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KEYWORDS:
Bloom's: Application
113. While on their family vacation, the Millers realize they left their camera at home. They purchase a disposable camera
at an amusement park using their credit card, but never interact with a person. What type of retailing did this transaction
most likely involve?
a.
Franchising
b.
Online retailing
c.
Direct-response marketing
d.
Automatic vending
e.
Machine marketing
114. An arrangement in which a supplier grants a dealer the right to sell products in exchange for some type of
consideration is
a.
selling products on consignment.
b.
retailing.
c.
wholesaling.
d.
licensing.
e.
franchising.
115. Victor knows that if he decides to buy a franchise, he will most likely have to supply
a.
management know-how and labor.
b.
buildings and daily operations.
c.
marketing assistance and management know-how.
d.
a percentage of total sales and expertise.
e.
labor and daily operations.
116. Malcolm Lewis has come up with the idea of a system for picking up people's cars while they are at work, washing
and waxing them, and returning them for a fee. Having been a big success in his home city, Malcolm plans to expand his
operation into other cities. The service described here seems best suited to
a.
party-plan retailing.
b.
franchising.
c.
vending.
d.
corporate chain retailing.
e.
off-price retailing.
117. Kevin is talking with Peter about purchasing a Wendy's franchise. Peter tells Kevin that one of the major advantages
of franchising for him to consider is the
a.
higher start-up costs.
b.
greater freedom it provides.
c.
individuality it offers.
d.
higher success rate for franchises.
e.
gross margin it provides.
118. Which of the following is not an advantage of franchising for the franchisee?
a.
The franchisee can capitalize on the business experience of others.
b.
When problems arise, the franchisee can obtain guidance and advice from the franchiser.
c.
Franchised outlets are usually more successful than independently owned businesses with respect to long-term
survival.
d.
The franchisee can participate in national promotional campaigns sponsored by the franchiser.
e.
The franchisee gives up a certain amount of control when participating in a franchise agreement.
119. In franchising, which of the following is not a benefit that the franchiser gains?
a.
The franchiser can gain more rapid product distribution.
b.
The franchiser can acquire capital more quickly for expanding production.
c.
The franchiser gains more control over how the franchisees operate the establishments.
d.
The franchiser benefits from the fact that franchisees tend to be highly motivated to succeed, which in turn
leads to higher sales and higher royalties.
e.
All of these are benefits for the franchiser.
120. Which of the following best describes wholesalers?
a.
Organizations that buy products from producers and sell them to retailers.
b.
Individuals or organizations that purchase products and then resell them to other businesses and consumers.
c.
Organizations or individuals who buy products for resale to government, reseller, producer, and institutional
users.
d.
Organizations or entities that buy products from government, reseller, and producer users and sell them to
customers in bulk.
e.
Companies that make products that have a general appeal and are resold to retailers for a profit.
121. The primary function of most wholesalers is to
a.
support the needs of the manufacturers and provide them with market information.
b.
provide for the unique needs of the individual retailers buying their merchandise.
c.
provide information system tracking of inventory for the ultimate consumer.
d.
perform physical distribution of products from manufacturers to retailers.
e.
develop and share database information about customers.
122. By using Johnson Wholesale Co. for its distribution needs, the Apex Production has a distinct competitive advantage
because the services performed by Johnson allow Apex to
a.
provide quality merchandise to consumers.
b.
focus on increasing production capacity.
c.
focus on increasing working capital.
d.
reduce manufacturing costs to retailers.
e.
focus on producing products that meet consumers' needs.
123. Which of the following services would a wholesaler least likely provide to a manufacturer?
a.
Assume the risks of selling to poor credit customers
b.
Look for and coordinate supply sources
c.
Pay the costs of transporting goods
d.
Provide up-to-date information on market developments
e.
Serve as an extension of the manufacturer's sales force
124. Which of the following is not a factor used to classify wholesalers?
a.
Whether the wholesaler is owned by the producer
b.
Whether the wholesaler takes title to the products it handles
c.
The range of services offered by the wholesaler
d.
The price range of the products carried by the wholesaler
e.
The breadth and depth of the product lines carried by the wholesaler
125. Wholesalers frequently help retailers with developing a marketing strategy, especially as it relates to the ____
component of the marketing mix.
a.
distribution
b.
promotion
c.
product
d.
price
e.
channel
126. By buying in large quantities and delivering to customers in smaller lots, a wholesaler may perform all of the
following physical distribution activities except
a.
inventory planning.
b.
transportation.
c.
materials handling.
d.
unit pricing.
e.
communication.
127. With respect to inventory, wholesalers can help retailers with all of the following except
a.
selection.
b.
storage.
c.
inventory control.
d.
transportation.
e.
production.
128. A merchant wholesaler
a.
arranges for transfer of goods directly to business and retail customers.
b.
takes title to goods, assumes risk associated with ownership, and buys and resells products.
c.
takes title and possession of goods and sells only to retailers.
d.
does not take title or possession of goods but facilitates exchanges between any parties.
e.
deals exclusively with business products.
129. Walmart has its own fleet of trucks and works directly with producers to take care of the ordering, delivery, and
handling of goods. In addition, Walmart works directly with suppliers through its advanced system of inventory control
and data processing. Walmart is
a.
able to eliminate many of the functions typically performed by wholesalers.
b.
performing many of the critical functions of wholesalers through its own system.
c.
successfully using wholesalers to run its venerable chain of discount stores.
d.
using information technology to eliminate the need to perform typical wholesale functions.
e.
vertically integrated in order to produce and distribute all products itself.
130. Sherri McRae wants to establish a fashion wholesaling firm. Because of the risks involved in the rapid obsolescence
of high-fashion items, Sherri does not want to establish an organization in which she has title to the garments. Which of
the following types of wholesale establishments has she ruled out?
a.
Merchant wholesaler
b.
Agent
c.
Broker
d.
Functional middleman
e.
Commission merchant
131. Martin owns and operates a wholesale hardware business that supplies small hardware parts to various manufacturers
in the area. He takes title to the hardware and assumes all risks associated with ownership. Martin is a
a.
rack jobber.
b.
merchant wholesaler.
c.
wholesaler agent.
d.
drop shipper.
e.
sales branch.
132. Merchant wholesalers can be divided into two basic categories:
a.
general merchandise and general-line.
b.
rack jobbers and cash-and-carry.
c.
commission and fee-based.
d.
goods and services.
e.
full-service and limited-service.
133. Cigarette manufacturer Philip Morris uses the services of Universal Corporation, the world's largest buyer and
processor of leaf tobacco, which provides financing for its customers. This means that Universal is a
a.
cash-and-carry wholesaler.
b.
general merchandise wholesaler.
c.
limited-service wholesaler.
d.
rack jobber.
e.
full-service wholesaler.
134. Customers rely on ____ for product availability, breaking larger quantities into smaller ones, technical advice and
service, financial assistance, and suitable assortments.
a.
full-line retailers
b.
limited-service wholesalers
c.
full-service wholesalers
d.
commission merchants
e.
cash-and-carry wholesalers
135. If a retailer needed help with store design and training sales personnel, it would most likely use the services of a
a.
full-service wholesaler.
b.
full-price wholesaler.
c.
rack jobber.
d.
cash-and-carry wholesaler.
e.
technical wholesaler.
136. A wholesaler that carries a wide product mix but offers only limited depth within product lines is called a
a.
specialty-line wholesaler.
b.
limited-service wholesaler.
c.
rack jobber.
d.
general merchandise wholesaler.
e.
general-line wholesaler.
137. All of the following are examples of full-service wholesalers except
a.
general merchandise wholesalers.
b.
mail-order wholesalers.
c.
rack jobbers.
d.
general-line wholesalers.
e.
specialty-line wholesalers.
138. Which of the following is a full-service merchant wholesaler?
a.
Cash-and-carry wholesaler
b.
General merchandise wholesaler
c.
Drop shipper
d.
Mail-order wholesaler
e.
Truck wholesaler
139. Brad operates a wholesale company that specializes in providing a wide variety of services to its customers, which
are all restaurants. He carries a wide assortment of restaurant equipment and cookware. Brad's business is a
a.
mail-order wholesaler.
b.
rack jobber.
c.
general-line wholesaler.
d.
specialty-line wholesaler.
e.
limited-service wholesaler.
140. A limited-line wholesaler would be expected to carry a ____ product mix.
a.
wide and deep
b.
wide and shallow
c.
narrow and shallow
d.
wide
e.
narrow and deep
141. Fiona is employed by Hallmark Cards, Inc., where her responsibilities include maintaining displays of greeting cards
in drugstores and discount stores. Her daily activities include straightening the cards, pulling outdated or slow sellers, and
installing new cards. Fiona is called a(n) _____.
a.
specialty-line wholesalers.
b.
full-service stockers.
c.
in-store maintainers.
d.
assemblers.
e.
rack jobbers.
142. Angela approaches David Hughes, owner of Hughes Auto Parts, to talk about the possibility of adding a new line of
products to his store. Angela tells David that the product is a line of high-quality driving sunglasses. She offers to set up
the display, service and restock it weekly, and maintain billing and inventory records. She tells David that all she needs is
a couple of square feet of space. Angela is in the business of serving retailers as a
a.
general-line wholesaler.
b.
specialty-line wholesaler.
c.
rack jobber.
d.
full-service merchant wholesaler.
e.
cash-and-carry wholesaler.
143. Lynn Taylor sells Revlon cosmetics on consignment to grocery stores, maintains the display racks, and restocks
when necessary. Lynn's job is best described as a
a.
rack jobber.
b.
drop shipper.
c.
general merchandise wholesaler.
d.
cash-and-carry wholesaler.
e.
truck jobber.
144. Merchant wholesalers who specialize in just a few functions and pass others along to other intermediaries or
customers are called
a.
limited-service wholesalers.
b.
wholesale service specialists.
c.
general-line wholesalers.
d.
specialty-line wholesalers.
e.
specialty-service wholesalers.
145. All of the following are types of limited-service merchant wholesalers except
a.
cash-and-carry wholesalers.
b.
truck wholesalers.
c.
mail-order wholesalers.
d.
specialty-line wholesalers.
e.
drop shippers.
146. Laura and Marie own and operate a small restaurant. On a weekly basis, they go to their local Sam's Wholesale Club
to purchase the food items and cleaning supplies they need for their business. With the exception of the volume they
purchase and the items' intended use, this grocery shopping trip is identical to a weekly trip by their families to a grocery
store. Sam's is serving as a ____ wholesaler for these entrepreneurs.
a.
general-line
b.
specialty-line
c.
full-service merchant
d.
truck
e.
cash-and-carry
147. What type of wholesaler transports a limited line of products directly to customers for immediate inspection and
selection?
a.
On-site wholesalers
b.
Cash-and-carry wholesalers
c.
Rack jobbers
d.
Truck wholesalers
e.
Drop shippers
148. Greg works with a group of farmers who provide him with a regular supply of a variety of fresh vegetables. He picks
up their produce and has a regular route of grocers and restaurants that purchase quantities of the items he has on any
given day. Greg's operation is which type of wholesaler?
a.
Drop shipper
b.
General-line
c.
Truck
d.
Cash-and-carry
e.
Specialty-line
149. Andrea owns and operates a small novelty store that sells home décor, gifts, jewelry, and gourmet snacks. Because
her business is very small, many wholesalers will not deal with her, so she relies primarily on ____ for the survival of her
business.
a.
drop shippers
b.
truck wholesalers
c.
rack jobbers
d.
specialty-line wholesalers
e.
cash-and-carry wholesalers
150. Drop shippers
a.
take title to but not physical possession of the goods.
b.
do not take title to or physical possession of the goods.
c.
take title to and physical possession of the goods.
d.
do not take title to but take physical possession of the goods.
e.
are similar to truck wholesalers but provide the extra service of placing products on retailers' shelves.
151. Which of the following wholesalers never take actual possession of the goods?
a.
Drop shippers
b.
Cash-and-carry wholesalers
c.
Truck jobbers
d.
Mail-order wholesalers
e.
Rack jobbers
152. Mark Bradley's company takes orders from its collection of retail customers and arranges the shipment of goods
directly from manufacturers or other wholesalers to its customers' businesses. Mark is operating as a
a.
mail-order wholesaler.
b.
drop shipper.
c.
desk wholesaler.
d.
truck jobber.
e.
specialty-line wholesaler.
153. Alison lives in a remote area of Montana, where few good roads exist. She runs a small retail store specializing in
western attire. Due to her remote location, Alison is most likely to obtain the merchandise for her store from
a.
rack jobbers.
b.
general-line wholesalers.
c.
mail-order wholesalers.
d.
truck wholesalers.
e.
specialty-line wholesalers.
154. ____ provide an effective method of selling small items to customers in remote areas that other wholesalers might
find unprofitable to serve.
a.
Desk jobbers
b.
Specialty-line wholesalers
c.
Cash-and-carry wholesalers
d.
Truck wholesalers
e.
Mail-order wholesalers
155. Agents and brokers that facilitate and negotiate purchases but do not actually take title to products are also known as
a.
functional wholesalers.
b.
commission wholesalers.
c.
hands-off intermediaries.
d.
contract negotiators.
e.
functional middlemen.
156. What is the primary difference between an agent and a broker?
a.
An agent gets compensated based on commission while a broker generally charges fees for his services.
b.
A broker works only for a seller whereas an agent can represent a buyer or a seller.
c.
An agent represents a company on a permanent basis while a broker is employed temporarily.
d.
An agent has much more extensive knowledge about the products he deals with than a broker does.
e.
Brokers have long-term relationships with their customers while an agent's relationships are generally short-
lived.
157. Independent intermediaries that represent two or more sellers and usually offer customers complete product lines in a
restricted territory are called
a.
commission merchants.
b.
manufacturers' agents.
c.
selling agents.
d.
truck wholesalers.
e.
brokers.
158. Because Gem Supply's sales have continued to decline, the jewelry manufacturer has found that the costs associated
with maintaining its own five-person sales force are prohibitive. The firm's marketing director begins to look for a small
company or individual willing to perform the sales function for Gem Supply in its least productive region, the Far West.
The ideal entity would carry complementary but non-competing lines. Such a firm or individual would be classified as a
a.
rack jobber.
b.
manufacturers' agent.
c.
specialty-line wholesaler.
d.
selling agent.
e.
commission merchant.
159. Manufacturers' agents offer products that are both
a.
noncompeting and complementary.
b.
competing and specialized.
c.
unrelated and noncompeting.
d.
complementary and competing.
e.
unrelated and competing.
160. Karen has been a buyer for Ocean Mist, a large cranberry processor, for several years. Believing that she knows a
great deal about cranberries, their growers, and processors, she decides to go into business for herself. Karen wants to
assume no risks of spoilage or price fluctuations. She sees herself as simply bringing the growers and processors together.
Her new company would be a
a.
sales agent.
b.
commission merchant.
c.
broker.
d.
sales branch.
e.
sales office.
161. A difference between manufacturers' agents and selling agents is that
a.
selling agents have little control over the marketing mix of the manufacturers they represent.
b.
selling agents represent retailers.
c.
manufacturers' agents do not offer retailers aid in advertising or promotional material.
d.
selling agents do not have the territorial restrictions that manufacturers' agents do.
e.
selling agents represent wholesalers.
162. Selling agents perform every wholesaling activity except
a.
transporting goods.
b.
setting prices.
c.
financing the products.
d.
taking title to products.
e.
inventory control.
163. A channel member that markets all of a manufacturer's goods, has authority over price, promotion, and distribution,
but does not take title to the product is a
a.
general-line wholesaler.
b.
selling agent.
c.
commission merchant.
d.
manufacturers' agent.
e.
broker.
164. Thad works for a company that markets all of Celetron's products. Thad's company acts as the marketing department
for Celetron, performing all marketing functions without actually taking title to the goods. Thad's company is a
a.
commission merchant.
b.
manufacturers' agent.
c.
sales branch.
d.
selling agent.
e.
full-service wholesaler.
165. An agent that receives goods on consignment from local sellers and negotiates sales in large, central markets is called
a
a.
commission merchant.
b.
sales branch agent.
c.
selling agent.
d.
manufacturers' agent.
e.
broker-agent.
166. Calhoun Produce, a ____, takes possession of truckloads of tomatoes, arranges for storage, and transports them to
auctions to be sold.
a.
manufacturer's agent
b.
selling agent
c.
commission broker
d.
commission merchant
e.
selling broker
167. Chandra has extensive contacts in the real estate business and brings together buyers and sellers. Although she
assumes no risks, she can offer specialized knowledge about real estate. Chandra is a
a.
commission merchant.
b.
selling agent.
c.
broker.
d.
specialty salesperson.
e.
sales branch agent.
168. Intermediaries owned by manufacturers that sell products and provide support services to the manufacturers' sales
forces are known as
a.
manufacturers' agents.
b.
sales branches.
c.
selling agents.
d.
sales offices.
e.
commission merchants.
169. The management at Kohler Inc., a manufacturer of sinks, tubs, and other plumbing products, thinks that there will
soon be a major growth in home remodeling due to rising interest rates. The management decides to use ____ in several
key cities to provide support services for its sales force in those areas, carry inventory, and offer credit and other services
to its retail plumbing customers.
a.
sales agents
b.
commission merchants
c.
broker offices
d.
sales branches
e.
facilitating agencies
170. A manufacturer-owned operation that provides services usually associated with agents is a
a.
facilitating agency.
b.
wholesaler.
c.
sales office.
d.
sales branch.
e.
public warehouse.
