91. (p. 413) Firms that rely on electronic retailing are almost guaranteed success because they give companies easy
access to literally millions of consumers all over the world.
92. (p. 413) Electronic retailing is selling goods and services over the Internet to the final consumer.
93. (p. 413) Because of delivery issues, Internet sales are predicted to decline to $150 billion in 2005.
94. (p. 413) Some Web sites are trying to improve their service by providing assistance from a real person.
95. (p. 413) A large number of traditional retailers have developed online sites in recent years, giving customers a
choice of shopping techniques.
96. (p. 413) Traditional retailers that have begun using the Internet to supplement their physical stores are finding
that the Internet not only provides a new way to sell goods, it also requires a new system to distribute goods.
97. (p. 414, Reaching Beyond Our Borders box) According to the “Reaching Beyond Our Borders” box in Chapter 15, using
Asian factories to manufacture the clothes sold in Zara is the reason its distribution system is so fast.
98. (p. 414) Telemarketing is the sale of goods and services by telephone.
99. (p. 414) Vending machines are used primarily to sell goods where consumers have little interest in
convenience.
100. (p. 415) Mall owners tend to like kiosks because they create a marketplace atmosphere.
101. (p. 414) One drawback of kiosks is that their high overhead costs result in low profit margins.
102. (p. 415) Direct selling is a distribution strategy that makes extensive use of the Internet and telephone.
103. (p. 415) Because so many people work outside the home and aren’t at home during the day, companies that
use direct selling are sponsoring parties at workplaces to sell their products.
104. (p. 415) In multilevel marketing, salespeople not only sell the product, they also recruit other people to sell
the product.
105. (p. 415) In multilevel marketing “upliners” recruit “downliners” and receive a commission on the sales their
downliners make.
106. (p. 415) The major disadvantage of multilevel marketing is that the high entry cost for most sellers means that
only relatively wealthy individuals can use this approach.
107. (p. 415) Although there have been some unethical firms involved in multilevel marketing, this form of
retailing remains quite successful.
108. (p. 415) Direct marketing involves having a salesperson visit the customer’s home or place of business.
109. (p. 415) A major advantage of direct marketing is that it is a very convenient way for consumers to shop.
110. (p. 415) Telemarketing, catalog sales, and online shopping are all examples of direct marketing.
111. (p. 413) In the battle between electronic retailers and traditional “bricks and mortar” retailers, the electronic
retailers seem to have all of the advantages needed to emerge as the clear winners.
112. (p. 414-415) Many firms that want to use an intensive distribution strategy would find vending machines an
attractive method of selling their goods.
113. (p. 414) Fancy Feet sells high quality socks and stockings by sending catalogs to customers and offering them
a toll-free telephone number so that they can call in their orders 24 hours a day any day of the year. Fancy Feet
uses telemarketing.
114. (p. 415-416) Direct selling has all but disappeared as a major form of nonstore retailing because the trend
toward two-income households means fewer opportunities for selling in the home.
115. (p. 415) In multilevel marketing, salespeople have little incentive to recruit new salespeople, because the new
salespeople may compete against them and reduce their income.
116. (p. 415) Chris Cole is a salesperson for Green Scene Lawn Care products. Chris’ job requires him to sell
Green Scene products, but he is also expected to recruit more salespeople for the company. He will earn a
commission on all of the sales earned by the salespeople he recruits. Green Scene is using a retail distribution
strategy known as multilevel marketing.
117. (p. 415-416) An important reason for the popularity of direct marketing is that many people enjoy developing a
personal relationship with a salesperson that comes directly to their home or place or work.
118. (p. 416) Traditional retailers can stay competitive with online retailers by being part of a unified system of
distribution.
119. (p. 416) There are four types of channel systems available that tie firms together in a unified way.
120. (p. 416) In a corporate distribution system, all of the organizations in the distribution channel are owned by
one firm.
121. (p. 416) Corporate distribution systems consist of several independently owned intermediaries, all of them
organized as corporations.
122. (p. 416) A problem with the corporate distribution system is that the manufacturer has very little control over
the operations of the retailers and other marketing intermediaries in the system.
123. (p. 416-417) Franchise systems, wholesaler-sponsored chains, and retail cooperatives are all forms of
contractual distribution systems.
124. (p. 416) One advantage of a franchise system of distribution is that it results in a consistent level of quality
and service.
125. (p. 416-417) In retail cooperatives, the members of the distribution system are bound to cooperate by a
contractual agreement.
126. (p. 417) Wholesaler-sponsored chains consist of stores that are all owned by a single corporation.
127. (p. 417) Retailers agree to cooperate with producers in administered distribution systems because the
producers provide extensive marketing services to the retailer for free.
128. (p. 417) In an administered distribution system, retail stores manage all of the marketing functions at the retail
level.
129. (p. 417) The entire collection of organizations that move goods and services from the source of raw materials
to the final consumer is referred to as the supply chain.
130. (p. 418) Because supply chains are so complex, firms have found it difficult to outsource supply chain
management.
131. (p. 417) The process of managing the movement of raw materials, parts, work in progress, finished goods,
and related information through all of the organizations involved in the supply chain in a timely manner is
called multi-modal management.
132. (p. 417) Supply chain management manages the movement of relevant information as well as the movement
of parts and finished goods through all organizations involved in the supply chain.
133. (p. 417) Supply chain management not only deals with the movement of materials, parts, and finished goods;
it also manages the return of goods and recycling of materials when appropriate.
134. (p. 416) Imaginex Toys, Inc. produces toys designed to stimulate the imaginations of young children. In order
to control all of the marketing operations, Imaginex owns all of the organizations in the channel of distribution
for its toys, including a chain of Imaginex retail stores. The approach taken by Imaginex is known as an
administered distribution system.
135. (p. 417) Even though all of the hardware stores that operate under the name of Hardie’s Hardware are
independently owned and managed, they have signed an agreement to participate in chain promotions, and
cooperate as a unified system of stores. The Hardie’s Hardware stores are using a distribution system known as
a wholesaler-sponsored chain.
136. (p. 417) Hi! Notes Card Shops has been approached by Novel Teas, a producer of herbal teas and exotic
spices. Novel Teas wants to sell its products in the Hi! Notes stores under an administered distribution system.
If Hi! Notes accepts Novel Teas proposal, it will perform many marketing services for the tea maker in
exchange for a flat fee.
137. (p. 417) Lazee Ladd Furniture obtains materials from several suppliers and uses these materials to produce its
goods. It relies on several marketing intermediaries to help it distribute the furniture. Together, Lazee Ladd, its
suppliers, and the marketing intermediaries are all part of a supply chain.
138. (p. 417-418) For a supply chain to be efficient, all of the activities must be performed by organizations that are
owned by the manufacturer.
139. (p. 417) Denise Shipman works in the marketing department of a major manufacturing firm. She spends a
great deal of time trying to coordinate the movement of materials, parts, finished goods, and information
through all of the organizations involved in the distribution process. These activities suggest that Denise’s job
responsibilities focus on supply chain management.
140. (p. 418) In the past, firms had very little interest in the distribution issues of marketing.
141. (p. 419) Logistics involves planning, implementing, and controlling the physical flow of materials, final
goods, and related information from points of origin to points of consumption.
142. (p. 418-419) With the current emphasis on product development, pricing, branding, and promotion, the
physical distribution of materials and goods is no longer a major concern of marketing.
143. (p. 418) Trade compliance systems help marketers manage problems with the process of moving goods
through customs.
144. (p. 419) Materials handling is that part of logistics that deals with moving goods within the warehouse, from
the warehouse to the production floor, and to various work stations along the production process.
145. (p. 419) Inbound logistics is concerned with the flow of finished products from the manufacturer to the final
consumer.
146. (p. 419) Inverted logistics is the term used for the activities involved in bringing products back to the
producer due to defects or for recycling of materials.
147. (p. 419) Third-party logistics is the term used to describe the use of outside firms to help move goods from
here to there.
148. (p. 420, Dealing with Change box) According to the “Dealing with Change” box in Chapter 15, improved logistics
149. (p. 419) Logistics is concerned with the flow of information as well as with the flow of goods.
150. (p. 419) Because some of its key suppliers have been late with their shipments of materials and parts, Marnex
Enterprises has had to shut down its manufacturing plant for several hours twice in the past week. These
difficulties indicate that Marnex has done a poor job in managing its inbound logistics.
151. (p. 419) Clay Gates is a distribution specialist who has been looking at ways to improve the flow of parts and
materials from his company’s warehouses to the production line, and the movement of work in process
throughout the company’s factories. These efforts suggest that Clay’s primary interest is in improving his
company’s inbound logistics.
152. (p. 419) Corinne is a marketing manager who specializes in logistical problems. In her position, Corrine is
likely to focus mainly on managing the flow of goods, and leave issues about how to manage the flow of
information to managers in other areas of marketing.
153. (p. 419) Zintelle, Inc. is a large manufacturing firm. It has recently reached an agreement with an intermodal
marketing company to significantly reduce the cost of shipping its finished goods to some major business
customers. This agreement will help Zintelle reduce the costs associated with outbound logistics.
154. (p. 420-421, figure 15.7) The basic transportation service criteria are speed, cost, dependability, flexibility,
frequency, and reach.
155. (p. 420) In the U.S. the largest percentage of goods is shipped by truck.
156. (p. 421) Motor vehicles like trucks and vans handle a little over 25 percent of freight transportation in the
U.S.
157. (p. 421) Ship transportation is the least expensive way to send goods overseas.
158. (p. 421) Water transportation has declined to the point where it now accounts for less than 5 percent of all
shipments.
159. (p. 421) Water transportation is inexpensive but slow.
160. (p. 421) Trucks can deliver small shipments to remote locations.
161. (p. 420) When truck trailers are placed on rail cars to travel long distances, the process is known as
leapfrogging.
162. (p. 422) Pipelines are used primarily to transport water, petroleum, and petroleum products.
163. (p. 422) Pipelines move liquid products very efficiently.
164. (p. 420) Railroads are an energy-efficient mode of transporting many types of goods.
165. (p. 422) Most international shipments move by air.
166. (p. 422) Although air transport currently accounts for only a small percentage of all shipments, it has become
a critical mode in many industries.
167. (p. 422) The air freight industry is starting to focus on global distribution.
168. (p. 422) The use of multiple modes of transportation to complete a single long-distance movement of freight
is known as multi-carrier shipping.
169. (p. 422) Services that specialize in intermodal shipping are known as intermodal marketing companies.
170. (p. 421) A freight forwarder breaks one large shipment into multiple small shipments so that it can be
transported by trucks or aircraft with limited cargo capacities.
171. (p. 421) Some freight forwarders offer warehousing and customs assistance.
172. (p. 422) There are three major types of warehouses: centralized, dispersed, and mode-specific.
173. (p. 422-423) A distribution warehouse stores products for relatively long periods of time.
174. (p. 422) Intermodal marketing companies specialize in using multiple modes of transportation to complete a
single long-distance movement of freight.
175. (p. 422) Seasonal goods are kept in storage warehouses.
176. (p. 423) RFID stands for real forward identification details.
177. (p. 423) RFID tags are used to keep track of cattle.
178. (p. 420) An increase in energy prices would encourage shippers to rely more on rail transportation.
179. (p. 421) Freight forwarders are particularly useful to large firms who must ship very large quantities on short
notice.
180. (p. 422) The use of pipelines should decline in the future because this mode is suitable only for shipping
petroleum.
181. (p. 421) Small-timers, Incorporated is a small manufacturer of charm bracelets that include watches as well as
keepsake items and trinkets. The company seldom has shipments large enough to be transported cost-efficiently
by filling an entire truck or railcar. Small-timers could benefit by relying on a freight forwarder to help it
distribute its goods.