31) In a ________, two or more companies at one level join together to develop a new marketing opportunity.
A) franchise
B) horizontal marketing system
C) corporate VMS
D) multichannel distribution system
E) conventional distribution channel
Answer: B
Diff: 1 Page Ref: 348
Skill: Concept
Objective: 12-2
32) Which of the following is an example of a manufacturer-sponsored retailer franchise system?
A) fast-food restaurants such as McDonald's and Burger King
B) Starbucks operating within Target stores
C) Ford and its network of independent franchised dealers
D) licensed bottlers that bottle and sell Coca-Cola to retailers
E) motels such as Holiday Inn and Ramada Inn
Answer: C
Diff: 3 Page Ref: 347
Skill: Concept
Objective: 12-2
33) When McDonald's offers its products inside of a Walmart store, it is using a(n) ________.
A) conventional distribution channel
B) corporate VMS
C) contractual VMS
D) administered VMS
E) horizontal marketing system
Answer: E
Diff: 3 Page Ref: 348
Skill: Concept
Objective: 12-2
34) As marketing manager for Globe Imports and Exports, you want to start reaping the benefits of a multichannel distribution system. You will likely enjoy all of the following EXCEPT which one?
A) expanded sales
B) expanded market coverage
C) selling at a higher gross margin
D) opportunities to tailor products and services to the needs of diverse segments
E) A and C
Answer: C
Diff: 3 Page Ref: 349
AACSB: Dynamics of the Global Economy
Skill: Concept
Objective: 12-2
35) Which of the following is the most likely disadvantage of adding new channels in a multichannel distribution system?
A) decreasing understanding of complex markets
B) decreasing control over the system
C) fewer opportunities for franchising
D) increasing disintermediation
E) reducing conflict among channel members
Answer: B
Diff: 2 Page Ref: 349
Skill: Concept
Objective: 12-2
36) Due in a large part to advances in technology, ________ is a major trend whereby product and service producers are bypassing intermediaries and going directly to final buyers, or radically new types of channel intermediaries are emerging to displace traditional ones.
A) the vertical marketing system
B) the corporate marketing system
C) disintermediation
D) the corporate merger
E) the hostile takeover
Answer: C
Diff: 2 Page Ref: 350
AACSB: Use of Information Technology
Skill: Concept
Objective: 12-2
37) The four major steps of designing a channel system are analyzing consumer needs, setting channel objectives, ________, and evaluating the alternatives.
A) establishing a budget
B) identifying major channel alternatives
C) seeking regulatory approval
D) seeking legal advice
E) measuring objectives
Answer: B
Diff: 2 Page Ref: 351
Skill: Concept
Objective: 12-3
38) Which of the following should be the first step in designing a marketing channel?
A) identifying channel objectives
B) identifying what consumers want from the channel
C) analyzing channel alternatives
D) evaluating intermediaries
E) exploring international opportunities
Answer: B
Diff: 2 Page Ref: 351
Skill: Concept
Objective: 12-3
39) To increase a channel's service level, the channel must provide a greater assortment of products, more add-on services, or ________.
A) lower prices
B) fewer middlemen
C) faster delivery
D) more competition
E) less follow-up
Answer: C
Diff: 2 Page Ref: 351
Skill: Concept
Objective: 12-3
40) Companies should state their channel objectives in terms of targeted levels of ________.
A) co-op advertising
B) efficiency
C) customer service
D) conflict reduction
E) profitability
Answer: C
Diff: 2 Page Ref: 352
Skill: Concept
Objective: 12-3
41) When a company is identifying its major channel alternatives, it should consider its choices in terms of ________ of intermediaries.
A) size, power, and profitability
B) power, cooperativeness, and location
C) types, number, and responsibilities
D) capacity, creativity, profitability
E) types, breadth, depth
Answer: C
Diff: 2 Page Ref: 352
Skill: Concept
Objective: 12-3
42) Which product will most likely be intensively distributed?
A) Olympus digital cameras
B) BMW cars
C) Guess blue jeans
D) Coca-Cola
E) Nike running shoes
Answer: D
Diff: 2 Page Ref: 352-353
Skill: Concept
Objective: 12-3
43) Which type of product might require a more direct marketing channel to avoid delays and too much handling?
A) lower-priced products
B) perishable products
C) high-priced products
D) products in their maturity stage
E) products in their decline stage
Answer: B
Diff: 2 Page Ref: 352
Skill: Concept
Objective: 12-3
44) When determining the number of channel members to use at each level, three strategies are available: intensive, exclusive, and ________ distribution.
A) multichannel
B) selective
C) international
D) direct
E) extensive
Answer: B
Diff: 1 Page Ref: 352
Skill: Concept
Objective: 12-3
45) An intensive distribution strategy is most suitable for which consumer product category?
A) convenience products
B) unsought goods
C) shopping products
D) luxury products
E) supplies
Answer: A
Diff: 2 Page Ref: 352-353
Skill: Concept
Objective: 12-3
46) Sometimes a producer chooses only a few dealers in a territory to distribute its products or services. Generally these dealers are given a right to ________ distribution.
A) exclusive
B) selective
C) intensive
D) administered
E) corporate
Answer: A
Diff: 1 Page Ref: 353
Skill: Concept
Objective: 12-3
47) Which type of distribution is used when the producer wants more than one, but fewer than all, of the intermediaries who are willing to carry its products?
A) exclusive
B) selective
C) intensive
D) administered
E) corporate
Answer: B
Diff: 1 Page Ref: 353
Skill: Concept
Objective: 12-3
48) When establishing the responsibilities of channel members, the producer establishes a list price, sets discounts for intermediaries, and defines each channel member's ________.
A) sales limits
B) territory
C) legal rights
D) customers
E) mission
Answer: B
Diff: 2 Page Ref: 353
Skill: Concept
Objective: 12-3
49) When a company compares the likely sales, costs, and profitability of different channel alternatives, it is using ________ criteria to evaluate its channel options.
A) selective
B) adaptive
C) economic
D) control
E) distribution
Answer: C
Diff: 2 Page Ref: 353
Skill: Concept
Objective: 12-3
50) It is most common for international marketers to ________ their channel strategies for each country.
A) extend
B) adapt
C) restrict
D) seek approval for
E) eliminate
Answer: B
Diff: 2 Page Ref: 354
AACSB: Dynamics of the Global Economy
Skill: Concept
Objective: 12-3
51) China and India each contain more than one billion people. However, companies can access only a small percentage of these potential markets due to ________.
A) inadequate distribution systems
B) indifference toward Western products
C) high regional taxes
D) the religious caste system
E) insurmountable language barriers
Answer: A
Diff: 3 Page Ref: 354
AACSB: Dynamics of the Global Economy
Skill: Concept
Objective: 12-3
52) A company should think of its intermediaries as both its ________ and ________.
A) competitors; partners
B) customers; partners
C) competitors; marketers
D) customers; employees
E) competitors; customers
Answer: B
Diff: 2 Page Ref: 355
Skill: Concept
Objective: 12-4
53) Most companies practice strong PRM to forge long-term relationships with channel members. What does PRM stand for?
A) primary relationship management
B) potential relationship management
C) perennial relationship management
D) partner relationship management
E) personnel roster maintenance
Answer: D
Diff: 1 Page Ref: 355
Skill: Concept
Objective: 12-4
54) Caterpillar, the famous heavy equipment manufacturer, has a reputation for working in harmony with its worldwide distribution network of independent dealers. Caterpillar has shared its successes with its dealers and protected its dealers during difficult economic times. This is an example of ________.
A) intensive distribution
B) integrated logistics management
C) disintermediation
D) 3PL
E) PRM
Answer: E
Diff: 2 Page Ref: 355
Skill: Concept
Objective: 12-4
55) Sometimes a seller requires its dealers to abstain from handling competitors' products in an arrangement called ________.
A) exclusive distribution
B) exclusive dealing
C) selective distribution
D) exclusive pricing
E) disintermediation
Answer: B
Diff: 2 Page Ref: 356
AACSB: Ethical Understanding and Reasoning Abilities
Skill: Concept
Objective: 12-4
56) Exclusive dealing is legal as long as it does not ________ or tend to create a monopoly and as long as both parties enter into the agreement ________.
A) substantially lessen competition; coercively
B) restrict trade; for a cause
C) substantially lessen competition; voluntarily
D) interfere with competitors; forcefully
E) create a smaller market; permanently
Answer: C
Diff: 3 Page Ref: 356
AACSB: Ethical Understanding and Reasoning Abilities
Skill: Concept
Objective: 12-4
57) A producer of a strong brand that agrees to sell its brand to a dealer only if the dealer will take some or all of the rest of the line is using ________.
A) exclusive distribution
B) exclusive dealing
C) intensive distribution
D) a tying agreement
E) disintermediation
Answer: D
Diff: 2 Page Ref: 357
AACSB: Ethical Understanding and Reasoning Abilities
Skill: Concept
Objective: 12-4
58) Marketing logistics involves getting the right product to the right customer in the right place at the right time. Which one of the following is NOT included in this process?
A) planning the physical flow of goods and services
B) implementing the plan for the flow of goods and services
C) controlling the physical flow of goods, services, and information
D) gathering customer's ideas for new products
E) planning the flow of logistics information to meet customer requirements at a profit
Answer: D
Diff: 1 Page Ref: 357
Skill: Concept
Objective: 12-5
59) Marketing logistics involves which of the following distribution flows?
A) outbound and inbound only
B) outbound, inbound, and reverse
C) inbound and reverse only
D) outbound and reverse only
E) outbound only
Answer: B
Diff: 2 Page Ref: 357
Skill: Concept
Objective: 12-5
60) ________ logistics controls the movement of products from points of production to consumers.
A) Inbound
B) Reverse
C) Outbound
D) Vertical
E) Horizontal
Answer: C
Diff: 2 Page Ref: 357
Skill: Concept
Objective: 12-5
61) ________ logistics concerns the methods consumers use to send products to a producer for return or repair.
A) Inbound
B) Reverse
C) Outbound
D) Vertical
E) Horizontal
Answer: B
Diff: 2 Page Ref: 357
Skill: Concept
Objective: 12-5
62) Which of the following is NOT an area of responsibility for a logistics manager?
A) information systems
B) warehousing
C) promotions
D) inventory
E) purchasing
Answer: C
Diff: 2 Page Ref: 358
Skill: Concept
Objective: 12-5
63) Which of the following innovations has created opportunities for significant gains in distribution efficiency?
A) tying agreements
B) Web-based logistics systems
C) customer relationship management
D) contractual vertical marketing systems
E) storage warehouses
Answer: B
Diff: 2 Page Ref: 358
AACSB: Use of Information Technology
Skill: Concept
Objective: 12-5
64) The goal of marketing logistics should be to provide a ________ level of customer service at the least cost.
A) maximum
B) targeted
C) moderate
D) minimum
E) noncompetitive
Answer: B
Diff: 2 Page Ref: 358
Skill: Concept
Objective: 12-5
65) The difference between distribution centers and storage warehouses is that distribution centers are designed to ________.
A) store goods for longer periods
B) hold larger volumes
C) move goods rather than just store them
D) primarily be owned by the manufacturer
E) be automated
Answer: C
Diff: 2 Page Ref: 360
Skill: Concept
Objective: 12-5
66) To reduce inventory management costs, many companies use a system called ________, which involves carrying only small inventories of parts or merchandise, often only enough for a few days of operation.
A) reduction-inventory management
B) just-in-time logistics
C) limited inventory logistics
D) supply chain management
E) economic order quantity
Answer: B
Diff: 2 Page Ref: 361
AACSB: Use of Information Technology
Skill: Concept
Objective: 12-5
67) Through the use of ________, or "smart tag" technology, a company is able to locate a product's exact position within the supply chain.
A) RFID
B) PRM
C) VMS
D) IT
E) 3PL
Answer: A
Diff: 2 Page Ref: 361
AACSB: Use of Information Technology
Skill: Concept
Objective: 12-5
68) Which of the following transportation modes is used for digital products?
A) trucks
B) rail
C) the Internet
D) air
E) ship
Answer: C
Diff: 1 Page Ref: 362
AACSB: Use of Information Technology
Skill: Concept
Objective: 12-5
69) In the proper order, identify the correct terms for these intermodal transportation combinations: rail and truck, water and truck, water and rail.
A) fishyback; airtruck; trainship
B) piggyback; airtruck; fishyback
C) trainship; fishyback; piggyback
D) piggyback; fishyback; trainship
E) piggyback, fishyback; birdyback
Answer: D
Diff: 2 Page Ref: 362-363
Skill: Concept
Objective: 12-5
70) Using ________, retailers can share real-time data on sales and current inventory levels with suppliers who take responsibility for ordering and delivering products to retailers, thereby saving time and money.
A) dual distribution modes
B) continuous inventory replenishment systems
C) an Intranet
D) intensive distribution
E) integrated distribution
Answer: B
Diff: 2 Page Ref: 363
AACSB: Use of Information Technology
Skill: Concept
Objective: 12-5
71) Lancaster Box Company wants to provide better customer service while trimming distribution costs through teamwork, both inside the company and among all the marketing channel organizations. Lancaster Box is thinking of ________.
A) integrated logistics management
B) vendor-managed inventory
C) customer relationship management
D) third-party logistics
E) disintermediation
Answer: A
Diff: 2 Page Ref: 363
Skill: Concept
Objective: 12-5
72) Which of the following best states the goal of integrated supply chain management?
A) to stabilize costs
B) to increase services with minimal cost through teamwork
C) to harmonize all of the company's logistics decisions
D) to eliminate conflict and increase cooperation among channel members
E) to ensure consistent services with minimal costs
Answer: C
Diff: 3 Page Ref: 363
Skill: Concept
Objective: 12-5
73) When Home Depot allows key suppliers to use its stores as a testing ground for new merchandising programs, it is conducting a(n) ________.
A) integrated logistics system
B) partnership management system
C) shared project
D) third-party project
E) cross-functional, cross-company team
Answer: C
Diff: 2 Page Ref: 364
Skill: Concept
Objective: 12-5
74) Today, a growing number of firms now outsource some or all of their logistics to ________.
A) cross-functional teams
B) disintermediaries
C) horizontal channel members
D) third-party logistics providers
E) competitors
Answer: D
Diff: 1 Page Ref: 364
Skill: Concept
Objective: 12-5
75) UPS Supply Chain Solutions, which handles all of its clients' "grunt work" associated with logistics, is an example of ________.
A) integrated logistics management
B) a distribution center
C) selective distribution
D) a third-party logistics provider
E) a cross-functional, cross-company team
Answer: D
Diff: 2 Page Ref: 365
Skill: Concept
Objective: 12-5
76) Proud Pets, a producer of clothing and accessories for pets, has recently partnered with a regional chain of pet stores. Which of the following would Proud Pets be LEAST likely to expect from its new channel member?
A) promoting its products through advertising
B) assembling and packaging its products for final sale
C) distributing relevant marketing research information
D) identifying raw materials and other productive inputs
E) negotiating on its products' prices
Answer: D
Diff: 2 Page Ref: 342-343
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 12-1
77) Which of the following is NOT a marketing intermediary?
A) the supplier of the raw materials used to make glass windows
B) the distributor who sells stained glass windows
C) the wholesaler who buys the stained glass window from its creator
D) the showroom that displays glass windows for customers to see
E) the manufacturers' agent who sells the stained glass windows
Answer: A
Diff: 2 Page Ref: 342
AACSB: Analytic Skills
Skill: Application
Objective: 12-5
78) Which of the following is the best example of a direct channel?
A) J&L Manufacturing Company sells drapery hardware to The Home Depot's Design Center, and the Design Center then sells it to consumers.
B) Family Dollar Store sells modeling clay to school-age children.
C) A wholesaler sells candy to convenience stores, who then sell it to store patrons.
D) Farmer Mintz sells corn to the Hughes household, who will eat it for supper.
E) A farmer in Columbia sells flowers to an international broker, who makes sure the flowers reach consumers in the United States.
Answer: D
Diff: 2 Page Ref: 343
AACSB: Analytic Skills
Skill: Application
Objective: 12-1
79) Steve's Physco Skates sells its products to Walmart, who then sells them to the consumer. This is an example of a(n) ________.
A) direct marketing channel
B) producer channel
C) indirect marketing channel
D) retailer channel
E) corporate vertical marketing system
Answer: C
Diff: 2 Page Ref: 343
AACSB: Analytic Skills
Skill: Application
Objective: 12-1
80) When two Taco Bell restaurants have a disagreement over who should be able to sell in quantity at a discount to the local high school band, they are in a ________ conflict.
A) vertical
B) conventional channel
C) logistics
D) horizontal
E) functional
Answer: D
Diff: 2 Page Ref: 344
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 12-2
81) Staples Office Supply opened an online store that created competition with many of its dealers. The corporate office created a(n) ________ conflict.
A) vertical
B) conventional channel
C) logistics
D) horizontal
E) intermediation
Answer: A
Diff: 2 Page Ref: 344
AACSB: Reflective Thinking Skills
Skill: Application
Objective: 12-2
82) Which of the following is an example of horizontal channel conflict?
A) managers of two separate Holiday Inns disagreeing over what constitutes poor service
B) United Airlines competing with Northwest Airlines for customers
C) disgruntled factory workers complaining about a small pay raise
D) the BMW dealership in Fort Wayne complaining that the BMW dealership in Indianapolis is situated too close
E) A and D
Answer: E
Diff: 3 Page Ref: 344
AACSB: Analytic Skills
Skill: Application
Objective: 12-2
83) Which of the following is an example of a multichannel distribution system?
A) Walmart locating to several countries
B) JC Penney's catalog and retail store sales
C) Avon's door-to-door distribution
D) Starbuck's location inside of book stores
E) a hotel providing guest privileges at a health spa across the street
Answer: B
Diff: 2 Page Ref: 349
AACSB: Analytic Skills
Skill: Application
Objective: 12-2
84) Blockbuster offers DVD rentals through its Total Access online rental service and through its bricks-and-mortar stores. This is an example of a(n)________.
A) contractual VMS
B) administered VMS
C) horizontal marketing system
D) conventional distribution channel
E) multichannel distribution system
Answer: E
Diff: 2 Page Ref: 349
AACSB: Analytic Skills
Skill: Application
Objective: 12-2
85) When Netflix began delivering DVDs directly to customers through the mail instead of using a brick-and-mortar system, Netflix was following the trend of ________.
A) indirect marketing
B) disintermediation
C) a franchise system
D) exclusive distribution
E) selective distribution
Answer: B
Diff: 2 Page Ref: 350
AACSB: Analytic Skills
Skill: Application
Objective: 12-2
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