Principles of Marketing 6th Edition

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Exam
Name___________________________________

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1) In your text, the system that efficiently and effectively makes and moves products to end users is termed ________.

A) physical distribution
B) logistics network management
C) a goods and services transportation network
D) cross docking
E) a supply chain
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

2) The modern marketing organisation uses its marketing logistics strength to coordinate functions and manage the
activities of a range of entities. Which of the following is NOT one of them?

A) suppliers
B) purchasing agents
C) manufacturers
D) intermediaries
E) government departments
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

3) Through the use of ________, or 'smart tag' technology, a company is able to locate exactly where a product is within the
supply chain.

A) RFID
B) PRM
C) VMS
D) IT
E) 3PL
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Use of IT

4) The supply chain involves many decisions related to marketing channels and logistics. Which of the following would be
a logistics decision?

A) whether to sole-source
B) where to locate a plant
C) what type of operational process to use
D) whether to supply from inventory or from production
E) All of the above.
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

5) The supply chain management involves many activities and decisions related to marketing channels and logistics.
Which of the following would NOT be a supply chain management decision?
A) sales forecasting
B) production plans
C) the total cost of logistics
D) transportation
E) All of the above.
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

6) The main supply chain functions focusing on the customer end include which of the following ?

A) warehousing
B) inventory management
C) transportation
D) logistics information management
E) All of the above.
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

7) Jewels for the Rich and Famous sells very exclusive jewellery with a minimum price of $25 000 to customers around the
world. Speed of delivery to distant markets is a must. Management should consider using ________ as its main carrier.

A) rail
B) air
C) truck
D) the internet
E) water
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Reflective Thinking

8) A firm located in a seaport town sells rock, gravel and sand to local markets. It has just been awarded a large contract
with a company 500 miles down the coast. Management should consider switching from truck to ________ transport.

A) water
B) rail
C) pipeline
D) air
E) None of the above.
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Reflective Thinking

9) Which of the following lists of intermodal transportation combinations means rail and trucks, water and trucks, and
water and rail?

A) fishyback, airtruck and trainship

B) piggyback, airtruck and fishyback
C) trainship, fishyback and piggyback
D) piggyback, fishyback and trainship
E) piggyback, fishyback and birdyback
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

10) Which of the following transportation modes is used for digital products?

A) trucks
B) rail
C) the internet
D) air
E) ship
Diff: 1
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Use of IT

11) In choosing a transportation mode for a product, shippers must balance many considerations. Which of the following is
NOT a principal consideration for selecting the optimal transportation mode?

A) speed
B) dependability
C) availability
D) cost
E) company reputation
Diff: 3
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

12) The modern marketing supply chain might also be thought of as a value delivery network.

A) True
B) False
Diff: 1
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

13) The following terms are often used interchangeably by different commentators: logistics, marketing logistics,
integrated logistics management, supply-chain management, materials management and physical distribution.

A) True
B) False
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

14) In moving goods, managers try to choose a set of warehouses, or cross-docking points, and transportation carriers that
will deliver finished goods to final destinations in the desired time and/or at the lowest total cost.

A) True
B) False
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

15) The total cost of logistics is minimal and can amount to just 5-10 per cent of a product's cost.

A) True
B) False
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

16) Logistics, more than almost any other marketing activity, affects the environment and a firm's environmental
sustainability efforts.

A) True
B) False
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

17) Developing a green supply chain is not only environmentally responsible; it can also be profitable.

A) True
B) False
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

18) Marketing logistics trade-offs occur when management seeks to find optimal results in terms of achieving shareholder
value while also achieving maximal sales and cash flow for the company.

A) True
B) False
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

19) A company using just-in-time (JIT) logistics carries only small inventories and uses sophisticated forecasting along with
flexibly delivery so that supplies of new stock arrive only when they are needed.

A) True
B) False
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

20) Carrying too much inventory is always preferable to carrying too little.

A) True
B) False
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

21) Many large and resourceful marketing companies, such as Coles, Woolworths, Metcash and Unilever are investing
heavily to make the full use of RFID technology a reality.

A) True
B) False
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

22) A 'smart tag' or RFID technology is a small transmitter chip embedded in or placed on products and packaging,
allowing the products to be tracked throughout the distribution channel.

A) True
B) False
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.
23) The modern marketing organisation uses its ________ strength to coordinate functions within it by managing the
activities of suppliers, purchasing agents, manufacturers, marketers, intermediaries and customers.
Diff: 3
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

24) In moving goods, managers try to choose a set of warehouses (stocking points), or cross-docking points, and
transportation carriers that will deliver finished goods to final destinations in the desired ________ and/or at the lowest
________.
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

25) The goal of marketing logistics should be to provide a(n) ________ level of customer service at the least cost.
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

26) The difference between distribution centres and storage warehouses is that distribution centres are designed to
________ goods rather than just store them.
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

27) 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.
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Use of IT

28) ________ account for the major share of freight movement within Australia with some 40 per cent of total cargo
tonne-kilometres moved.
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

29) Air carriers transport less than ________ per cent of cargo tonne-kilometres of the nation's goods.
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

30) Among the most frequently air-freighted products are ________.

Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

31) The ________ carries digital products from producer to customer via satellite, cable or copper wire.
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

32) Using ________ ________ ________ systems, 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.
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Use of IT

ESSAY. Write your answer in the space provided or on a separate sheet of paper.
33) Briefly outline how channel members add value to a marketing system.
Diff: 2
Learning Obj.: 10.1 Describe the nature of supply chain management and how marketing channels add value. pp. 298-305
AACSB: Communication

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
34) A marketing ________ is a network of interdependent organisations called intermediaries that are involved in the
process of making a product or services available to users.

A) channel
B) network
C) structure
D) chain
E) complex
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

35) Members of the marketing channel add value when they move goods from producers and suppliers to consumers by
overcoming ________, ________ and ________ gaps that arise when separate suppliers are unable to coordinate supply and
demand.

A) time; place; possession

B) time; substance; style
C) form; economic; service
D) market; competitive; strategic
E) access; convenience; service
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

36) Marketing channel members perform many key functions. Which of the following is NOT normally a channel function?

A) information gathering and distributing

B) matching the offer to the buyer's needs
C) negotiating an agreement on price and other terms to facilitate transfer of ownership
D) risk taking—assuming the risks of carrying out the channel work.
E) sale of products or services to final end users
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

37) Intermediaries usually offer a firm more than it can achieve on its own. Which of the following is most likely an
advantage of working with intermediaries?

A) financial support
B) fast service
C) scale of operation
D) working relationships with foreign distributors
E) strategy development
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Reflective Thinking

38) From the economic system's point of view, the role of marketing intermediaries is to transform the assortment of
products made by producers into the assortment of products wanted by ________.

A) channel members
B) distributors
C) consumers
D) manufacturers
E) marketers
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

39) Producers benefit from using intermediaries because they ________.

A) offer greater efficiency in making goods available to target markets

B) bring a fresh point of view to strategy development
C) eliminate risk
D) are generally backlogged with orders
E) refuse to store products for longer than a few days
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

40) 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
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Reflective Thinking

41) Intermediaries play an important role in coordinating ________.

A) dealer with customer

B) supply and demand
C) strategy and product
D) manufacturer to product
E) information and promotion
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

42) In marketing terms, we say that the number of intermediary levels indicates the ________ of a channel.

A) depth
B) complexity
C) involvement
D) length
E) width
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

43) To a producer of goods, a greater number of channel levels means ________ and greater channel complexity.

A) less distance between producer and end consumer

B) less control
C) more potential ideas
D) higher taxes
E) fewer channel members
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

44) 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
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Reflective Thinking

45) Each layer of intermediary that performs some work in bringing the product and its ownership closer to the final buyer
is a channel ________.

A) layer
B) level
C) tier
D) stratum
E) None of the above.
Diff: 3
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

46) A direct marketing channel consists of how many levels?

A) zero
B) one
C) two
D) three
E) It is inappropriate to use levels when describing direct marketing.
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

47) Which of the following statements about a zero-level channel is correct?

A) It may also be called a backward channel.

B) It is the same as a direct marketing channel.
C) It has only one intermediary between producer and consumer.
D) It has three members.
E) It refers to intensive distribution channels where there are an indeterminate number of channel members.
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

48) The goal of channels in the service sector is to make the service ________.

A) available to target populations

B) affordable, differentiated and easy to find
C) risk free, readily available and differentiated
D) differentiated, targeted and affordable
E) affordable and accessible
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

49) Marketing channels may be used to market ________.

A) a hospital
B) government ideas
C) birth-control clinics
D) comedians
E) All of the above.
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Reflective Thinking

50) All of the institutions in a channel are connected by flows, including physical flow, flow of ownership, payment flow,
information flow and ________ flow.

A) promotion
B) acquisition
C) customer
D) return product
E) by-product
Diff: 3
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication
51) When two Hungry Jacks restaurants have a disagreement over who should be able to sell in quantity at a discount to
local athletic teams, it is called a ________ channel conflict.

A) vertical
B) disintermediation
C) multichannel
D) horizontal
E) functional
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Reflective Thinking

52) 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) problematic
C) functional
D) horizontal
E) intermediation
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Reflective Thinking

53) A distribution channel is more than a collection of firms connected by various flows; it is a(n) ________ in which people
and companies interact to accomplish individual, company and channel goals.

A) added value chain

B) complex behavioural system
C) corporate marketing system
D) vertical marketing system
E) multichannel system
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

54) ________ conflict, which occurs between different levels of the same channel, is more common than ________ conflict,
which occurs among firms at the same level of the channel.

A) Horizontal; vertical
B) Vertical; horizontal
C) Contractual; corporate
D) Corporate; franchise
E) Wholesaler; retailer
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

55) David Jones terminated its arrangements to supply clothing from popular fashion label, Country Road, following the
latter's increasing involvement with direct factory outlets. For the prestige retailer, David Jones, Country Road's activities
were not only a direct source of competition, but also represented an inconsistency with their carefully crafted prestige
image. This is an example of ________.
A) exclusive dealing
B) channel conflict
C) a breakdown in a contractual network
D) a power struggle
E) All of the above.
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

56) Which of the following are the three major types of vertical marketing systems?

A) corporate, contractual and chain

B) contractual, corporate and independent
C) corporate, contractual and administered
D) administered, independent and franchised
E) corporate, contractual and task
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

57) A ________ consists of producers, wholesalers and retailers acting as a unified system.

A) value-driven marketing network

B) corporate marketing network
C) complex marketing network
D) physical distribution system
E) vertical marketing network
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

58) Historically, ________ have lacked strong leadership and have been troubled by damaging conflict and poor
performance.

A) corporate vertical marketing systems

B) contractual vertical marketing systems
C) conventional marketing channels
D) administered vertical marketing systems
E) conventional vertical marketing systems
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

59) A conventional distribution channel consists of one or more ________ producers, wholesalers and retailers.

A) product-related
B) independent
C) contract
D) franchised
E) None of the above.
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication
60) A channel consisting of one or more independent producers, wholesalers or retailers each seeking to maximise its own
profits even at the expense of profits for the channel as a whole is a(n) ________.

A) vertical marketing system

B) conventional marketing channel
C) independent channel allocation
D) corporate VMS
E) administered vertical marketing system
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

61) An advantage of a vertical marketing network (VMN) over a conventional distribution channel is that it acts as a
________ system.

A) unified
B) democratic
C) socially responsible
D) customer-driven
E) task-driven
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

62) The Beta Corporation retains outright ownership of all members of its distribution channel. Beta's channel would be
best described as a(n) ________.

A) corporate VMN
B) consolidated VMN
C) administrative VMN
D) contractual VMN
E) proprietary VMN
Diff: 1
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Reflective Thinking

63) Equitable Products Corporation has negotiated legal agreements with each member of its channel to ensure channel
coordination, and it spells out procedures for conflict management. The firm's distribution system would be best described
as a(n) ________.

A) administrative VMN
B) contractual VMN
C) consolidated VMN
D) corporate VMN
E) proprietary VMN
Diff: 1
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Reflective Thinking

64) A corporate VMN has the advantage of controlling the entire distribution chain under ________.

A) a profit-maximising strategic plan

B) single ownership
C) mass distribution
D) a few intermediaries
E) franchise agreements
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

65) Which of the following is NOT a form of contractual VMN?

A) wholesaler sponsored voluntary chain

B) retailer cooperative
C) manufacturer-sponsored retailer franchise network
D) service-firm-sponsored retailer franchise network
E) corporate vertically managed network
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

66) Leadership in which type of marketing system is assumed not through common ownership or contractual ties, but
through the size and power of one or a few dominant channel members?

A) horizontal marketing system

B) administered VMN
C) corporate VMN
D) conventional marketing channel
E) multichannel distribution system
Diff: 1
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

67) In a ________, two or more companies at one level join together to follow a new marketing opportunity.

A) franchise
B) corporate VMN
C) horizontal marketing network
D) multichannel distribution network
E) conventional distribution channel
Diff: 1
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

68) Which of the following is an example of a manufacturer-sponsored retailer franchise system?

A) fast-food restaurants such as McDonald's and Hungry Jacks

B) Ford and its network of independent franchised dealers
C) licensed bottlers that bottle and sell Coca-Cola to retailers
D) a motel chain such as Holiday Inn and Quest Group
E) All of the above.
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Reflective Thinking

69) When a Hudsons coffee shop offers its products inside of a private hospital, it is acting as part of a ________.

A) conventional distribution channel

B) direct marketing channel
C) disintermediated system
D) administered VMS
E) horizontal marketing system
Diff: 3
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Reflective Thinking

70) Which of the following is an example of a multichannel distribution system?

A) K-Mart setting up outlets in several new countries

B) Myer catalogue and retail store sales
C) Avon's door-to-door distribution
D) a hotel providing guest privileges at a health spa across the street
E) All of the above.
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Reflective Thinking

71) It is becoming rare for marketers to use a(n) ________ marketing channel to reach their target markets.

A) single
B) dual
C) controlled
D) complex
E) tertiary
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

72) Multichannel distribution systems are also called ________.

A) dual distribution systems

B) hybrid marketing systems
C) administered franchises
D) horizontal multichannel systems
E) contractual marketing systems
Diff: 3
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

73) ________ occur when a single firm sets up two or more marketing channels to reach one or more customer segments.

A) Dual distribution systems

B) Multichannel distribution networks
C) Administered franchises
D) Horizontal multichannel systems
E) Contractual marketing systems
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

74) Orica's Dulux paint is sold through company-owned trade stores in Australasia as well as through competing outlets
such as Bunnings and Mitre 10, and it is sold directly via the internet to professional painters. This is an example of
________.

A) dual distribution systems

B) multichannel distribution networks
C) administered franchises
D) horizontal multichannel systems
E) contractual marketing systems
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Reflective Thinking

75) 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) greater profitability
Diff: 3
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Reflective Thinking

76) 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
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Reflective Thinking

77) Disintermediation refers to ________.

A) a process of restructuring marketing channels in order to deal more directly with customers
B) a process of attempting to exert some control over complex and fragmented channels
C) a shift from conventional to vertical marketing networks
D) a synonym for direct marketing
E) the process of acting as a mediator in channel conflict
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

78) 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
Diff: 1
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Use of IT

79) Producers who can afford to set up their own channels are unlikely to use intermediaries.

A) True
B) False
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Analytic Skills

80) With increased use of the internet, few producers sell through intermediaries today.

A) True
B) False
Diff: 1
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Use of IT

81) Members of the marketing channel add value when they move goods from producers and suppliers to consumers by
overcoming time, placement and possession gaps.

A) True
B) False
Diff: 1
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

82) A major role played by intermediaries is to buy large quantities of products from many producers and break them
down into the smaller quantities and broader assortments wanted by consumers.

A) True
B) False
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

83) Members of the marketing channel may help a company complete transactions by performing key functions such as
promotion and negotiation.

A) True
B) False
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

84) The producer and the final consumer are part of every type of marketing channel.

A) True
B) False
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication
85) In a direct marketing channel, which has no intermediary levels, the company sells directly to consumers.

A) True
B) False
Diff: 1
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

86) The manager of the local McDonald's franchise in Bankstown had recently had her request to participate in cooperative
advertising, like the other McDonald's in her district, refused by Head Office. Now she is irritated and demands fairness in
treatment. This is an example of horizontal conflict.

A) True
B) False
Diff: 3
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Reflective Thinking

87) Channel conflict is always damaging and managers should do all they can to eradicate it altogether.

A) True
B) False
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

88) In a conventional distribution channel, no channel member has much control over the other members, and no formal
means exists for assigning roles and resolving channel conflict.

A) True
B) False
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

89) When Haynes, a Ballarat paint manufacturer, has single ownership of integrated, successive stages of production and
distribution, it has created a corporate VMS.

A) True
B) False
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Reflective Thinking

90) The three main types of franchises are manufacturer-sponsored retailers, manufacturer-sponsored wholesalers and
service-firm-sponsored retailers.

A) True
B) False
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication
91) When the dry cleaners and the laundromat in your home town join forces to follow a new marketing opportunity, they
are forming a horizontal marketing network.

A) True
B) False
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Reflective Thinking

92) Allfarmers Produce Company has a route selling to more than 100 groceries, schools and restaurants at wholesale
prices. Last week the owners opened up a walk-in discounted consumer produce outlet in the local town. It is now using a
multichannel network.

A) True
B) False
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Reflective Thinking

93) Disintermediation involves restructuring marketing channels to deal more directly with customers.

A) True
B) False
Diff: 1
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

94) Marketers using multichannels gain sales with each new channel but also risk offending existing channels.

A) True
B) False
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.
95) The use of intermediaries largely reflects their greater ________ in making goods available to target markets.
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

96) Marketing channels are a major part of any marketing logistics network and involve the interaction of ________ to
bring the goods and services to the marketplace.
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

97) A marketing ________ is a set of interdependent organisations involved in the process of making a product or service
available to users.
Diff: 1
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

98) Members of the marketing channel add ________ when they move goods from producers and suppliers to consumers.
Diff: 3
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

99) Although channel members are dependent on one another, disagreements can and do occur. Such disagreements are
known as channel ________.
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

100) ________ conflict is conflict between firms at the same level of the channel.
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

101) ________ conflict is conflict between different levels of the same channel, and is even more common.
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

102) A(n) ________ marketing network consists of producers, wholesalers and retailers acting as a unified network; one
channel member owns the others, has contracts with them or wields so much power that they all cooperate.
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

103) A(n) ________ VMN is a vertical marketing network that combines successive stages of production and distribution
under single ownership; channel leadership is established through common ownership.
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

104) A(n) ________ marketing network is one in which two or more companies at one level join together to follow a new
marketing opportunity.
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

ESSAY. Write your answer in the space provided or on a separate sheet of paper.
105) Compare and contrast a conventional distribution channel with a vertical marketing system (VMS).
Diff: 3
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

106) Why are multichannel distribution systems gaining popularity today?

Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Communication

107) Outline the ways that retailers are using technology to enhance the in-store customer experience.
Diff: 2
Learning Obj.: 10.2 Describe the nature of marketing channels and how they organise to create value. pp. 305-316
AACSB: Use of IT

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
108) ________ involves all the activities involved in selling goods or services directly to final consumers for their personal,
non-business use.

A) Wholesaling
B) Producing
C) Retailing
D) Consumer marketing
E) Direct marketing
Diff: 2
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Reflective Thinking

109) A producer sells its products to K-Mart, who then onsells them to the consumers. 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
Diff: 2
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Reflective Thinking

110) Every night at about 1:00 am, a shift worker stops by the 7-11 store near her house. She often buys milk or bread while
she's there, even though the prices at the 7-11 are higher than at her local Woolworths supermarket. The 7-11 is an example
of a ________.

A) specialty store
B) superstore
C) warehouse store
D) convenience store
E) combination store
Diff: 1
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Reflective Thinking

111) Costco opened its first Australian outlet in Melbourne in 2009 amid much media hype about the deep discounts on a
wide range of products. Costco's business model requires consumers to become members with a subscription fee of $60
before they are entitled to make purchases from the store. Costco would best be described as a ________.

A) combination store
B) factory outlet
C) discount store
D) superstore
E) warehouse club
Diff: 2
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Reflective Thinking

112) Officeworks carries a deep assortment of goods for the home office or small business. Product lines include office
stationery, office equipment, computer software and hardware, and office furniture—as well as services including copying
and printing. Officeworks would be best described as a ________.

A) category killer
B) factory outlet
C) discount store
D) superstore
E) warehouse club
Diff: 2
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Reflective Thinking

113) Consumers who value such factors as location, ease of access and non-traditional store hours more than large
assortments and lower prices are likely to purchase in ________.

A) convenience stores
B) shopping stores
C) department stores
D) hypermarkets
E) discount stores
Diff: 3
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Reflective Thinking

114) Some retail stores are designed to allow customers to easily locate merchandise which they pay for at centrally-located
checkouts before loading the goods into their own cars. This approach to retailing is best described as ________.

A) self-service retailing
B) no-service retailing
C) limited-service retailing
D) full-service retailing
E) None of the above.
Diff: 2
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Communication

115) Retailers who typically offer some sales assistance and information as well as credit and merchandise return services
to support the sale of the shopping goods they carry are known as ________.

A) full-service
B) low-service
C) limited-service
D) self-service
E) no service
Diff: 2
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Communication

116) Specialty stores and first-class department stores are most likely to employ a ________ approach.

A) self-service
B) full-service
C) low-service
D) limited-service
E) None of the above.
Diff: 3
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Communication

117) A store that carries a narrow product line with a deep assortment within that line is called a ________.

A) specialty store
B) department store
C) convenience store
D) self-service store
E) discount store
Diff: 2
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Communication

118) Stores that offer a wide variety of product lines organised according to type of product are known as ________.

A) department stores
B) convenience stores
C) specialty stores
D) discount stores
E) None of the above.
Diff: 2
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Communication

119) Of the following, the store that is best described as a large, low-cost, low-margin, high-volume, self-service retailer is
the ________.

A) convenience store
B) specialty store
C) supermarket
D) factory outlet store
E) discount store
Diff: 2
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Communication

120) An amateur jogger goes to the Adidas warehouse to find athletic shoes and clothing at lower prices than that charged
by department stores and sports stores. The room within the factory complex carries leftover merchandise, overruns,
samples and irregulars. This is an example of a ________.

A) combination store
B) factory outlet
C) discount store
D) superstore
E) warehouse club
Diff: 2
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Reflective Thinking

121) Independent retailers who join together to form their own wholesaling operation and conduct joint merchandising
and promotional activities are called a ________.

A) wholesaler cooperative
B) voluntary chain
C) purchasing cooperative
D) retailer cooperative
E) hyperchain
Diff: 2
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Communication

122) Two or more outlets that are commonly owned and controlled, employ central buying and merchandising, and sell
similar lines of merchandise are known as ________.

A) chain stores
B) retail cooperatives
C) franchises
D) retail banner groups
E) retail conglomerates
Diff: 2
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Communication

123) A feature of David Jones is the availability of fashion by high profile Australian designers. Some of labels carried by
David Jones include Thurley, Bianca Spender, Camilla & Marc, Collette by Collette Dinnigan and Willow. None of these
designer labels are carried by any other department store or fashion retail outlet. For David Jones, this is an example of
________.

A) national brands
B) selective brands
C) exclusive merchandise
D) repositioning
E) competitive blocking
Diff: 3
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Reflective Thinking

124) Many new types of retailing forms began as low-margin, low-price, low-status operations according to the concept
called ________.

A) the wheel of retailing

B) retailing cycle
C) cyclical retailing
D) retail evolutionary cycle
E) retail life-cycle
Diff: 2
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Communication

125) The most common type of agent wholesaler is ________.

A) limited service wholesaler

B) merchant wholesaler
C) broker
D) manufacturers' agent
E) subcontracted salesforce
Diff: 2
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Communication

126) ________ do not take title to goods and perform only a few functions. Their main function is to facilitate buying and
selling, for which they are paid a commission.

A) Agents and brokers

B) Industrial distributors
C) Rack jobbers
D) Producer's cooperatives
E) Commission merchants
Diff: 1
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Communication

127) ________ are expected to bring buyers and sellers together and are paid by the party hiring them. They do not carry
inventory, get involved in financing or assume risk.

A) Brokers
B) Agents
C) Rack jobbers
D) Producer's cooperatives
E) Commission merchants
Diff: 1
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Communication

128) A shopping centre is a group of retail businesses planned, developed, owned and managed as a unit.

A) True
B) False
Diff: 2
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Communication

129) The retailing sector suffers from chronic overcapacity, resulting in fierce competition for customer dollars.
A) True
B) False
Diff: 2
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Communication

130) In Australia, strip shopping centres, usually built along arterial roads and other high traffic routes, have been a major
component in the retail distribution spectrum.

A) True
B) False
Diff: 1
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Communication

SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.
131) All activities involved in selling goods or services directly to final consumers for their personal, non-business use is
known as ________.
Diff: 2
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Communication

132) A(n) ________ is a contractual association between a manufacturer, wholesaler or service organisation and
independent business people who buy the right to own and operate one or more business units.
Diff: 2
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Communication

133) _________ must first define their target markets and then decide how they will position themselves in those markets.
Diff: 2
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Communication

134) Retailers must decide on three main product variables: product assortment, ________ ________ and ________ ________.
Diff: 2
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Communication

135) Unlike other forms of shopping centre, ________ ________ ________ are not centrally owned or managed.
Diff: 2
Learning Obj.: 10.3 Discuss retailing, retailers' marketing decisions and the different ways of classifying stores, and describe retailing
trends and developments. pp. 316-328
AACSB: Communication

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
136) Which of the following functions is NOT likely to be performed by a wholesaler?

A) gathering market information

B) buying and assortment building
C) bulk breaking
D) risk bearing
E) selling goods or services to final consumers
Diff: 2
Learning Obj.: 10.4 Compare and contrast the different types of wholesalers and their marketing decisions, and discuss wholesaling
trends. pp. 328-332
AACSB: Communication

137) The largest single group of wholesalers, accounting for roughly 50 per cent of all wholesaling, are the ________.

A) limited service wholesalers

B) merchant wholesalers
C) brokers
D) manufacturers' agents
E) None of the above.
Diff: 2
Learning Obj.: 10.4 Compare and contrast the different types of wholesalers and their marketing decisions, and discuss wholesaling
trends. pp. 328-332
AACSB: Communication

138) Wholesalers who have a limited line of fast-moving goods, sell to small retailers for cash and normally do not deliver
are known as ________.

A) cash-and-carry wholesalers
B) truck wholesalers
C) drop shoppers
D) rack jobbers
E) None of the above.
Diff: 2
Learning Obj.: 10.4 Compare and contrast the different types of wholesalers and their marketing decisions, and discuss wholesaling
trends. pp. 328-332
AACSB: Communication

139) Wholesalers that are owned by farmer-members who assemble farm products to sell in local markets are known as
________.

A) producers' cooperatives
B) truck wholesalers
C) produce wholesalers
D) cash-and-carry cooperatives
E) None of the above.
Diff: 3
Learning Obj.: 10.4 Compare and contrast the different types of wholesalers and their marketing decisions, and discuss wholesaling
trends. pp. 328-332
AACSB: Communication

140) Which of the following products would be most likely handled by a drop shipper?

A) fresh-cut orchids
B) plastic beverage sets
C) snack cakes
D) timber
E) laptop computers
Diff: 1
Learning Obj.: 10.4 Compare and contrast the different types of wholesalers and their marketing decisions, and discuss wholesaling
trends. pp. 328-332
AACSB: Communication

141) Wholesalers fall into three main groups. Which of the following is largest of those groups?

A) merchant wholesalers
B) agents and brokers
C) producers' co-operatives
D) manufacturers' sales branches and offices
E) full-line sales contractors
Diff: 1
Learning Obj.: 10.4 Compare and contrast the different types of wholesalers and their marketing decisions, and discuss wholesaling
trends. pp. 328-332
AACSB: Communication

142) The wholesaler who represents two or more manufacturers of related lines is called a ________.

A) broker
B) manufacturer's agent
C) commission agent
D) selling agent
E) contractor
Diff: 1
Learning Obj.: 10.4 Compare and contrast the different types of wholesalers and their marketing decisions, and discuss wholesaling
trends. pp. 328-332
AACSB: Communication

143) The wholesaler who contracts to sell a producer's entire output with no territory limits is called a ________.

A) broker
B) manufacturer's agent
C) commission agent
D) selling agent
E) contractor
Diff: 1
Learning Obj.: 10.4 Compare and contrast the different types of wholesalers and their marketing decisions, and discuss wholesaling
trends. pp. 328-332
AACSB: Communication

144) Wholesalers today are increasing the number of lines they carry, choosing to carry a wider assortment in an effort to
attract a broader mix of customers.

A) True
B) False
Diff: 2
Learning Obj.: 10.4 Compare and contrast the different types of wholesalers and their marketing decisions, and discuss wholesaling
trends. pp. 328-332
AACSB: Communication

145) Wholesalers today must define their target markets and position themselves effectively.

A) True
B) False
Diff: 2
Learning Obj.: 10.4 Compare and contrast the different types of wholesalers and their marketing decisions, and discuss wholesaling
trends. pp. 328-332
AACSB: Communication

SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.
146) ________ includes all activities involved in selling goods and service to those buying for resale or business use.
Diff: 1
Learning Obj.: 10.4 Compare and contrast the different types of wholesalers and their marketing decisions, and discuss wholesaling
trends. pp. 328-332
AACSB: Communication

147) Wholesalers fall into three main groups—merchant wholesalers, brokers and ________, and manufacturers' sales
branches and offices.
Diff: 3
Learning Obj.: 10.4 Compare and contrast the different types of wholesalers and their marketing decisions, and discuss wholesaling
trends. pp. 328-332
AACSB: Communication

148) A(n) ________ brings buyers and sellers together and assists in negotiations.
Diff: 1
Learning Obj.: 10.4 Compare and contrast the different types of wholesalers and their marketing decisions, and discuss wholesaling
trends. pp. 328-332
AACSB: Communication
1) E
2) E
3) A
4) E
5) C
6) E
7) B
8) A
9) D
10) C
11) E
12) A
13) A
14) A
15) B
16) A
17) A
18) B
19) A
20) B
21) A
22) A
23) logistics
24) time; total cost
25) targeted
26) move
27) just-in-time (JIT)
28) Railroads
29) one
30) perishables
31) internet
32) continuous inventory replenishment
33) Suggested Answer: Intermediaries reduce the amount of work that must be done by both producers and consumers.
They transform the assortment of products made by producers into the assortment wanted by consumers. They buy large
quantities from many producers and break them down into the smaller quantities and broader assortments wanted by
consumers. Intermediaries help to match supply and demand. Channel members add value by bridging the major time,
place and possession gaps that separate goods and services from those who would use them.
34) A
35) A
36) E
37) C
38) C
39) A
40) D
41) B
42) D
43) B
44) B
45) B
46) A
47) B
48) A
49) E
50) A
51) D
52) A
53) B
54) B
55) B
56) C
57) E
58) C
59) B
60) B
61) A
62) A
63) B
64) B
65) E
66) B
67) C
68) B
69) E
70) B
71) A
72) B
73) B
74) B
75) C
76) B
77) A
78) C
79) B
80) B
81) A
82) A
83) A
84) A
85) A
86) B
87) B
88) A
89) A
90) A
91) A
92) A
93) A
94) A
95) efficiency
96) intermediaries
97) channel
98) value
99) conflict
100) Horizontal
101) Vertical
102) vertical
103) corporate
104) horizontal
105) Suggested Answer: A conventional distribution channel consists of one or more independent producers, wholesalers
and retailers. Each is a separate business seeking to maximise its own profits, even at the expense of the system as a whole.
No channel member has much control over the other members, and no formal means exists for assigning roles and
resolving channel conflict. On the other hand, a vertical marketing system is a unified system made up of producers,
wholesalers, and retailers. While members of a conventional distribution channel seek to maximise their own profits,
members of a vertical marketing system all cooperate because either one member owns the others, one has contracts with
the others or one wields more power than the others.
106) Suggested Answer: Multichannel distribution systems exist when a single firm sets up two or more marketing
channels to reach one or more customer segments. Such a system offers advantages to firms facing large and complex
markets. It allows the firms to expand sales and market coverage. It allows firms to tailor their products and services to the
specific needs of diverse customer segments. Larger bottom-line profits may occur.
107) Suggested Answer: Today's customers have become used to the speed and convenience of online environments and
use it to control the buying process. Retailers are beginning to understand this and are using retail technology to connect
with consumers.
Many retailers now routinely use technologies ranging from touch-screen kiosks, handheld shopping assistants,
customer-loyalty cards and self-scanning checkout systems.
These technologies provide consumers with a range of benefits from increased information about stocks, prices, etc.
(via kiosks), through to speed and efficiency (self-scanning checkouts) and improved relationships (via loyalty systems).
108) C
109) C
110) D
111) E
112) A
113) A
114) A
115) C
116) B
117) A
118) A
119) C
120) B
121) B
122) A
123) C
124) A
125) D
126) A
127) A
128) A
129) A
130) A
131) retailing
132) franchise
133) Retailers
134) services mix; store atmosphere
135) strip shopping centres
136) E
137) B
138) A
139) A
140) D
141) A
142) B
143) D
144) B
145) A
146) Wholesaling
147) agents
148) broker