Professional Documents
Culture Documents
ESSAY
1. How do marketing channel decisions influence the rest of the marketing mix?
ANS:
Answer not provided.
PTS: 1 DIF: Moderate
OBJ: 14-01 Describe the foundations of supply-chain management.
NAT: AACSB: Analytic | MKTG: Marketing Plan MSC: Knowledge
2. What is a marketing intermediary, and what are the activities that marketing intermediaries perform?
ANS:
Answer not provided.
3. What are the three types of utility that marketing channels create, and what do they involve?
ANS:
Answer not provided.
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Answer not provided.
5. Wholesalers are often criticized for being inefficient and for causing consumers to pay higher prices
than they would if there were no wholesalers. Discuss.
ANS:
Answer not provided.
6. What is supply chain management? How can it help marketing channel members?
ANS:
Answer not provided.
7. What are the key tasks in supply chain management? How does each of these facilitate supply chain
management?
ANS:
Answer not provided.
8. What advantages do industrial distributors offer? What are some of the disadvantages of using
industrial distributors?
ANS:
Answer not provided.
ANS:
Answer not provided.
PTS: 1 DIF: Moderate OBJ: 14-05 Identify the intensity of market coverage.
NAT: AACSB: Analytic | MKTG: Strategy | MKTG: Distribution
MSC: Knowledge
10. Discuss channel cooperation and conflict. How might each one affect distribution channel functions?
ANS:
Answer not provided.
11. Discuss the advantages and disadvantages of channel integration. Who benefits from channel
integration?
ANS:
Answer not provided.
ANS:
Answer not provided.
13. Compare and contrast the three major levels of market coverage.
ANS:
Answer not provided.
PTS: 1 DIF: Easy OBJ: 14-05 Identify the intensity of market coverage.
NAT: AACSB: Communication | MKTG: Distribution MSC: Knowledge
ANS:
Answer not provided.
15. Discuss the importance of order processing in the physical distribution system.
ANS:
Answer not provided.
ANS:
Answer not provided.
17. Explain how electronic data interchange (EDI) and just-in-time (JIT) inventory management might be
used in combination to improve physical distribution effectiveness and efficiency.
ANS:
Answer not provided.
PTS: 1 DIF: Moderate
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Knowledge
18. How are materials handling techniques important in efficient warehouse operations?
ANS:
Answer not provided.
ANS:
Answer not provided.
20. Identify and describe the criteria used for selecting transportation modes.
ANS:
Answer not provided.
21. Discuss how the strategic importance of physical distribution is evident in each element of the
marketing mix.
ANS:
Answer not provided.
ANS:
Answer not provided.
PTS: 1 DIF: Moderate OBJ: 14-08 Explore legal issues in channel management.
NAT: AACSB: Communication | MKTG: Strategy | MKTG: Distribution
MSC: Knowledge
MULTIPLE CHOICE
23. Long-term partnerships among channel members working together to reduce inefficiencies, costs, and
redundancies in the entire marketing channel is called
a. supply chain management.
b. vertical channel integration.
c. industrial management.
d. industrial distribution.
e. marketing management.
ANS: A PTS: 1 DIF: Easy
OBJ: 14-01 Describe the foundations of supply-chain management.
NAT: AACSB: Communication | MKTG: Distribution MSC: Knowledge
24. The Home Depot is trying to reduce transportation, information management, and administrative costs.
To accomplish this goal, channel members need to
a. work independently.
b. avoid cooperation due to antitrust considerations.
c. work with competitors and share information.
d. increase competition among channel members.
e. cooperate and accommodate one another's needs.
ANS: E PTS: 1 DIF: Easy
OBJ: 14-01 Describe the foundations of supply-chain management.
NAT: AACSB: Analytic | MKTG: Strategy | MKTG: Distribution
MSC: Application
26. All members of the supply chain should determine their position in the chain, identify their partners
and their roles, and establish partnerships whose focus is
a. shifting costs to suppliers.
b. maximizing costs.
c. maximizing technology implementation.
d. cooperation with competitors.
e. customer relationships.
ANS: E PTS: 1 DIF: Moderate
OBJ: 14-01 Describe the foundations of supply-chain management.
NAT: AACSB: Analytic | MKTG: Strategy | MKTG: Distribution
MSC: Comprehension
27. Wal-Mart is working with its suppliers, using tools such as electronic billing, purchase order
verification, and bar code technology, to integrate data used to improve overall performance. This is an
example of
a. supply chain management.
b. a vertical marketing system.
c. a horizontal marketing system.
d. channel conflict.
e. dual distribution.
ANS: A PTS: 1 DIF: Moderate
OBJ: 14-01 Describe the foundations of supply-chain management.
NAT: AACSB: Analytic | MKTG: Strategy | MKTG: Distribution
MSC: Application
28. A group of organizations and individuals that directs the flow of products from producers to the
ultimate consumers is called a
a. free trade association
b. marketing channel
c. channel of suppliers
d. production line-up
e. chain of retailers
ANS: B PTS: 1 DIF: Easy
OBJ: 14-02 Explore the role and significance of marketing channels and supply chains.
NAT: AACSB: Communication | MKTG: Distribution MSC: Knowledge
31. What links producers to consumers through the purchase and reselling of products or contractual
agreements?
a. Marketing intermediaries
b. Distributors
c. Suppliers
d. Middle marketers
e. Marketing channels
ANS: A PTS: 1 DIF: Easy
OBJ: 14-02 Explore the role and significance of marketing channels and supply chains.
NAT: AACSB: Communication | MKTG: Distribution MSC: Knowledge
32. Most marketing channels have marketing intermediaries. A marketing intermediary's role is to
a. link wholesalers to other wholesalers.
b. link producers to other middlemen or to consumers.
c. always sell products to wholesalers.
d. not take title to products.
e. always sell products to retailers.
ANS: B PTS: 1 DIF: Easy
OBJ: 14-02 Explore the role and significance of marketing channels and supply chains.
NAT: AACSB: Communication | MKTG: Distribution MSC: Knowledge
34. If Nokia decides to make changes in its marketing channels, the strategic significance is that channel
decisions are
a. long-term commitments.
b. short-term commitments.
c. easier to change than prices.
d. easier to change than promotion.
e. impossible to change.
ANS: A PTS: 1 DIF: Easy
OBJ: 14-02 Explore the role and significance of marketing channels and supply chains.
NAT: AACSB: Analytic | MKTG: Strategy | MKTG: Distribution
MSC: Application
35. Having products available when the customer wants them is called
a. place utility.
b. time utility.
c. availability.
d. possession utility.
e. chronavailability.
ANS: B PTS: 1 DIF: Easy
OBJ: 14-02 Explore the role and significance of marketing channels and supply chains.
NAT: AACSB: Communication | MKTG: Distribution MSC: Knowledge
36. Marketing channels create three types of utility for consumers including
a. place, time, and possession.
b. location, availability, and suitability.
c. time, location, and promotion.
d. retailer, wholesaler, and producer.
e. position, possession, and place.
ANS: A PTS: 1 DIF: Easy
OBJ: 14-02 Explore the role and significance of marketing channels and supply chains.
NAT: AACSB: Communication | MKTG: Distribution MSC: Knowledge
39. In a simple economy of five producers and five consumers, there would be ____ transactions possible
without an intermediary and ____ transactions possible with one intermediary.
a. ten; twenty-five
b. thirty; ten
c. twenty-five; fifteen
d. sixteen; eight
e. twenty-five; ten
ANS: E PTS: 1 DIF: Moderate
OBJ: 14-02 Explore the role and significance of marketing channels and supply chains.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Knowledge
41. When three buyers purchase the products of three producers, nine transactions are required. If one
intermediary serves both producers and buyers, the number of possible transactions is
a. fifteen.
b. five.
c. eighteen.
d. six.
e. twenty.
ANS: D PTS: 1 DIF: Easy
OBJ: 14-02 Explore the role and significance of marketing channels and supply chains.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Comprehension
43. Customers who purchase computer laptops from manufacturer websites are acquiring products through
a. the most efficient channel of distribution.
b. the most common type of marketing channel.
c. a direct-marketing channel.
d. a business-to-business channel of distribution.
e. an indirect-marketing channel.
ANS: C PTS: 1 DIF: Easy
OBJ: 14-03 Identify types of marketing channels.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
44. Select Comfort, a producer of adjustable air mattresses, sells most of its products through direct mail
sales and Internet sales. This channel would be classified as
a. direct distribution.
b. producer, retailer, consumer.
c. telemarketing.
d. direct-marketing.
e. indirect marketing.
ANS: D PTS: 1 DIF: Easy
OBJ: 14-03 Identify types of marketing channels.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
47. When Sophie buys organic produce for her household using a channel with only one intermediary, that
intermediary is classified as a
a. retailer.
b. wholesaler.
c. broker.
d. functional middleman.
e. producer.
ANS: A PTS: 1 DIF: Moderate
OBJ: 14-03 Identify types of marketing channels.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
48. Large retailers such as J.C. Penney's and Target are most likely to participate in which of the following
channels?
a. Producer, industrial distributors, retailers, consumers
b. Producer, consumers
c. Producer, wholesalers, retailers, consumers
d. Producer, retailers, consumers
e. Producer, agents, wholesalers, retailers, consumers
ANS: D PTS: 1 DIF: Difficult
OBJ: 14-03 Identify types of marketing channels.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
49. The marketing channel of producer to retailer to consumer is most likely to be used by producers of
which of the following products?
a. Chewing gum
b. Tobacco
c. Automobiles
d. Hardware
e. Saltine crackers
ANS: C PTS: 1 DIF: Moderate
OBJ: 14-03 Identify types of marketing channels.
NAT: AACSB: Analytic | MKTG: Strategy | MKTG: Distribution
MSC: Application
50. Nationally distributed consumer convenience products are most likely distributed through which of the
following channels?
a. Producer, consumers
b. Producer, agents, wholesalers, retailers, consumers
c. Producer, wholesalers, consumers
d. Producer, wholesalers, retailers, consumers
e. Producer, industrial distributor, wholesalers, retailers, consumers
ANS: D PTS: 1 DIF: Easy
OBJ: 14-03 Identify types of marketing channels.
NAT: AACSB: Analytic | MKTG: Strategy | MKTG: Distribution
MSC: Application
51. Manufacturers of convenience products such as chewing gum reach customers through thousands of
retailers. What marketing channel are these manufacturers most likely to use?
a. Producer, consumer
b. Producer, wholesaler, retailer, consumer
c. Producer, wholesaler, agent, retailer, consumer
d. Producer, retailer, consumer
e. Retailer, consumer
ANS: B PTS: 1 DIF: Easy
OBJ: 14-03 Identify types of marketing channels.
NAT: AACSB: Analytic | MKTG: Strategy | MKTG: Distribution
MSC: Application
52. Which of the following is the most commonly used channel for distributing business products?
a. Producer, agents, industrial distributors, organizational buyers
b. Producer, industrial distributors, organizational buyers
c. Producer, agents, organizational buyers
d. Producer, organizational buyers
e. Industrial distributors, organizational buyers
ANS: D PTS: 1 DIF: Easy
OBJ: 14-03 Identify types of marketing channels.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Application
53. Steelcase, Inc. markets furniture directly to businesses. This is an example of a(n) ____ channel.
a. producer-to-business buyer
b. producer-to-industrial-distributor-to-business buyer
c. producer-to-agent-to-business buyer
d. equipment
e. consumer
ANS: A PTS: 1 DIF: Easy
OBJ: 14-03 Identify types of marketing channels.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
54. Organizational buyers are especially partial to direct marketing channels when
a. they buy cheap materials in large quantities.
b. they try a new product for the first time.
c. they are filling an order for a very important customer.
d. a modified rebuy type of decision is involved.
e. expensive and/or complex equipment is involved.
ANS: E PTS: 1 DIF: Moderate
OBJ: 14-03 Identify types of marketing channels.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Knowledge
55. Caruthers Paint Manufacturing Company buys the chemicals it needs for producing its products from a
chemical producer, Roth Chemicals. In this instance, the chemicals are being distributed to Caruthers
through which of the following types of channels?
a. Industrial distributor
b. Direct distribution
c. Retail
d. Wholesaler-sponsored
e. Producer
ANS: B PTS: 1 DIF: Difficult
OBJ: 14-03 Identify types of marketing channels.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
56. An independent business that takes title to products and carries inventories is a(n)
a. industrial distributor.
b. intermediary.
c. agency.
d. wholesaler.
e. producer.
ANS: A PTS: 1 DIF: Easy
OBJ: 14-03 Identify types of marketing channels.
NAT: AACSB: Communication | MKTG: Distribution MSC: Knowledge
57. Jeff Wood's company buys machine tools from large producers and sells them to several Midwestern
manufacturing companies. The company Jeff works for carries inventories of the tools, which reduces
capital requirements for the producers. Jeff's company is an example of a(n) ____ in a distribution
channel.
a. direct distributor
b. manufacturers' agent
c. industrial distributor
d. producers' agent
e. wholesalers' agent
ANS: C PTS: 1 DIF: Moderate
OBJ: 14-03 Identify types of marketing channels.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
58. Which of the following is most likely to be a product stocked by an industrial distributor?
a. Tires
b. Exercise equipment
c. Screws
d. Countertops
e. Bananas
ANS: C PTS: 1 DIF: Easy
OBJ: 14-03 Identify types of marketing channels.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Knowledge
62. A channel that includes both a manufacturers' agent and an industrial distributor is appropriate under
which of the following circumstances?
a. When the firm wants specialized personnel to follow up the work of the sales force
b. When the marketer wishes to enter a new geographic market but does not wish to expand
the existing sales force
c. When only one or two channels of distribution are available for products
d. When the sales force is large and the marketer is thinking of cutting it down
e. When customers are highly concentrated in one geographic area
ANS: B PTS: 1 DIF: Moderate
OBJ: 14-03 Identify types of marketing channels.
NAT: AACSB: Analytic | MKTG: Distribution | MKTG: Strategy
MSC: Comprehension
63. Rob Stevens is the head of a company that produces computer software for production scheduling. The
firm is small and presently does not generate enough volume to justify hiring a sales force. The firm is
probably using ____ to maintain contact with the firms using its products.
a. wholesalers
b. brokers
c. agents
d. merchants
e. retailers
ANS: C PTS: 1 DIF: Moderate
OBJ: 14-03 Identify types of marketing channels.
NAT: AACSB: Analytic | MKTG: Distribution | MKTG: Strategy
MSC: Application
64. An independent businessperson who is paid a commission to sell complementary products of different
producers in an assigned territory without actually taking title of the merchandise is a(n)
a. sole intermediary.
b. manufacturers' agent.
c. producers' broker.
d. industrial distributor.
e. channel facilitator.
ANS: B PTS: 1 DIF: Easy
OBJ: 14-03 Identify types of marketing channels.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Knowledge
65. What is a primary difference between an industrial distributor and a manufacturers' agent?
a. A manufacturers' agent does not acquire title nor usually take possession of the products
whereas an industrial distributor does.
b. A manufacturers' agent is employed by the manufacturers while an industrial distributor is
independent.
c. An industrial distributor is employed by the manufacturers while a manufacturers' agent is
independent.
d. A manufacturers' agent rarely adds any value to the marketing channel while an industrial
distributor reduces costs significantly.
e. An industrial distributor does not form relationships with customers for repeat business
whereas a key asset of a manufacturers' agent is his knowledge of his customers.
ANS: A PTS: 1 DIF: Moderate
OBJ: 14-03 Identify types of marketing channels.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Knowledge
66. Del Monte markets ketchup for household use to supermarkets through grocery wholesalers. It markets
ketchup for institutional use through industrial distributors and food brokers. Del Monte is using
a. dual distribution.
b. industrial distribution.
c. strategic channel alliance.
d. supply chain management.
e. an unethical marketing channel.
ANS: A PTS: 1 DIF: Easy
OBJ: 14-03 Identify types of marketing channels.
NAT: AACSB: Analytic | MKTG: Distribution | MKTG: Strategy
MSC: Application
67. Many companies use more than one marketing channel to distribute their products to the same target
market, a tactic called
a. multiple channeling.
b. strategic channel alliance.
c. intensive distribution.
d. dual distribution.
e. market splitting.
ANS: D PTS: 1 DIF: Easy
OBJ: 14-03 Identify types of marketing channels.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Knowledge
68. Gateway Computer makes computers available through its own stores, its toll-free telephone line, and
a website. This is an example of
a. dual distribution.
b. vertical integration.
c. horizontal integration.
d. tying agreements.
e. exclusive dealing.
ANS: A PTS: 1 DIF: Easy
OBJ: 14-03 Identify types of marketing channels.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
69. Starbucks has an agreement with Pepsi Co. through which Pepsi distributes Starbucks' coffee drink,
Frappucino, to grocery stores and other retail outlets. This is an example of
a. a strategic channel alliance.
b. exclusive distribution.
c. dual distribution.
d. horizontal channel integration.
e. channel leadership.
ANS: A PTS: 1 DIF: Easy
OBJ: 14-03 Identify types of marketing channels.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
70. Which of the following is least likely to be a factor affecting the selection of marketing channels?
a. Customer characteristics
b. Product attributes
c. Product packaging
d. Competition
e. Environmental forces
ANS: C PTS: 1 DIF: Easy
OBJ: 14-04 Understand factors that influence marketing channel selection.
NAT: AACSB: Analytic | MKTG: Product | MKTG: Distribution
MSC: Knowledge
71. Fragile products that require special handling are more likely to be distributed through
a. longer channels.
b. shorter channels.
c. Channel D.
d. Channel H.
e. exclusive outlets.
ANS: B PTS: 1 DIF: Easy
OBJ: 14-04 Understand factors that influence marketing channel selection.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Knowledge
72. When considering the best channel to use, all of the following are true with regard to larger firms
except they
a. can use an extensive product mix as a competitive tool.
b. may be better able to negotiate better deals with vendors or other channel members.
c. may have more distribution centers.
d. may have the resources to develop their own sales force.
e. may be better suited to serve customers in a particular region.
ANS: E PTS: 1 DIF: Easy
OBJ: 14-04 Understand factors that influence marketing channel selection.
NAT: AACSB: Analytic | MKTG: Distribution | MKTG: Strategy
MSC: Knowledge
73. The three major levels of intensity at which a company can choose to distribute its products are ____
distribution.
a. narrow, medium, and wide
b. cooperative, conflicting, and integrated
c. intensive, extensive, and exclusive
d. selective, cooperative, and conflicting
e. exclusive, selective, and intensive
ANS: E PTS: 1 DIF: Easy
OBJ: 14-05 Identify the intensity of market coverage.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Knowledge
74. When Busch Light Beer was introduced as part of the Anheuser-Busch product line, the company most
likely used ____ distribution.
a. horizontal
b. intensive
c. selective
d. agent
e. exclusive
ANS: B PTS: 1 DIF: Easy
OBJ: 14-05 Identify the intensity of market coverage.
NAT: AACSB: Analytic | MKTG: Distribution | MKTG: Strategy
MSC: Application
75. Producers of convenience products such as soft drinks, toothpaste, and breath mints are most likely to
use ____ distribution.
a. selective
b. extensive
c. intensive
d. exclusive
e. demand-based
ANS: C PTS: 1 DIF: Easy
OBJ: 14-05 Identify the intensity of market coverage.
NAT: AACSB: Analytic | MKTG: Distribution | MKTG: Strategy
MSC: Application
76. Candy bars and chewing gum are most likely to be distributed through ____ and ____.
a. selective distribution; multiple channels
b. intensive; dual distribution
c. strategic channel alliances; intensive
d. exclusive; a single channel
e. dual distribution; convenience channels
ANS: B PTS: 1 DIF: Easy
OBJ: 14-05 Identify the intensity of market coverage.
NAT: AACSB: Analytic | MKTG: Distribution | MKTG: Strategy
MSC: Application
77. Sales are most likely to have a direct relationship to product availability for products that use ____
distribution.
a. selective
b. dual
c. intensive
d. extensive
e. exclusive
ANS: C PTS: 1 DIF: Moderate
OBJ: 14-05 Identify the intensity of market coverage.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Knowledge
78. In marketing a new line of nursery furniture for infants and small children, the Fisher Company will
most likely use ____ distribution for the products.
a. intensive
b. exclusive
c. horizontal
d. priority
e. selective
ANS: E PTS: 1 DIF: Easy
OBJ: 14-05 Identify the intensity of market coverage.
NAT: AACSB: Analytic | MKTG: Distribution | MKTG: Strategy
MSC: Application
79. Using only some of the available outlets to distribute a product is called
a. selective distribution.
b. intensive distribution.
c. channel conflict.
d. vertical channel integration.
e. exclusive distribution.
ANS: A PTS: 1 DIF: Easy
OBJ: 14-05 Identify the intensity of market coverage.
NAT: AACSB: Communication | MKTG: Distribution MSC: Knowledge
80. Durable goods such as television sets and DVD players generally reach their target markets through
a. intensive distribution.
b. channel cooperation.
c. direct marketing.
d. exclusive distribution.
e. selective distribution.
ANS: E PTS: 1 DIF: Easy
OBJ: 14-05 Identify the intensity of market coverage.
NAT: AACSB: Analytic | MKTG: Distribution | MKTG: Strategy
MSC: Knowledge
81. Product and target market characteristics usually determine the type of coverage a product receives.
For which of the following products is selective distribution most appropriate?
a. Gasoline
b. Jaguar automobiles
c. Cigarettes
d. Laundry detergent
e. Panasonic stereos
ANS: E PTS: 1 DIF: Easy
OBJ: 14-05 Identify the intensity of market coverage.
NAT: AACSB: Analytic | MKTG: Distribution | MKTG: Strategy
MSC: Application
82. Honey Farms is a maker of fine chocolates. The company's latest product, Fudge-Dipped Strawberries,
is the premier product in its Fudge-Dipped line. The product is very expensive and targeted to upscale
consumers. Which form of distribution would Honey Farms be likely to use for its new product?
a. Intensive
b. Selective
c. Targeted
d. Exclusive
e. Premier
ANS: D PTS: 1 DIF: Moderate
OBJ: 14-05 Identify the intensity of market coverage.
NAT: AACSB: Analytic | MKTG: Distribution | MKTG: Strategy
MSC: Application
83. Expensive, high-quality products that are purchased infrequently often reach consumers through
a. selective distribution.
b. highly-selective distribution.
c. sole-source retailers.
d. complex marketing channels.
e. exclusive distribution.
ANS: E PTS: 1 DIF: Easy
OBJ: 14-05 Identify the intensity of market coverage.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Knowledge
84. For which of the following products would exclusive distribution be most appropriate?
a. Gasoline
b. Rolls Royce automobile
c. Washing machine
d. Laundry detergent
e. Moderately priced luggage
ANS: B PTS: 1 DIF: Moderate
OBJ: 14-05 Identify the intensity of market coverage.
NAT: AACSB: Analytic | MKTG: Distribution | MKTG: Strategy
MSC: Application
85. Because Coke is such a popular product and the company is so powerful, Coca-Cola is in a position to
exert considerable control over channel structures and the way Coke is marketed. This is an illustration
of channel ____ in the distribution channel.
a. conflict
b. leadership
c. dominance
d. cooperation
e. negotiation
ANS: B PTS: 1 DIF: Easy
OBJ: 14-06 Examine strategic issues in marketing channels, including leadership, cooperation, and
conflict. NAT: AACSB: Analytic | MKTG: Distribution | MKTG: Strategy
MSC: Application
86. A single leader who controls and organizes a marketing channel is called a
a. channel champion.
b. distribution leader.
c. marketing maverick.
d. channel captain.
e. lead distributor.
ANS: D PTS: 1 DIF: Easy
OBJ: 14-06 Examine strategic issues in marketing channels, including leadership, cooperation, and
conflict. NAT: AACSB: Reflective Thinking | MKTG: Distribution
MSC: Knowledge
87. Nike maintains a good deal of control over how its products are promoted, displayed, and sold.
Because of this control, Nike would be appropriately described as the channel
a. intermediary.
b. captain.
c. allocator.
d. terminator.
e. price leader.
ANS: B PTS: 1 DIF: Easy
OBJ: 14-06 Examine strategic issues in marketing channels, including leadership, cooperation, and
conflict. NAT: AACSB: Analytic | MKTG: Distribution
MSC: Application
88. Few supermarkets would try to replace a national brand of baby food with their own brand. Assuming
that this is true, we have a good example of channel leadership by
a. wholesalers.
b. producers.
c. retailers.
d. agents.
e. brokers.
ANS: B PTS: 1 DIF: Moderate
OBJ: 14-06 Examine strategic issues in marketing channels, including leadership, cooperation, and
conflict. NAT: AACSB: Analytic | MKTG: Distribution | MKTG: Strategy
MSC: Application
89. When one company in a marketing channel has the ability to influence another member's goal
achievement, the company has
a. channel control.
b. channel power.
c. marketing leadership.
d. a channel captain.
e. distributive influence.
ANS: B PTS: 1 DIF: Easy
OBJ: 14-06 Examine strategic issues in marketing channels, including leadership, cooperation, and
conflict. NAT: AACSB: Reflective Thinking | MKTG: Distribution
MSC: Knowledge
90. If Ralston Purina forced Kroger's grocery chain to place all of its products in the stores' most favorable
locations, it would be
a. demonstrating sound channel leadership.
b. insisting on exclusive exposure.
c. exercising channel power.
d. minimizing channel conflict.
e. creating a coordinate system.
ANS: C PTS: 1 DIF: Moderate
OBJ: 14-06 Examine strategic issues in marketing channels, including leadership, cooperation, and
conflict. NAT: AACSB: Analytic | MKTG: Distribution
MSC: Application
91. Overall channel goals and individual channel member goals cannot be achieved together without
a. conflict.
b. captains.
c. leadership.
d. cooperation.
e. tying agreements.
ANS: D PTS: 1 DIF: Moderate
OBJ: 14-06 Examine strategic issues in marketing channels, including leadership, cooperation, and
conflict. NAT: AACSB: Communication | MKTG: Distribution
MSC: Knowledge
92. Marketing channel members are likely to experience misunderstandings, frustration, and poorly
coordinated strategies as a result of
a. channel conflict caused by inefficient communication between channel members.
b. open communication among the channel members.
c. methods of channel coordination designed to reduce ambiguity.
d. negotiating territorial issues among regional distributors of a product.
e. allowing one member of the channel to take the role of channel captain.
ANS: A PTS: 1 DIF: Moderate
OBJ: 14-06 Examine strategic issues in marketing channels, including leadership, cooperation, and
conflict. NAT: AACSB: Communication | MKTG: Distribution
MSC: Knowledge
93. When produce companies such as Dole Tomatoes bypass wholesalers and sell directly to retailers, it is
likely to create channel ____ between Dole and these wholesalers.
a. conflict
b. cooperation
c. leadership
d. integration
e. flows
ANS: A PTS: 1 DIF: Easy
OBJ: 14-06 Examine strategic issues in marketing channels, including leadership, cooperation, and
conflict. NAT: AACSB: Analytic | MKTG: Distribution
MSC: Application
94. Goodyear allows companies like Sears and Discount Tire to distribute and discount its tires. This
action significantly increases the possibility of channel ____ with independent Goodyear dealers.
a. understanding
b. power
c. leadership
d. communication
e. conflict
ANS: E PTS: 1 DIF: Moderate
OBJ: 14-06 Examine strategic issues in marketing channels, including leadership, cooperation, and
conflict. NAT: AACSB: Analytic | MKTG: Distribution
MSC: Application
95. If a wholesaler continually emphasizes and promotes one company's products over a competing
company's products, ____ is likely to result.
a. channel cooperation
b. vertical channel integration
c. channel conflict
d. horizontal channel integration
e. channel leadership.
ANS: C PTS: 1 DIF: Easy
OBJ: 14-06 Examine strategic issues in marketing channels, including leadership, cooperation, and
conflict. NAT: AACSB: Analytic | MKTG: Distribution
MSC: Comprehension
97. When a single channel member manages an integrated marketing channel to achieve low-cost, efficient
distribution for satisfying target markets, ____ exists.
a. a vertical marketing system
b. horizontal channel integration
c. channel power
d. channel cooperation
e. extensive distribution
ANS: A PTS: 1 DIF: Easy
OBJ: 14-06 Examine strategic issues in marketing channels, including leadership, cooperation, and
conflict. NAT: AACSB: Reflective Thinking | MKTG: Distribution
MSC: Knowledge
98. Warner Bros. sells cookie jars, puzzles, photo albums, and other items featuring its popular cartoon
characters directly through its own retail outlets. This is an example of
a. channel leadership.
b. channel cooperation.
c. channel conflict.
d. horizontal channel integration.
e. vertical channel integration.
ANS: E PTS: 1 DIF: Difficult
OBJ: 14-06 Examine strategic issues in marketing channels, including leadership, cooperation, and
conflict. NAT: AACSB: Analytic | MKTG: Distribution
MSC: Application
99. The reasons a vertically integrated channel can be more effective against competition is because of all
of the following except
a. the consolidation of power.
b. tightly controlled and bureaucratic management style.
c. the ability to inhibit competitors.
d. the sharing of responsibilities and information.
e. increased bargaining power.
ANS: B PTS: 1 DIF: Difficult
OBJ: 14-06 Examine strategic issues in marketing channels, including leadership, cooperation, and
conflict. NAT: AACSB: Analytic | MKTG: Distribution | MKTG: Strategy
MSC: Knowledge
100. Bennetton, a leading manufacturer of knitwear in Italy, expanded its operations to include retail outlets
in the United States and South America. This type of integration is called
a. horizontal.
b. vertical.
c. multilevel.
d. retail.
e. merchandising.
ANS: B PTS: 1 DIF: Difficult
OBJ: 14-06 Examine strategic issues in marketing channels, including leadership, cooperation, and
conflict. NAT: AACSB: Analytic | MKTG: Distribution
MSC: Application
101. When Benetton, the Italian sportswear designer and manufacturer, decided to open its own specialty
shops to sell its merchandise, the firm was engaging in
a. channel repetition.
b. vertical channel integration.
c. channel conflict.
d. horizontal channel integration.
e. channel expansion.
ANS: B PTS: 1 DIF: Moderate
OBJ: 14-06 Examine strategic issues in marketing channels, including leadership, cooperation, and
conflict. NAT: AACSB: Analytic | MKTG: Distribution
MSC: Application
102. The Limited, which produces and retails clothing products in a coordinated channel, is an example of
a(n)
a. administered vertical marketing system.
b. conventional marketing channel.
c. channel network.
d. contractual marketing channel.
e. corporate vertical marketing system.
ANS: E PTS: 1 DIF: Moderate
OBJ: 14-06 Examine strategic issues in marketing channels, including leadership, cooperation, and
conflict. NAT: AACSB: Analytic | MKTG: Distribution
MSC: Application
103. When channel members are linked by legal agreements that specify each member's rights and
responsibilities, ____ exists.
a. horizontal channel integration
b. an administered VMS
c. a corporate VMS
d. a channel captain
e. a contractual VMS
ANS: E PTS: 1 DIF: Easy
OBJ: 14-06 Examine strategic issues in marketing channels, including leadership, cooperation, and
conflict. NAT: AACSB: Reflective Thinking | MKTG: Distribution
MSC: Knowledge
105. In an administered VMS, informal coordination brings about a high level of interorganizational
management. Nonetheless,
a. decision making does not take into account the goals of the system.
b. the channel members do not remain autonomous.
c. the decision making is not coordinated.
d. the channel members remain autonomous.
e. the goals of the individual firms are not congruent with the goals of the system.
ANS: D PTS: 1 DIF: Moderate
OBJ: 14-06 Examine strategic issues in marketing channels, including leadership, cooperation, and
conflict. NAT: AACSB: Communication | MKTG: Distribution
MSC: Comprehension
106. In the distribution channel for Domino's Pizza, channel members are linked by legal agreements that
spell out the obligations and rights of each member. This is an example of a(n) ____ vertical marketing
system.
a. contractual
b. administered
c. corporate
d. negotiated
e. institutional
ANS: A PTS: 1 DIF: Moderate
OBJ: 14-06 Examine strategic issues in marketing channels, including leadership, cooperation, and
conflict. NAT: AACSB: Analytic | MKTG: Distribution
MSC: Application
107. The Wicks 'N Sticks candle and gift marketing organization has a(n) ____ vertical marketing system
arrangement with its franchised retail store operations.
a. corporate
b. administered
c. negotiated
d. contractual
e. horizontal
ANS: D PTS: 1 DIF: Difficult
OBJ: 14-06 Examine strategic issues in marketing channels, including leadership, cooperation, and
conflict. NAT: AACSB: Analytic | MKTG: Distribution
MSC: Application
109. To expand the number of its retail outlets in the Washington, D.C., area, the Dress Barn bought out a
small chain of women's apparel stores in northern Virginia. This type of integration is called
a. vertical.
b. retail.
c. horizontal.
d. backward.
e. forward.
ANS: C PTS: 1 DIF: Easy
OBJ: 14-06 Examine strategic issues in marketing channels, including leadership, cooperation, and
conflict. NAT: AACSB: Analytic | MKTG: Distribution
MSC: Application
110. Order processing, inventory management, materials handling, warehousing, and transportation are the
activities that define
a. wholesaling.
b. retailing.
c. physical distribution.
d. channel management.
e. drop shipping.
ANS: C PTS: 1 DIF: Easy
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Knowledge
113. If a firm decides to contract its physical distribution functions to third parties that have no managerial
authority within the marketing channel, it is using
a. outsourcing.
b. sole-sourcing.
c. logistics.
d. wholesaling.
e. distribution services.
ANS: A PTS: 1 DIF: Moderate
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Knowledge
115. As her Internet quilt and bed linen business grew, Danielle could no longer perform all the distribution
activities, so she hired a shipper and an information technology firm to assist with these functions.
Danielle is using ____ for physical distribution for her business.
a. producers
b. wholesalers
c. retailers
d. selling agents
e. outsourcing
ANS: E PTS: 1 DIF: Easy
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Analytic | MKTG: Distribution | MKTG: Strategy
MSC: Application
118. According to the text, physical distribution cost tradeoffs enable firms to
a. resolve pricing conflicts among channel partners.
b. minimize risk during test marketing of new products.
c. reduce costs of all distribution functions simultaneously.
d. resolve pricing conflicts within industry sectors.
e. utilize resources for greatest cost-effectiveness.
ANS: E PTS: 1 DIF: Difficult
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Analytic | MKTG: Distribution | MKTG: Strategy
MSC: Comprehension
119. At the annual managers' planning conference, Jackie Conrad asks the other managers to consider her
proposal to increase the quantity of inventory to a five-week supply in order to increase the percentage
of completely filled customer orders from 85 percent to 90 percent. She states that she is willing to
trade off the ____ incurred for the positive effect of better customer service.
a. lower response time
b. higher warehousing costs
c. higher transportation costs
d. higher order processing costs
e. higher performance levels
ANS: B PTS: 1 DIF: Moderate
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Analytic | MKTG: Distribution | MKTG: Strategy
MSC: Application
120. An important goal of physical distribution is reducing the time it takes to complete
a. inventory management.
b. outsourcing evaluation.
c. electronic data interchange.
d. order processing.
e. cycle time.
ANS: E PTS: 1 DIF: Easy
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Knowledge
121. The United States Postal Service works hard to get priority mail from the sender to the recipient as
quickly as possible in order to compete with companies such as UPS and FedEx. The postal service
works to reduce
a. cycle time.
b. order processing.
c. turn-around.
d. shipping time.
e. transportation.
ANS: A PTS: 1 DIF: Easy
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
122. A goal of physical distribution is to reduce ____ or how long it takes to complete a process.
a. time standards
b. processing time
c. production
d. throughput measure
e. cycle time
ANS: E PTS: 1 DIF: Easy
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Knowledge
125. By receiving orders online instead of through a paper-based ordering system, Barnes and Nobles has
been able to save time and money on
a. electronic data interchange.
b. order entry.
c. inventory management.
d. order delivery.
e. order handling.
ANS: B PTS: 1 DIF: Easy
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Analytic | MKTG: Distribution | MKTG: Strategy
MSC: Application
126. The order-processing task that involves verifying product availability, checking prices and customer
credit ratings, and filling orders is
a. warehousing.
b. order handling.
c. information processing.
d. materials handling.
e. order entry.
ANS: B PTS: 1 DIF: Moderate
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Comprehension
127. Order handling involves all of the following activities except that the
a. credit department approves the purchase.
b. order is transmitted to the warehouse.
c. availability of product is verified.
d. warehouse is instructed to fill the order.
e. customer places a purchase order.
ANS: E PTS: 1 DIF: Difficult
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Knowledge
128. A commonly used computerized means of integrating order processing with production, inventory,
accounting, and transportation is
a. web-based inventory management.
b. just-in-time.
c. electronic data interchange.
d. universal product codes.
e. activity based management.
ANS: C PTS: 1 DIF: Easy
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Knowledge
129. Nathan is trying to decide which shipping company to use to transport his custom-made furniture to
customers. Nathan is facing a decision about
a. order entry.
b. order completion.
c. just-in-time.
d. order handling.
e. order delivery.
ANS: E PTS: 1 DIF: Moderate
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
130. Because of the significant investment many companies have in the products they sell to customers,
they must develop and maintain adequate varieties of products to meet their customers' needs. This is
called
a. just-in-time.
b. order processing.
c. inventory management.
d. merchandise stocking.
e. logistical management.
ANS: C PTS: 1 DIF: Easy
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Knowledge
131. Greg Braddock is a physical distribution manager. He is currently developing and maintaining
assortments of products that are adequate for customer demand. In which stage in the physical
distribution system is Greg currently involved?
a. Order processing
b. Materials handling
c. Inventory management
d. Transportation
e. Warehousing
ANS: C PTS: 1 DIF: Moderate
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
133. Anna Wren, sales manager for Pacific Lumber, tells Jason Peoples, the firm's inventory manager, that
the firm's failure to have adequate supplies of pressure-treated lumber on hand has cost the firm
$175,000 in lost sales. This figure represents which of the following inventory management costs?
a. Carrying
b. Replenishment
c. Stockout
d. Safety stock
e. Reorder
ANS: C PTS: 1 DIF: Easy
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Analytic | MKTG: Distribution | MKTG: Strategy
MSC: Application
134. What is the reorder point if the usage rate is 10 units per day, the order lead time is five days, and the
safety stock is 30?
a. 50
b. 150
c. 80
d. 200
e. 400
ANS: C PTS: 1 DIF: Moderate
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Comprehension
135. A manufacturer has decided to improve its inventory management by maintaining low inventory levels
and waiting to purchase materials until right before they are needed in production. This inventory
management technique is called
a. just-in-time (JIT).
b. time management.
c. inventory minimization.
d. economic order quantity.
e. reorder point maximization.
ANS: A PTS: 1 DIF: Easy
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
136. Eric is concerned about not having enough air conditioning units in inventory during June, July, and
August so he keeps extra inventory to guard against stockouts during this critical period. Eric is
keeping
a. short order lead times.
b. just-in-time inventory.
c. a controlled usage rate.
d. safety stock.
e. excessive inventory.
ANS: D PTS: 1 DIF: Easy
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Analytic | MKTG: Distribution | MKTG: Strategy
MSC: Application
137. All of the following are concepts used in a just-in-time inventory management system except
a. supplies arrive just as they are needed.
b. safety stock is kept to reduce stockouts.
c. much waste is eliminated.
d. purchases are made in small quantities.
e. purchases are made frequently.
ANS: B PTS: 1 DIF: Moderate
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Knowledge
138. Justin Abercrombie attends a seminar on just-in-time inventory management. Excited about the idea,
he returns to his office at Atlanta Auto Supply to start designing such an inventory system. Which of
the following steps must Justin take as he institutes this change?
a. Increase safety stock
b. Raise the reorder point
c. Reduce customer service standard
d. Increase order frequency
e. Reduce estimates of inventory turnover rate
ANS: D PTS: 1 DIF: Difficult
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
139. What is the primary determinant in deciding how materials will be handled?
a. Unit loading
b. Containerization
c. Customer preference
d. Cost reduction
e. Product characteristics
ANS: E PTS: 1 DIF: Moderate
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Analytic | MKTG: Distribution | MKTG: Product
MSC: Knowledge
140. Johnson Controls hires a consultant to assess its materials handling procedures. The consultant
recommends the implementation of ____ if they want easier movement of items between internal
destinations in the warehouse.
a. unit loading
b. piggybacking
c. containerization
d. inventory management
e. priority transportation
ANS: A PTS: 1 DIF: Difficult
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
141. Federal Mogul places several boxes of products or materials on pallets in order to load them efficiently
using forklifts. This system of materials handling is called
a. warehousing.
b. containerization.
c. group storage.
d. unit loading.
e. mechanized handling.
ANS: D PTS: 1 DIF: Easy
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Application
142. Fansteel manufactures parts used in jet engines, which it sells to companies such as Boeing. When
shipping products to Boeing, Fansteel seals the parts in 8' 8' 40' boxes for shipping to decrease loss
and damage. This method of materials handling is
a. unit loading.
b. containerization.
c. freight forwarding.
d. unitized shipping.
e. bonded packaging.
ANS: B PTS: 1 DIF: Moderate
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Analytic | MKTG: Product | MKTG: Distribution
MSC: Application
143. Managers and consultants at Colgate-Palmolive are meeting to discuss better ways to package its
products to reduce damage and make loading more efficient. The primary function they are trying to
improve is
a. warehousing.
b. inventory management.
c. materials handling.
d. cycle time.
e. containerization.
ANS: C PTS: 1 DIF: Easy
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Application
144. Which of the following physical distribution functions involves design and operation of facilities for
storing goods?
a. Order processing
b. Materials handling
c. Transportation
d. Warehousing
e. Inventory management
ANS: D PTS: 1 DIF: Difficult
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Knowledge
145. What function of physical distribution enables companies to compensate for dissimilar production and
consumption rates and stabilize prices and availability of seasonal items?
a. Materials handling
b. Warehousing
c. Transportation
d. Inventory management
e. Order processing
ANS: B PTS: 1 DIF: Moderate
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Reflective Thinking | MKTG: Distribution | MKTG: Pricing
MSC: Knowledge
146. Morgan Steel Company leases a warehouse in Jacksonville, Alabama to serve Deep South markets that
were large enough and stable enough to make a long-term commitment to fixed facilities. This is a
a. flexible warehouse.
b. dispatching center.
c. distribution center.
d. private warehouse.
e. public warehouse.
ANS: D PTS: 1 DIF: Moderate
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
147. When companies operate their own facilities for storing and shipping products, these facilities are
known as
a. distribution centers.
b. product storehouses.
c. public warehouses.
d. megawarehouses.
e. private warehouses.
ANS: E PTS: 1 DIF: Easy
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Knowledge
148. Air-Tech management learns that last month's production run of heaters at its Newark plant is
defective and announces a recall of the specific models produced. To handle the large number of
products it expects to receive for replacement of the defective thermostats, Air-Tech will probably
need to add a ____ to its distribution network.
a. distribution center
b. private warehouse
c. dispatching shipment system
d. public warehouse
e. materials handling system
ANS: D PTS: 1 DIF: Difficult
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
150. Garcia Wholesale Plumbing has seen its sales in the Southeast triple in the past two years. Materials
handling director Barb Peterson announces plans to the board for an Atlanta facility that will combine
shipments received from Garcia's 25 suppliers for nearly immediate shipment to plumbing stores and
contractors in the region. This new facility would be best classified as which of the following?
a. Sales office
b. Public warehouse
c. Field public warehouse
d. Distribution center
e. Bonded warehouse
ANS: D PTS: 1 DIF: Moderate
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
152. ____ adds time and place utility to a product by moving it from where it is made to where it is
purchased and used.
a. Warehousing
b. Containerization
c. Distribution
d. Materials handling
e. Transportation
ANS: E PTS: 1 DIF: Difficult
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Knowledge
153. Which major mode of freight transportation provides the most flexible schedules and routes?
a. Trucks
b. Waterways
c. Airways
d. Pipelines
e. Railroads
ANS: A PTS: 1 DIF: Easy
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Knowledge
154. Which mode of transportation hauls more freight than any other?
a. Railroads
b. Waterways
c. Pipelines
d. Trucks
e. Airways
ANS: A PTS: 1 DIF: Easy
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Knowledge
155. Magnetic Springs wants to ship its bottled water with the most flexible schedules and routes of all
transportation modes. Magnetic Springs should use ____ as its transportation mode.
a. railroads
b. waterways
c. pipelines
d. trucks
e. airways
ANS: D PTS: 1 DIF: Easy
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Analytic | MKTG: Strategy | MKTG: Distribution
MSC: Application
156. If a microchip in a computer in New York failed, which method of transportation would be most
appropriate to use to replace the chip immediately if one could get the new chip only from Silicon
Valley, California?
a. Pipeline
b. Airways
c. Waterways
d. Truck
e. Railroad
ANS: B PTS: 1 DIF: Easy
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
157. Kolder Inc. is using a new just-in-time inventory management system that requires ordering smaller
quantities of parts more frequently. The success of its business depends significantly on receiving
these parts very quickly, so like many other companies using just-in-time, Kolder Inc. is relying more
on the ____ mode of transportation despite its expense.
a. railroad
b. pipeline
c. airway
d. truck
e. waterway
ANS: C PTS: 1 DIF: Moderate
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Analytic | MKTG: Strategy | MKTG: Distribution
MSC: Application
158. The Diamond Salt Company needs to transport 20 tons of salt from Baton Rouge, Louisiana, to
Cincinnati. Which of the following methods would be the cheapest for transporting this cargo?
a. Pipelines
b. Waterways
c. Trucks
d. Airways
e. Railroads
ANS: B PTS: 1 DIF: Easy
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
159. Assuming everything else equal, the most cost-efficient way for British Petroleum to transport crude
oil from remote oil drilling sites in central Alaska to shipping terminals on the Alaskan coast would be
a. waterways.
b. airways.
c. tanker trucks.
d. railroads.
e. pipelines.
ANS: E PTS: 1 DIF: Easy
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
160. ____ is the combining and coordinating of two or more modes of transportation to take advantage of
benefits offered by each of the different types of carriers.
a. Intermodal transportation
b. Physical distribution
c. Containerized movement
d. Efficient transportation
e. Freight forwarding
ANS: A PTS: 1 DIF: Easy
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Knowledge
161. Piggyback, fishyback, and birdyback are terms usually associated with gaining efficiency in shipping
through
a. transit time.
b. warehousing.
c. packaging.
d. containerization.
e. lot sizes.
ANS: D PTS: 1 DIF: Difficult
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Knowledge
162. What two modes of transportation are used when containers are shipped by piggyback?
a. Railroads and airways
b. Trucks and airways
c. Pipelines and trucks
d. Waterways and railroads
e. Railroads and trucks
ANS: E PTS: 1 DIF: Easy
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Knowledge
163. Which of the following organizations consolidates shipments from several firms into more efficient lot
sizes?
a. Freight forwarder
b. Forwarding agency
c. Transporter
d. Special transportation company
e. Intermodal shipping company
ANS: A PTS: 1 DIF: Easy
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Knowledge
164. Freight transportation companies that offer several different shipment methods are called
a. megacarriers.
b. intermodal transporters.
c. freight forwarders.
d. shipping experts.
e. superfreighters.
ANS: A PTS: 1 DIF: Easy
OBJ: 14-07 Examine physical distribution as a part of supply-chain management.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Knowledge
167. In which of the following situations is dual distribution likely to be determined illegal?
a. A manufacturer sells its product online and through independent and company-owned
retail outlets.
b. A manufacturer opens its own retail outlets across the country and sells its entire line of
products.
c. A producer uses company outlets to dominate independent retailers that carry its products.
d. A producer sells its products both to wholesalers who deal with small and medium-sized
retailers and directly to retailers.
e. A producer charges higher prices at its company-owned retail outlets than independent
retailers charge for the same products.
ANS: C PTS: 1 DIF: Moderate
OBJ: 14-08 Explore legal issues in channel management.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Knowledge
168. Ralph Lauren sells Polo products through department stores as well as in its own specialty shops. The
designer uses ____ as a channel strategy.
a. channel extension
b. intermediary exclusion
c. broker utilization
d. dual distribution
e. channel diversification
ANS: D PTS: 1 DIF: Easy
OBJ: 14-08 Explore legal issues in channel management.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
169. The main reason a manufacturer will prohibit intermediaries from selling its products outside
designated sales territories is to
a. tighten its control over distribution of its products.
b. discourage competition from other manufacturers.
c. incorporate selective distribution.
d. contain distribution costs.
e. punish intermediaries for past behavior.
ANS: A PTS: 1 DIF: Easy
OBJ: 14-08 Explore legal issues in channel management.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Knowledge
171. An arrangement where a producer forbids an intermediary to carry products made by competing
manufacturers is called
a. exclusive distribution.
b. a tying agreement.
c. refusal to deal.
d. contractual VMS.
e. exclusive dealing.
ANS: E PTS: 1 DIF: Moderate
OBJ: 14-08 Explore legal issues in channel management.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Knowledge
172. Dell Computers is a nationally recognized manufacturer of computers for the small business and home
markets. If Dell were to order one of its wholesalers not to carry any computer products other than
those made by Dell, this arrangement would be called
a. a tying contract.
b. refusal to deal.
c. a restricted sales territory.
d. a restricted channel.
e. exclusive dealing.
ANS: E PTS: 1 DIF: Easy
OBJ: 14-08 Explore legal issues in channel management.
NAT: AACSB: Analytic | MKTG: Strategy | MKTG: Distribution
MSC: Application
173. If an intermediary wants to carry Tide detergent and Procter & Gamble agrees only if the supplier
purchases P&G's entire line of detergents as well, the company is engaging in which of the following
channel management practices?
a. Exclusive dealing
b. Dual distribution
c. Tying agreement
d. Refusal to deal
e. Restricted sales territories
ANS: C PTS: 1 DIF: Easy
OBJ: 14-08 Explore legal issues in channel management.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
174. If Anheuser-Busch refused to allow Jackson Distributing to carry its product if the distributor also
carried Miller Brewing products, the company would have been engaging in which of the following
channel management practices?
a. Exclusive dealing
b. Dual distribution
c. Tying contacts
d. Refusal to deal
e. Restricted sales territories
ANS: A PTS: 1 DIF: Difficult
OBJ: 14-08 Explore legal issues in channel management.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
Scenario 15.1
Use the following to answer the questions.
Liz Claiborne, Inc. markets several different brands, under their own Claiborne name label, as well as
others. Their primary brands, such as Liz Claiborne, Liz & Co, and DKNY, are sold to wholesalers.
These brands are then available through retail department stores such as Kohl's and Macy's. Their
wholesale-based brands division is positioned as customer-focused and cost-efficient. Their premium
brands division includes labels such as Kate Spade, Juicy Couture, and Mexx. These premium brands
are sold through stores that the Claiborne company owns.
175. Refer to Scenario 15.1. Liz Claiborne, Inc. uses which type of channel of distribution for its premium
brands?
a. A short, direct channel
b. A long, direct channel
c. Dual distribution
d. Horizontal integration
e. Intensive distribution
ANS: A PTS: 1 DIF: Moderate
OBJ: 14-08 Explore legal issues in channel management.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
176. Refer to Scenario 15.1. The Liz & Co brand is sold only at J.C. Penney's. This is an example of ____
distribution.
a. selective
b. routine
c. horizontal
d. intensive
e. exclusive
ANS: E PTS: 1 DIF: Moderate
OBJ: 14-08 Explore legal issues in channel management.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
177. Refer to Scenario 15.1. If Liz Claiborne were to distribute their Kate Spade brand through its
company-owned stores and through wholesalers, to major department stores, then Liz Claiborne would
be using ____ distribution.
a. intensive
b. vertical
c. horizontal
d. dual
e. exclusive
ANS: D PTS: 1 DIF: Difficult
OBJ: 14-08 Explore legal issues in channel management.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
178. Refer to Scenario 15.1. Which of the following is most likely the primary factor Liz Claiborne, Inc.
used when selecting the marketing channel for its Juicy Couture brand?
a. characteristics of the intermediaries
b. product attributes
c. type of organization
d. marketing environmental forces
e. competition
ANS: B PTS: 1 DIF: Difficult
OBJ: 14-08 Explore legal issues in channel management.
NAT: AACSB: Reflective Thinking | MKTG: Strategy | MKTG: Distribution
MSC: Application
Scenario 15.2
Use the following to answer the questions.
Star Supplies, Inc. manufactures commercial-grade floor cleaners, such as vacuums and floor
polishers. The firm has recently begun manufacturing other janitorial-related product lines, such as
paper products and chemical cleaners. Star Supplies distributes its products in two ways. It sells its
vacuum, floor polisher, and janitorial supply products to an independent business that takes title to the
products and then sells them to various small businesses throughout the region. Also, Star has a list of
large businesses that it distributes to directly, on an as-needed basis. These businesses keep very little
inventory and purchase janitorial supplies in small quantities. Recently, Star has decided to add new
two new service product linespaper shredding and a uniform rental service. Clint Rodriguez, the
marketing manager, is conducting a meeting to discuss the ways in which Star can strategically
manage these new businesses. Star has the choice of marketing the paper shredding service to their
large business clients, by picking up the paper as they drop off the other janitorial supplies, or they can
buy a small paper shredding business and market to both large and small business customers. With
regard to the uniform rental service, Star can either pick up and deliver the uniforms to the small
businesses themselves, or contract that out to a third party.
179. Refer to Scenario 15.2. Star Supplies, Inc. is most likely using which of the following to market its
vacuum, floor polisher, and janitorial supplies to its small business customers?
a. Wholesalers
b. Retailers
c. Merchants
d. Industrial distributors
e. Manufacturers' agents
ANS: D PTS: 1 DIF: Easy
OBJ: 14-08 Explore legal issues in channel management.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
180. Refer to Scenario 15.2. Currently, Star is using the ____ approach to distributing its janitorial supplies
to its large customers.
a. intensive
b. just-in-time
c. segmented
d. outsourcing
e. exclusive
ANS: B PTS: 1 DIF: Easy
OBJ: 14-08 Explore legal issues in channel management.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application
181. Refer to Scenario 15.2. When Clint suggested that Star consider purchasing a paper shredding business
and then offer the service to its large and small business customers, he was suggesting a method called
____, where Star would be the ____.
a. horizontal integration; channel manager
b. horizontal integration; channel captain
c. vertical integration; channel captain
d. outsourcing; channel manager
e. outsourcing; channel captain
ANS: C PTS: 1 DIF: Moderate
OBJ: 14-08 Explore legal issues in channel management.
NAT: AACSB: Reflective Thinking | MKTG: Distribution MSC: Application
182. Refer to Scenario 15.2. Clint's suggestion for the uniform rental service was either picking up and
delivering the uniforms themselves, or contracting this to a third party. If Star decides to pick up and
deliver the uniforms with its own trucks, this is an example of a(n) ____ channel. If Star contracts this
action to a third party, it is called ____.
a. long; industrial distribution
b. direct; industrial distribution
c. long; outsourcing
d. direct; outsourcing
e. exclusive; outsourcing
ANS: D PTS: 1 DIF: Difficult
OBJ: 14-08 Explore legal issues in channel management.
NAT: AACSB: Analytic | MKTG: Distribution MSC: Application