TRUE/FALSE QUESTIONS Answer whether the following statements are true or false
1 Explain what a marketing channel is and why intermediaries are needed
3. Jill would like to put some kiwifruit in her fruit salad. Fortunately, she does not have to hop on an airplane and fly to New Zealand to buy one; she can buy a kiwifruit at the neighbourhood grocery store. In this case, marketing channels have helped to overcome a spatial discrepancy. true false
2 Define the types of channel intermediaries and describe their functions and activities
4. The three basic functions that a channel intermediary provides are transactional (including physical distribution and sorting), logistical (including research and financing), and facilitating (including contacting, promoting, negotiating, and risk taking). true false
3 Describe the channel structures for consumer and business-to-business products and discuss alternative channel arrangements
5. Company Alpha sells cotton balls for consumers to use. Company Zeta sells cotton for the fabric industry to make clothing. It is more likely that Company Zeta will use a direct channel because the direct channel is used more often in business markets than in consumer markets. true false 6. Many clothing manufacturers sell both through catalogues and through retail shops. This is known as dual distribution. true false 7. Volvo united with FedEx Logistics to overcome its problem getting replacement parts where needed for emergency roadside repairs. This is an example of a strategic channel alliance. true false
5. Company Alpha sells cotton balls for consumers to use. Company Zeta sells cotton for the fabric industry to make clothing. It is more likely that Company Zeta will use a direct channel because the direct channel is used more often in business markets than in consumer markets. true false
6. Many clothing manufacturers sell both through catalogues and through retail shops. This is known as dual distribution. true false
7. Volvo united with FedEx Logistics to overcome its problem getting replacement parts where needed for emergency roadside repairs. This is an example of a strategic channel alliance. true false
4 Discuss the issues that influence channel strategy
8. The objective of intensive distribution is to achieve mass market selling. true false 9. The D'Or Galleries sells its solid gold picture frames at only five stores inCanada. D'Or promotes the frames intensively to those retailers and performs much cooperative advertising. This is an example of intensive distribution. true false 10. The Mini-Micro company manufactures miniature microwave ovens suitable for campers, dorm rooms, and small kitchens. The company's marketing research indicates that consumers are willing to look around for miniature microwaves but may not be willing to search or travel extensively to acquire the product. Mini-Micro should use selective distribution. true false
8. The objective of intensive distribution is to achieve mass market selling. true false
9. The D'Or Galleries sells its solid gold picture frames at only five stores inCanada. D'Or promotes the frames intensively to those retailers and performs much cooperative advertising. This is an example of intensive distribution. true false
10. The Mini-Micro company manufactures miniature microwave ovens suitable for campers, dorm rooms, and small kitchens. The company's marketing research indicates that consumers are willing to look around for miniature microwaves but may not be willing to search or travel extensively to acquire the product. Mini-Micro should use selective distribution. true false
5 Explain channel leadership, conflict, and partnering
11. Savings Mart is a large discount retailer that dictates to its suppliers to provide the lowest possible cost and to adhere to a just-in-time inventory system. Wholesalers and manufacturers generally yield to the authority of this giant retailer. Savings Mart exercises channel power. true false 12. Fred's Mart and Josephine's Foods are two independent grocery stores that are claiming that a large manufacturer is treating them unfairly because they are small. This is an example of vertical conflict within the marketing channel. true false
11. Savings Mart is a large discount retailer that dictates to its suppliers to provide the lowest possible cost and to adhere to a just-in-time inventory system. Wholesalers and manufacturers generally yield to the authority of this giant retailer. Savings Mart exercises channel power. true false
12. Fred's Mart and Josephine's Foods are two independent grocery stores that are claiming that a large manufacturer is treating them unfairly because they are small. This is an example of vertical conflict within the marketing channel. true false
6 Identify the special problems and opportunities associated with distribution in service organizations
13. Marketers of services do not have to address the question of logistics because there is no distribution of a service in which there are no physical products. true false
7 Discuss channel structure and logistics issues in global markets
14. Small firms are most likely to enter global markets because logistics are easier for smaller firms. true false
MULTIPLE-CHOICE QUESTIONS Select the response that best answers the question, and write the corresponding letter in the space provided.
16. The Hit-the-Beach Store purchases swimsuits, sunscreen products, towels, beach toys, beach chairs, and surf boards from a variety of manufacturers and brings these items to its large store in a large coastal city. The store's goal is to provide every amenity needed for a trip to the beach, so Hit-the-Beach is aiding consumers by overcoming the: a. discrepancy of assortment b. discrepancy of quantity c. spatial discrepancy d. temporal discrepancy e. contact discrepancy
17. The Howlin' Halloween company operates its manufacturing facilities year-round, but the sales season for Halloween costumes and party decorations is usually September 1 through November 1. However, sales remain steady all year as the company sells to wholesale distributors that stock the product. The wholesale distributors are helping to overcome a: a. discrepancy of assortment b. temporal discrepancy c. contact discrepancy d. discrepancy of quantity e. spatial discrepancy
2 Define the type of channel intermediaries and describe their functions and activities
18. McKesson Drug purchases large quantities of over-the-counter and prescription pharmaceutical products from manufacturers and sells them to drug stores. McKesson takes title to the products when they are purchased. This company is a(n): a. retailer b. agent c. broker d. merchant wholesaler e. manufacturer's representative 19. Murdock and Company represents several health and beauty care products made by small manufacturers that cannot afford their own salesforces. Murdock sells the goods to distributors and retailers and does not carry brands that compete directly with each other. Murdock does not take title to the goods. This company is a(n): a. retailer b. distributor c. merchant wholesaler d. placement company e. agent 20. Lands' End sells casual and outdoor clothing on-line and through catalogues directly to consumers. Lands' End is a(n): a. retailer b. distributor c. merchant wholesaler d. broker e. agent
18. McKesson Drug purchases large quantities of over-the-counter and prescription pharmaceutical products from manufacturers and sells them to drug stores. McKesson takes title to the products when they are purchased. This company is a(n): a. retailer b. agent c. broker d. merchant wholesaler e. manufacturer's representative
19. Murdock and Company represents several health and beauty care products made by small manufacturers that cannot afford their own salesforces. Murdock sells the goods to distributors and retailers and does not carry brands that compete directly with each other. Murdock does not take title to the goods. This company is a(n): a. retailer b. distributor c. merchant wholesaler d. placement company e. agent
20. Lands' End sells casual and outdoor clothing on-line and through catalogues directly to consumers. Lands' End is a(n): a. retailer b. distributor c. merchant wholesaler d. broker e. agent
21. The Custo-Lift Company manufactures customized, high-tech elevator shelving systems for specialized automated warehouses. For distribution, you would expect Custo-Lift to use a: a. network of facilitating agents b. horizontally integrated channel c. long channel d. vertical marketing system e. direct channel 22. General Electric sells large home appliances both through independent retailers (department stores and discount houses) and directly to large housing-tract builders. This is an example of: a. intensive distribution b. intermediary distribution c. selective distribution d. alternative distribution e. dual distribution
21. The Custo-Lift Company manufactures customized, high-tech elevator shelving systems for specialized automated warehouses. For distribution, you would expect Custo-Lift to use a: a. network of facilitating agents b. horizontally integrated channel c. long channel d. vertical marketing system e. direct channel
22. General Electric sells large home appliances both through independent retailers (department stores and discount houses) and directly to large housing-tract builders. This is an example of: a. intensive distribution b. intermediary distribution c. selective distribution d. alternative distribution e. dual distribution
23. Life Savers candy is sold in grocery stores, service stations, convenience stores, drugstores, discount stores, and vending machines. This is a(n) ____________ distribution strategy. a. exclusive b. franchising c. selective d. intensive e. horizontal 24. Lennox Air Conditioners carefully screens its dealers to ensure a quality dealer image and service ability. Only a few dealers are chosen in any single geographic area. This is an example of: a. selective distribution b. intensive distribution c. exclusive distribution d. dual distribution e. intermediary distribution 25. Rolls Royce has a restrictive policy of only establishing one or two dealers within a given large geographic area. Buyers of this type of expensive car will travel to acquire the product, so this form of distribution, ____________, is appropriate for the product. a. intermediary b. intensive c. selective d. dual e. exclusive
23. Life Savers candy is sold in grocery stores, service stations, convenience stores, drugstores, discount stores, and vending machines. This is a(n) ____________ distribution strategy. a. exclusive b. franchising c. selective d. intensive e. horizontal
24. Lennox Air Conditioners carefully screens its dealers to ensure a quality dealer image and service ability. Only a few dealers are chosen in any single geographic area. This is an example of: a. selective distribution b. intensive distribution c. exclusive distribution d. dual distribution e. intermediary distribution
25. Rolls Royce has a restrictive policy of only establishing one or two dealers within a given large geographic area. Buyers of this type of expensive car will travel to acquire the product, so this form of distribution, ____________, is appropriate for the product. a. intermediary b. intensive c. selective d. dual e. exclusive
26. As the largest retailer of any kind in the world, Wal-Mart exerts great power over its suppliers, who provide the best possible prices. In the marketing channel, Wal-Mart would be considered a: a. channel authority b. channel member c. channel leader d. channel team e. merchant wholesaler 27. American Booksellers Association, a group of small independent bookstores, filed a suit against the large chains Barnes & Noble and Borders, alleging that they violated antitrust laws by using their buying power for deeper discounts on books. This is an example of: a. horizontal channel conflict b. lateral channel conflict c. retailer conflict d. vertical channel conflict e. channel conspiracy
26. As the largest retailer of any kind in the world, Wal-Mart exerts great power over its suppliers, who provide the best possible prices. In the marketing channel, Wal-Mart would be considered a: a. channel authority b. channel member c. channel leader d. channel team e. merchant wholesaler
27. American Booksellers Association, a group of small independent bookstores, filed a suit against the large chains Barnes & Noble and Borders, alleging that they violated antitrust laws by using their buying power for deeper discounts on books. This is an example of: a. horizontal channel conflict b. lateral channel conflict c. retailer conflict d. vertical channel conflict e. channel conspiracy
28. You are responsible for physical distribution of your company's service and should focus on: a. ensuring the intangibility of the service so physical distribution becomes a less important factor b. customer-oriented order processing and inventory control c. making sure that production and consumption are simultaneous d. setting quality standards, choosing faster transportation modes, and using safety stock e. minimizing wait times, managing service capacity, and providing delivery through distribution channels
29. Celestial Seasonings, a United States tea manufacturer, would like to sell its herbal teas in China and Russia. Given the product and market characteristics, Celestial Seasonings should probably: a. use a direct-mail wholesaler b. establish an overseas company salesforce c. use independent foreign intermediaries for distribution d. establish a vertical marketing system and act as channel leader e. purchase the services of an industrial distributor
