retailer agrees to meet the operating requirements of a
manufacturer is called a(n) _____.
217. Controlling part of the supply chain that involves raw materials, inbound logistics, and warehouse and
storage facilities is called _____.
218. Controlling part of the supply chain that involves finished product storage, outbound logistics, marketing
and sales, and customer service is called _____.
219. A condition that results when individual operations achieve their objectives but interfere with progress
toward broader organizational goals is referred to as _____.
220. Businesses that provide transportation services as for-hire carriers to the general public are called _____.
221. Transporters that provide service solely for internally generated freight are called _____.
222. The set of activities that move production inputs and other goods within factories, warehouses, and
transportation terminals is called the _____.
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223. Discuss the three classes of freight carriers.
224. Describe the role of distribution channels in a firm’s marketing strategy.
225. Discuss the five major transportation alternatives.
226. Discuss RFID and ERP systems as methods for streamlining and managing logistics.
227. List the six major elements of the physical distribution system along with the focus area for each.
228. Define dual distribution. Why do marketers usually adopt a dual strategy? Give some examples of firms
that employ dual distribution.
229. Define direct channel and direct selling. Describe the party plan as a direct selling strategy. Give an
example of a firm that sells its products using the party plan.
230. Define distribution intensity and explain its three levels.
231. Define supply chain. Describe a manufacturing supply chain with an example.
232. Describe the factors that influence a firm’s choice of a marketing channel strategy.
233. What is the advantage of intermodal transportation? Give examples of intermodal coordination.
234. Compare and contrast wholesalers and agents/brokers.
235. Discuss the two categories of channel conflict. Give an example of each.
236. Discuss the three types of vertical marketing system.
237. Discuss the three types of contractual marketing systems.
238. What is a vertical marketing system? Distinguish between forward integration and backward integration.
239. Define reverse channels. List some factors that have contributed to the increasing importance of reverse
channels. How do firms operate reverse channels?
240. Discuss the legal problems associated with exclusive distribution.
241. Discuss the concept of protective packaging and materials handling.
242. Define marketing intermediaries. Give two examples.
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