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Exam 15: Distributing Products

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Question 131

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Mini-Case "We've got a number of important issues to discuss today," began Dee Stribyute as she opened the weekly marketing manager's meeting for Lite Bite Foods. Lite Bite is a producer of low fat, low calorie snack foods. The other managers attending the meeting were her two top assistants, Mark Etter and Rhea Taylor. "First, sales were hurt last year when we had to recall our almond chocolate bars because of concerns about contaminated ingredients. We've got our work cut out for us to recover from that setback. Many stores quit carrying our products, and even the ones that continued to do so put less emphasis on displaying and promoting them. We've got to get our products into as many stores as possible. Consumers shouldn't have to go all over town trying to find our snacks. We also need to make sure that our products are displayed and promoted in a way that attracts attention." Dee looked at her assistants, and saw that they seemed ready to make some proposals. However, she decided to get another important issue out on the table before stopping to discuss solutions, so she continued with her comments. "The other big concern is the cost of moving our goods. Distribution costs are a major part of the overall cost of selling our goods. What can we do to make the flow of products from our kitchens to our ultimate consumers more efficient?" Having laid out her concerns, Dee sat down at the head of the table, saying to her assistants, "O.K. guys, I'm ready for suggestions." -Currently, Lite Bite uses a lot of intermediaries to help distribute its products. Collectively, the organizations that participate in getting finished goods from Lite Bite to the ultimate consumers of its products are all part of the

A) marketing mix.
B) franchise system.
C) channel of distribution.
D) marketing network.

E) B) and D)
F) A) and C)

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Question 132

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Jessi ships various perishable flowers from her greenhouses near St. Louis to florists thousands of miles away in cities such as San Antonio, Seattle, and Hartford. Since the flowers must reach the florists as quickly as possible, the best mode of transportation for Jessi to use would be

A) railroads.
B) trucks.
C) air.
D) ships.

E) All of the above
F) B) and C)

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Question 133

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In a(n) ________, independently owned and managed stores sign an agreement to use the same name, participate in chain promotions, and cooperate as a unified system.

Direct mail, telemarketing, and catalog sales are all common examples of

Retailers that participate in an exclusive distribution strategy will have a strong incentive to carry a large inventory of the good and provide exceptional service to customers.

About ________ of the costs of things we buy are marketing costs that go to pay for distribution costs of intermediaries.

Online retailing is selling goods and services to ultimate consumers online.

Discount stores compete in the retail market mainly on the basis of price.

Tony brings together buyers and sellers of used heavy construction equipment, and helps them negotiate the terms of the sale. However, he never takes title to any of the equipment himself, nor does he provide any financing for the buyer. Tony is acting as a

Selena owns and operates a Global Goods grocery store. Although her store is independently owned and operated, she has signed an agreement with over seventy stores in the Midwest to use a common name, participate in chain promotions, and cooperate with other stores in the chain. What is Selena's store a part of?

Ariel stocks several local supermarkets and discount stores with Shimmer Cosmetics. At the stores, she sets up displays of products carrying the Shimmer brand name, and sells the goods on consignment, sharing any profits on the sales with the retailer. What is Ariel?

Explain why you agree or disagree with the following statement: "Marketing intermediaries must charge a high enough price for the functions they perform to earn a profit. Therefore, the cost of distributing goods can almost always be reduced by eliminating marketing intermediaries from the channel of distribution."

Merchant wholesalers do not take title to the goods they handle.

Groceries and More sells a wide range of foods and household supplies within a suburb of a large city. The store frequently advertises that its prices are much lower than the prices charged by larger supermarket chains in the area. This low-price approach means that Groceries and More is a classic example of a merchant wholesaler.

Wholesalers are marketing intermediaries who sell goods or services to ultimate consumers.

Agents and brokers and wholesalers are types of marketing intermediaries.

A common trait of corporate distribution systems, administered distribution systems, contractual distribution systems, and supply chains is that they all

Outdoor Adventures, Inc. operates a chain of very large stores that offer an incredible selection of sporting goods at very competitive prices. When Outdoor Adventures opens its first store in a new region, smaller sporting goods stores almost always experience a noticeable drop in sales. Outdoor Adventures stores can be classified as

Foot Friends, a high-quality socks and stockings company, makes sales by sending catalogs to customers and offering them a toll-free telephone number so that they can call in their orders 24-hours-a-day, any day of the year. Foot Friends uses telemarketing.

Currently, Spark Electrical sells directly to thousands of industrial customers. Spark could reduce the number of exchange relationships by including wholesalers in its channel of distribution.