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1. (p. 404) Organizations that assist in moving goods and services from producers to business and consumer users
are called financial intermediaries.
2. (p. 404) Retailers and wholesalers are two major types of marketing intermediaries.
3. (p. 404) Wholesalers are marketing intermediaries who sell goods or services to ultimate consumers.
4. (p. 404) A channel of distribution consists of the marketing intermediaries who join together to transport and
store goods in their path from producers to consumers.
5. (p. 404) Brokers are marketing intermediaries that do not take title to the goods they help distribute.
6. (p. 404) Retailers are marketing intermediaries who sell to ultimate consumers.
7. (p. 404-405, figure 15.1) Some manufacturers sell directly to consumers or businesses rather than relying on
marketing intermediaries.
8. (p. 404) Agents are marketing intermediaries who take title to the goods they distribute and provide credit to
customers who need it.
9. (p. 404) Manufacturers are usually able to perform marketing functions such as transporting, advertising, and
storing, faster and more cheaply than marketing intermediaries.
10. (p. 405) One way marketing intermediaries improve marketing efficiency is by reducing the number of
exchange relationships necessary to move goods through the channel of distribution.
11. (p. 405) Some economists would say that intermediaries add costs to the channel of distribution and need to be
eliminated.
12. (p. 405) Marketers claim that intermediaries add value to the channel of distribution that outweighs the cost.
13. (p. 407, figure 15.3) Marketing costs make up less than 25 percent of the total cost of the goods consumers buy.
14. (p. 407) The activities performed by most marketing intermediaries are not essential to the marketing process.
15. (p. 407) The best way to reduce the cost of goods is to eliminate marketing intermediaries from the distribution
channel.
16. (p. 407) Marketing intermediaries have survived because they have been able to perform marketing functions
more efficiently and effectively than a manufacturer or consumer could perform these functions.
17. (p. 407) The costs added by marketing intermediaries usually outweigh the value they create.
18. (p. 404) Jessica Talmadge is a real estate agent who brings together the buyers and sellers of houses and
commercial property. Jessica helps the parties negotiate the terms and conditions of real estate sales, but she
does not take title to the property, provide credit, or assume any risks associated with the exchanges she helps
19. (p. 404) Sav-U-More Grocery Store sells a wide range of foods and household supplies to households in
Miller’s Creek, a suburb of a large city. The store advertises that its prices are much lower than the prices
charged by larger supermarket chains in the area. This low price approach means that Sav-U-More is a classic
example of a merchant wholesaler.
20. (p. 404) Although Helpusell brings together buyers and sellers and helps negotiate exchanges, it does not
actually take title to any of the goods being traded. Helpusell would be classified as an agent or broker.
21. (p. 407) Most marketing intermediaries have survived in the past because consumers were unaware of how
much these companies add to the cost of distributing goods.
22. (p. 404) An effective channel of distribution does more than simply ensure that goods are transported
efficiently from producer to buyer.
23. (p. 407) Marketing intermediaries must charge a price for the functions they perform. Thus, a surefire way to
reduce distribution costs is to eliminate marketing intermediaries from the channel of distribution.
24. (p. 405-406, figure 15.2) Currently, Halperin Electrical sells directly to thousands of industrial customers. Halperin
could reduce the number of exchange relationships by including wholesalers in its channel of distribution.
25. (p. 407) Hartselle Home Products, Inc., manufacturers a variety of inexpensive household gadgets. The
company has decided to cut costs by eliminating all of the marketing intermediaries who help distribute its
products. Hartselle will be able to reduce its total marketing costs by eliminating the marketing functions these
intermediaries perform.
26. (p. 407) To marketers, the term utility refers to the value added to goods or services by organizations when
they make the product more useful or accessible to consumers.
27. (p. 407) A total of four types of utility are provided by marketers: primary, secondary, marginal, and total.
28. (p. 407–408) Producers normally provide form utility, but retailers sometimes also provide this type of utility.
29. (p. 407–409) Marketing intermediaries concentrate on providing mainly form, time and place utility, while
producers focus on the provision of possession, information, and service utility.
30. (p. 408) Delivery, installation, and follow-up services are the most common ways that marketing
intermediaries provide information utility.
31. (p. 408) One way that marketers can provide utility is by making sure the good is available at a location that is
convenient for consumers.
32. (p. 407–409) Marketers tend to concentrate on providing form utility, and rely on production workers,
accountants and financial managers to provide other types of utility.
33. (p. 408–409) Salespeople can be important providers of information utility.
34. (p. 407–408) Form utility has become the most important utility provided by retailers.
35. (p. 409) A key way for traditional retailers to compete with direct marketing is by providing outstanding
service utility.
36. (p. 407–409) Marketers normally provide form, time, place, information and service utility, but they are seldom
involved in providing possession utility.
37. (p. 408) Providing buyers with credit terms such as “90 days same as cash” is a way marketing intermediaries
can provide time utility to customers.
38. (p. 407–409) In today’s competitive market environment, traditional retailers will need to put more emphasis on
providing form and place utility, and less emphasis on service utility.
39. (p. 408–409) Once the final customer has taken title to a good, marketing intermediaries no longer are involved
in providing utility to the customer.
40. (p. 408–409) Jack Deck is a computer salesperson for a major retail electronics chain. When he advises
customers to help them select a computer that will meet their needs, Jack is providing information utility.
41. (p. 408) Frank Crimmins was driving on Interstate 85 in eastern Alabama when he noticed he was running low
on fuel. Frank was relieved when he found a gas station open at the next exit just 2 miles ahead. This is an
example of the value place utility provides to a consumer.
42. (p. 410) Some marketing intermediaries make both wholesale and retail sales.
43. (p. 410) A retail sale is a sale to a consumer for his or her own use.
44. (p. 410) The sale of goods to a business purchasing the items for resale is a wholesale transaction.
45. (p. 410) A firm that makes wholesale sales cannot also legally make retail sales.
46. (p. 410) Merchant wholesalers do not take title to the goods they handle.
47. (p. 410) About 80 percent of all wholesalers are classified as merchant wholesalers.
48. (p. 410) The two main types of merchant wholesalers are storage wholesalers and distribution wholesalers.
49. (p. 410) Limited-function wholesalers are one type of merchant wholesaler.
50. (p. 410) Cash-and-carry wholesalers and drop shippers are both classified as limited-function wholesalers.
51. (p. 410) Rack jobbers furnish racks or shelves full of merchandise to retailers and keep title to these goods until
they are sold.
52. (p. 410) Rack jobbers sell goods on consignment, splitting the profits from their sales with a retailer.
53. (p. 410) Although drop shippers own merchandise they have shipped to buyers, they do not actually handle,
stock, or deliver this merchandise themselves.
54. (p. 410) Drop shippers are wholesalers that stock heavy or bulky items and transport them to retail stores.
55. (p. 410) Drop shippers typically put together many small shipments to form a single larger shipment.
56. (p. 410) Cash-and-carry wholesalers are limited-function wholesalers that serve mostly smaller retailers with a
limited assortment of products.
57. (p. 410–411) The main difference between agents and brokers is that agents perform a wide array of marketing
functions while brokers only negotiate exchanges between buyers and sellers.
58. (p. 410) As long as they do not represent competing products, manufacturer’s agents can represent more than
one manufacturer in a given sales territory.
59. (p. 410–411) A key distinction between agents and brokers is that agents tend to maintain long-term relationships
with the people they represent whereas brokers are hired on a temporary basis.
60. (p. 411) A sales agent is an agent who represents the interests of the consumer when negotiating terms of
purchases made directly from a producer.
61. (p. 411, figure 15.4) A full-service wholesaler will provide suppliers with market information they can’t afford or
can’t obtain themselves.
62. (p. 411, figure 15.4) Wholesalers may provide market information and business consulting services.4
63. (p. 410) Larry and Dale Ingram solicit orders for lumber from area wholesalers and retailers specializing in
building supplies and arrange to have the orders shipped directly from nearby logging companies. Larry and
Dale are drop shippers.
64. (p. 410) Henry Hart supplies shelves of inexpensive plastic toys to grocery stores, supermarkets, and drug
stores. He keeps title to the goods until they are sold and then splits the profits with the retailer. Henry is a drop
shipper.
65. (p. 410) Barbara Dixon operates a small business out of her home. She makes a trip to a local Riteprice Office
Supply about once a month to buy computer and office supplies for her business. The prices at the Riteprice are
very low, but it does not offer credit or delivery services. Riteprice is a cash-and-carry wholesaler.
66. (p. 410–411) Merrill helps growers of fresh fruits and vegetables negotiate sales to food processing companies.
However, once he has helped negotiate the transaction, he does not maintain a long-term relationship with the
growers. Merrill is an example of a sales agent.
67. (p. 410–411) Melanie is a broker who has just helped negotiate a major deal. As a broker Melanie can expect to
earn a fixed amount of profit for her efforts regardless of the dollar value of the contract she negotiated.
68. (p. 411) Retail organizations employ more than 11 million people in the U.S.
69. (p. 412, figure 15.5) Discount stores, department stores, supermarkets, and specialty stores are all among the major
types of retail stores.
70. (p. 412, figure 15.5) Department stores offer a wide variety of products that are sold in separate departments.
71. (p. 412, figure 15.5) Warehouse clubs seldom try to compete on price.
72. (p. 412, figure 15.5) Discount stores compete mainly on the basis of price.
73. (p. 412, figure 15.5) A category killer is an extremely successful product that kills the sales of other products in its
category in a retail store.
74. (p. 411) Specialty stores use variety as a competitive tool.
75. (p. 412, figure 15.5) Category killer stores tend to compete mainly on the basis of superior service.
76. (p. 412, figure 15.5) Warehouse clubs are usually smaller than supermarkets.
77. (p. 412, figure 15.5) Discount stores and department stores sell products that are usually priced about the same.
79. (p. 412) Candy, gum, cigarettes, and popular magazines are usually distributed using a selective distribution
strategy.
80. (p. 412) A distribution strategy that puts the product into as many retail outlets as possible is known as an
intensive distributive strategy.
81. (p. 412) Producers of shopping goods such as furniture, appliances, and clothing usually rely on an exclusive
distribution strategy.
82. (p. 412) An advantage of a selective distribution strategy is that consumers are able to find the product at a
wide variety of retailers.
83. (p. 412) Retailers that participate in an exclusive distribution strategy will have a strong incentive to carry a
large inventory of the good and provide exceptional service to customers.
84. (p. 411) In order to succeed in today’s markets retailers must compete with low prices.
85. (p. 412, figure 15.5) Words 4 Hire is a nationwide chain of stores that offers such a huge selection of paperback
and hardback books at such competitive prices that small local bookstores have a hard time competing with
them. Words 4 Hire is best classified as a discount store.
86. (p. 412, figure 15.5) Saul-Mart is the name of a new chain of discount stores. A major part of Saul-Mart’s
competitive strategy is likely to be based on keeping its prices lower than those of other types of retailers.
87. (p. 412) Soundworthy Stereo is a producer of high quality speakers and stereo components. The company sells
its products through a few preferred retailers in any geographic area. Soundworthy uses a selective distribution
strategy.
88. (p. 412) The main difference between selective distribution and exclusive distribution is the number and type
of market segments the firm chooses. In a selective strategy, a variety of profitable niche markets are selected,
while in an exclusive strategy one specific market segment is targeted, and all others are excluded.
89. (p. 412) The Newsville City Press is a daily newspaper serving a city with a population of just over 200,000.
The publishers have placed vending machines for their paper throughout Newsville and its suburbs. They also
sell their papers at most of the supermarkets, convenience stores, bookstores, and drug stores in the area. The
Newsville City Press uses an intensive distribution strategy.
90. (p. 412) The owners of the TriCities Mall recently renovated the mall’s interior. Much of the interior of the
Mall was made to look like scenes from famous movies. The mall also hired employees to dress like characters
from these movies. There are many types of shops in the mall, including six different jewelers, however only
one jeweler carries the very expensive Romex brand of watch. Romex appeals to customers who are looking for
status in their jewelry. Romex is practicing exclusive distribution by placing its brand in only one store in a