68. Because of its size and relative power, Walmart can easily impose controls on small manufacturers, such as PenAgain, but with large, powerful
suppliers such as P&G, the control is more balanced between parties. Walmart’s various marketing channel relationships offer examples of different
forms of a(n) ______________ marketing system.
69. In a(n) __________ marketing channel, several independent members each attempt to satisfy their own objectives and maximize their profits, often
at the expense of the other members.
70. In a vertical marketing system, if the system is _______, the less likely conflict will occur.
71. In an administered vertical marketing system,
72. Franchising is the most common type of contractual _______ marketing system.
73. In a corporate vertical marketing system,
74. Felicia had just taken over her family’s business after spending ten years in the marketing department of a large corporation. She met with a
representative from one of her firm’s biggest customers, who told her, “We should think about how we can make the pie bigger rather than fighting over
the size of the slices.” She had expected a more cutthroat approach rather than this call for a
75. All of the following are required to build a successful strategic relationship except
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76. If a firm declared that it wanted to develop a strategic relationship, but was unwilling to commit funds or any effort to make it succeed, there would
be an obvious lack of
77. TT TOYS manufactures toys. The company recently started buying paint for its toys from a Chinese firm. This Chinese company is part of TT Toys’
78. Walmart needs P&G to satisfy its customers, and P&G recognizes that if it can keep Walmart happy, it will have more than enough business for
years to come. Walmart and P&G recognize that it is in their common interest to be
79. All of the following statements about distribution centers are true except
80. A(n) __________ is a supply chain whose members act like a unified system.
81. A(n) __________ is a document used by a forklift driver indicating how much of each item to get from specific storage areas.
82. A(n) __________ is a 13-digit code retailers can use to track inventory.
83. When Cynthia’s Boutique receives dresses, they already have price tags and are on hangers. Cynthia’s Boutique receives __________ merchandise.
84. When Joe’s Chicken Shack wants chicken delivered in smaller batches more frequently, it offers its distributors an incentive in the form of special
bonuses to change their schedules. Joe’s demonstrates which kind of power?
85. Because Walmart has vast information about the consumer goods market, it might exert ___________ power over P&G by providing or withholding
important market information.
86. When her company’s dry goods deliveries were late for the third time, Melissa withheld payment from her supplier until it was back on schedule.
This is an example of ________ power.
87. Walmart may have _________ power if a supplier desperately wants to be associated with Walmart, because being known as an important Walmart
supplier enables that supplier to attract other retailers’ business.
88. When supply chain members view their goals and ultimate success as intricately linked, or ________, they develop deeper long-term relationships.
89. In a retail supply chain, the ________ records the purchase information and electronically sends it to the corporate office.
90. The local auto supply store gets merchandise delivered to it by its manufacturers as soon as it has a need, reducing stockouts with minimal inventory.
This demonstrates the concept of
91. Manufacturers trying to implement a just-in-time delivery system need to start with
92. After installing an electronic data interchange, Carmella’s gift shop was able to reduce _______, the amount of time between the recognition that an
order needs to be placed and the arrival of the needed merchandise.
93. The amount of time between the recognition that an order needs to be placed and the arrival of the needed merchandise at the seller’s store to be
available for sale is referred to as
94. One of the benefits of EDI is that it can reduce lead time, which is
95. After installing a(n) _______ in its JIT system, Chocolate Tree (a retail chocolate store) was able to reduce lead time for merchandise orders.
96. Shorter lead times allow retailers
97. With more frequent shipments associated with quick response (QR) systems, a retailer is
98. While JIT systems have many benefits, they
99. Leona is the logistics manager for the Barnes & Noble bookstore chain. She is weighing the many benefits of the company’s JIT system, but will
need to consider that just-in-time inventory management systems increase _______ costs.
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100. When Walmart promises to purchase larger quantities if a manufacturer will lower its wholesale price, it is exhibiting ________ power.
Essay Questions
101. Supply chain management expert Bernard LaLonde once said, “American management’s philosophy has been: If you’re smart enough to make it,
and aggressive enough to sell it—then any dummy can get it there. Now we’re paying for [that philosophy].” What supply chain problems will managers
with this philosophy likely encounter?
102. As the text states, “Students of marketing often overlook or underestimate the importance of place in the marketing mix.” Why? Create an example
to describe how place is important to consumers.
103. Where does the value for the consumer lie in the supply chain?
104. What is the difference between a distribution center and a fulfillment center?
105. Give examples of the kinds of information flows that take place between a store and its consumers, a distribution center, and a manufacturer.
106. What kinds of information affecting the supply chain would be found in a data warehouse?
107. As a very small manufacturer of nutritional products for race horses, Horse Health Products Company maintained information using bookkeeping
and inventory management software and communicated with customers through e-mail and fax. As its business expanded, Horse Health Products’s
owner began to consider creating an electronic data interchange. What could an EDI system do for his company?
108. You see an advertisement for an internship with Best Buy to work with its regional dispatcher. The advertisement describes the types of activities
associated with working in dispatching. What sorts of activities would you expect the ad to list?
109. Years ago, a hardware store had a sign that said, “If we don’t have it, you don’t need it.” How is the implementation of a quick response system the
complete opposite of this marketing philosophy?
110. Firms such as Forever 21 and H&M have adopted a just-in-time (JIT) or quick response (QR) inventory system. Why is this type of inventory
especially valuable in a market like fashion clothing?
111. What are the main challenges in managing a supply chain?
112. A small manufacturer was once quoted as saying, “The best day and the worst day of my business life was the day we got a contract from
Walmart.” What type of vertical supply chain is the manufacturer entering? Why would the manufacturer say this?
113. Why is mutual trust important in managing a supply chain?
114. Coastal Glass Company provides bottles to the major beverage companies in the United States. Coastal knows it needs to build partnering
relationships with each of the beverage companies, and the beverage companies know that Coastal is important to them. What will both sides need to do
to build and maintain a partnering relationship?
115. What types of firms typically operate distribution centers?
116. If your company is asked to ship its products to a cross-docking distribution center, what will you need to do to the merchandise in each package?
117. How have radio frequency identification tags made work easier for distribution centers?
118. Jae is adapting the new routing software his company bought for its distribution center. What factors will he likely include in the software program
in order to maximize distribution efficiency?
119. Explain how a firm like Walmart would exert referent power over another firm.
120. Compare an independent supply chain with a vertical marketing system.
121. Why does conflict arise in the supply chain? How do partnering relationships help reduce conflict?
122. Explain the difference between an indirect and a direct marketing channel.
123. Describe a scenario that represents the first phase of a vertical marketing system.
124. Define the six types of power that occur in a marketing channel.
125. Name three benefits of a strategic relationship between channel members.
126. How can an electronic data interchange be used by a manufacturer to support the product, price, and promotion elements of the marketing mix?
127. What are the two major problems related to QR systems?
128. Describe the three types of vertical marketing systems.
129. What elements, outlined in your text, contribute to the success of strategic relationships?
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130. What are RFID tags, where have they typically been used, and why are they becoming more prevalent in retail supply chain applications?
Category # of Questions
AACSB: Analytical Thinking 90
AACSB: Knowledge Application 35
AACSB: Technology 6
Accessibility: Keyboard Navigation 100
Blooms: Apply 36
Blooms: Evaluate 2
Blooms: Remember 39
Blooms: Understand 54
Difficulty: 1 Easy 39
Difficulty: 2 Medium 54
Difficulty: 3 Hard 37
Learning Objective: 16-01 Understand the importance of marketing channels and supply chain management. 23
Learning Objective: 16-02 Understand the difference between direct and indirect marketing channels. 9
Learning Objective: 16-03 Describe how marketing channels are managed. 41
Learning Objective: 16-04 Describe the flow of information and merchandise in the marketing channel. 57
Topic: Channel Management 24
Topic: Distribution Centers 23
Topic: Marketing Channels 29
Topic: Supply Chain Management 47
Topic: The Four Ps 5
Topic: Wholesaling 2