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a. dual distribution, involving direct online sales and intermediary sales through a distributor
b. a direct channel, specifically a company-run e-commerce website
c. a marketing intermediary, specifically a fresh food and produce distributor
d. a direct channel, specifically open-air markets across the region
101. Having worked in a large law firm for quite a few years, you’ve decided to start your own legal practice
helping people write up their wills and plan for their estates. The success of your new business will depend
largely on the connections you’ve made or can make in your hometown of Minneapolis and the nearby city of
St. Paul. Which type of distribution channel will work best for your objectives, and why?
a. Your desire to build personal relationships with people in a concentrated geographic location means you
will need to set up a short distribution channel without intermediaries.
b. Due to the concentrated geographic location of your potential customers, you will need to set up a short
distribution channel with one or two intermediaries who can facilitate the exchange process.
c. You’d like to establish and maintain personal relationships with your clients in a business-to-business
context, so you should set up a short distribution channel.
d. Because of the challenges involved in identifying potential customers for your new law firm, you will
need to engage the services of several sales and marketing intermediaries who can assist you.
102. 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.
103. You’re the marketing arm of your family’s business, Happy Valley Farms, where you raise organic beef,
pork, and lamb. Up until last year, you used a very short distribution channel – you were marketing and selling
directly to your local customers. But now you’ve doubled the size of your farm and intend to sell to customers
throughout the state, and you’re not sure this approach still works for you. Which type of distribution channel
will work best for your current and future needs, and why?
a. Given that your business has succeeded on personal relationships, you should continue to use a short
distribution channel without any intermediaries.
b. If you involve intermediaries, you will lose all the profits you might gain from expanding your business,
so you should continue to avoid any intermediaries.
c. Your business’s need to warehouse and transport perishable products throughout the state mean that you
will need to involve a couple of intermediaries in your new, still relatively short distribution channel.
d. Doubling the size of your business changes everything, and you’ll now need a long distribution channel
involving logistics and sales and marketing intermediaries who can assist you.
104. 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
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d. Cooperative
105. Everyone is familiar with Bic writing pens and pencils, which are sold in thousands of grocery stores,
convenience stores, and discount retailers around the world. As the marketing director for this division of the
Bic corporation, you’ve set up a fairly long distribution channel for the company’s writing instruments because:
a. it’s the appropriate channel for distributing products to other businesses.
b. it’s more cost effective to outsource the sales function rather than hire a sales force big enough to address
all of your international customers.
c. maintaining personal relationships with your customers is not important.
d. it gives you greater control over the flow of your goods out to the ultimate consumers.
106. 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
107. Which of the following distribution strategies seeks to distribute a product through a limited number of
retailers?
a. Discriminative distribution
b. Associative distribution
c. Selective distribution
d. Intensive distribution
108. Which of the following statements about intermediaries in a distribution channel is true?
a. As much as possible, a producer of goods or services should try to avoid using intermediaries in order to
keep more profits.
b. For many producers, partnering with the right intermediaries can result in more sales and higher profits.
c. By law, producers of goods or services are required to use intermediaries.
d. Intermediaries are always able to perform the distribution functions more effectively and less
expensively than a producer of goods and services.
109. Thanks to a number of investors, you’re ready to launch your new business manufacturing imported leather
furniture, such as sofas, chairs, and ottomans. You can imagine your products selling in furniture stores,
department stores, and maybe even some grocery superstores that also carry furniture, all across the country and
beyond. Which type of distribution channel will work best for your objectives, and why?
a. Personal relationships will make or break your new business, so you should use a short distribution
channel without any intermediaries.
b. Intermediaries will diminish your profit potential, so you should minimize the number of intermediaries
involved and create a short distribution channel.
c. The fact that you are using imported leather means you are already part of the leather manufacturer’s
long distribution channel.
d. Given all of the logistical and marketing assistance you’ll need to effectively reach so many customers
over such a large territory, a long distribution channel involving multiple intermediaries would be best for you.
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110. 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
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
111. 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
112. 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
113. 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
114. On the first day of your new summer job working in a warehouse, you notice that groups of cartons have
been stacked onto wooden palettes and wrapped together tightly with transparent plastic. Your boss explains
that this is called unitizing. He mentions several reasons why the company unitizes except that:
a. it makes cartons of goods easier to move within the warehouse.
b. it reduces the cost of shipping the goods.
c. it helps protect the goods from getting damaged.
d. it helps protect the goods from getting pilfered or stolen.
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115. 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
116. You’re proud to be the marketing director for HootSuite, an online tool that allows social media marketers
to create, schedule, and monitor their social media promotions. You don’t see any reason to involve numerous
intermediaries in your distribution channel because:
a. it would only diminish your profit margins without offering any benefits.
b. you’re selling to such a tiny group of customers that you can manage your own sales efforts within the
company.
c. you’re marketing a digital product in a B2B environment.
d. you can store and warehouse your own product before it’s sold.
117. 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
118. 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
119. 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
120. You’re the marketing director for a new wrinkle-reducing skincare product manufacturer. Your moderately
priced skincare products are quite different from others on the market, and you’d like to make personal contact
with your target market – women over 40 – so you can demonstrate the use and benefits of your product. Which
distribution channel makes the most sense for your objectives?
a. Dual distribution, involving in-home sales demonstrations plus drugstore sales
b. A marketing intermediary, specifically drugstores and grocery stores
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c. A direct channel based strictly on in-home sales demonstrations and order-taking
d. A direct channel involving in-home, informercial, and online sales demonstrations and order-taking
121. 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
122. 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
123. Which of the following modes of transportation has the lowest transport cost?
a. Railroads
b. Water carriers
c. Air freight
d. Trucks
124. 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
125. Over the last 10 years, you’ve dedicated your life to developing a completely unique fitness program, which
is how you’ve become one of the premier physical trainers in Los Angeles. Now you’re ready to take your
business to an entirely new level by launching your first line of exercise DVDs aimed primarily at women in
their 20s and 30s. You’d like to be able to show your target audience exactly how to use your program so they
get the best results, so you’ve determined that ______is the best fit for your objectives.
a. a marketing intermediary, specifically sporting goods stores
b. dual distribution, involving online sales and sporting goods store sales
c. a direct channel involving informercial and online sales demonstrations and order-taking
d. a direct channel, specifically a company run e-commerce site
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126. 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
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
127. In addition to traditional drug stores, Dr Scholl’s foot care company sells its products through convenience
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
128. At Microsoft, you’re responsible for marketing the world-famous Microsoft Office software products. You
want to make sure you’re using the best distribution channel strategy for reaching both business and home users.
In evaluating Microsoft’s needs, which factors do you believe have the biggest influence on your choice of the
best distribution approach?
a. Product factors, especially the fact that there is no physical product to warehouse or deliver, suggest that
you should market all of your products directly to your customers.
b. Organizational factors, particularly the vast resources that come from being one of the premier software
developers in the world, enable you to market all of your products directly to your customers.
c. Product factors, especially the fact that you’re marketing to both the B2B and B2C markets, suggest that
distributing through intermediaries is the best means of reaching both types of customers.
d. Market factors, especially the fact that you’re marketing to both the B2B and B2C markets, suggest that
dual distribution is the best strategy.
129. 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
130. 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.
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131. Now that you’ve started your new pet grooming business, you’ve been studying lots of books on marketing
so that you can more effectively attract new clients who own pets. You’re currently reading about long and short
distribution channels. Based on what you’ve just read, which type of distribution channel will work best for your
objectives, and why?
a. Due to the concentrated geographic location of your potential customers, you will need to set up a short
distribution channel with one or two intermediaries who can facilitate the exchange process.
b. Because you are marketing your services in the B2B environment, a short distribution channel works
best for your new business.
c. You’d like to establish and maintain personal relationships with your clients, so you should set up a short
distribution channel without intermediaries.
d. Because of the challenges involved in identifying potential customers, you will need to engage the
services of several sales and marketing intermediaries who can assist you.
132. When a logistics manager combines several unitized loads into a single, well-protected load for shipment, it
is called:
a. suboptimization.
b. consolidation.
c. containerization.
d. palletization.
133. 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.
134. You’re the chief marketing officer for Mars, Inc., the company that manufactures such famous brands as
Snickers, M&Ms, and Twix. Given that you’d like to get your affordable snacks into as many hands as possible,
which level of distribution intensity makes the most sense for you to use?
a. Exclusive distribution, where the product is available at one dominant grocery store chain, like Kroger,
which also owns Ralph’s, Fred Meyer, and many other chains
b. Selective distribution, where the product is available at select grocery stores and convenience stores
c. Intensive distribution, where the product is available in grocery stores, convenience stores, drugstores,
mini-marts, and vending machines
d. Digital distribution, where the product is only available through online retailers
135. People love celebrity gossip, which is what makes your Hollywood insider magazine so popular. That’s
why your product is sold in a wide range of outlets, from bookstores to drugstores and convenience stores to
outdoor kiosks. As the marketing director for the magazine, you’ve set up a fairly long distribution channel
because:
a. it is more cost effective to use intermediaries to develop and maintain contacts with such a diversified
group of customers.
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b. it’s just easier to let someone else figure out the logistics of storing and delivering the product.
c. your product has a very short shelf life and needs to be delivered to customers quickly.
d. your customers are centrally located in a concentrated geographic area.
136. Which of the following components in the supply chain of a manufacturing company are most concerned
with speed and timeliness?
a. Inbound logistics, outbound logistics
b. Production, customer service
c. Inbound logistics, production, customer service
d. Inbound logistics, outbound logistics, production
137. Describe the factors that influence a firm’s choice of a marketing channel strategy.
138. Describe the three important functions of intermediaries in a distribution channel.
139. Discuss RFID and ERP systems as methods for streamlining and managing logistics.
140. Discuss the five major transportation alternatives.
141. Discuss the two categories of channel conflict. Give an example of each.
142. Explain the difference between a short distribution channel and a long distribution channel, and provide a
detailed example of one or the other.
143. 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.
144. Define marketing intermediaries. Give two examples.
145. Define dual distribution. Why do marketers usually adopt a dual strategy? Give some examples of firms
that employ dual distribution.
146. Compare and contrast wholesalers and agents.
147. Define distribution intensity and explain its three levels.
148. Discuss the concept of protective packaging and materials handling.
149. Define reverse channels. List some factors that have contributed to the increasing importance of reverse
channels. How do firms operate reverse channels?
150. Define supply chain. Describe a manufacturing supply chain with an example.
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Answer Key
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