Quiz 15: Distributing Products

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

Agents and brokers and wholesalers are types of marketing intermediaries.

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

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

Brokers are marketing intermediaries that do not take title to the goods they help distribute.

Retailers are marketing intermediaries who sell to ultimate consumers.

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

Agents are marketing intermediaries who take title to the goods they distribute and provide credit to customers who need it.

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

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

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

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

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

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

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

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.

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

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

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

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.

According to the Seeking Sustainability box, IKEA found that even though paper pallets can only be used once, they can help reduce shipping costs and are easier to recycle.

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

Sav-U-More Grocery Store sells a wide range of foods and household supplies to households in Miller's Creek, a suburb of a large city. The store advertises that its prices are much lower than the prices charged by larger supermarket chains in the area. This low-price approach means that Sav-U-More is a classic example of a merchant wholesaler.

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

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

Hartselle Home Products, Inc., manufactures a variety of inexpensive household gadgets. The company has decided to cut costs by eliminating all of the marketing intermediaries who help distribute its products. Hartselle will be able to reduce its total marketing costs by eliminating the marketing functions these intermediaries perform.

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.

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

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

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

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

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

Salespeople can be important providers of information utility.

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

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

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

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

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.

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

Jack Deck is a computer salesperson for a major retail electronics chain. When he advises customers to help them select a computer that will meet their needs, Jack is providing information utility.

Frank Crimmins was driving on Interstate 85 in eastern Alabama when he noticed he was running low on gas. Frank 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.

Some marketing intermediaries make both wholesale and retail sales.

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

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

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

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

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

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

Limited-function wholesalers are a type of merchant wholesaler.

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

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

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

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

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

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

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

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.

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

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.

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.

A full-service wholesaler will provide suppliers with market information they can't afford or can't obtain themselves.

Wholesalers may provide market information and business consulting services.

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

Larry and Dale Ingram 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. Larry and Dale operate as drop shippers.

Henry Hart supplies shelves of inexpensive plastic toys to grocery stores, supermarkets, and drug stores. He keeps title to the goods until they are sold and then splits the profits with the retailer. Henry works as a drop shipper.

Barbara Dixon operates a small business out of her home. She makes a trip to a local Riteprice Office Supply about once a month to buy computer and office supplies for her business. The prices at the Riteprice are very low, but it does not offer credit or delivery services. Riteprice is a cash-and-carry wholesaler.

Merrill helps growers of fresh fruits and vegetables negotiate sales to food processing companies. However, once he has helped negotiate the transaction, he does not maintain a long-term relationship with the growers. Merrill is an example of a sales agent in this market.

Retail organizations employ more than 5 million people in the U.S.

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

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

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

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

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

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

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

Warehouse clubs are usually smaller than supermarkets.

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

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

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

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

Producers of shopping goods such as furniture, appliances, and clothing usually rely on an exclusive distribution strategy.

An advantage of a selective distribution strategy is that consumers are able to find a popular product at a wide variety of retailers.

Retailers that participate in an exclusive distribution strategy will have a strong incentive to carry a large inventory of the good and provide exceptional service to customers.

In order to succeed in today's tough economic times all retailers must compete with low prices.

The main difference between selective distribution and exclusive distribution is the number and type of market segments the firm chooses. In a selective strategy, a variety of profitable niche markets are selected, while in an exclusive strategy one specific market segment is targeted, and all others are excluded.

According to the Adapting to Change box, the over 3 million food trucks in operation in the U.S. need to make sure they're up on the latest social media craze so they can reach customers.

Words 4 Hire is a nationwide chain of stores that offers such a huge selection of paperback and hardback books at such competitive prices that small local bookstores have a hard time competing with them. Words 4 Hire is best classified as a discount store.

Saul-Mart is the name of a new chain of discount stores. A major part of Saul-Mart's competitive strategy is likely to be based on keeping its prices lower than those of other types of retailers.

Soundworthy Stereo is a producer of high-quality speakers. The company sells its products through a few preferred retailers in any geographic area. Soundworthy uses a selective distribution strategy.

The Newsville City Press is a daily newspaper serving a city with a population of just over 200,000. The publishers have placed vending machines for their paper throughout Newsville and its suburbs. They also sell their papers at most of the supermarkets, convenience stores, bookstores, and drug stores in the area. The Newsville City Press uses an intensive distribution strategy.

The owners of the TriCities Mall recently renovated the mall's interior. Much of the interior of the mall was made to look like scenes from famous movies. The mall also hired employees to dress like characters from these movies. There are many types of shops in the mall, including six different jewelers; however, only one jeweler carries the very expensive Romex brand of watch that appeals to customers who are looking for status in their jewelry. Romex is practicing exclusive distribution by placing its brand in only one store in a given area.

Firms that rely on electronic retailing are almost guaranteed success because they give companies easy access to literally millions of consumers all over the world.

Electronic retailing is selling goods and services over the Internet to the final consumer.

Some websites are trying to improve their service by providing assistance from a real person.

A large number of traditional retailers have developed online sites in recent years, giving customers a choice of shopping techniques.

Traditional retailers that have begun using the Internet to supplement their physical stores are finding that the Internet not only provides a new way to sell goods, it also requires a new system to distribute goods.

Social commerce is a form of electronic commerce that involves social media.

Telemarketing is the sale of goods and services by telephone.

Vending machines are used primarily to sell goods where consumers have little interest in convenience.

Mall owners tend to like kiosks because they create a marketplace atmosphere.

One drawback of kiosks is that their high overhead costs result in low profit margins.

Direct selling is a distribution strategy that makes extensive use of the Internet and telephone.

Because so many people work outside the home and aren't at home during the day, companies that use direct selling are sponsoring parties at workplaces to sell their products.

In multilevel marketing, salespeople not only sell the product, they also recruit other people to sell the product.

In multilevel marketing upliners recruit downliners and receive a commission on the sales their downliners make.

The major disadvantage of multilevel marketing is that the high entry cost for most sellers means that only relatively wealthy individuals can use this approach.

Although there have been some unethical firms involved in multilevel marketing, this form of retailing remains quite successful.

Direct marketing involves having a salesperson visit the customer's home or place of business.

A major advantage of direct marketing is that it is a very convenient way for consumers to shop.

Telemarketing, catalog sales, and online shopping are all examples of direct marketing.

In the battle between electronic retailers and traditional "bricks and mortar" retailers, the electronic retailers seem to have all of the advantages needed to emerge as the clear winners.

Many firms that want to use an intensive distribution strategy would find vending machines an attractive method of selling their goods.

Direct selling has all but disappeared as a major form of nonstore retailing because the trend toward two-income households means fewer opportunities for selling in the home.

In multilevel marketing, salespeople have little incentive to recruit new salespeople, because the new salespeople may compete against them and reduce their income.

An important reason for the popularity of direct marketing is that many people enjoy developing a personal relationship with a salesperson that comes directly to their home or place or work.

Fancy Feet sells high-quality socks and stockings by sending catalogs to customers and offering them a toll-free telephone number so that they can call in their orders 24 hours a day any day of the year. Fancy Feet uses telemarketing.

Chris Cole is a salesperson for Green Scene Lawn Care products. Chris's job requires him to sell Green Scene products, but he is also expected to recruit more salespeople for the company. He will earn a commission on all of the sales earned by the salespeople he recruits. Green Scene is using a retail distribution strategy known as multilevel marketing.

Traditional retailers can stay competitive with online retailers by being part of a unified system of distribution.

There are four specific types of channel systems available to companies that tie firms together in a unified way.

In a corporate distribution system one firm owns all of the organizations in the distribution.

Corporate distribution systems consist of several independently owned intermediaries, all of them organized as multinational corporations.

A problem with the corporate distribution system is that the manufacturer has very little control over the operations of the retailers and other marketing intermediaries in the system.

Franchise systems, wholesaler-sponsored chains, and retail cooperatives are all forms of contractual distribution systems.

One advantage of a franchise system of distribution is that it results in a consistent level of quality and service.

In retail cooperatives, the members of the distribution system are bound to cooperate by a contractual agreement.

Wholesaler-sponsored chains consist of stores that are all owned by a single corporation.

In an administered distribution system, retail stores manage all of the marketing functions at the retail level.

The entire collection of organizations that move goods and services from the source of raw materials to the final consumer is referred to as the supply chain.

Because supply chains are so complex, firms have found it difficult to outsource supply chain management.

The process of managing the movement of raw materials, parts, work in progress, finished goods, and related information through all of the organizations involved in the supply chain in a timely manner is called multi-modal management.

Supply chain management manages the movement of relevant information as well as the movement of parts and finished goods through all organizations involved in the supply chain.

Supply chain management not only deals with the movement of materials, parts, and finished goods, it also manages the return of goods and recycling of materials when appropriate.

For a supply chain to be efficient, all of the activities must be performed by organizations that are owned by the manufacturer.

In the Reaching Beyond Our Borders box, we learned that natural disasters and other potential problems can wreak economic havoc on a supply chain.

Imaginex Toys, Inc., produces toys designed to stimulate the imaginations of young children. In order to control all of the marketing operations, Imaginex owns all of the organizations in the channel of distribution for its toys, including a chain of Imaginex retail stores. The approach taken by Imaginex is known as an administered distribution system.

Even though all of the hardware stores that operate under the name of Hardie's Hardware are independently owned and managed, they have signed an agreement to participate in chain promotions, and cooperate as a unified system of stores. The Hardie's Hardware stores are using a distribution system known as a wholesaler-sponsored chain.

Hi! Notes Card Shops has been approached by Novel Teas, a producer of herbal teas and exotic spices. Novel Teas wants to sell its products in the Hi! Notes stores under an administered distribution system. If Hi! Notes accepts Novel Teas proposal, it will perform many marketing services for the tea maker in exchange for a flat fee.

Lazee Ladd Furniture obtains materials from several suppliers and uses these materials to produce its goods. It relies on several marketing intermediaries to help it distribute the furniture. Together, Lazee Ladd, its suppliers, and the marketing intermediaries are all part of a supply chain.

Denise Shipman works in the marketing department of a major manufacturing firm. She spends a great deal of time trying to coordinate the movement of materials, parts, finished goods, and information through all of the organizations involved in the distribution process. These activities suggest that Denise's job responsibilities focus on supply chain management.

Logistics involves planning, implementing, and controlling the physical flow of materials, final goods, and related information from points of origin to points of consumption.

With the current emphasis on product development, pricing, branding, and promotion, the physical distribution of materials and goods is no longer a major concern of marketing.

Materials handling is that part of logistics that deals with moving goods within the warehouse, from the warehouse to the production floor, and to various work stations along the production process.

Inbound logistics is concerned with the flow of finished products from the manufacturer to the final consumer.

Inverted logistics is the term used for the activities involved in bringing products back to the producer due to defects or for recycling of materials.

Third-party logistics is the term used to describe the use of outside firms to help move goods from here to there.

Logistics is concerned with the flow of information as well as with the flow of goods.

The basic transportation service criteria are speed, cost, dependability, flexibility, frequency, and reach.

In the U.S. the largest percentage of goods (by volume) is shipped by truck.

Water transportation is the least expensive way to send goods overseas.

Water transportation has declined to the point where it now accounts for a very small part of transporting goods.

Water transportation has benefits and drawbacks; for example, it is inexpensive but slow.

A value of shipping by truck is that trucks can deliver small shipments to remote locations.

Pipelines are used primarily to transport water, petroleum, and petroleum products.

Pipelines move liquid products very efficiently and can even move products like coal.

Railroads are an energy-efficient mode of transporting many types of goods.

Although air transport currently accounts for only a small percentage of all shipments, it has become a critical mode in many industries.

The air freight industry is starting to focus on global distribution.

The use of multiple modes of transportation to complete a single long-distance movement of freight is known as multi-carrier shipping.

Services that specialize in intermodal shipping are known as intermodal marketing companies.

A freight forwarder breaks one large shipment into multiple small shipments so that it can be transported by trucks or aircraft with limited cargo capacities.

Some freight forwarders offer warehousing and customs assistance.

There are three major types of warehouses: centralized, dispersed, and mode-specific.

A distribution warehouse stores products for relatively long periods of time.

Seasonal goods are kept in storage warehouses.

Suppliers to large retailers like Target and Walmart may soon be required to use RFID tags when shipping products to these companies.

An increase in energy prices would encourage shippers to rely more on rail transportation.

Freight forwarders are particularly useful to large firms who must ship very large quantities on short notice.

The use of pipelines should decline in the future because this mode is suitable only for shipping petroleum.

The main difference between storage warehouses and distribution warehouses is that storage warehouses are relatively small, specialized facilities used to store one particular type of good for short periods while distribution warehouses are large facilities used to store a wide variety of goods for longer periods of time.

Because some of its key suppliers have been late with their shipments of materials and parts, Marnex Enterprises has had to shut down its manufacturing plant for several hours twice in the past week. These difficulties indicate that Marnex has done a poor job in managing its inbound logistics.

Clay Gates is a distribution specialist who has been looking at ways to improve the flow of parts and materials from his company's warehouses to the production line, and the movement of work in process throughout the company's factories. These efforts suggest that Clay's primary interest is in improving his company's inbound logistics.

Corinne is a marketing manager who specializes in logistical problems. In her position, Corrine is likely to focus mainly on managing the flow of goods, and leave issues about how to manage the flow of information to managers in other areas of marketing.

Zintelle, Inc. is a large manufacturing firm. It has recently reached an agreement with an intermodal marketing company to significantly reduce the cost of shipping its finished goods to some major business customers. This agreement will help Zintelle reduce the costs associated with outbound logistics.

Small-Timers, Inc., is a small manufacturer of charm bracelets that include watches as well as keepsake items and trinkets. The company seldom has shipments large enough to be transported cost-efficiently by filling an entire truck or railcar. Small-timers could benefit by relying on a freight forwarder to help it distribute its goods.

Childress Manufacturing wants to ship a large quantity of its goods across the country. They have contacted Grunwell Shipping, Inc., to find out what the shipment would cost. Grunwell has shown Childress how a combination of barges, trains, and trucks could be used to complete the shipment at low cost. Grunwell's strategy is an example of intermodal shipping.

Qwikship is a new delivery company that wants to compete against FedEx and UPS in the United States, Canada, and Mexico. One of the keys to Qwikship's success will be the ability to establish large storage warehouses at a few key locations throughout North America.

Those organizations that assist in the movement of goods and services from producer to industrial and consumer users are known as: A) directed marketers. B) distributive specialists. C) marketing intermediaries. D) supplementary marketers.

A(n) ____________ consists of the marketing intermediaries that transport and store goods as they move through their path from producer to final user. A) channel of distribution B) marketing network C) input-output matrix D) mode of distribution

A _________ is a marketing intermediary that sells products to other organizations. A) wholesaler B) retailer C) disintermediary D) jobber

A __________ is a marketing intermediary that sells to ultimate consumers. A) channel captain B) wholesaler C) secondary marketer D) retailer

A (n) _________ is one type of marketing intermediary that brings together buyers and sellers and assists in negotiating an exchange, but does not take title to the goods. A) agent B) retailer C) drop shipper D) merchant wholesaler

Marketing intermediaries: A) are unlikely to survive in a competitive global economy. B) have survived because they can often perform marketing functions faster and at lower cost than producers. C) create value, but this value is seldom great enough to justify the added cost they charge for their services. D) tend to increase the number of exchange relationships producers and consumers must deal with in order to buy and sell goods.

Marketing intermediaries: A) add value that exceeds the cost of their services. B) add cost that exceeds the value they provide. C) increase the number of exchange relationships in the channel. D) complicate the distribution process.

About __________ of the costs of things we buy are marketing costs that go to pay for distribution costs of intermediaries. A) 25 percent B) 30 percent C) 75 percent D) 90 percent

In the distribution process, the largest percentage of the retail price goes to: A) profits. B) warehouse costs. C) labor. D) transportation.

Which of the following statements about channels of distribution is most accurate? A) Channels of distribution always begin with a manufacturer and end with consumers, and always have one or more marketing intermediaries in between. B) Channels of distribution always include retailers, but they may or may not also include wholesalers. C) The fewer the marketing intermediaries in a channel of distribution, the more efficient the channel is likely to be. D) Some channels of distribution include marketing intermediaries, while in others a manufacturer sells directly to the final consumer.

The primary difference between retailers and wholesalers is that: A) retailers sell consumer goods, while wholesalers sell industrial goods. B) retailers operate in local areas, while wholesalers operate over a wide geographic area. C) retailers sell to final consumers, while wholesalers sell to other organizations, such as retailers or manufacturers. D) retailers have sales of less than $100 million, while wholesalers have sales of $100 million or more.

Which of the following statements about marketing intermediaries is true? A) All channels of distribution must contain at least one marketing intermediary. B) Marketing intermediaries and their functions can be eliminated. C) Marketing intermediaries survive because they can perform marketing functions faster and more cheaply than producers and consumers. D) The costs added to products by marketing intermediaries usually exceed the value they add to products.

Nina Corby owns a card shop in a small shopping center where she sells cards produced by a national company. Nina sells to final customers, so she is a: A) merchant wholesaler. B) retailer. C) rack jobber. D) channel captain.

Patrick Bolger is convinced that his product idea has tremendous potential. He has decided to produce the product himself, but plans to use other firms who specialize in storing and transporting to help him move the product along its path to the final consumer. These specialists Patrick uses will be part of his: A) wheel of retailing. B) market network. C) channel of distribution. D) franchise system.

Suppose that eight bakeries each tried to sell their products directly to seven supermarkets. The total number of exchange relationships that would be established is: A) 14. B) 25. C) 56. D) 72.

Mark A) Teer believes he has found a surefire way to save money. He advises his friends, "Buy direct from the manufacturer. Any time intermediaries get involved, you'll pay a higher price. After all, every intermediary involved in the marketing process must charge enough to earn a profit." Mark's advice: A) is entirely correct. Intermediaries must charge a high enough price for the activities they perform to earn a profit, so using intermediaries must result in a higher price. B) is impractical, because in most markets the distribution process is so complex that it is impossible to determine who the actual producer really is. C) is not valid in many cases. Intermediaries do add costs to products, but they also create value by performing marketing functions efficiently. In many cases the value they create more than offsets the costs they add. D) is never true. Markets that make use of intermediaries can always provide goods at lower cost than those that rely on direct distribution.

Robbie Veath brings together buyers and sellers of used heavy construction equipment, and helps them negotiate the terms of the sale. However, Robbie never actually takes title to any of the equipment himself, nor does he provide any financing for the buyer. Robbie is acting as a: A) channel captain. B) broker. C) wholesaler. D) logistics specialist.

Sharp Focus Cameras is facing intense competitive pressure. Top marketing managers are looking for ways to cut costs. They are considering a plan to cut distribution costs by eliminating marketing intermediaries from the channel of distribution. If Sharp Focus carries out this plan, it is likely to find that: A) most of the marketing functions performed by marketing intermediaries are helpful, but they aren't really necessary. B) as the producer of the products, it will be able to perform the same functions more efficiently. C) it will be unable to perform the functions as efficiently as they were performed by the marketing intermediaries. D) telemarketing will become the only viable means of distributing its products.

__________ is the value or want-satisfying ability that is added to products by organizations that make the product more useful or accessible to consumers. A) Utility B) Applicability C) Functionality D) User friendliness

__________ utility is usually provided by producers rather than marketers. A) Possession B) Time C) Place D) Form

The types of utility commonly provided by marketing intermediaries include: A) product, price, place, and promotion. B) time, place, possession, information, and service. C) retailing, wholesaling, brokering, and financing. D) cost, value, flexibility, use, and resale.

When marketing intermediaries perform the steps necessary to transfer ownership from one party to another, they are providing _________ utility. A) marginal B) title C) possession D) registration

Placing ads in newspapers and having knowledgeable salespeople to answer customers' questions are ways marketing intermediaries can provide: A) form utility. B) possession utility. C) time utility. D) information utility.

One way a store selling high-def televisions might add ________ utility is to provide convenient delivery and setup to customers. A) possession B) distributive C) conditional D) time

Marketing intermediaries add ________ utility to products by having them available when consumers want them. A) time B) allocative C) response D) form

_________ utility adds value to goods by having them available where people want them. A) Spatial B) Location specific C) Place D) Geographic

Retailers who have stores at convenient locations are trying to add value by: A) using a horizontal distribution strategy. B) using a broad resource allocation strategy. C) providing place utility. D) achieving market concentration.

One way traditional retailers have maintained customers in the face of increasing competition from online sellers and other direct markers is to place more emphasis on providing _________ utility. A) psychographic B) place C) service D) form

Marketing intermediaries can provide _________ utility by offering customers affordable credit, free delivery, and product guarantees. A) possession B) information C) form D) promotion

Stores that remain open 24 hours a day, seven days a week are providing _________ utility to their customers. A) possession B) time C) service D) schedule

The Knot is an online company that helps people with the complex task of planning a wedding. Multiple vendors are recommended for things like flowers, caterers, wedding gowns, and more. Through The Knot, a couple can establish a website that acts as a registry. Once the couple is married, the website directs them to another site having to do with beginning married life. What type of utility or utilities is this site providing to its users? A) Form only B) Service only C) Service and information D) Form and service

E-Gadgets is a chain of electronics stores that specializes in devices and gadgets incorporating cutting-edge technologies. The company has more than 170 stores located in large cities throughout the Southeast and Midwest. E-Gadgets has chosen the locations of its stores so that most customers living in upper middle class and wealthy neighborhoods can get to an E-Gadgets store in less than 15 minutes. E-Gadgets is providing its customers with: A) scrambled merchandising. B) allocative utility. C) place utility. D) saturation marketing.

Barbeau Heating and Cooling offers customers who buy air conditioners and furnaces free delivery and low installation charges. The company also offers a free follow-up inspection of the new equipment one month after it is installed. These services are ways that Barbeau provides its customers with __________ utility. A) possession B) time C) marginal D) situational

Which of the following statements about service utility is most accurate? Service utility is: A) becoming less important to retailers in this age of self-service marketing. B) the one type of utility that online firms provide more efficiently than traditional retailers. C) more likely to be provided by wholesalers than by retailers. D) becoming crucial to traditional retailers as they try to prevent their customers from defecting to firms using direct marketing.

At Stockman's Butcher Shop the butchers will hand cut steaks to the thickness their customers specify and trim off the excess fat. This extra service provides ________ utility. A) possession B) form C) secondary D) alterational

____________ wholesalers are independently owned and take title to the goods they handle. A) Full service broker B) Merchant C) Agent D) Primary

The two basic types of merchant wholesalers are: A. full-service wholesalers and limited-function wholesalers. B. functional wholesalers and distributive wholesalers. C. independent wholesalers and subsidiary wholesalers. D. capital wholesalers and full-value wholesalers.

___________ are merchant wholesalers who perform all of the distribution functions. A) Retailers B) Intensive contact wholesalers C) Total-capacity wholesalers D) Full-service wholesalers

Marketing intermediaries that solicit orders from retailers or other wholesalers and have the products delivered directly from the producer to the buyer are known as: A) drop shippers. B) truck jobbers. C) channel captains. D) merchandise agents.

___________ are limited-function wholesalers who furnish shelves full of merchandise to retailers who sell these items on consignment. A) Cash-and-carry wholesalers B) Rack jobbers C) Merchandise forwarders D) Consignment agents

Limited-function wholesalers that mainly serve small businesses by selling them a limited assortment of goods are known as: A) backdoor wholesalers. B) consolidated wholesalers. C) cash-and-carry wholesalers. D) agency wholesalers.

Unlike merchant wholesalers, ___________ never actually own the goods they help to distribute. A) rack jobbers B) retailers C) cash-and-carry wholesalers D) agents and brokers

__________ may represent several producers in a specific territory, as long as they do not represent competing products. A) Consignment brokers B) Sales contractors C) Manufacturer's agents D) Freight forwarders

The main way __________ differ from agents is that they do not develop long-term relationships with the buyers or sellers they assist. A) brokers B) rack jobbers C) wholesalers D) sales discounters

Which of the following activities would a drop shipper be most likely to perform? A) Provide delivery services from a wholesaler's warehouse to a retailer's store B) Solicit orders from a retailer and arrange for the producer to make the deliveries C) Manage a large stock of items in a single product category, and make large volume shipments to other intermediaries using rail or truck D) Provide brokerage services by helping other wholesalers negotiate deals

Which of the following statements provides the most accurate distinction between an agent and a broker? Agents: A) represent final buyers while brokers represent marketing intermediaries. B) represent one manufacturer in a large sales area, while brokers represent several different manufacturers in a smaller area. C) develop a long-term relationship with the people they represent, while brokers are usually hired on a temporary basis. D) take title to the goods they help distribute, while brokers never assume ownership of the products they distribute.

Paper 'N More sells a variety of office supplies to small businesses and local offices. The fact that it sells only to other firms and not consumers indicates that Paper 'N More engages only in: A) wholesale sales. B) mass marketing. C) pure retailing. D) second-tier retailing.

Rita Sauer stocks several local supermarkets and discount stores with Lumi Cosmetics. She sets up displays of various cosmetic products carrying the Lumi brand name, and sells the goods on consignment, sharing any profits on the sales with the retailer. Rita is a: A) cash-and-carry wholesaler. B) truck jobber. C) broker. D) rack jobber.

Comstock Coal Distributors does not mine coal itself. In fact, the firm does not even store or handle coal. Instead, Comstock solicits orders for low sulfur coal from other firms, then purchases the required amount from suppliers and directs them to ship the coal to its customers. Comstock is a: A) drop shipper. B) resource delivery facilitator. C) cash-and-carry wholesaler. D) limited distribution broker.

Which of the following would be the best example of a broker? A) Tri-State Lumber Supply does not actually store, handle, or deliver lumber, but rather solicits orders from retail hardware and home improvement stores, takes title to the lumber, then arranges for it to be shipped directly from sawmills to the retail stores. B) Jill Moon helps buyers and sellers of used heavy construction equipment negotiate the terms and conditions of their transactions, but does not actually take title to any of the equipment, nor does she develop long-term relationships with the buyers or sellers. C) Hal Hinton is not an employee of Hyloft Golf Clubs, but he does solicit sales for their products at golf and sporting goods stores in a fairly large sales territory. D) Spence Coker is employed by a vacuum cleaner company, and goes door-to-door selling products produced by his company.

Discount stores, supermarkets, and department stores are all common types of: A) multilevel marketers. B) full-service wholesalers. C) retail stores. D) category killers.

A(n) __________ sells general merchandise directly from the manufacturer at a discount; items may be discontinued or have certain product flaws. A) department store B) discount store C) outlet store D) specialty store

Discount stores owe much of their success to a competitive strategy based on: A) low prices. B) extra service. C) special credit arrangements. D) a wide selection in a limited number of categories of goods.

Retailers such as jewelry stores, shoe stores, and bicycle shops are: A) department stores. B) discount stores. C) warehouse clubs. D) specialty stores.

A __________ offers a huge selection of one type of product (such as books, toys, or sporting goods) to dominate that category of goods. A) department store B) category killer store C) saturation retailer D) cash-and-carry retailer

A firm that wants to distribute its products as widely in a market as possible would use a(n) ___________ distribution strategy. A) extensive B) shotgun C) universal D) intensive

A(n) ___________ distribution strategy distributes a product through only a preferred group of retailers in a given area. A) intensive B) selective C) exclusive D) restrictive

A(n) ______________ distribution strategy uses only one retail outlet in a given geographic area. A) selective B) restrictive C) exclusive D) solitary

Producers of snack foods (such as candy bars or potato chips) are most likely to use a(n) _____________ distribution strategy for their products. A) intensive B) exclusive C) selective D) restrictive

___________ would probably be distributed using an intensive strategy. A) iPads B) High-def television sets C) Men's suits D) Popular magazines

Which of the following firms would be most likely to use a selective distribution strategy for its products? A) Newspaper publisher B) Maker of designer men's suits C) Super luxury car manufacturer D) Maker of snack foods such as potato chips and pretzels

Producers who use an exclusive distribution strategy for their products can expect retailers who carry the products to do which of the following? A) Carry a large inventory of their products B) Provide limited service and delivery for their products C) Sell their products at substantially discounted prices D) Pay attention to the multiple competing brands that they carry

Marcy and Liz developed a new jewelry design. They were fortunate to get the attention of a large online retailer who was willing to fund the production of the jewelry abroad, as long as the designers agreed to sell their design through its outlets for the first two years. The retailer was asking the designers to agree to __________________. A) intensive distribution B) exclusive distribution C) multi-level distribution D) selective distribution

Sportstors, Inc., operates a chain of very large stores that offer an incredible selection of sporting goods at very competitive prices. When Sportstors opens its first store in a geographic area, smaller sporting goods stores almost always experience a noticeable drop in sales. Sportstors stores can be classified as: A) warehouse clubs. B) department stores. C) category killers. D) full-service wholesalers.

Northern Lights Electronics just completed plans to distribute its new tablet. The product has several unique features that differentiate it from competitor products. The marketing team plans to begin a roll-out with ____________ to only one traditional retailer for the first two months. This strategy will give consumers the perception of the product's stand-out personality and increase demand. Marketing will proceed with _______________ for the next four months, where it plans to distribute to three other retailers, as well. For the last six months of the year, it will initiate distribution agreements with discount retailers and online retailers, and any other electronics store that wants to carry it. The marketing team is confident that the tablet will cycle through the first three stages of its product life cycle quickly. As the tablet reaches maturity during the second half of its first year in the market, it is good strategy to proceed with ______________, as described above. A) mono-level distribution; secondary level distribution; tertiary level distribution B) intensive distribution; selective distribution; exclusive distribution C) tertiary level distribution; secondary level distribution; mono-level distribution D) exclusive distribution; selective distribution; intensive distribution

Tammy Knowles is the publisher of "New Woman Magazine," which is a publication targeted to Gen Y women. Because it is a small, new publication, some of the larger bookstores, convenience stores and newsstands are not agreeing to distribute the magazine. Tammy is very concerned by this trend, because she believes that her publication, like most magazines, needs ____________ distribution in order to succeed. A) selective B) exclusive C) intensive D) exhaustive

Delacroix Shoes produces top-quality high-fashion shoes, designed for the person concerned about style. Delacroix gives only a few preferred retailers in a given market area the right to market its product. Delacroix Shoes uses: A) intensive distribution. B) selective distribution. C) exclusive distribution. D) limited function distribution.

Lazario Motor Car Company produces some of the most luxurious and expensive cars in the world. The company typically authorizes only a single dealership to sell its cars in certain major metropolitan areas. In less populous areas, Lazario authorizes a single dealer for an entire state or region. The manufacturer of Lazario automobiles is using a(n) ___________ distribution strategy for its product. A) intensive B) primary C) extrinsic D) exclusive

___________ means selling goods and services to ultimate consumers over the Internet. A) Electronic retailing B) B2B distribution C) E-selling D) Intercommerce

___________ is the sale of goods and services by telephone. A) Cel-tailing B) Teleselling C) Telemarketing D) Direct marketing

Vending machines are most often used to sell: A) shopping goods. B) convenience goods. C) specialty goods. D) inferior goods.

Mall owners like to have __________ located along the walkways of their malls, because they create a marketplace type of atmosphere. A) cartels B) storettes C) kiosks D) minimarts

Companies who send salespeople to customers' homes or places of work are making use of __________ selling. A) direct B) point of contact C) downline D) nonretail

In _____________, salespeople are independent contractors who not only sell the product, but also recruit additional salespeople. A) telemarketing B) two-stage marketing C) hierarchical marketing D) multilevel marketing

In multilevel marketing, independent contractors who sell a product can increase their own incomes by recruiting _________ to also sell the product. A) commissionaires B) front-men C) merchant wholesalers D) downliners

In the terminology of multilevel marketing, downliners: A) are the intermediaries who are responsible for handling the shipping of goods down the channel of distribution from the producer to the retailer. B) are salespeople who have been recruited by other salespeople known as upliners to market the product. C) sell through a telemarketing arrangement, while upliners use direct selling. D) are experienced salespeople who are allowed to sell in more than one franchise area by the distributor.

Direct mail, telemarketing, and catalog sales are all common examples of: A) direct marketing. B) downline selling. C) multilevel marketing. D) direct selling.

Any marketing method that directly links manufacturers or intermediaries with the ultimate consumer could be classified as: A) direct selling. B) online marketing. C) direct marketing. D) kiosk-based.

The characteristic that all forms of direct marketing have in common is that they: A) are carried out by agents or brokers. B) involve face-to-face or teleconferencing sessions with the customer. C) include some type of activity that directly links manufacturers to the ultimate consumer. D) make use of exclusive distribution systems with a network of traditional "bricks and mortar" stores.

In the terminology of multilevel marketing, which of the following statements about the relationship between upliners and downliners is most accurate? In multilevel marketing, A) upliners are intermediaries who deal directly with final customers, while downliners are intermediaries who coordinate the transportation and storage services the upliners need to move the goods they sell through the channel of distribution. B) upliners are salespeople who act as independent contractors, earning commissions on their own sales and also on the sales of downliners, who are additional salespeople that they recruit. C) upliners sell through electronic retailing arrangements, while downliners use more traditional methods of retail selling. D) upliners use intensive distribution strategies to sell a good, while downliners use either a selective or exclusive distribution strategy to sell the same type of good.

Which of the following statements identifies a key advantage of direct marketing? Direct marketing: A) enables salespeople to close a non-refundable sale in the customer's home or place of work. B) allows firms to expand their markets by selling to both ultimate consumers and other marketing intermediaries. C) is popular with consumers because it is so convenient to shop from home or work. D) creates a strong incentive for salespeople to recruit additional salespeople in order to gain the greatest possible market coverage.

Which of the following assessments of electronic retailing is most accurate? A) Electronic retailing has two major advantages over traditional businesses: simplicity and very low start-up costs. B) One of the reasons electronic retailing firms have been so successful has been their ability to deal with customer complaints and provide personalized services more efficiently than traditional firms. C) Traditional retailers seldom find much success when they attempt to incorporate online selling into their businesses. D) The line between electronic retailing and traditional retailing is blurring as traditional retailers go online.

Which of the following statements about kiosks and carts is the most accurate? A) Kiosks and carts are popular with mall owners because their sales are exempt from sales taxes. B) Mall owners often want kiosks and carts to be located along their walkways because they create a marketplace atmosphere. C) Kiosks and carts have struggled in recent years because of their high overhead costs. D) Most mall owners would like to eliminate kiosks and carts from their walkways, but are barred by law from doing so.

Sports Coasters sells good-quality athletic wear by sending its customers a catalog nine times a year. The company has no retail stores, but offers a toll-free order number that operates 24 hours a day, 365 days a year. Sports Coasters sells using a technique known as: A) tel-tailing. B) indirect marketing. C) telemarketing. D) multilevel marketing.

Which of the following is an example of a consumer making a purchase through a direct marketing arrangement? A) Purchasing a box of cereal at a local grocery store with a coupon on the box B) Purchasing software at a big-box retailer's special tech department C) Purchasing a set of towels featured in a department store's lower level D) Purchasing a book on the history of the U.S. by sending in an order form attached to a pamphlet sent to the customer by the publisher

In a(n) ____________ distribution system all of the organizations in the channel of distribution are owned by one firm. A) administered B) contractual C) supply-based D) corporate

In a(n) __________ distribution system the producer manages all of the marketing functions at the retail level. A) administered B) contractual C) conglomerate D) master limited

Franchise systems are one type of __________ distribution system. A) corporate B) wholesale C) contractual D) administered

McDonald's, KFC, Baskin-Robbins, and AAMCO all make use of the __________ form of contractual distribution system. A) wholesale-sponsored chain B) franchise C) retail cooperative D) horizontally administered

In a(n) ___________, independently owned and managed stores sign an agreement to use the same name, participate in chain promotions, and cooperate as a unified system. A) administered distribution system B) corporate distribution system C) wholesaler-sponsored chain D) cash-and-carry chain

Taken together, all of the organizations that move goods from the sources of raw materials to ultimate consumers are known as a: A) multifunction network. B) supply chain. C) critical distribution path. D) marketing priority network.

__________ manages the movement of raw materials, parts, work in progress, finished goods and related information throughout the supply chain, as well as managing the return of goods when necessary and the recycling of goods when appropriate. A) Distribution planning B) Multilevel marketing C) Supply chain management D) Distributional strategy

A common trait of corporate distribution systems, administered distribution systems, contractual distribution systems and supply chains is that they all: A) are arrangements which seek to distribute goods more efficiently by eliminating most functions performed by marketing intermediaries. B) seek to consolidate and control the distribution system by having one firm own all of the distribution functions. C) attempt to improve the efficiency of distribution systems by linking the firms together in a formal relationship. D) have been replaced by more efficient distribution systems relying heavily on online linkages.

One thing that franchise systems, wholesaler-sponsored chains and retail cooperatives have in common is that they are all: A) distribution systems in which producers also act as intermediaries in the distribution process. B) dependent on multilevel marketing strategies. C) forms of distribution systems in which a single firm owns all of the organizations involved in distributing the product. D) forms of contractual distribution systems.

In administered distribution systems, retailers: A) are reluctant to cooperate because they must perform many marketing functions for an uncertain payment. B) receive a great deal of marketing help from producers. C) are really subsidiaries of a manufacturer. D) sign a contract agreeing to cooperate with wholesalers in the channel of distribution.

Which of the following statements about wholesaler-sponsored chains is most accurate? In a wholesaler-sponsored chain all stores: A) are independently owned, but cooperate as a unified system of stores. B) act independently except for an agreement to share the costs associated with distribution. C) are owned by a single wholesaler, but operate under separate management. D) share profits and losses according to a contractual arrangement.

Which of the following activities is most likely to be performed by someone responsible for supply chain management? A) Developing an effective advertising campaign for a particular line of products B) Establishing a budget for the firm's next fiscal year C) Finding ways to handle the return of goods and recycled materials D) Holding focus groups to learn what consumers want in new products

Sherwin Williams owns its manufacturing sites as well as over 3,000 retail stores in North America. Sherwin Williams exemplifies a ___________________. A) selective distribution system B) contractual distribution system C) administered distribution system D) corporate distribution system

TasteBest Spice Company was unable to get retailers to agree to a contractual arrangement to cooperate in the distribution process, so it took over all of the marketing functions for its products at grocery stores. The grocers like this arrangement because TasteBest provides outstanding marketing support for its products. TasteBest is using a(n) _________ system to distribute its products. A) corporate distribution B) franchise C) retail cooperative distribution D) administered distribution

Millie Woods owns and operates a World of Food grocery store. Although her store is independently owned and operated, she has signed an agreement with over seventy stores in the Midwest to use a common name, participate in chain promotions, and cooperate with other stores in the chain. Millie's store is part of a(n): A) administered chain. B) wholesaler-sponsored chain. C) corporate distribution system. D) horizontal distribution chain.

Tony works at an auto assembly plant for a U.S. auto manufacturer. He manages a group of employees who measure the quality of parts that arrive on rail cars from Mexico and other countries. As a receiver of auto parts from other suppliers, Tony works in __________________. A) third-party logistics. B) supply chain management. C) a corporate distribution system. D) direct mail operations.

Rodney Halpern works in the marketing department of a major manufacturing firm. Much of his job involves managing the movement of materials, parts, and information from suppliers to his firm. He tries to coordinate these flows with his firm's factory processes and assists with the efficient movement of finished goods to final consumers. These activities suggest that Rodney's job responsibilities focus on: A) merchant wholesaling. B) multilevel marketing. C) utility processing. D) supply chain management.