Chapter 12- Marketing Channels and Supply Chain Management

Chapter 12—Marketing Channels and Supply Chain Management

1. A marketing channel is a business structure of interdependent organizations that reach from the point of product origin to the consumer with the purpose of moving products to their final consumption destination.

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2. As products move through the marketing channel, channel members provide economies to the distribution process in the form of specialization and division of labor, overcoming discrepancies, and contact efficiency.

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3. Ted stopped by the convenience store to buy a can of Coke. He is glad that he can buy one can at a time, instead of having to buy the thousands of gallons of Coke the manufacturer produces every day. For Ted, the convenience store overcomes a discrepancy of assortment.T    F

4. Residents of Yon, California, live in an isolated area of the state. To purchase a new car, the residents will very often need to drive two to three hours to visit a dealership. Luckily, a local dealer has just opened a new car lot for the residents of Yon to shop. In this case, the automobile manufacturer has overcome spatial discrepancies by franchising a dealership close to consumers.T    F

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. Demonstrating the idea of contact efficiency, introducing one intermediary reduces the required number of transactions to eight.T    F

6. A wholesaler that takes title and physical possession of the goods can be called a merchant wholesaler.

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7. Terry Kapron represents a large yachting company and gets paid a commission for finding buyers and linking them up with the yacht manufacturer. Kapron is a merchant wholesaler.T    F

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).T    F

9. Logistics management is a subset of physical distribution and means transporting raw materials and/or finished goods.T    F

10. Buttercup Coffees sells all its products to end users (Fortune 1000 companies with coffee-break rooms), without the use of channel intermediaries. Buttercup uses a direct channel.T    F

MULTIPLE CHOICE

  1. 1.  A business structure of interdependent organizations, reaching from the point of product origin to the consumer, is a:

a.	facilitating agency or place member
b.	marketing mix intermediary
c.	selective distribution canalis
d.	marketing channel or channel of distribution
e.	transportation channel or channel of movement

  2.   Marketing channels can achieve economies of scale through:

a.	overcoming spatial discrepancies
b.	contact expertise
c.	specialization and division of labor
d.	overcoming temporal discrepancies
e.	overcoming discrepancies of quantity

  3.   Distribution channels aid in overcoming barriers to exchange that are created in the production process by overcoming all of the following type discrepancies EXCEPT:

a.	possession
b.	assortment
c.	quantity
d.	spatial
e.	temporal

  4.   The difference between the amount of product produced and the amount an end user wants to buy is referred to as a discrepancy of:

a.	space
b.	quantity
c.	assortment
d.	accumulation
e.	temporality

  5.   The Cedarburg Dairy purchases milk in 100,000-gallon truckloads from several dairy farms. The dairy packages the milk into pint, quart, half-gallon, and gallon containers and sells these containers by the case to grocery stores. The Cedarburg Dairy has aided the grocery stores by overcoming the discrepancy of:

a.	temporality
b.	space
c.	assortment
d.	accumulation
e.	quantity

  6.   If a retail outlet does not offer all the items necessary in order to use or to receive full satisfaction from a product that it sells, there is a:

a.	discrepancy of assortment
b.	discrepancy of quantity
c.	spatial discrepancy
d.	temporal discrepancy
e.	contact discrepancy

  7.   A manufacturer may only produce one product, yet additional products may be required to actually use the first product. This creates a:

a.	discrepancy of quantity
b.	discrepancy of assortment
c.	spatial discrepancy
d.	temporal discrepancy
e.	contact discrepancy

  8.   The Hit-the-Beach Store purchases swimsuits, sunscreen products, towels, beach toys, beach chairs, and surf boards from a variety of manufacturers and brings these items to its large store in a California coastal city. The store's goal is to provide every amenity needed for a trip to the beach, so Hit-the-Beach is aiding consumers by overcoming the:

a.	spatial discrepancy
b.	discrepancy of quantity
c.	discrepancy of assortment
d.	temporal discrepancy
e.	contact discrepancy

  9.   A(n) _____ discrepancy is created when a product is produced but a consumer is not ready to purchase it.

a.	quantity
b.	spatial
c.	contact
d.	temporal
e.	assortment

10.   The Howlin' Halloween Company operates its manufacturing facilities year-round, but the sales season for Halloween costumes and party decorations is usually September 1 through November 1. However, sales remain steady all year as the company sells to wholesale distributors that stock the product. The wholesale distributors are helping to overcome a(n) _____ discrepancy.

a.	assortment
b.	spatial
c.	contact
d.	quantity
e.	temporal

TRUE/FALSE