Chapter 10 Quiz
BU270 PRINCIPLES OF MARKETING
Chapter 10—Marketing Channels and Supply Chain Management
NAME:______________________________________________SCORE:______________DATE
TRUE/FALSE
1. A marketing channel is a business structure composed of interdependent organizations that reach from the point of
product origin to the consumer. Its purpose is to move products to their final consumption destination.
2. As products move through the marketing channel, channel members provide specialization and division of labor,
overcome discrepancies, and provide contact efficiency.
3. Theo stopped by the convenience store to buy a loaf of bread. He is glad that he can buy one loaf at a time, instead
of having to buy the thousands of loafs of bread the manufacturer produces every day. For Theo, the convenience
store overcomes a discrepancy of quantity.
4. Residents of Sobarro, New Mexico live in an isolated area of the state. Residents must travel two hours to receive
medical treatment. Luckily, a physician has just opened a new practice in Sobarro. In this case, the physician has
overcome service discrepancies by opening an office close to consumers.
5. Consider a scenario in which there are four manufacturers, no intermediaries, and three consumers. Twelve
transactions would be required for each consumer to receive products from each manufacturer. The introduction of
one intermediary reduces the required number of transactions to four and demonstrates the idea of contact
efficiency,
6. A merchant wholesaler is an institution that buys goods from manufacturers and resells them to businesses,
government agencies, and other wholesalers or retailers.
7. Harris Peng represents a manufacturer of prefabricated housing and gets paid a commission for finding buyers and
linking them up with the manufacturer. Peng is a merchant wholesaler.
8. The three basic functions a channel intermediary provides are transactional (including physical distribution and
sorting), logistical (including research and financing), and facilitating (including contacting, promoting, negotiating,
and risk taking).
9.
.
Logistics is a subset of physical distribution and refers to the transporting of raw materials and/or finished goods.
10. Grace Yoder makes jams and jellies, which she sells at craft festivals to end users. Yoder does not the use channel
intermediaries; she uses a direct channel.
11. The direct channel is used more often in consumer markets than in business-to-business markets.
12. LoneStar Bar & Grill is a small chain of restaurants that feature marinated steaks. The marinade is so popular that
LoneStar sells it at its restaurants and also sells it at Kroger supermarkets. This is an example of intensive
distribution.
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Chapter 10 Quiz
BU270 PRINCIPLES OF MARKETING
13. Supply chain management is completely producer-driven.
14. Companies that use supply chain management techniques typically also use a push promotional strategy.
15. The use of supply chain management results in reduced inventory management costs.
16. Metallurgical Designs makes gold and silver charms for necklaces and bracelets. It markets its charms to a few
retailers in any one region and promotes them intensively to those retailers. This is an example of intensive
distribution.
17. Shopping goods are usually distributed selectively. Consumers are willing to look around for them but may not be
willing to search or travel extensively to acquire the product.
18. An international consumer products manufacturer requires all of its suppliers to provide the lowest possible cost and
to adhere to a just-in-time inventory system. Wholesalers and manufacturers generally yield to the authority of this
large manufacturer. This consumer products manufacturer exercises channel power.
19. Horizontal conflict occurs among channel members on the same level, such as two or more different wholesalers or
two or more different retailers that handle the same manufacturer's brands.
20. Master Technology produces neon insulator sign components on an assembly line, and suppliers deliver the needed
parts in four small shipments each day. Master Technology has noticed a dramatic decrease in carrying costs using
this method, but a sharp increase in delivery costs since the company must pay more for the added delivery
convenience. Master Technology uses just-in-time (JIT) manufacturing.
21. Despite its name, the goal of a materials-handling system is to handle products as infrequently as possible.
22. Another name for outsourcing is downsizing.
23. Contract logistics allows companies to cut inventories, locate stock at fewer plants and distribution centers, and still
provide the same service level or even better.
24. Unlike marketers of physical products, marketers of services do not have to address the question of logistics since
services do not require a distribution strategy.
25. One of the ways that service firms improve their distribution efficiency is by managing service capacity.
Business Division
COM-FSM National Campus