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Marketing: Real People, Real Choices

1) A firm that brings in outside companies to accomplish supply chain activities is using
________.
a. insourcing
b. outsourcing
c. crowdsourcing
d. intensive distribution
e. exclusive distribution

Answer: b
Diff: 2
Type: MC
Page Reference: 443
Topic: Place: The Final Frontier
Skill: Concept
Objective: 12-1 Understand the value chain and the supply chain

2) Which of the following includes all the activities necessary to convert raw materials
into a good or service and put it in the hands of the consumer or business customer?
a. the supply chain
b. the value chain
c. the channel of distribution
d. the retailer chain
e. the industrial network

Answer: a
Diff: 1
Type: MC
Page Reference: 443
Topic: Place: The Final Frontier
Skill: Concept
Objective: 12-1 Understand the value chain and the supply chain

3) Through ________, many companies today are strengthening their connections to all
partners, from providers of raw materials to components to final products that are
delivered to final buyers.
a. supply chain management

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Marketing: Real People, Real Choices

b. channel of distribution management


c. partnership relationship marketing
d. enterprise resource planning
e. knowledge management

Answer: a
Diff: 2
Type: MC
Page Reference: 444
Topic: Place: The Final Frontier
Skill: Concept
Objective: 12-1 Understand the value chain and the supply chain

4) When a company uses ________, it brings in an external company to run some of its
essential operations.
a. outsourcing
b. insourcing
c. conventional marketing
d. logistics management
e. a vertical marketing system

Answer: b
Diff: 1
Type: MC
Page Reference: 444
Topic: Place: The Final Frontier
Skill: Concept
Objective: 12-1 Understand the value chain and the supply chain

5) Which of the following is the series of firms or individuals that facilitate(s) the
movement of a product from the producer to the final customers?
a. the industrial network
b. the retailer chain
c. the multilevel network
d. the channel of distribution
e. the conventional marketing system

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Marketing: Real People, Real Choices

Answer: d
Diff: 1
Type: MC
Page Reference: 445
Topic: Place: The Final Frontier
Skill: Concept
Objective: 12-1 Understand the value chain and the supply chain

6) Through the practice of insourcing, a company brings in an external company to run its
________.
a. human resource management
b. nonessential operations
c. essential operations
d. value proposition
e. facilitating functions

Answer: c
Diff: 2
Type: MC
Page Reference: 444
Topic: Place: The Final Frontier
Skill: Concept
Objective: 12-1 Understand the value chain and the supply chain

7) Producers benefit from using intermediaries because they ________.


a. offer greater efficiency in making goods available to target markets
b. bring a fresh point of view to strategy development
c. eliminate risk
d. are rarely backlogged with orders
e. will store products indefinitely

Answer: a
Diff: 2
Type: MC
Page Reference: 445

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Marketing: Real People, Real Choices

Topic: Distribution Channels: Get it There


Skill: Concept
Objective: 12-2 The distribution channel

8) At minimum, a channel of distribution consists of a producer and a(n) ________.


a. wholesaler
b. agent
c. broker
d. intermediary
e. customer

Answer: e
Diff: 2
Type: MC
Page Reference: 445
Topic: Distribution Channels: Get it There
Skill: Concept
Objective: 12-2 The distribution channel

9) Which of the following is the term for the firms and individuals who help move a
product to the consumer or the business user?
a. third-party logistics providers
b. channel leaders
c. channel intermediaries
d. enterprise resource planners
e. strategic allies

Answer: c
Diff: 1
Type: MC
Page Reference: 445
Topic: Distribution Channels: Get it There
Skill: Concept
Objective: 12-2 The distribution channel

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Marketing: Real People, Real Choices

10) Wholesalers and retailers purchase large quantities of goods from manufacturers but
sell only one or a few at a time to many different customers. This process is called
________.
a. creating assortments
b. breaking bulk
c. third-party logistics
d. order processing
e. inventory control

Answer: b
Diff: 1
Type: MC
Page Reference: 446
Topic: Distribution Channels: Get it There
Skill: Concept
Objective: 12-2 The distribution channel

11) Wholesalers and retailers create efficiencies in the flow of goods from producer to
end consumer by ________ when they provide a variety of products in one location.
a. creating assortments
b. just in time processing
c. third-party logistics
d. order processing
e. inventory control

Answer: a
Diff: 1
Type: MC
Page Reference: 446
Topic: Distribution Channels: Get it There
Skill: Concept
Objective: 12-2 The distribution channel

12) Functions provided by channel intermediaries that make the purchase process easier
for customers and manufacturers are referred to as ________ functions.
a. distributing

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Marketing: Real People, Real Choices

b. facilitating
c. management
d. marketing
e. wholesaling

Answer: b
Diff: 1
Type: MC
Page Reference: 446
Topic: Distribution Channels: Get it There
Skill: Concept
Objective: 12-2 The distribution channel

13) Offering credit to buyers and providing refund services for products are both
examples of ________ functions provided by channel intermediaries.
a. communication
b. marketing
c. promotional
d. facilitating
e. management

Answer: d
Diff: 1
Type: MC
Page Reference: 446
Topic: Distribution Channels: Get it There
Skill: Concept
Objective: 12-2 The distribution channel

14) Channel members can help producers by identifying customer complaints, customer
preferences, and new competitors in the market. These are all examples of the ________
function of channel intermediaries.
a. communication
b. marketing
c. promotional
d. transaction

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Marketing: Real People, Real Choices

e. management

Answer: a
Diff: 2
Type: MC
Page Reference: 447
Topic: Distribution Channels: Get it There
Skill: Concept
Objective: 12-2 The distribution channel

15) Through a process of ________, traditional intermediaries are being eliminated as


many companies question the value added by layers in the distribution channel.
a. knowledge management
b. disintermediation
c. horizontal marketing
d. vertical marketing
e. hybrid marketing

Answer: b
Diff: 1
Type: MC
Page Reference: 448
Topic: The Internet in Distribution Channel
Skill: Concept
Objective: 12-2 The distribution channel

16) Which of the following describes a comprehensive approach to collecting,


organizing, storing, and retrieving a firm's information assets?
a. logistics
b. knowledge management
c. facilitation
d. enterprise resource planning
e. just in time techniques

Answer: b
Diff: 1

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Marketing: Real People, Real Choices

Type: MC
Page Reference: 448
Topic: The Internet in Distribution Channel
Skill: Concept
Objective: 12-2 The distribution channel

17) The theft and unauthorized repurposing of intellectual material via the Internet is
called ________.
a. information logistics theft
b. non-permission-based downloading
c. online distribution piracy
d. disintermediation
e. taking title

Answer: c
Diff: 1
Type: MC
Page Reference: 448
Topic: The Internet in Distribution Channel
Skill: Concept
Objective: 12-2 The distribution channel

18) Intermediaries that do business with many different manufacturers and many different
customers are most accurately referred to as ________.
a. interdependent intermediaries
b. dependent intermediaries
c. independent intermediaries
d. wholesalers
e. retail outlets

Answer: c
Diff: 1
Type: MC
Page Reference: 449
Topic: Wholesaling Intermediaries
Skill: Concept

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Marketing: Real People, Real Choices

Objective: 12-3 Describe the types of wholesaling intermediaries

19) Limited-service merchant wholesalers are less likely than full-service merchant
wholesalers to do which of the following?
a. set the prices of the merchandise they sell
b. take title to the merchandise they sell
c. suffer financial losses if the merchandise they sell is damaged or stolen
d. offer marketing assistance or delivery for the products they sell
e. use their own sales force

Answer: d
Diff: 3
Type: MC
Page Reference: 449
Topic: Wholesaling Intermediaries
Skill: Concept
Objective: 12-3 Describe the types of wholesaling intermediaries

20) Which group of independent intermediaries can be divided into the two broad types
of full-service and limited-service?
a. brokers
b. agents
c. sales branches
d. specialty wholesalers
e. merchant wholesalers

Answer: e
Diff: 2
Type: MC
Page Reference: 449
Topic: Wholesaling Intermediaries
Skill: Concept
Objective: 12-3 Describe the types of wholesaling intermediaries

21) An intermediary who ________ legally owns the goods being handled.
a. breaks bulk

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Marketing: Real People, Real Choices

b. takes title
c. creates assortments
d. takes consignments
e. selectively distributes

Answer: b
Diff: 1
Type: MC
Page Reference: 449
Topic: Wholesaling Intermediaries
Skill: Concept
Objective: 12-3 Describe the types of wholesaling intermediaries

22) The owner of a grocery store wants to have non-food items delivered, priced,
displayed and inventoried by a wholesaler. Which type of wholesaler best fits the owner's
needs?
a. drop shipper
b. cash-and-carry wholesaler
c. truck jobber
d. rack jobber
e. mail-order wholesaler

Answer: d
Diff: 3
Type: MC
Page Reference: 450
Topic: Wholesaling Intermediaries
Skill: Application
Objective: 12-3 Describe the types of wholesaling intermediaries

23) Which of the following are intermediaries that receive fees for facilitating
transactions in markets such as real estate, food, and used equipment in which there are a
lot of small buyers and sellers?
a. manufacturers' agents
b. selling agents
c. commission merchants

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Marketing: Real People, Real Choices

d. merchandise brokers
e. sale mediators

Answer: d
Diff: 2
Type: MC
Page Reference: 451
Topic: Wholesaling Intermediaries
Skill: Concept
Objective: 12-3 Describe the types of wholesaling intermediaries

24) Manufacturers' ________, also called manufacturers' representatives, represent a


buyer or seller on an ongoing basis.
a. brokers
b. franchisers
c. agents
d. retailers
e. intermediaries

Answer: c
Diff: 2
Type: MC
Page Reference: 451
Topic: Wholesaling Intermediaries
Skill: Concept
Objective: 12-3 Describe the types of wholesaling intermediaries

25) A commission merchant would most likely sell which of the following?
a. agricultural products
b. extractive materials such as coal and iron
c. convenience goods such as gum and candy
d. clothing and textiles
e. real estate

Answer: a
Diff: 2

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Marketing: Real People, Real Choices

Type: MC
Page Reference: 451
Topic: Wholesaling Intermediaries
Skill: Concept
Objective: 12-3 Describe the types of wholesaling intermediaries

26) Which of the following is true about sales branches, sales offices, and manufacturers'
showrooms?
a. They are all manufacturer-owned intermediaries.
b. They all determine the marketing strategy for the products they sell.
c. They are all independent intermediaries.
d. They all carry inventory and take title to the inventory they carry.
e. They perform the same functions as self-service wholesalers.

Answer: a
Diff: 2
Type: MC
Page Reference: 451
Topic: Wholesaling Intermediaries
Skill: Concept
Objective: 12-3 Describe the types of wholesaling intermediaries

27) Ed Barney owns a chain of small gift shops. Before buying merchandise to carry in
his store, Barney can visit a ________ where he can examine a manufacturer's products
before he stocks his stores.
a. sales office
b. manufacturer's showroom
c. commission merchandise mart
d. merchandise brokerage
e. manufacturer's office

Answer: b
Diff: 2
Type: MC
Page Reference: 452
Topic: Wholesaling Intermediaries

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Marketing: Real People, Real Choices

Skill: Application
Objective: 12-3 Describe the types of wholesaling intermediaries

28) To a producer of goods, a greater number of channel levels means ________.


a. less distance between producer and end consumer
b. less control
c. more creativity
d. higher taxes
e. multiple distribution systems

Answer: b
Diff: 2
Type: MC
Page Reference: 452
Topic: Types of Distribution Channels
Skill: Concept
Objective: 12-4 Describe the types of distribution channels

29) The producer-retailer-consumer channel is ________.


a. the most efficient channel
b. also referred to as a triple channel
c. the shortest indirect channel
d. the shortest direct channel
e. a rarely used channel form

Answer: c
Diff: 2
Type: MC
Page Reference: 454
Topic: Types of Distribution Channels
Skill: Concept
Objective: 12-4 Describe the types of distribution channels

30) In business-to-business channels, the functions of a merchant wholesaler are


performed by a(n) ________.
a. sales office

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Marketing: Real People, Real Choices

b. commission merchant
c. merchant broker
d. business retailer
e. industrial distributor

Answer: e
Diff: 2
Type: MC
Page Reference: 454
Topic: Types of Distribution Channels
Skill: Concept
Objective: 12-4 Describe the types of distribution channels

31) Which of the following statements about business-to-business channels is true?


a. Direct channels are more common in business-to-business markets than consumer
markets.
b. Business-to-business channels have few parallels with consumer channels.
c. The size of business markets makes indirect channels more efficient.
d. Indirect channels are more common in business-to-business markets than consumer
markets.
e. When an industrial distributor is included in a business-to-business channel, the
channel is by definition direct.

Answer: a
Diff: 2
Type: MC
Page Reference: 454
Topic: Types of Distribution Channels
Skill: Concept
Objective: 12-4 Describe the types of distribution channels

32) Which of the following is in place when a producer, dealer, wholesaler, retailer, or
customer interacts with more than one type of channel?
a. dual or multiple distribution system
b. intermediation
c. knowledge management

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Marketing: Real People, Real Choices

d. supply chain management


e. vertical marketing system

Answer: a
Diff: 2
Type: MC
Page Reference: 454
Topic: Types of Distribution Channels
Skill: Concept
Objective: 12-4 Describe the types of distribution channels

33) Which of the following is a distribution system that uses different channels and
communication methods to reach and serve a target market?
a. a vertical marketing system
b. a horizontal marketing system
c. a hybrid marketing system
d. a logistics system
e. an intensive distribution system

Answer: c
Diff: 1
Type: MC
Page Reference: 455
Topic: Types of Distribution Channels
Skill: Concept
Objective: 12-4 Describe the types of distribution channels

34) Which of the following is most likely to force a manufacturer to pay a slotting
allowance?
a. a selling agent
b. a merchandise broker
c. a large retail chain
d. a small retailer
e. a rack jobber

Answer: c

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Marketing: Real People, Real Choices

Diff: 2
Type: MC
Page Reference: 455
Topic: Types of Distribution Channels
Skill: Concept
Objective: 12-4 Describe the types of distribution channels

35) Which of the following should be the first step in distribution planning?
a. identifying the channel leader
b. determining a distribution budget
c. developing distribution objectives
d. evaluating the internal and external environments
e. determining the desired level of distribution intensity

Answer: c
Diff: 1
Type: MC
Page Reference: 456
Topic: Plan a Channel Strategy
Skill: Concept
Objective: 12-5 Planning a distribution channel strategy

36) Once an organization has developed its distribution objectives, it should next
________.
a. identify the channel leader
b. determine a distribution budget
c. select the optimum number of channel levels
d. define the target market and articulate the market segmentation strategy
e. evaluate the internal and external environments

Answer: e
Diff: 2
Type: MC
Page Reference: 456
Topic: Plan a Channel Strategy
Skill: Concept

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Marketing: Real People, Real Choices

Objective: 12-5 Planning a distribution channel strategy

37) Conventional distribution channels consist of one or more ________ producers,


wholesalers, and retailers.
a. independent
b. product-related
c. contract
d. merchant
e. domestic

Answer: a
Diff: 2
Type: MC
Page Reference: 457
Topic: Plan a Channel Strategy
Skill: Concept
Objective: 12-5 Planning a distribution channel strategy

38) A corporate VMS has the advantage of controlling the entire distribution chain under
________.
a. a profit-maximizing strategic plan
b. single ownership
c. mass distribution
d. a limited number of intermediaries
e. contractual agreements

Answer: b
Diff: 2
Type: MC
Page Reference: 458
Topic: Plan a Channel Strategy
Skill: Concept
Objective: 12-5 Planning a distribution channel strategy

39) What are the three major types of vertical marketing systems?
a. corporate, contractual, and chain

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Marketing: Real People, Real Choices

b. contractual, corporate, and independent


c. corporate, contractual, and administered
d. administered, independent, and franchised
e. corporate, franchised, and task

Answer: c
Diff: 2
Type: MC
Page Reference: 458
Topic: Plan a Channel Strategy
Skill: Concept
Objective: 12-5 Planning a distribution channel strategy

40) Which of the following statements about a vertical marketing system (VMS) is true?
a. A VMS is a channel in which there is cooperation among channel members at two or
more different levels of the channel.
b. Members of a VMS operate totally independently of one another outside of buying and
selling one another's products.
c. The three types of vertical marketing systems are independent, conventional, and
customized.
d. Channel conflict is a more serious problem in a vertical marketing system than in a
conventional marketing system.
e. Conventional marketing systems are more efficient than vertical marketing systems.

Answer: a
Diff: 2
Type: MC
Page Reference: 457-458
Topic: Plan a Channel Strategy
Skill: Concept
Objective: 12-5 Planning a distribution channel strategy

41) Burger King, Holiday Inn, Avis, and H&R Block tax service are all franchises, which
means they are also members of a(n) ________ vertical marketing system (VMS).
a. administered
b. conventional

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Marketing: Real People, Real Choices

c. corporate
d. horizontal
e. contractual

Answer: e
Diff: 3
Type: MC
Page Reference: 458
Topic: Plan a Channel Strategy
Skill: Concept
Objective: 12-5 Planning a distribution channel strategy

42) In a ________, two or more companies at the same channel level join together to
develop a new marketing opportunity.
a. franchise
b. corporate VMS
c. horizontal marketing system
d. multiple distribution system
e. conventional marketing system

Answer: c
Diff: 1
Type: MC
Page Reference: 459
Topic: Plan a Channel Strategy
Skill: Concept
Objective: 12-5 Planning a distribution channel strategy

43) When determining the number of channel members to use at each level, three
strategies are availableintensive, exclusive, and ________ distribution.
a. multiple
b. selective
c. international
d. direct
e. extensive

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Marketing: Real People, Real Choices

Answer: b
Diff: 2
Type: MC
Page Reference: 460
Topic: Plan a Channel Strategy
Skill: Concept
Objective: 12-5 Planning a distribution channel strategy

44) Which type of distribution means limiting distribution of a product to a single outlet
in a particular region?
a. exclusive
b. intensive
c. selective
d. independent
e. insourced

Answer: a
Diff: 1
Type: MC
Page Reference: 460
Topic: Plan a Channel Strategy
Skill: Concept
Objective: 12-5 Planning a distribution channel strategy

45) Which of the following is another name for the channel leader?
a. materials expert
b. distribution facilitator
c. franchiser
d. channel captain
e. logistics leader

Answer: d
Diff: 2
Type: MC
Page Reference: 461
Topic: Plan a Channel Strategy

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Marketing: Real People, Real Choices

Skill: Concept
Objective: 12-5 Planning a distribution channel strategy

46) Which of the following is the process of designing, managing, and improving the
movement of products through the supply chain?
a. logistics
b. warehousing
c. materials handling
d. inventory management
e. distribution strategy

Answer: a
Diff: 1
Type: MC
Page Reference: 462
Topic: Logistics: Implement the Supply Chain
Skill: Concept
Objective: 12-6 Explain logistics

47) Marketing logistics involves which of the following types of distribution flows?
a. outbound and inbound only
b. outbound, inbound, and reverse
c. outbound and reverse only
d. inbound and reverse only
e. outbound only

Answer: b
Diff: 2
Type: MC
Page Reference: 462
Topic: Logistics: Implement the Supply Chain
Skill: Concept
Objective: 12-6 Explain logistics

48) Physical distribution activities include all of the following EXCEPT which one?
a. order processing

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Marketing: Real People, Real Choices

b. warehousing
c. materials handling
d. transportation
e. order getting

Answer: e
Diff: 2
Type: MC
Page Reference: 463
Topic: Logistics: Implement the Supply Chain
Skill: Concept
Objective: 12-6 Explain logistics

49) The difference between distribution centers and storage warehouses is that
distribution centers are designed to ________.
a. have greater capacity
b. store goods for longer periods
c. perform other functions, such as breaking bulk
d. primarily be owned by the manufacturer
e. be automated

Answer: c
Diff: 2
Type: MC
Page Reference: 464
Topic: Logistics: Implement the Supply Chain
Skill: Concept
Objective: 12-6 Explain logistics

50) Which of the following do manufacturers typically NOT use as a factor in deciding
which mode of transportation to use for a product?
a. dependability
b. cost
c. accessibility
d. responsiveness
e. traceability

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Marketing: Real People, Real Choices

Answer: d
Diff: 3
Type: MC
Page Reference: 464
Topic: Logistics: Implement the Supply Chain
Skill: Concept
Objective: 12-6 Explain logistics

51) Which of the following is a logistics activity that involves developing and
implementing a process to ensure the firm always has sufficient goods available to meet
customers' demands--no more and no less?
a. materials handling
b. inventory control
c. supply chain supervision
d. order processing
e. distribution implementation

Answer: b
Diff: 1
Type: MC
Page Reference: 466
Topic: Logistics: Implement the Supply Chain
Skill: Concept
Objective: 12-6 Explain logistics

52) To reduce inventory management costs, many companies use a system called
________, which involves carrying only small inventories of parts or merchandise, often
only enough for a few days of operation.
a. just in time (JIT)
b. supply chain management
c. value chain management
d. logistics management
e. enterprise resource planning (ERP)

Answer: a
Diff: 2

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Marketing: Real People, Real Choices

Type: MC
Page Reference: 466
Topic: Logistics: Implement the Supply Chain
Skill: Concept
Objective: 12-6 Explain logistics

53) Through the use of ________, a company is able to know exactly where a product is
located within the distribution channel.
a. ERP
b. RFID
c. PRM
d. VMS
e. JIT

Answer: b
Diff: 2
Type: MC
Page Reference: 466
Topic: Logistics: Implement the Supply Chain
Skill: Concept
Objective: 12-6 Explain logistics

54) Which of the following is the final stop in the distribution channel in which
organizations sell goods and services to consumers for their personal use?
a. franchising
b. retailing
c. brokering
d. wholesaling

Answer: b
Diff: 1
Type: MC
Page Reference: 442
Topic: Retailing: Special Delivery
Skill: Concept
Objective: 12-7 Define retailing

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Marketing: Real People, Real Choices

55) According to the ________ hypothesis, new retailing forms often begin as low-
margin, low-price, low-status operations to challenge established retailers, then become
successful, and eventually take the place of the established retailers they had challenged.
a. agent
b. broker
c. wheel-of-retailing
d. warehousing
e. retail life cycle

Answer: c
Diff: 2
Type: MC
Page Reference: 468
Topic: The Evolution of Retailing
Skill: Concept
Objective: 12-7 Define retailing

56) The ________ is a way to categorize retail operations by the conditions they face at
different points in their existence.
a. product life cycle
b. retail life cycle
c. pyramid scheme
d. merchandise mix
e. retail placement theory

Answer: b
Diff: 2
Type: MC
Page Reference: 470
Topic: The Evolution of Retailing
Skill: Concept
Objective: 12-7 Define retailing

57) In the ________ stage of the retail life cycle, the retailer often is an aggressive
entrepreneur who takes a unique approach to doing business by creating a differential

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Marketing: Real People, Real Choices

advantage, such as competing on the basis of low price, offering a distinctive assortment,
or using a different way to distribute products.
a. expansion
b. introduction
c. extension
d. maturity
e. growth

Answer: b
Diff: 2
Type: MC
Page Reference: 470
Topic: The Evolution of Retailing
Skill: Concept
Objective: 12-7 Define retailing

58) When two or more separately owned retail firms combine, a(n) ________ has
occurred.
a. downturn
b. merger
c. expansion
d. shrinkage
e. niche strategy

Answer: b
Diff: 1
Type: MC
Page Reference: 471
Topic: The Evolution of Retailing
Skill: Concept
Objective: 12-7 Define retailing

59) Which of the following is NOT a function of a point-of-sale (POS) system?


a. collecting sales data
b. connecting directly into a store's inventory-control system
c. evaluating bids from potential suppliers

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Marketing: Real People, Real Choices

d. collecting data on returns and transfers to other stores


e. automatically sending orders to suppliers

Answer: c
Diff: 3
Type: MC
Page Reference: 472
Topic: The Evolution of Retailing
Skill: Concept
Objective: 12-7 Define retailing

60) Shoplifting, sweethearting, and retail borrowing are all problems that contribute to
________.
a. off-price retailing
b. shrinkage
c. pyramid schemes
d. understored trade areas
e. pop-up retailing

Answer: b
Diff: 2
Type: MC
Page Reference: 473
Topic: Ethical problems in Retailing
Skill: Concept
Objective: 12-7 Define retailing

61) For the retailer, the practice of ________ results in lower total sales and, in many
cases, damaged merchandise.
a. sweethearting
b. experiential shopping
c. retail borrowing
d. off-price retailing
e. network marketing

Answer: d

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Marketing: Real People, Real Choices

Diff: 2
Type: MC
Page Reference: 474
Topic: Ethical problems in Retailing
Skill: Concept
Objective: 12-7 Define retailing

62) A ________ is a set of related products a retailer offers.


a. merchandise mix
b. merchandise assortment
c. merchandise breadth
d. product depth
e. product line

Answer: e
Diff: 2
Type: MC
Page Reference: 475
Topic: Classify retailers by what they sell
Skill: Concept
Objective: 12-8 Classify retailers

63) ________ combine an economy supermarket with other lower-priced non-food


merchandise.
a. Variety stores
b. Category killers
c. Supercenters
d. Box stores
e. Convenience stores

Answer: c
Diff: 1
Type: MC
Page Reference: 475
Topic: Classify retailers by what they sell
Skill: Concept

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Marketing: Real People, Real Choices

Objective: 12-8 Classify retailers

64) ________, such as Walmart Canada and Old Navy, provide merchandise return and
offer credit, but customers select merchandise without much assistance.
a. Self-service retailers
b. Full-service retailers
c. Specialty retailers
d. Off-price retailers
e. Limited-service retailers

Answer: e
Diff: 1
Type: MC
Page Reference: 476
Topic: Classify retailers by what they sell
Skill: Application
Objective: 12-8 Classify retailers

65) Retail stores are often classified on the breadth and depth of their merchandise
assortment. The breadth of the merchandise is the number of different lines available. The
merchandise breadth may be classified as ________ or ________.
a. narrow; broad
b. narrow; deep
c. shallow; broad
d. shallow; deep
e. narrow; full

Answer: a
Diff: 2
Type: MC
Page Reference: 476
Topic: Classify retailers by Merchandise selection
Skill: Concept
Objective: 12-8 Classify retailers

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66) ________ carry a narrow assortment of product lines with deep assortments within
those lines.
a. Supermarkets
b. Specialty stores
c. Convenience stores
d. Discount stores
e. Off-price stores

Answer: b
Diff: 1
Type: MC
Page Reference: 478
Topic: Major types of retailers
Skill: Concept
Objective: 12-8 Classify retailers

67) Which of the following is a discount retailer owned by a manufacturer that provides
the manufacturer a store to sell off defective merchandise?
a. a specialty store
b. a factory outlet store
c. a department store
d. a general merchandise discount store
e. a warehouse club

Answer: b
Diff: 1
Type: MC
Page Reference: 478
Topic: Major types of retailers
Skill: Concept
Objective: 12-8 Classify retailers

68) Which type of store carries a wide variety of items and offers a deep selection, but
has been squeezed in recent years between more focused and more service-oriented
specialty stores on the one hand and more efficient, lower-priced discounters on the
other?

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a. department
b. factory outlet
c. off-price
d. hypermarket
e. wholesaler

Answer: a
Diff: 2
Type: MC
Page Reference: 479
Topic: Major types of retailers
Skill: Concept
Objective: 12-8 Classify retailers

69) Which of the following types of retailers have been more successful in Europe than in
Canada?
a. convenience stores
b. supermarkets
c. specialty stores
d. warehouse clubs
e. hypermarkets

Answer: e
Diff: 3
Type: MC
Page Reference: 479
Topic: Major types of retailers
Skill: Concept
Objective: 12-8 Classify retailers

70) Which of the following is any method a firm uses to complete an exchange that does
NOT require a customer to visit a store?
a. kiosk merchandising
b. nonstore retailing
c. direct selling
d. exchange retailing

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e. e-commerce

Answer: b
Diff: 1
Type: MC
Page Reference: 479
Topic: Nonstore retailing
Skill: Concept
Objective: 12-9 Describe forms of nonstore retailing

71) Which of the following prohibits door-to-door selling unless prior permission has
been granted by the household?
a. the National Do Not Call Registry
b. a Green River Ordinance
c. permission-based e-marketing
d. network marketing
e. a party plan system

Answer: b
Diff: 1
Type: MC
Page Reference: 480
Topic: Nonstore retailing
Skill: Concept
Objective: 12-9 Describe forms of nonstore retailing

72) Through the ________ of direct selling, people tend to get caught up in the "group
spirit" and buy things they would not normally buy if alone.
a. multilevel network
b. pyramid scheme
c. automatic vending system
d. door-to-door sales
e. party plan system

Answer: e
Diff: 2

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Type: MC
Page Reference: 480
Topic: Nonstore retailing
Skill: Concept
Objective: 12-9 Describe forms of nonstore retailing

73) In ________, a master distributor recruits other people to become distributors. The
master distributor sells the company's products to the people she entices to join and
receives commissions on all the merchandise sold by the people she recruits.
a. multilevel marketing
b. integrated sales
c. disintermediated sales
d. hierarchical sales
e. party plan systems

Answer: a
Diff: 1
Type: MC
Page Reference: 480
Topic: Nonstore retailing
Skill: Concept
Objective: 12-9 Describe forms of nonstore retailing

74) ________ e-commerce is the online exchange between companies and individual
consumers.
a. B2B
b. B2C
c. P2P
d. C2C
e. C2B

Answer: b
Diff: 1
Type: MC
Page Reference: 480
Topic: Nonstore retailing

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Skill: Concept
Objective: 12-9 Describe forms of nonstore retailing

75) Which of the following is NOT a benefit provided by e-commerce?


a. It provides consumers the satisfaction of instant gratification.
b. It reduces the cost of doing business.
c. It enables specialized businesses to be more successful.
d. It provides consumers more access to pricing information.
e. It broadens product choices for consumers in smaller communities.

Answer: a
Diff: 1
Type: MC
Page Reference: 482
Topic: Nonstore retailing
Skill: Concept
Objective: 12-9 Describe forms of nonstore retailing

76) Experts predicting that destination retail will be a future trend believe that consumers
will soon visit retailers more for ________ than for the basic process of purchasing
products.
a. information
b. credit services
c. comparison shopping
d. entertainment
e. social opportunities

Answer: d
Diff: 3
Type: MC
Page Reference: 485
Topic: Develop a store positioning strategy
Skill: Concept
Objective: 12-10 Understand the importance of store image to a retail positioning strategy

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77) Which of the following is the term for how the marketplace perceives a retailer
relative to the competition?
a. store layout
b. store atmosphere
c. merchandise assortment
d. store image
e. market segmentation

Answer: d
Diff: 1
Type: MC
Page Reference: 486
Topic: Store Image
Skill: Concept
Objective: 12-10 Understand the importance of store image to a retail positioning strategy

78) Which of the following is NOT an element involved in the creation of store
atmospherics?
a. color
b. furnishings
c. smells
d. sounds
e. knowledgeable personnel

Answer: e
Diff: 1
Type: MC
Page Reference: 486
Topic: Store Image
Skill: Concept
Objective: 12-10 Understand the importance of store image to a retail positioning strategy

79) A retail site's storefront and marquee are both examples of ________.
a. store layout
b. visual merchandising
c. experiential marketing

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d. trade areas
e. customer services

Answer: b
Diff: 2
Type: MC
Page Reference: 487
Topic: Store Image
Skill: Concept
Objective: 12-10 Understand the importance of store image to a retail positioning strategy

80) Store location planners look at a store's ________, the geographic zone that accounts
for the majority of its sales and customers.
a. trade area
b. microenvironment
c. primary market
d. traffic paths
e. target market

Answer: a
Diff: 1
Type: MC
Page Reference: 487
Topic: Store Location
Skill: Concept
Objective: 12-10 Understand the importance of store image to a retail positioning strategy

81) A new company called LidRock is prospering because it figured out a novel way to
get music, video games, and movies into the hands of consumerson mini-CDs tucked into
the lids of soft drinks. LidRock is focusing on which one of the four Ps?
a. product
b. price
c. promotion
d. place
e. packaging

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Answer: d
Diff: 2
Type: MC
Page Reference: 442
Topic: Place: The Final Frontier
Skill: Application
Objective: 12-1 Understand the value chain and the supply chain

82) Burt can visit his local hardware store and buy one 4-inch paint brush and not the
case of 24 brushes that the retailer had to buy. This is an example of how the channel of
distribution facilitates ________.
a. assortment creation
b. risk taking
c. breaking bulk
d. relationship management
e. logistics

Answer: c
Diff: 2
Type: MC
Page Reference: 446
Topic: Functions of Distribution Channels
Skill: Application
Objective: 12-2 The distribution channel

83) Nita can visit her local supermarket and buy a dozen roses, a gallon of milk, two
birthday cards, a bag of cat litter, and a pan for roasting a turkey. This illustrates how
channels of distribution benefit consumers by ________.
a. creating atmospherics
b. creating assortments
c. directing logistics
d. managing knowledge
e. managing relationships

Answer: b
Diff: 2

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Type: MC
Page Reference: 446
Topic: Functions of Distribution Channels
Skill: Application
Objective: 12-2 The distribution channel

84) Tony Pool Chemical Co. purchased 144 buckets of chlorine tablets over the Internet
from Chemical, Inc., which then placed the order with the manufacturer and arranged for
its transportation by truck to the Tony Pool store. Chemical, Inc. is an example of which
of the following?
a. a piggyback marketer
b. a reverse flow marketer
c. a disintermediator
d. a hybrid marketer
e. a wholesaling intermediary

Answer: e
Diff: 2
Type: MC
Page Reference: 449
Topic: Wholesaling Intermediaries
Skill: Application
Objective: 12-3 Describe the types of wholesaling intermediaries

85) Tony Pool Chemical Co. purchased 144 buckets of chlorine tablets over the Internet
from Chemical, Inc., then placed the order with the manufacturer and arranged for its
transportation by truck to the Tony Pool store. Chemical, Inc. took title to the pool
chemicals but never actually took possession of them. Chemical, Inc. is an example of a
________.
a. drop shipper
b. truck jobber
c. rack jobber
d. mail-order wholesaler
e. cash-and-carry wholesaler

Answer: a
Diff: 3

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Type: MC
Page Reference: 450
Topic: Wholesaling Intermediaries
Skill: Application
Objective: 12-3 Describe the types of wholesaling intermediaries

86) An independent hardware retail store 100 miles from the nearest city of more than
5,000 people but providing needed supplies for area ranchers would most likely buy its
plumbing and electrical supplies through a ________.
a. truck jobber
b. commission merchant
c. mail-order wholesaler
d. rack jobber
e. merchandise broker

Answer: c
Diff: 3
Type: MC
Page Reference: 450
Topic: Wholesaling Intermediaries
Skill: Application
Objective: 12-3 Describe the types of wholesaling intermediaries

87) Which of the following is an example of a dual distribution system?


a. Walmart locating in several countries
b. J.C. Penney's catalog and retail store sales
c. Avon's door-to-door distribution
d. Starbucks located inside a bookstore
e. a hotel providing guest privileges at a nearby health spa

Answer: b
Diff: 2
Type: MC
Page Reference: 455
Topic: Types of Distribution Channels
Skill: Application

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Objective: 12-4 Describe the types of distribution channels

88) Increasingly commonplace today is the appearance of two different franchise chains
under the same roof, such as Pizza-Hut and Taco Bell. This is an example of a(n)
________ marketing system.
a. administered
b. conventional
c. cooperative
d. vertical
e. horizontal

Answer: e
Diff: 2
Type: MC
Page Reference: 455
Topic: Types of Distribution Channels
Skill: Application
Objective: 12-4 Describe the types of distribution channels

89) Chewing gum is stocked in many outlets in the same market or community; in fact, it
is placed in as many outlets as possible. This is an example of ________ distribution.
a. exclusive
b. selective
c. dual
d. intensive
e. disintermediated

Answer: d
Diff: 2
Type: MC
Page Reference: 459
Topic: Plan a Channel Strategy
Skill: Application
Objective: 12-5 Planning a distribution channel strategy

90) Which of the following is most likely exclusively distributed?

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a. BMW automobiles
b. Diesel blue jeans
c. Bazooka bubble gum
d. Prairie Farms yogurt
e. Coca-Cola

Answer: a
Diff: 2
Type: MC
Page Reference: 460
Topic: Plan a Channel Strategy
Skill: Application
Objective: 12-5 Planning a distribution channel strategy

91) At some catalog retailers, employees on roller skates called pickers are handed a
printout of the products a customer wants, and then the pickers skate through large
warehouses accumulating the desired products into one central location. The pickers are
engaged in ________.
a. enterprise resource planning
b. transportation
c. materials handling
d. warehousing
e. inventory control

Answer: c
Diff: 2
Type: MC
Page Reference: 464
Topic: Logistics Functions
Skill: Application
Objective: 12-6 Explain logistics

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

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b. air
c. trucks
d. water
e. pipeline

Answer: b
Diff: 2
Type: MC
Page Reference: 465
Topic: Logistics Functions
Skill: Application
Objective: 12-6 Explain logistics

93) The Home Depot entered the market as a store for professional and amateur
plumbers, electricians, and carpenters. Then it introduced its garden centers. Next came
its home design center that provides help with all kinds of interior decorating problems.
Now it is enlarging its garden centers and hiring knowledgeable gardeners to staff these
centers. The addition of more amenities and greater assortment can be best explained by
which of the following?
a. the interconnectedness of the retail life cycle
b. the trend toward disintermediation
c. the success of off-price retailers
d. the wheel-of-retailing hypothesis
e. the 80/20 rule of retailing

Answer: d
Diff: 2
Type: MC
Page Reference: 469
Topic: The Evolution of Retailing
Skill: Application
Objective: 12-7 Define retailing

94) The Healthy Bites Grill is fast-food restaurant chain that sells burgers made from lean
buffalo meat, fries that aren't fried, and veggie pockets with soy cheese. The company is
four years old and already has outlets in New York, Japan, Canada, and Kuwait, and has
plans to expand to many other markets. In which stage of the retail life cycle is the
Healthy Bites Grill?

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a. introduction
b. growth
c. maturity
d. expansion
e. extension

Answer: b
Diff: 2
Type: MC
Page Reference: 470
Topic: The Evolution of Retailing
Skill: Application
Objective: 12-7 Define retailing

95) Costco's surprise offerings of seconds, overstocks, and closeouts–occasionally


including diamonds–is an example of how a retailer can differentiate itself through its
________.
a. merchandise mix
b. services mix
c. destination retailing
d. store atmosphere
e. level of service

Answer: a
Diff: 2
Type: MC
Page Reference: 475
Topic: Classify retailers by what they sell
Skill: Application
Objective: 12-8 Classify retailers

96) GameStop sells video games and systems, offering a narrow product line with a deep
assortment within that line. GameStop is a(n) ________.
a. department store
b. convenience store
c. specialty store

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d. general merchandise discount store


e. off-price retailer

Answer: c
Diff: 2
Type: MC
Page Reference: 478
Topic: Major Types of retailers
Skill: Application
Objective: 12-8 Classify retailers

97) Stan Clark, the owner of Eskimo Joe's bar, is considering closing the bar and selling
the logo apparel with direct marketing through a catalog. Stan Clark is considering a(n)
________ option.
a. wholesaling
b. nonstore retailing
c. B2B commerce
d. experiential shopping
e. box store

Answer: b
Diff: 2
Type: MC
Page Reference: 480
Topic: Nonstore retailing
Skill: Application
Objective: 12-9 Describe forms of nonstore retailing

98) The purchase of a set of flannel sheets from the Lands' End catalog Web site is an
example of ________ e-commerce.
a. B2B
b. B2C
c. POS
d. C2C
e. C2B

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Answer: b
Diff: 2
Type: MC
Page Reference: 481
Topic: Nonstore retailing
Skill: Application
Objective: 12-9 Describe forms of nonstore retailing

99) The Paradise Surf Store carried everything the serious female surfer needed to ride
the waves. It displayed lightweight surfboards with flowers painted on them stacked
along the walls of the store. It also had clean, well-lit dressing rooms for trying on
wetsuits and knowledgeable staff who knew what a woman needed to succeed in an
essentially male-dominated sport. These factors together created its ________.
a. store layout
b. merchandise assortment
c. media plan
d. atmospherics
e. store image

Answer: e
Diff: 2
Type: MC
Page Reference: 486
Topic: Store Image
Skill: Application
Objective: 12-10 Understand the importance of store image to a retail positioning strategy

100) Which of the following is most likely true about shoppers who prefer to shop at
lifestyle centers?
a. They prefer inexpensive, thrifty atmospheres.
b. They value an aesthetically pleasing shopping environment.
c. They prefer out-of-the-way locations.
d. They rarely dine out.
e. They are motivated by deals on last year's merchandise.

Answer: b
Diff: 3

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Type: MC
Page Reference: 489
Topic: Store Location
Skill: Application
Objective: 12-10 Understand the importance of store image to a retail positioning strategy

101) The supply chain only includes components dealing with the flow of materials
internal to the firm.
a. True
b. False

Answer: b
Diff: 2
Type: TF
Page Reference: 443
Topic: Place: The Final Frontier
Skill: Concept
Objective: 12-1 Understand the value chain and the supply chain

102) Channels that contain intermediaries are indirect.


a. True
b. False

Answer: a
Diff: 2
Type: TF
Page Reference: 445
Topic: Distribution Channels
Skill: Concept
Objective: 12-2 The distribution channel

103) Due to the success of the Internet, few producers sell through intermediaries today.
a. True
b. False

Answer: b
Diff: 2
Type: TF
Page Reference: 447

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Topic: Internet in the Distribution Channel


Skill: Concept
Objective: 12-2 The distribution channel

104) The producer and the final consumer are part of every type of channel of
distribution.
a. True
b. False

Answer: a
Diff: 1
Type: TF
Page Reference: 445
Topic: Internet in the Distribution Channel
Skill: Concept
Objective: 12-2 The distribution channel

105) Rooms-To-Go furniture retailers perform a channel intermediary facilitating


function by providing financing for customers' purchases.
a. True
b. False

Answer: a
Diff: 2
Type: TF
Page Reference: 446
Topic: Functions of Distribution Channel
Skill: Concept
Objective: 12-2 The distribution channel

106) Limited-service wholesalers do not take title to the merchandise they handle.
a. True
b. False

Answer: b
Diff: 2
Type: TF
Page Reference: 449
Topic: Wholesaling Intermediaries

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Skill: Concept
Objective: 12-3 Describe the types of wholesaling intermediaries

107) Rack jobbers are important to both the producers and the customers of bulky
products such as coal, oil, or lumber.
a. True
b. False

Answer: b
Diff: 3
Type: TF
Page Reference: 450
Topic: Wholesaling Intermediaries
Skill: Concept
Objective: 12-3 Describe the types of wholesaling intermediaries

108) Sales branches are independent wholesalers that are allowed to operate only in
specific geographical territories.
a. True
b. False

Answer: b
Diff: 2
Type: TF
Page Reference: 450
Topic: Wholesaling Intermediaries
Skill: Concept
Objective: 12-3 Describe the types of wholesaling intermediaries

109) The first step in planning a channel strategy is to determine what market(s) need to
be reached.
a. True
b. False

Answer: b
Diff: 2
Type: TF
Page Reference: 456
Topic: Plan a Channel Strategy

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Skill: Concept
Objective: 12-5 Planning a distribution channel strategy

110) An environmental analysis is an important step in distribution planning.


a. True
b. False

Answer: a
Diff: 1
Type: TF
Page Reference: 456
Topic: Plan a Channel Strategy
Skill: Concept
Objective: 12-5 Planning a distribution channel strategy

111) Intensive distribution seeks many outlets in a market, while selective distribution
seeks only one outlet in a given market area.
a. True
b. False

Answer: b
Diff: 2
Type: TF
Page Reference: 459-460
Topic: Plan a Channel Strategy
Skill: Concept
Objective: 12-5 Planning a distribution channel strategy

112) Reverse logistics are becoming even more important as more firms seriously
consider sustainability as a competitive advantage.
a. True
b. False

Answer: a
Diff: 2
Type: TF
Page Reference: 462
Topic: Logistics : Implement the supply chain
Skill: Concept

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Objective: 12-6 Explain logistics

113) When shipping large amounts of bulk products such as forest products, coal, sand, or
rock over large distances, a company should choose large trucks because of their low cost
per ton shipped.
a. True
b. False

Answer: b
Diff: 2
Type: TF
Page Reference: 462
Topic: Logistics Functions
Skill: Application
Objective: 12-6 Explain logistics

114) Failing to provide equal access to customers who appear economically


disadvantaged is both unethical and illegal.
a. True
b. False

Answer: b
Diff: 2
Type: TF
Page Reference: 470
Topic: Ethical problems in Retailing
Skill: Concept
Objective: 12-7 Define retailing

115) In limited-service retail operations, such as specialty stores and first-class


department stores, salespeople assist customers in every phase of the shopping process.
a. True
b. False

Answer: b
Diff: 2
Type: TF
Page Reference: 475
Topic: Classify retailers by level of service

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Skill: Concept
Objective: 12-8 Classify retailers

116) Factory outlet stores tend to have a very broad assortment of merchandise.
a. True
b. False

Answer: b
Diff: 2
Type: TF
Page Reference: 478
Topic: Major types of retailers
Skill: Concept
Objective: 12-8 Classify retailers

117) The majority of direct salespeople are women.


a. True
b. False

Answer: a
Diff: 3
Type: TF
Page Reference: 480
Topic: Nonstore retailing
Skill: Concept
Objective: 12-9 Describe forms of nonstore retailing

118) Vending machines are currently best-suited to the sales of impulse items and
expensive merchandise.
a. True
b. False

Answer: b
Diff: 2
Type: TF
Page Reference: 481
Topic: Nonstore retailing
Skill: Concept

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Objective: 12-9 Describe forms of nonstore retailing

119) Experiential shoppers enjoy the "thrill of the hunt" available through the experience
of shopping on-line.
a. True
b. False

Answer: a
Diff: 2
Type: TF
Page Reference: 482
Topic: Nonstore retailing
Skill: Concept
Objective: 12-9 Describe forms of nonstore retailing

120) A store's "feel," whether cluttered, cheerful, plush, or somber, is referred to as the
store's franchise.
a. True
b. False

Answer: b
Diff: 2
Type: TF
Page Reference: 486
Topic: Store Image
Skill: Concept
Objective: 12-10 Understand the importance of store image to a retail positioning strategy

121) Location planners use a site evaluation to determine how to design store layouts.
a. True
b. False

Answer: b
Diff: 2
Type: TF
Page Reference: 489
Topic: Store Location
Skill: Concept
Objective: 12-10 Understand the importance of store image to a retail positioning strategy

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122) When a cashier at the local grocery store purposefully fails to scan all of the items
purchased by her friends and allows her friends to leave the store without paying for all
of their items, the cashier is engaged in sweethearting.
a. True
b. False

Answer: a
Diff: 2
Type: TF
Page Reference: 473
Topic: Ethical problems in Retailing
Skill: Application
Objective: 12-7 Define retailing

123) A restaurant that features a serve-yourself buffet, which eliminates the need for a full
wait staff, is using disintermediation.
a. True
b. False

Answer: a
Diff: 2
Type: TF
Page Reference: 448
Topic: Internet in the Distribution Channel
Skill: Application
Objective: 12-2 The distribution channel

124) A Canadian wool producer that wanted to export its product to Europe could use a
selling agent or a merchandise broker
a. True
b. False

Answer: a
Diff: 3
Type: TF
Page Reference: 451
Topic: Merchandise agents or brokers
Skill: Application

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Objective: 12-3 Describe the types of wholesaling intermediaries

125) Always Fresh Produce Company has a route selling to more than 100 groceries,
schools, and restaurants at wholesale prices. Last week the owners opened up a walk-in
discounted consumer produce outlet. Always Fresh is now using a dual distribution
system.
a. True
b. False

Answer: a
Diff: 2
Type: TF
Page Reference: 454
Topic: Dual and Hybrid Distribution systems
Skill: Application
Objective: 12-4 Describe the types of distribution channels

126) In a brief essay, explain the concept of the supply chain

Answer:
The supply chain encompasses all the activities necessary to turn raw materials into a
good or service and put it in the hands of the consumer or business customer. Firms may
decide to outsource or insource some of these activities. Distribution channels are a
subset of the supply chain, and logistics management is the process of actually moving
goods through the supply chain.

Diff: 2
Type: ES
Page Reference: 443
Topic: Place: The Final Frontier
Skill: Concept
Objective: 12-1 Understand the value chain and the supply chain

127) How do channel members add value to a distribution channel?

Answer:
Intermediaries reduce the amount of work that must be done by both producers and
consumers. They transform the assortment of products made by producers into the
assortment wanted by consumers. They buy large quantities from many producers and
break them down into the smaller quantities and broader assortments wanted by

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consumers. Intermediaries also provide facilitating functions that make the purchase
process easier; examples of these facilitating functions include offering credit, providing
maintenance service, taking risk, and providing communication and transaction functions.
Channel members add value by bridging the major time, place, and ownership gaps that
separate goods and services from those who would use them.

Diff: 2
Type: ES
Page Reference: 446
Topic: Distribution Channels
Skill: Concept
Objective: 12-2 The distribution channel

128) Compare the responsibilities associated with full-service merchant wholesalers to


those associated with limited-service merchant wholesalers.

Answer:
Full-service merchant wholesalers provide a wide range of services for their customers,
including delivery, credit, product-use assistance, repair, advertising, and other
promotional support. At times market research is also completed by full-service merchant
wholesalers. In contrast, limited-service merchant wholesalers provide fewer services. A
limited-service merchant wholesaler is less likely to provide credit or marketing
assistance to retailers. However, both full-service and limited-service merchant
wholesalers take title to merchandise.

Diff: 3
Type: ES
Page Reference: 449
Topic: Wholesaling Intermediaries
Skill: Concept
Objective: 12-3 Describe the types of wholesaling intermediaries

129) What are the similarities and differences between manufacturers' agents and selling
agents?

Answer:
Manufacturers' agents are independent salespeople who carry several lines of
noncompeting products. They have contractual arrangements with manufacturers that
outline territories, selling prices, and other specific aspects of the relationship. Selling

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agents market a whole product line or one manufacturer's total output. Unlike
manufacturers' agents, they have unlimited territories and control over pricing.

Diff: 3
Type: ES
Page Reference: 451
Topic: Wholesaling Intermediaries
Skill: Concept
Objective: 12-3 Describe the types of wholesaling intermediaries

130) Explain the concept of a hybrid marketing system. What might be the advantages of
a company implementing this type of marketing system?

Answer:
Hybrid marketing systems use a number of different channels and communication
methods to serve a target market. A hybrid marketing system might use all or some of the
following: direct sales, distributors, retail sales, and direct mail. Hybrid marketing
systems can offer companies certain competitive advantages, including increased
coverage of the market, lower marketing costs, and a greater potential for customization.

Diff: 2
Type: ES
Page Reference: 454
Topic: Dual and Hybrid Distribution systems
Skill: Application
Objective: 12-4 Describe the types of distribution channels

131) Compare and contrast a conventional marketing system with a vertical marketing
system (VMS).

Answer:
A conventional distribution channel consists of one or more independent producers,
wholesalers, and retailers. Each is a separate business seeking to maximize its own
profits. No channel member has much control over the other members. On the other
hand, a vertical marketing system is a unified system made up of producers, wholesalers,
and retailers. While members of a conventional distribution channel seek to maximize
their own profits, members of a vertical marketing system all cooperate because either
one member owns the others, one has contracts with the others, or one wields more
power than the others.

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Diff: 3
Type: ES
Page Reference: 457-458
Topic: Plan a Channel Strategy
Skill: Concept
Objective: 12-5 Planning a distribution channel strategy

132) Compare and contrast the three distribution strategies, giving examples of products
that might be distributed through each strategy.

Answer:
Producers of convenience products and staples typically seek intensive distribution as a
strategy to stock their products in as many outlets as possible. For example, products such
as chewing gum are available just about wherever and whenever consumers want them.
Selective distribution is used when selling to more than one but fewer than all of the
intermediaries who are willing to carry a company's products in a given market.
Examples are name-brand blue jeans and computers. Exclusive distribution is used when
the producer wants to stock its products with only one dealer in an area. Examples are
expensive cars and prestige clothing.

Diff: 2
Type: ES
Page Reference: 459
Topic: Plan a Channel Strategy
Skill: Application
Objective: 12-5 Planning a distribution channel strategy

133) Describe the three sources of power for a channel captain.

Answer:
There are three potential sources of power for channel captains. A channel captain has
economic power when it has the ability to control resources. A channel captain has
legitimate power when it has the legal authority to call the shots. A channel captain has
reward or coercive power if it engages in exclusive distribution and has the ability to give
profitable products and to take them away from the channel intermediaries.

Diff: 3
Type: ES
Page Reference: 461
Topic: Develop Distribution Tactics

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Skill: Concept
Objective: 12-5 Planning a distribution channel strategy

134) Explain the rationale for identifying the best modes of transportation for a product.

Answer:
Mode of transportation decisions entail a compromise between minimizing costs and
providing the service customers want. Factors to consider are dependability, cost, speed
of delivery, accessibility, capability, and traceability. Each mode of transportation has
different strengths and weaknesses that make it a good choice for different transportation
needs. For example, railroads have a moderate speed of delivery and average cost, while
air has a high cost and very fast speed of delivery.

Diff: 2
Type: ES
Page Reference: 465
Topic: Logistics Functions
Skill: Application
Objective: 12-6 Explain logistics

135) Explain why inventory control has such a major impact on the costs of logistics.

Answer:
If supplies of a product are too low to meet fluctuations in customer demand, a firm may
have to make expensive emergency deliveries or lose customers to competitors. If
inventories are above demand, unnecessary storage expense and the possibility of damage
or deterioration can occur. Channel members want to minimize the cost of holding
inventory while at the same time ensuring that inventory will be there when customers
need it.

Diff: 2
Type: ES
Page Reference: 466
Topic: Inventory Control
Skill: Application
Objective: 12-6 Explain logistics

136) A supply chain relies on profitable relationships all along the way. How might
Walmart rely on its marketing partners in order to offer low prices?

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Answer:
Walmart must rely on suppliers that will provide merchandise at low costs, a low-cost and
efficient distribution system, and a strong partnership with each member of its supply
chain.

Diff: 2
Type: ES
Page Reference: 443
Topic: Place: The Final Frontier
Skill: Application
Objective: 12-1 Understand the value chain and the supply chain

137) What are some advantages of a farmer selling strawberries grown on his farm
directly to consumers instead of using channel intermediaries?

Answer:
The farmer will be able to directly serve the customer and may be able to sell the
strawberries at a lower price but higher profit margin than if an intermediary were
involved. Also, the farmer has control of the product and the sale, making sure that the
berries are sold when they are still fresh.

Diff: 3
Type: ES
Page Reference: 451
Topic: Wholesaling Intermediaries
Skill: Application
Objective: 12-3 Describe the types of wholesaling intermediaries

138) Briefly explain the wheel-of-retailing concept.

Answer:
According to this concept, many new types of retailing forms begin as low-margin, low-
price, low-status operations. Over time, the retailers' success leads them to upgrade their
facilities and offer more services; consequently, their costs increase, forcing them to
increase their prices. Eventually, these retailers become prey to the new retailers entering
the marketplace.

Diff: 3
Type: ES

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Page Reference: 468-469


Topic: The Evolution of Retailing
Skill: Application
Objective: 12-7 Define retailing

139) Describe the stages of the retail life cycle. How is it like the product life cycle?

Answer:
The retail life cycle, like the product life cycle, is a way to understand how retailers
evolve. The retail life cycle allows the categorization of retail stores by the conditions
they face at different points in the cycle. Like the product life cycle, the retail life cycle
consists of an introduction stage, a growth stage, a maturity stage, and a decline stage.

Diff: 2
Type: ES
Page Reference: 468-469
Topic: The Retail Life Cycle
Skill: Application
Objective: 12-7 Define retailing

140) What is meant by merchandise breadth and depth? Give an example of a store for
each of the following: narrow assortment, broad assortment, shallow assortment, and
deep assortment.

Answer:
Merchandise breadth is the number of different product lines available. Merchandise
depth is the variety of product choices available for each product line. A convenience
store tends to have a narrow assortment. Convenience stores also tend to have a shallow
assortment. Discount stores like Walmart have a broad assortment. A bookstore that
carried only mysteries, including hard-to-find ones, would have a deep assortment.

Diff: 2
Type: ES
Page Reference: 476
Topic: Classify Retailers by merchandise selection
Skill: Application
Objective: 12-8 Classify retailers

141) Compare and contrast the four types of discount stores.

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Answer:
General merchandise discount stores offer a broad assortment of items at low prices with
minimal services. Off-price retailers have a more narrow assortment, selling surplus
merchandise from well-known manufacturers at low prices. Like general discount
merchandise stores, warehouse clubs sell a broad assortment of food and nonfood items
in bulk size. However, warehouse clubs are almost entirely self-service and often charge
a modest membership fee. Unlike the other types of discount stores, factory outlet stores
are owned by manufacturers that use the stores to sell defective merchandise or excess
inventory at a low price.

Diff: 3
Type: ES
Page Reference: 478
Topic: Major types of Retailers
Skill: Application
Objective: 12-8 Classify retailers

142) Describe how nonstore retailing has recently grown.

Answer:
Though most purchases are still made in stores, more and more consumers are now
shopping using a broad range of nonstore alternatives, including catalog shopping, direct
selling, and automated vending. Easy-to-use Web sites, improved online service, and
sophisticated search engines have all helped online business grow at a faster rate than
retail buying. All types of retailers now use direct and online channels, with traditional
bricks-and-mortar retailers selling online.

Diff: 2
Type: ES
Page Reference: 480
Topic: Non store retailing
Skill: Application
Objective: 12-9 Describe forms of nonstore retailing

143) Explain the limitations for marketers offering e-commerce shopping.

Answer:
Limitations for marketers engaging in e-commerce retailing may include a lack of
security and a customer's fear of fraud. The marketer must maintain the site to reap its

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full potential benefits. The marketer must also work to find innovative ways to address
the consumers' need for "touch-and-feel" information before buying a product. Finally,
marketers may have difficulties arranging for payment methods for consumers from
developing countries that primarily use cash.

Diff: 2
Type: ES
Page Reference: 483
Topic: Non store retailing
Skill: Application
Objective: 12-9 Describe forms of nonstore retailing

144) Describe the two types of retail store layouts, explain the advantages of each, and
identify the kind of store in which you would expect to find each layout type used.

Answer:
A grid layout consists of rows of neatly spaced shelves that are at right angles or parallel
to one another. The grid layout is used in supermarkets and discount stores. It helps move
a large volume of shoppers systematically through the store, making sure that a majority
of shoppers pass by high-margin sections. A free-flow layout has the merchandise
arranged in circles or arches–sometimes assigning different areas of the store their own
image and merchandise mix. This layout is commonly found in department stores and
specialty stores. This type of layout encourages browsing.

Diff: 3
Type: ES
Page Reference: 486
Topic: Store design
Skill: Application
Objective: 12-10 Understand the importance of store image

145) Bass Pro Shops, a chain of outdoor sports equipment stores, features giant
aquariums, waterfalls, trout ponds, archery and rifle ranges, putting greens, and free
classes on topics from ice fishing to conservation. Why would a retailer do this?

Answer:
Many shoppers are looking for a buying, entertainment, and social experience, which
Bass Pro Shops offers as part of its destination retail strategy.

Diff: 2

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Type: ES
Page Reference: 485
Topic: Develop a store positioning
Skill: Application
Objective: 12-10 Understand the importance of store image

146) What elements are involved in atmospherics?

Answer:
Atmospherics is the use of color, lighting, scents, furnishings, sounds, and other design
elements to create a desired setting.

Diff: 2
Type: ES
Page Reference: 486
Topic: Develop a store positioning
Skill: Application
Objective: 12-10 Understand the importance of store image

147) An appliance, television, and stereo dealer serves as an authorized repair center,
provides maintenance contracts, and sells essential supplies to customers. What types of
channel functions are being implemented by this dealer?

Answer:
The dealer is offering facilitating functions; the dealer is making the purchase process
easier for customers by having so many added benefits available at one location.

Diff: 2
Type: ES
Page Reference: 446-447
Topic: Functions of Distribution Channels
Skill: Application
Objective: 12-2 The distribution channel

148) How has the Internet most likely affected the distribution channel of an artisan who
makes handmade dolls that had been sold only at craft shows?

Answer:

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The Internet has become an important place for consumers to shop. By using the Internet,
this artisan can market her dolls with the same competitive advantages as larger
companies who market their products around the globe.

Diff: 2
Type: ES
Page Reference: 447-448
Topic: The internet in the distribution channel
Skill: Application
Objective: 12-2 The distribution channel

149) How do merchant wholesalers and agents/brokers differ?

Answer:
Merchant wholesalers "take title to" (or own) what they sell; agents/brokers serve as
liaisons, bringing buyers and sellers together.

Diff: 2
Type: ES
Page Reference: 449-450
Topic: Independent Intermediaries
Skill: Application
Objective: 12-3 Describe the types of wholesaling intermediaries

150) A major manufacturer of bread sells its finished products to a grocery store chain.
This grocery store then sells the bread to its customers. What type of channel of
distribution is this, and what are the levels of distribution?

Answer:
This is a typical consumer channel of distribution. There are three levels of distribution:
the producer (the bread manufacturer), the retailer (the grocery store), and the consumer.

Diff: 2
Type: ES
Page Reference: 453
Topic: Consumer Channels
Skill: Application
Objective: 12-4 Describe the types of distribution channels

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