Marketing Principles, 2nd Edition by William M. Pride – Test Bank

Marketing Principles, 2nd Edition by William M. Pride – Test Bank

CHAPTER 11
Distribution decisions
SHORT ANSWER

1. How do marketing-channel decisions influence the rest of the marketing mix?
AACSB Outcomes: Analytical; Communication
DF: M LO: 1 Topic Heading: The role of marketing channels
Type: KN

2. What is a marketing intermediary, and what are the activities that marketing intermediaries perform?
AACSB Outcomes: Reflective thinking
DF: E LO: 1 Topic Heading: The role of marketing channels
Type: KN

3. What are the three types of utility that marketing channels create, and what do they involve?
AACSB Outcomes: Communication
DF: M LO: 1 Topic Heading: Marketing channels create utility
Type: KN

4. In what ways do retailers add value to products?
AACSB Outcomes: Analytical; Communication
DF: M LO: 3 Topic Heading: Major types of retail stores
Type: KN

5. Compare and contrast department stores and discount stores.
AACSB Outcomes: Communication
DF: M LO: 3 Topic Heading: General merchandise retailers
Type: KN

6. Identify and describe three kinds of specialty stores.
AACSB Outcomes: Communication
DF: M LO: 3 Topic Heading: Specialty retailers
Type: KN

7. What is supply-chain management? How can it help marketing channel members?
AACSB Outcomes: Communication
DF: M LO: 2 Topic Heading: Physical distribution in supply-chain management and marketing strategies
Type: KN

8. Discuss channel cooperation and conflict, and explain how each might affect distribution channel functions.
AACSB Outcomes: Communication
DF: M LO: 6 Topic Heading: Channel leadership, cooperation and conflict
Type: KN

9. Why is a store’s location one of the most important strategic retailing decisions?
AACSB Outcomes: Communication
DF: M LO: 3 Topic Heading: Location
Type: KN

10. Discuss the advantages and disadvantages of online retailing.
AACSB Outcomes: Analytical
DF: D LO: 3 Topic Heading: Strategic issues in retailing
Type: KN

11. What is a store’s image, and how does it affect retailing strategy decisions?
AACSB Outcomes: Communication
DF: M LO: 3 Topic Heading: Store image
Type: KN

12. Identify and describe the criteria used for selecting transportation modes.
AACSB Outcomes: Communication
DF: M LO: 2 Topic Heading: Transportation modes
Type: KN

MULTIPLE CHOICE

13. A group of organisations and individuals that directs the flow of products from producers to the ultimate consumers is called a:
A) marketing intermediary.
B) supply chain.
C) marketing channel.
D) distribution network.
E) strategic channel alliance.
Ans: C AACSB Outcomes: Communication
DF: M LO: 1 Topic Heading: The role of marketing channels
Type: KN

14. A channel of distribution is defined as a group of individuals and organisations that:
A) consumes about one-half of every dollar spent on products.
B) directs the flow of products from producers to customers.
C) links producers to other marketing intermediaries.
D) takes title to products and resells them.
E) manages transportation and warehousing functions.
Ans: B AACSB Outcomes: Communication
DF: E LO: 1 Topic Heading: The role of marketing channels
Type: KN

15. The driving force behind marketing-channel decisions should be:
A) convenience.
B) cost reduction.
C) environmental concerns.
D) customer satisfaction.
E) quality.
Ans: D AACSB Outcomes: Communication
DF: M LO: 2 Topic Heading: Physical distribution in supply-chain management and marketing channels
Type: KN

16. Which of the following 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 AACSB Outcomes: Communication
DF: M LO: 1 Topic Heading: The role of marketing channels
Type: KN

17. 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 AACSB Outcomes: Communication
DF: E LO: 1 Topic Heading: The role of marketing channels
Type: KN

18. Long-term partnerships among channel members that work together to reduce inefficiencies, costs and redundancies in the entire marketing channel are called:
A) supply-chain management.
B) vertical channel integration.
C) industrial management.
D) industrial distribution.
E) marketing management.
Ans: A AACSB Outcomes: Communication
DF: E LO: 2 Topic Heading: Physical distribution in supply-chain management and marketing channels
Type: KN

19. The supply chain includes:
A) producers, wholesalers and retailers.
B) suppliers, producers, intermediaries and customers.
C) suppliers and suppliers’ suppliers.
D) all entities that facilitate product distribution.
E) buyers, sellers, marketing intermediaries and agents.
Ans: D AACSB Outcomes: Communication
DF: M LO: 2 Topic Heading: Physical distribution in supply-chain management and marketing channels
Type: KN

20. All members of the supply chain should determine their position in the chain, identify their partners and their roles, and establish partnerships that focus on:
A) shifting costs to suppliers.
B) maximising costs.
C) maximising technology implementation.
D) cooperation with competitors.
E) customer relationships.
Ans: E AACSB Outcomes: Analytical
DF: M LO: 2 Topic Heading: Physical distribution in supply-chain management and marketing channels
Type: KN

21. L’Oréal, the largest beauty company in the world, coordinates activities with both its suppliers and its distributors in order to produce and deliver products that its customers demand. Which statement is most likely to be true about the impact of L’Oréal’s supply-chain management?
A) L’Oréal demonstrates a product firm orientation that increases its competitiveness.
B) L’Oréal demonstrates a market firm orientation that increases its competitiveness.
C) L’Oréal demonstrates a sales firm orientation that increases its competitiveness.
D) L’Oréal’s supply-chain management overlaps with all of the firm’s marketing functions but not its financial functions.
E) L’Oréal’s primary objective is to maximise efficiency in its supply chain.
Ans: D AACSB Outcomes: Communication
DF: M LO: 2 Topic Heading: Physical distribution in supply-chain management and marketing channels
Type: KN

22. Having products available when the customer wants them is called:
A) place utility.
B) time utility.
C) availability.
D) possession utility.
Ans: B AACSB Outcomes: Communication
DF: M LO: 2 Topic Heading: Physical distribution in supply-chain management and marketing channels
Type: KN

23. If Samsung 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 AACSB Outcomes: Analytical
DF: M LO: 2 Topic Heading: Physical distribution in supply-chain management and marketing channels
Type: AP

24. Marketing channels create three types of utility for consumers, namely:
A) place, time and possession.
B) location, availability and suitability.
C) time, location and promotion.
D) position, possession and place.
Ans: A AACSB Outcomes: Communication
DF: M LO: 2 Topic Heading: Physical distribution in supply-chain management and marketing channels
Type: KN

25. After direct distribution to the customer, the next, slightly longer marketing channel adds a(n):
A) retailer.
B) producer.
C) wholesaler.
D) agent.
E) consumer.
Ans: A AACSB Outcomes: Communication
DF: M LO: 1 Topic Heading: Types of marketing channels
Type: KN

26. When Sophia buys organic products 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 AACSB Outcomes: Analytical; Communication
DF: M LO: 1 Topic Heading: Types of marketing channels
Type: AP

27. Large retailers such as Target are most likely to participate in which of the following channels?
A) Producer, industrial distributors, retailers and consumers
B) Producer and consumers
C) Producer, wholesalers, retailers and consumers
D) Producer, retailers and consumers
E) Producer, agents, wholesalers, retailers and consumers
Ans: D AACSB Outcomes: Communication
DF: D LO: 1 Topic Heading: Types of marketing channels
Type: AP

28. The marketing channel that runs from producer to retailer to consumer is most likely to be used by producers of which product?
A) Chewing gum
B) Tobacco
C) Automobiles
D) Hardware
E) Saltine crackers
Ans: C AACSB Outcomes: Analytical; Communication
DF: E LO: 1 Topic Heading: Types of marketing channels
Type: AP

29. A small retailer could no longer handle all of the distribution activities as her business grew. She hired a shipper and an information technology company to assist with these functions. She is using __________ for physical distribution for her business.
A) producers
B) wholesalers
C) retailers
D) selling agents
E) outsourcing
Ans: E AACSB Outcomes: Analytical
DF: E LO: 1 Topic Heading: Marketing channels create utility
Type: AP

30. 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 AACSB Outcomes: Reflective thinking
DF: M LO: 1 Topic Heading: Marketing channels create utility
Type: KN

31. Australia Post works hard to get parcels from the sender to the receiver as quickly as possible to compete with courier companies. Australia Post is competing with them in terms of:
A) cycle time.
B) order processing.
C) turnaround time.
D) shipping time.
E) transportation.
Ans: A AACSB Outcomes: Reflective thinking
DF: M LO: 2 Topic Heading: Order processing
Type: AP

32. 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 and consumer
B) Producer, wholesaler, retailer and consumer
C) Producer, wholesaler, agent, retailer and consumer
D) Producer, retailer and consumer
E) Retailer and consumer
Ans: B AACSB Outcomes: Communication
DF: M LO: 1 Topic Heading: Types of marketing channels
Type: KN

33. Eliminating a wholesaler from a marketing channel will:
A) cut costs and lower prices.
B) not eliminate the functions performed by that wholesaler.
C) eliminate the functions performed by that wholesaler.
D) lead to lower costs but higher prices.
E) reduce channel conflict.
Ans: B AACSB Outcomes: Analytical
DF: D LO: 1 Topic Heading: Marketing channels create utility
Type: KN

34. Heinz markets tomato sauce for household use to supermarkets through grocery wholesalers. It markets tomato sauce for institutional use through industrial distributors and food brokers. Heinz is using a(n):
A) hybrid marketing channel
B) industrial distribution.
C) strategic channel alliance.
D) supply-chain management.
Ans: A AACSB Outcomes: Analytical; Communication
DF: E LO: 1 Topic Heading: Multiple marketing channels
Type: AP

35. Many companies use more than one marketing channel to distribute their products to the same target market, a tactic called:
A) multiple channelling.
B) strategic channel alliance.
C) intensive distribution.
D) hybrid channel
E) market splitting.
Ans: D AACSB Outcomes: Communication
DF: M LO: 1 Topic Heading: Multiple marketing channels
Type: KN

36. Retailing is best characterised as:
A) large organisations that carry wide and deep product mixes.
B) transactions in which a buyer intends to consume the product through personal, family or household use.
C) arrangements whereby a supplier grants a dealer the right to sell its products.
D) transactions in which the purchaser intends to use the product for resale or for business operations.
E) exchanges that take place only in a store or service establishment.
Ans: B AACSB Outcomes: Communication
DF: E LO: 3 Topic Heading: Types of retailers and strategic issues in retailing
Type: KN

37. By locating its dealership in the same general vicinity as other car dealerships, Hartfield Honda can:
A) facilitate comparison shopping.
B) create form utility.
C) facilitate wholesale exchanges.
D) create possession utility.
E) create exchange utility.
Ans: A AACSB Outcomes: Analytical
DF: M LO: 3 Topic Heading: Types of retailers and strategic issues in retailing
Type: AP

38. A general merchandise retailer offers:
A) a single product line that is stocked in depth.
B) a few product lines with deep assortments of these lines.
C) a few choices of a large variety of product lines.
D) a variety of product lines that are stocked in depth.
Ans: D AACSB Outcomes: Communication
DF: M LO: 3 Topic Heading: General merchandise retailers
Type: KN

39. Supermarkets, discount stores and hypermarkets can all be classified as:
A) superstores.
B) general merchandise retailers.
C) department stores.
D) specialty retailers.
E) off-price retailers.
Ans: B AACSB Outcomes: Communication
DF: M LO: 3 Topic Heading: General merchandise retailers
Type: KN

40. Compared with other types of retailers, department stores compete mainly on the basis of:
A) customer services.
B) low prices.
C) a very deep assortment of a few specific products.
D) high sales volume.
E) catalogue sales.
Ans: A AACSB Outcomes: Communication
DF: D LO: 3 Topic Heading: Department stores
Type: KN

41. Myer and David Jones are considered:
A) department stores.
B) discount stores.
C) off-price retailers.
D) specialty retailer.
E) category killers.
Ans: A AACSB Outcomes: Analytical; Communication
DF: M LO: 3 Topic Heading: Department stores
Type: AP

42. If a store has areas for men’s apparel, women’s apparel, housewares, cosmetics and jewellery, and competes mostly on the basis of service, it is a(n):
A) off-price retailer.
B) department store.
C) discount store.
D) superstore.
E) supermarket.
Ans: B AACSB Outcomes: Communication
DF: M LO: 3 Topic Heading: Department stores
Type: KN

43. Which type of retailer generally accepts lower margins than traditional retailers in exchange for higher sales volume?
A) Department stores
B) Traditional specialty retailers
C) Warehouse showrooms
D) Direct marketers
E) Discount stores
Ans: E AACSB Outcomes: Communication
DF: M LO: 3 Topic Heading: Discount stores
Type: KN

44. Self-service, general merchandise stores such as Kmart are known as:
A) discount stores.
B) warehouse showrooms.
C) catalogue showrooms.
D) superstores.
E) specialty retailers.
Ans: A AACSB Outcomes: Analytical; Communication
DF: E LO: 3 Topic Heading: Discount stores
Type: KN

45. A small, self-service store that is open long hours and carries a narrow product assortment in convenient locations is best described as a:
A) discount store.
B) department store.
C) convenience store.
D) supermarket.
E) category killer.
Ans: C AACSB Outcomes: Communication
DF: M LO: 3 Topic Heading: Convenience stores
Type: KN

46. Jason Beaumont gets a shopping list from his wife. On the list are a potted plant, fresh salmon, motor oil, bread, milk and a birthday cake. To make just one stop and save time, Jason should go to a(n):
A) convenience store.
B) off-price retailer.
C) specialty store.
D) franchiser.
E) supermarket.
Ans: E AACSB Outcomes: Analytical; Communication
DF: E LO: 3 Topic Heading: Supermarkets
Type: AP

47. Large, self-service stores that carry a complete line of food products and some non-food products are called:
A) discount stores.
B) superstores.
C) supermarkets.
D) department stores.
E) warehouse clubs.
Ans: C AACSB Outcomes: Communication
DF: M LO: 3 Topic Heading: Supermarkets
Type: KN

48. Coles and Woolworths are considered:
A) superstores.
B) groceries.
C) department stores.
D) supermarkets.
E) food stores.
Ans: D AACSB Outcomes: Analytical; Communication
DF: M LO: 3 Topic Heading: Supermarkets
Type: AP

49. A __________ is a retail establishment that combines a supermarket and a discount store in one location.
A) superstore
B) department store
C) category killer
D) hypermarket
Ans: D AACSB Outcomes: Communication
DF: D LO: 3 Topic Heading: Hypermarket
Type: KN

50. After shopping in the same store for nearly two hours, Chester goes to McDonald’s for a Big Mac while Cynthia goes to the optical shop to see if her contacts are ready. They engage in these activities without leaving the store in which they have been shopping. They are most likely in a:
A) superstore.
B) hypermarket.
C) department store.
D) general merchandise retailer.
E) discount store.
Ans: B AACSB Outcomes: Analytical; Communication
DF: D LO: 3 Topic Heading: Hypermarkets
Type: AP

51. What is the primary distinction between superstores and hypermarkets?
A) Superstores offer a wider variety of products than hypermarkets.
B) Superstores offer low prices while hypermarkets offer moderate-to-high prices.
C) Hypermarkets have fewer departments but deeper product lines than superstores.
D) Hypermarkets are larger and have more types of products than superstores.
E) These two types of retailers carry very different types of products.
Ans: D AACSB Outcomes: Communication
DF: M LO: 3 Topic Heading: Hypermarkets
Type: KN

52. Costco is an example of a:
A) discounter.
B) warehouse club.
C) warehouse showroom.
D) discount club.
E) wholesaler.
Ans: B AACSB Outcomes: Analytical; Communication
DF: M LO: 3 Topic Heading: Warehouse clubs
Type: AP

53. Retail facilities located in big, low-cost buildings with large on-premises inventories and minimal services are called:
A) catalogue showrooms.
B) category killers.
C) warehouse showrooms.
D) warehouse clubs.
E) display outlets.
Ans: C AACSB Outcomes: Communication
DF: M LO: 3 Topic Heading: Warehouse showrooms
Type: KN

54. IKEA is located in huge, low-cost buildings, offers minimum service and maintains large, on-premises inventories. IKEA is a:
A) warehouse showroom.
B) catalogue showroom.
C) superstore.
D) warehouse club.
E) department store.
Ans: A AACSB Outcomes: Analytical; Communication
DF: E LO: 3 Topic Heading: Warehouse showrooms
Type: AP

55. A store that offers a wide variety of shoes for men, women and children would most likely be considered a(n):
A) department store.
B) specialty retailer.
C) category killer.
D) off-price retailer.
E) warehouse showroom.
Ans: B AACSB Outcomes: Analytical; Communication
DF: M LO: 3 Topic Heading: Specialty retailers
Type: AP

56. Matt’s girlfriend tells him that she wants a cashmere sweater for her birthday. Matt decides to go to a store that provides the best possible selection of sweaters. His best choice would be to shop at a__________ store.
A) department
B) catalogue
C) discount
D) traditional specialty
E) convenience
Ans: D AACSB Outcomes: Analytical; Communication
DF: M LO: 3 Topic Heading: Specialty retailers
Type: AP

57. Off-price retailers and category killers are both:
A) specialty retailers.
B) discount stores.
C) showrooms.
D) general merchandisers.
E) department stores.
Ans: A AACSB Outcomes: Communication
DF: M LO: 3 Topic Heading: Specialty retailers
Type: KN

58. Specialty stores offer __________ than department stores.
A) greater varieties of product lines and higher prices
B) lower prices and higher quality
C) more product depth and less customer service
D) more sales expertise and better selections
E) more frequent price discounts and less selection
Ans: D AACSB Outcomes: Communication
DF: M LO: 3 Topic Heading: Specialty retailers
Type: KN

59. Category killers compete primarily on the basis of:
A) enormous product selection and sales expertise.
B) low prices and enormous product availability.
C) convenient locations and customer services.
D) rock-bottom prices and moderate selections.
E) one-stop shopping and product availability.
Ans: B AACSB Outcomes: Communication
DF: M LO: 3 Topic Heading: Specialty retailers
Type: KN

60. Which of the following is an example of a category killer?
A) McDonald’s
B) Kmart
C) Foot Locker
D) Bunnings
Ans: D AACSB Outcomes: Analytical; Communication
DF: M LO: 3 Topic Heading: Specialty retailers
Type: AP

61. Bunnings and Officeworks are examples of:
A) department stores.
B) off-price retailers.
C) category killers.
D) traditional specialty retailers.
E) superstores.
Ans: C AACSB Outcomes: Analytical; Communication
DF: M LO: 3 Topic Heading: Specialty retailers
Type: AP

62. Which type of retailers primarily competes with specialty retailers?
A) Discount stores
B) Category killers
C) Catalogue marketers
D) Department stores
E) Superstores
Ans: D AACSB Outcomes: Analytical
DF: M LO: 3 Topic Heading: Specialty retailers
Type: KN