Exam Prep + Manage Marketing Channels, Logistics, And + Ch12

Marketing Management, 3e (Marshall)

Chapter 12 Manage Marketing Channels, Logistics, and Supply Chain

1) The value chain portrays a mixture of primary and support activities utilized by an organization to design, produce, market, deliver, and support its products.

2) Customers, both end users and those within a channel, are often considered by organizations as unimportant members of the value network.

3) A channel is a system of interdependent relationships among a set of organizations that facilitates the exchange process.

4) Cutting out intermediaries will always guarantee that consumers will save money.

5) A wide variety of types of intermediaries exist, and they usually fall within two principal categories: merchant intermediaries and agent intermediaries.

6) Logistics is a function of channel intermediaries.

7) Facilitating functions performed by intermediaries include a variety of activities, including financing and market research.

8) The performance of transaction and communication functions is a category of intermediary contribution within a channel.

9) Disintermediation is common in the machining channel.

10) Many firms are using outsourcing or third-party logistics to better focus on their core business.

11) A vertical marketing system is comprised of independent entities.

12) The lead player in an administered VMS is called the channel captain. 

13) Unresolved channel conflict will never result in an uncooperative and inefficient channel; however, it may impact end-user consumers through inferior products, spotty inventory, and higher prices.

14) Expert power is when channel members adopt an approach of utilizing their unique competencies to influence others in the channel.

15) When marketing planning, a good channel decision can be one of the most important within the entire planning process and can lead to market advantage over competitors.

16) With a push strategy, much of the intensive promotional activities take place from the manufacturer downward through the channel of distribution.

17) The degree of push versus pull used is fundamental in framing the channel structure and relationships that are likely to optimize a product's success.

18) Physical distribution, or logistics, is the integrated process of moving input materials to the producer, in-process inventory through the firm, and finished goods out of the firm through the channel of distribution.

19) Receiving and properly processing customer orders takes place before the product moves into the supply chain.

20) In an ideal supply chain, materials of all kinds are handled as many times as possible.

21) Exclusive dealing may be legal if the parties show exclusivity is essential for strategic reasons, such as to maintain product image.

22) A producer can always grant an intermediary an exclusive territory for sales purposes.

23) E-commerce is not generally a central part of most firms' marketing strategies.

24) Electronic retailing is the communication and sale of products or services to consumers over the Internet.

25) Although the Internet has reshaped the way businesses and consumers interact, it has not been successful in B2B customer interfaces.

26) In evaluating a website, one of the key measures is its "stickiness," which refers to the amount of time visitors remain and explore a site.

27) A(n) ________ is thought of as an overarching system of formal and informal relationships within which the firm participates to procure, transform and enhance, and ultimately supply its offerings in final form within a market space.

A) value network

B) virtual organization

C) business conglomerate

D) organic organization

E) tall organization

28) A value network perspective is a macro-level strategic approach that is being adopted by many firms in part because of the intense competition to cut ________ and maximize ________ every step of the way to market.

A) costs; process efficiencies

B) rewards; stock inventory

C) employee benefits; cost control

D) time inefficiencies; profits

E) labor hours; performance incentives

29) A virtual organization is otherwise known as a ________ organization.

A) flat

B) boundaryless

C) bureaucratic

D) tall

E) network

30) A ________ eliminates many in-house business functions and activities in favor of focusing only on those aspects for which it is best equipped to add value.

A) value network

B) mechanistic distribution system

C) virtual organization

D) physical distribution system

E) tall organization

31) Jenn, a production manager at a company, has decided to take a value network approach to create a competitive advantage over the company's competitors. In the context of network organizations, this approach will make the company's operations more ________.

A) rigid

B) costly

C) consistent

D) static

E) nimble

32) A(n) ________ represents all organizations involved in providing a firm, the members of its channels of distribution, and its end-user consumers and business users.

A) value chain

B) supply chain

C) virtual channel

D) direct channel

E) indirect channel

33) Keisha is in charge of overseeing the flow of activities among several entities for Walmart. Her main objective is to coordinate these value-adding activities in a way that maximizes value and profit. She is in charge of ________.

A) physical distribution

B) assortment creation

C) supply chain management

D) partner relationship management

E) transaction reduction

34) A channel of distribution consists of interdependent entities that ________.

A) transfer possession of a product from producer to consumer

B) fix the price of a product to create monopoly

C) experience inefficiencies in business processes

D) develop new products

E) include members of the same market segment

35) In the context of the distribution channel, which of the following takes title to a product?

A) product promoters

B) merchant intermediaries

C) agent intermediaries

D) brokers

E) commission dealers

36) ________ intermediaries perform a variety of physical distribution, transaction and communication, and facilitating functions that make exchange possible. They do not take title to the product.

A) Wholesalers

B) Retailer

C) Agent

D) Distributor

E) Supplier

37) Which of the following has no intermediaries and operates strictly from producer to end-user consumer or business user?

A) exclusive distribution

B) physical distribution

C) virtual network

D) direct channel

E) indirect channel

38) Channel members add their value by bridging gaps in form, time, place, and ownership that naturally exist between ________.

A) consumers and transporters

B) facilitating agents and transporters

C) producers and consumers

D) producers and retailers

E) distributors and agents

39) A(n) ________ contains one or more intermediary levels.

A) channel community

B) network organization

C) virtual organization

D) direct channel

E) indirect channel

40) ________ enhance utilities by providing a wide array of specific functions including physical distribution functions, transaction and communication functions, and facilitating functions.

A) Direct channels

B) Value networks

C) Indirect channels

D) Pull strategies

E) Channel intermediaries

41) Good Egg Co. buys eggs from local farmers, sorts them into different grades, and then packages them to sell to larger grocers. Good Egg Co. is performing the distribution function of ________.

A) physical distribution

B) product processing

C) determining variety

D) breaking bulk

E) accumulating bulk

42) Intermediaries engage in ________ when they accumulate products from several sources and then make those products available down the channel as a convenience for consumers.

A) creating assortments

B) reducing transactions

C) transportation and storage functions

D) facilitating functions

E) disintermediation

43) Introducing an intermediary into a channel may contribute to ________ that are necessary to complete an exchange.

A) creating assortments

B) reducing transactions

C) transportation and storage functions

D) facilitating functions

E) disintermediations

44) An intermediary works with large consumer product manufacturers as well as small local retailers. The company buys large quantities of products from the manufacturers and sells them in smaller quantities to retailers to better match quantities needed for space constraints and inventory turnover requirements. The intermediary is performing the distribution function of ________.

A) disintermediation

B) assortment creation

C) reverse logistics

D) breaking bulk

E) accumulating bulk

45) ________ is one of the most commonly provided channel intermediary activities.

A) Showrooming

B) Franchising

C) Storage

D) Outsourcing

E) Disintermediation

46) Financing, market research, risk-taking, and other services are considered to be ________ functions.

A) physical distribution

B) transaction and communication

C) transportation and storage

D) facilitating

E) e-commerce

47) Big Market purchases different fruits from local farmers and then sells them to local restaurants and retailers. If the fruits rot before Big Market sells them, the store takes the loss. As an intermediary, Big Market is performing the function of ________.

A) financing

B) market research

C) channeling

D) risk-taking

E) sorting

48) ________ means the shortening or collapsing of marketing channels due to the elimination of one or more intermediaries, which is common in the electronic channel.

A) Creating assortments

B) Reducing transactions

C) Channel integration

D) Outsourcing

E) Disintermediation

49) ________ refers to companies handing over most or all of their supply chain activities to third-party organizations that are experts in those areas.

A) Creating assortments

B) Outsourcing

C) Channel integration

D) Disintermediation

E) Breaking bulk

50) Nadia works for a major soda distributor. The company decides to buy a transportation company to move its product from its own manufacturing facility to the consumer. This is an example of a(n) ________ vertical marketing system.

A) private

B) intermediated

C) corporate

D) contractual

E) administered

51) Local Farmers of Tampa Bay sell their produce in the market every day. They band together to gain cost and operating economies of scale in the market for selling their produce. This is an example of a ________.

A) retailer cooperative

B) disintermediation

C) pull strategy

D) vertical integration

E) customer community

52) A vertical ________ system consists of vertically aligned networks behaving and performing as a unified system.

A) insourcing

B) marketing

C) assortment

D) allowance

E) inventory

53) In a(n) ________ vertical marketing system, a channel member invests in backward or forward vertical integration by buying a controlling interest in other intermediaries.

A) private

B) distributive

C) corporate

D) contractual

E) administered

54) A(n) ________ vertical marketing system creates a powerful competitive advantage in the marketplace due to cost and process efficiencies realized when a channel is strictly controlled by one entity.

A) distributive

B) disintermediated

C) corporate

D) contractual

E) administered

55) An example of a contractual vertical marketing system is ________.

A) e-tailing

B) stocking

C) wholesaling

D) franchising

E) retailing

56) It is possible that a(n) ________ vertical marketing system can be more formally structured through strategic alliances and partnership agreements among channel members that agree to work in mutual cooperation. An example of this is the relationship between Walmart and Procter & Gamble.

A) distributive

B) private

C) corporate

D) contractual

E) administered

57) A ________ is the highest-potential start-up and growth mechanism for small-business owners, and it is an effective way to expand a distribution channel quickly and efficiently.

A) franchise operation

B) retailer cooperative

C) wholesaler cooperative

D) channel captain

E) partner relationship management (PRM) strategy

58) Core Inc., a dealer of electronic items, enjoys economies of scale due to its large buying and selling operations and controls many aspects of the channel's operations. As a consequence of this, the company enjoys tremendous power in the market. In the context of administered vertical marketing systems, Core Inc. is a(n) ________.

A) franchise organization

B) retailer cooperative

C) channel captain

D) wholesaler cooperative

E) agent intermediary

59) In an administered vertical marketing system, the sheer size and power of one of the intermediaries places it in a position of control. The lead player in such situations may be referred to as the ________.

A) virtual organization

B) retailer cooperative

C) wholesaler cooperative

D) channel captain

E) network organization

60) The goal of ________ is to share resources, especially knowledge-based resources, to effect optimally profitable relationships between two channel members.

A) pull strategies

B) push strategies

C) materials requirement planning (MRP)

D) enterprise resource planning (ERP)

E) partner relationship management (PRM) strategies

61) ________ is the degree to which any member of a marketing channel can exercise influence over the other members of the channel.

A) Channel power

B) Distribution intensity

C) Disintermediation

D) Assortment

E) Exclusive power

62) ________ occurs when channel members experience disagreements and their relationship becomes strained.

A) Disintermediation

B) Channel conflict

C) Stock-out

D) Vertical integration

E) Outsourcing

63) Unresolved channel conflict can result not only in an uncooperative and inefficient channel, but it can also ultimately impact end-user consumers through ________.

A) intensive distribution

B) selective distribution

C) increased supply

D) increased demand

E) higher prices

64) ________ power involves an explicit or implicit threat that a channel captain will invoke negative consequences on a channel member if it does not comply with the leader's request or expectations.

A) Coercive

B) Reward

C) Expert

D) Referent

E) Legitimate

65) ________ power is NOT a source of channel power.

A) Reward

B) Referent

C) Legitimate

D) Consumer

E) Expert

66) The motivating force for suppliers to work with large chain stores is that the stores can offer huge ________ power in the form of writing big orders.

A) coercive

B) reward

C) expert

D) referent

E) legitimate

67) ________ power can take the form of sharing important product knowledge.

A) Coercive

B) Reward

C) Expert

D) Referent

E) Legitimate

68) When a channel member is respected, admired, or revered based on one or more attributes, that member enjoys ________ power within the channel.

A) coercive

B) reward

C) expert

D) referent

E) legitimate

69) ________ power results from contracts such as franchise agreements or other formal agreements.

A) Coercive

B) Reward

C) Expert

D) Referent

E) Legitimate

70) When the objective is to obtain maximum product exposure throughout the channel, a(n) ________ strategy is designed to saturate every possible intermediary.

A) selective distribution

B) intensive distribution

C) exclusive distribution

D) partnership relationship management

E) materials requirement planning

71) In a(n) ________ vertical marketing system, one channel member may be placed in a position of channel control.

A) referent

B) organic

C) corporate

D) contractual

E) administered

72) Intensive distribution is typically associated with low-cost ________.

A) industrial goods

B) heavy equipment

C) convenience goods

D) machine tools

E) manufacturing tools

73) ________ goods are appropriate for intensive distribution, as their sales rely on the consumer seeing the product, feeling an immediate want, and being able to purchase now.

A) High-technology

B) Durable

C) Convenience

D) Impulse

E) Shopping

74) Consumers engage in limited search for items like midrange fashion apparel, home furnishings, and appliances. These are examples of ________ goods, which are candidates for selection distribution.

A) technology

B) durable

C) convenience

D) impulse

E) shopping

75) ________ distribution is often part of an overall positioning strategy built on prestige, scarcity, and premium pricing.

A) Selective

B) Exclusive

C) Widespread

D) Convenience

E) Intensive

76) ________ strategies can be intensive, selective, or exclusive.

A) Assortment

B) Disintermediation

C) Virtual

D) Referent

E) Distribution

77) In deciding on the right balance between control and flexibility in a channel, marketing managers must consider ________.

A) utilizing software applications

B) the type of channel power to be used

C) the right pull strategy

D) employing enterprise resource planning systems

E) the type of products involved

78) Grape Inc. sells high-end wines to liquor, wine, and spirits wholesalers who have built relationships among select restaurants and hotels. Grape Inc. employs a(n) ________ strategy.

A) selective distribution

B) exclusive distribution

C) push

D) pull

E) intensive distribution

79) ________ implies that many of the promotional activities take place from the manufacturer downward through the channel of distribution.

A) A selective distribution

B) An exclusive distribution

C) A push strategy

D) A pull strategy

E) An intensive distribution

80) An example of a push strategy is ________.

A) organizing couponing campaigns

B) utilizing newspaper advertising

C) using television advertising

D) employing direct marketing

E) paying a shelf fee

81) A manufacturer employing a(n) ________ strategy focuses much of its promotional investment on the end-user consumer.

A) selective distribution

B) exclusive distribution

C) push

D) pull

E) limited distribution

82) A manufacturer employing a pull strategy would engage in ________.

A) offering discounts to wholesalers

B) Investing in intermediaries

C) paying slotting allowances

D) offering shelf fee to intermediaries

E) advertising in mass media

83) ________ logistics is the process that starts with production and ends with the delivery of a final product.

A) Outbound

B) Inbound

C) Reverse

D) Third-party

E) Bulk

84) ________ refers to sourcing materials and knowledge inputs from external suppliers to the point at which production begins.

A) Outbound logistics

B) Inbound logistics

C) Reverse logistics

D) Third-party logistics

E) Breaking bulk

85) Venus Office Supplies offers customers a $0.50 coupon for turning in their empty printer cartridges. Venus collects the cartridges and then returns them to the producer for recycling. This is an example of ________.

A) outbound logistics

B) inbound logistics

C) reverse logistics

D) order processing

E) reducing transactions

86) Logistics and other processes are managed using sophisticated and integrated ________.

A) partner relationships management strategies

B) total quality management strategies

C) enterprise resource planning systems

D) vertical marketing systems

E) integrated contractual systems

87) When an item is not in stock, it is called ________. In this case, inbound replenishment processes are triggered.

A) a slotting allowance

B) an empty shelf

C) disintermediation

D) a stock-out

E) a supply chain disruption

88) A part of ERP, ________, guides overall management of the inbound materials from suppliers to facilitate minimal production delays.

A) materials requirement planning

B) distributed marketing

C) vertical marketing

D) virtual network

E) just-in-time inventory control

89) To ensure that inventories of both raw materials and finished goods are sufficient to meet customer demand without undue delay, firms utilize sophisticated ________.

A) just-in-time (JIT) inventory control systems

B) materials requirement planning (MRP) systems

C) exclusive dealings

D) exclusive territorities

E) multiverse inventories

90) When a supplier creates a restrictive agreement that prohibits intermediaries that handle its product from selling competing firms' products, ________ has occurred.

A) just-in-time (JIT) inventory control

B) materials requirement planning (MRP)

C) exclusive dealing

D) exclusive territory

E) tying contract

91) NextGen Electronix Inc. is a wholesaler of electronic goods in the city of Erbia. The company sells goods manufactured by CellDer Inc. The wholesaler enjoys monopoly because it is the only intermediary selling those products in the city. This is an example of a(n) ________.

A) just-in-time (JIT) inventory control

B) materials requirement planning (MRP)

C) exclusive dealing

D) exclusive territory

E) tying contract

92) If a seller requires an intermediary to purchase a supplementary product to qualify to purchase the primary product the intermediary wishes to buy, it results in ________.

A) channel disintermediation

B) vertical integration

C) exclusive dealing

D) exclusive territory

E) a tying contract

93) A stationary store offers a 5 percent discount on pens and pencils to students if they agree to purchase all the books needed for the academic year from the store. This is an example of a(n) ________.

A) tying contract

B) exclusive territory

C) exclusive dealing

D) intermediary contract

E) pull strategy

94) ________ is the point of contact in the supply chain with the consumer of the product.

A) Retailing

B) Wholesaling

C) Stocking

D) Promotion

E) Feedback

95) ________ is any business activity that creates value in the delivery of goods and services to consumers for their personal, nonbusiness consumption.

A) Distribution

B) Retailing

C) Stocking

D) Merchandising

E) Wholesaling

96) ________ is the fastest-growing retail format.

A) Electronic retailing

B) Wholesaling

C) Customer Communities

D) Promotion

E) Franchising

97) Websites where customers come to engage with other customers, the sponsoring firm, and others in the ecosystem to share ideas and collaborate on topics of mutual interest are called ________.

A) e-commerce sites

B) product communities

C) omnichannel retailing sites

D) customer communities

E) tying contracts

98) Explain the important aspects of a value network.

99) Explain the difference between merchant and agent intermediaries.

100) Channel intermediaries enhance utilities by providing a wide array of specific functions. Their contributions can be classified into physical distribution functions, transaction and communication functions, and facilitating functions. Give an example of an activity under each of these functions and explain its importance in the value chain.

101) Define disintermediation, and explain why it's common in the electronic channel.

102) A vertical marketing system (VMS) consists of vertically aligned networks behaving and performing as a unified system. Explain the three different ways they can be set up.

103) Define channel power and explain how it can lead to channel conflict. How does it affect vertical marketing systems?

104) Explain the difference between a push and pull strategy.

105) Name the three different types of logistics and explain why they are important for businesses.

106) Describe three of the legal issues in supply chain management.

107) Describe two advantages of e-tailing and two disadvantages.

Advantages

1. Extensive Selection: No other channel offers the breadth and depth of selection. From information search to purchase, the Internet gives consumers greater access to more choices and different product options.

2. Considerable Information Available for Product Research and Evaluation: The Internet dramatically expands consumers' knowledge, offering an almost unlimited number of websites that research, evaluate, and recommend products and services. From retailers (Best Buy in electronics) to independent testing organizations (CNet in technology), consumers can find information on anything.

3. Build Product Communities: The Internet brings together groups of individuals with a shared interest to create virtual communities. These communities share information, ideas, and product information.

4. Individualized Customer Experience: The Internet allows a great deal of personalization for both the consumer and the company. Consumers can get one-on-one interaction from a customer service representative and create their own web content based on personal preferences. At the same time, companies can tailor messages and web content by analyzing consumer web history. The end result is a more customized, personal experience for the consumer.

Disadvantages

1. Easier for Customers to Walk Away: The customer is in total control of the web experience and has the opportunity to walk away at any time. In sharp contrast to a personal-selling situation or even a retail store, the customer can simply click to another site. This puts additional pressure on the website to attract and then hold on to visitors.

2. Reduced Ability to Sell Features and Benefits: Websites incorporate sophisticated tools to display and highlight critical features and benefits. However, unless the customer initiates additional contact via web live chat, phone, or e-mail, it can prove challenging to engage the customer to answer questions or deal with objections.

3. Security of Personal Data: Over the past several years, numerous highly publicized data security breaches have occurred involving e-retailers (as well as retail stores). While companies work hard to make their websites secure and keep personal data such as credit card numbers private, many consumers still have concerns about the security of their data. These concerns lead some consumers to limit their electronic purchases.