Deck 15: Distributing Products

Question 1

Marketers claim that intermediaries add value to the channel of distribution that outweighs the cost.

Answer 1

True

Question 2

An effective channel of distribution does more than simply ensure that goods are transported efficiently from producer to buyer.

Answer 2

True
Explanation:A channel of distribution is concerned with transporting and storing goods, but it also involves the flow of communications, money, and the title to the goods, and ensures that the right quantity and assortment of goods will be available when and where needed.

Question 3

Wholesalers are marketing intermediaries who sell goods or services to ultimate consumers.

Answer 3

False

Question 4

Agents and brokers and wholesalers are types of marketing intermediaries.

Question 5

The best way to reduce the cost of goods is to eliminate marketing intermediaries from the distribution channel.

Question 6

Marketing intermediaries have survived because they have been able to perform marketing functions more efficiently and effectively than a manufacturer or consumer could perform these functions.

Question 7

Manufacturers are usually able to perform marketing functions, such as transporting, advertising, and storing, faster and more cheaply than marketing intermediaries.

Question 8

Most marketing intermediaries have survived in the past because consumers were unaware of how much these companies add to the cost of distributing goods.

Question 9

A channel of distribution consists of the marketing intermediaries who join together to transport and store goods in their path from producers to consumers.

Question 10

Marketing costs make up less than 25 percent of the total cost of the goods consumers buy.

Question 11

Some manufacturers sell directly to consumers or businesses rather than relying on marketing intermediaries.

Question 12

Agents are marketing intermediaries who do not take title to the goods they distribute and provide credit to customers who need it.

Question 13

Marketing intermediaries must charge a price for the functions they perform. Thus, a surefire way to reduce distribution costs is to eliminate marketing intermediaries from the channel of distribution.

Question 14

The activities performed by most marketing intermediaries are not essential to the marketing process.

Question 15

One way marketing intermediaries improve marketing efficiency is by reducing the number of exchange relationships necessary to move goods through the channel of distribution.

Question 16

Brokers are marketing intermediaries that take title to the goods they help distribute.

Question 17

Retailers are marketing intermediaries who sell to ultimate consumers.

Question 18

The costs added by marketing intermediaries usually outweigh the value they create.

Question 19

Some economists would say that intermediaries add costs to the channel of distribution and need to be eliminated.

Question 20

Organizations that assist in moving goods and services from producers to business and consumer users are called supply-side transition specialists.

Question 21

One way that marketers can provide utility is by making sure the good is available at a location that is convenient for consumers.

Question 22

A key way for traditional retailers to compete with direct marketing is by providing outstanding service utility.

Question 23

Marketers provide a total of four types of utility: primary, secondary, marginal, and total.

Question 24

Marketing intermediaries concentrate on providing mainly form, time, and place utility, while producers focus on the provision of possession, information, and service utility.

Question 25

To marketers, the term utility refers to the value added to goods or services by organizations when they make the product more useful or accessible to consumers.

Question 26

Once the final customer has taken title to a good, marketing intermediaries no longer are involved in providing utility to the customer.

Question 27

Producers normally provide form utility, but retailers sometimes also provide this type of utility.

Question 28

Groceries and More sells a wide range of foods and household supplies within a suburb of a large city. The store frequently advertises that its prices are much lower than the prices charged by larger supermarket chains in the area. This low-price approach means that Groceries and More is a classic example of a merchant wholesaler.

Question 29

Simon is a personal electronics salesperson for a major retail chain. When he makes recommendations to customers to help them select the product that will best meet their needs, Simon is providing information utility.

Question 30

Form utility has become the most important utility provided by retailers.

Question 31

Currently, Spark Electrical sells directly to thousands of industrial customers. Spark could reduce the number of exchange relationships by including wholesalers in its channel of distribution.

Question 32

According to the Spotlight on Small Business box, thredUP founders discovered their first distribution system, very similar to eBay's, was the best suited for their business.

Question 33

Marketers normally provide form, time, place, information, and service utility, but they are seldom involved in providing possession utility.

Question 34

Although SellSmart brings together buyers and sellers and helps negotiate exchanges, it does not actually take title to any of the goods being traded. SellSmart would be classified as an agent or broker.

Question 35

Brad Gordon, a real estate agent, brings together the buyers and sellers of houses as well as commercial property. Brad helps the parties negotiate the terms and conditions of real estate sales, but he does not take title to the property, provide credit, or assume any risks associated with the exchanges he helps negotiate. Because Brad provides only limited services, he is not a true marketing intermediary.

Question 36

Delivery, installation, and follow-up services are the most common ways that marketing intermediaries provide information utility.

Question 37

Providing buyers with credit terms such as "90 days same as cash" is a way marketing intermediaries can provide time utility to customers.

Question 38

In today's competitive market environment, traditional retailers will need to put more emphasis on providing form and place utility, and less emphasis on service utility.

Question 39

Home Helpers, Inc. produces a variety of reasonably-priced household appliances. To cut costs, the company has decided to eliminate all of the marketing intermediaries who help distribute its products. Home Helpers will be able to reduce its total marketing costs by eliminating the marketing functions these intermediaries perform.

Question 40

Salespeople can be important providers of information utility.

Question 41

Cash-and-carry wholesalers are limited-function wholesalers that serve mostly smaller retailers with a limited assortment of products.

Question 42

A sales agent is an agent who represents the interests of the consumer in a particular territory when negotiating terms of purchases made directly from a producer.

Question 43

The two main types of merchant wholesalers are storage wholesalers and distribution wholesalers.

Question 44

Devar was driving on Interstate 95 in eastern Florida when he noticed he was running low on gas. Devar was relieved when he found a gas station open at the next exit just 2 miles ahead. This is an example of the value place utility provides to a consumer.

Question 45

Rack jobbers furnish racks or shelves full of merchandise to retailers and keep title to these goods until they are sold.

Question 46

Drop shippers are limited function wholesalers that typically put together many small shipments to form a single larger shipment.

Question 47

A firm that makes wholesale sales cannot also legally make retail sales.

Question 48

About 80 percent of all wholesalers are classified as merchant wholesalers.

Question 49

As long as they do not represent competing products, manufacturer's agents can represent more than one manufacturer in a given sales territory.

Question 50

A retail sale is a sale to a consumer of products for his or her own use.

Question 51

The main difference between agents and brokers is that agents perform a wide array of marketing functions while brokers only negotiate exchanges between buyers and sellers.

Question 52

Some marketing intermediaries make both wholesale and retail sales.

Question 53

Limited-function wholesalers are a type of merchant wholesaler.

Question 54

The sale of goods to a business purchasing the items for resale is a wholesale transaction.

Question 55

Merchant wholesalers do not take title to the goods they handle.

Question 56

Drop shippers are wholesalers that stock heavy or bulky items and transport them to retail stores.

Question 57

Although drop shippers own merchandise they have shipped to buyers, they do not actually handle, stock, or deliver this merchandise themselves.

Question 58

Cash-and-carry wholesalers and drop shippers are both classified as limited-function wholesalers.

Question 59

Rack jobbers sell goods on consignment, splitting the profits from their sales with a retailer.

Question 60

A key distinction between agents and brokers is that agents tend to maintain long-term relationships with the people they represent whereas brokers are hired on a temporary basis.

Question 61

Discount stores compete in the retail market mainly on the basis of price.

Question 62

Discount stores, department stores, supermarkets, and specialty stores are all among the major types of retail stores.

Question 63

Warehouse clubs compete with enhanced service to customers and seldom try to compete on price.

Question 64

Wholesalers may provide market information and business consulting services.

Question 65

Exclusive distribution is the use of only one retail outlet in a given geographic area.

Question 66

Warehouse clubs are usually smaller than supermarkets.

Question 67

Discount stores and department stores sell different brands of products that are usually priced about the same.

Question 68

A distribution strategy that puts the product into as many retail outlets as possible is known as an intensive distributive strategy.

Question 69

Department stores offer a wide variety of products that are sold in separate departments.

Question 70

Fernando and Mariana solicit orders for lumber from area wholesalers and retailers specializing in building supplies and arrange to have the orders shipped directly from nearby logging companies. Fernando and Mariana operate as drop shippers.

Question 71

Specialty stores use a wide variety of products in one product category as their key competitive tool.

Question 72

Candy, gum, and popular magazines are usually distributed using a selective distribution strategy.

Question 73

Keira owns and operates a home business. Once a month she heads to OfficePRO to buy office supplies for her business. The prices at the OfficePRO are very low, but it does not offer credit or delivery services. OfficePRO is a cash-and-carry wholesaler.

Question 74

Category killer stores tend to compete mainly on the basis of carrying a wide array of products, superior service, and low prices.

Question 75

Phoebe helps small farmers negotiate sales to food processing companies. However, once she has helped negotiate the transaction, she does not maintain a long-term relationship with the farmers. Phoebe is an example of a sales agent in this market.

Question 76

Retail organizations employ more than 40 million people in the U.S.

Question 77

Seth supplies shelves of magazines to supermarkets and drug stores. He keeps title to the goods until they are sold and then splits the profits with the retailer. Seth is a drop shipper.

Question 78

A full-service wholesaler will provide suppliers with market information.

Question 79

A category killer is an extremely successful product that kills the sales of other products in its category in a retail store.

Question 80

A broker can expect to earn a fixed amount of profit for her efforts regardless of the dollar value of the contract she negotiated.