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ADM 2320 Chapter Notes - Chapter 12: Logistics, Demand Forecasting, Customer Service

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14 Nov 2018

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University of Ottawa

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Document Summary

Distribution channel the set of institutions that transfer the ownership of and move goods from the point of production to the point of consumption: make products available to consumers, wholesalers/retailers, direct or indirect. Those firms engaged in buying, taking title to, often storing, and physically handing goods in large quantities, and then reselling the goods to retailers or industrial or business users: retailers. Channel choices affect other decisions in the marketing mix: a strong distribution system is a competitive advantage, good distribution is critical to marketing success. Channel intermediaries add value by bridging the major time, place, and possession discrepancies. Individuals and firms involved in the process of making a product or service available for use or consumption by consumers. Intermediaries help minimize number of sales contacts necessary to reach a target market. Lo2: what intermediaries are and why we need them. Takes ownership of product: retailer, an intermediary who mainly sells to consumers.

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Related Questions

A channel of distribution:

A) is any series of firms or individuals who participate in the flow of goods and services from producer to consumer or final user.
B) is only needed when products must be stored.
C) must include one or more intermediaries.
D) is only needed when products are sold indirectly.

Which of the following statements about Place decisions is True?

A) Product classes are not related to Place objectives.
B) The product life cycle is not related to Place objectives.
C) Place decisions are short-term decisions that are easy to change.
D) Different market segments may require separate Place arrangements.

Direct _____ involves personal sales contact between a representative of the company and an individual consumer.

A) marketing
B) selling
C) distribution
D) servicing

A manufacturer prefers to produce and ship in large quantities to take advantage of economies of scale. Final consumers often want to purchase in small quantities. This difference between the producer and consumer is a:

A) Discrepancy of assortment.
B) Discrepancy of quantity.
C) Regrouping activity.
D) Discrepancy adjustment

Which of the following best illustrates adjusting "discrepancies of assortment?"

A) General Motors makes Hummer for one product-market and Chevrolet for another product-market.
B) A hardware store sells all the hardware items wanted by most people.
C) Over 310 million U.S. consumers are served by around 330,000 manufacturers.
D) RCA sold more than 2,000,000 TVs last year

Small farmers in the mountains of Peru pick coffee beans by hand, obtaining only a bucket a day. Then they sell them to buyers who put the beans in large bags to be shipped to processors. This regrouping activity is called:

A) Assorting
B) Wholesaling
C) Bulk-breaking
D) Accumulating

Costco is a warehouse store that sells groceries, household items, and business products. Purchase quantities tend to be larger than in traditional stores that serve final consumers. For example, soft drinks are only sold in 24-can cases, not in 6-packs. Coffee is sold in 3-pound cans instead of one-pound foil packs. Which regrouping activity is Costco shifting to the consumer?

A) Accumulating.
B) Adjusting discrepancies.
C) Assorting.
D) Bulk-breaking.

_____ means separating products into grades and qualities desired by different target markets.A) B) C) D)

A) Bulk-breaking
B) Sorting
C) Accumulating
D) Assorting

A wine producer wants a supermarket manager to display its wines in a desirable end-of-aisle location, but the supermarket manager refuses to give that valuable real estate to this producer. This is an example of __________ conflict.

A) contractual
B) vertical
C) corporate
D) horizontal

10.

A local TV retailer hires knowledgeable salespeople to explain the differences among its models to customers, but a nearby discount store with very few sales staff sells the same TVs at a lower price. This is an example of __________ conflict.

A) horizontal
B) traditional
C) vertical
D) contractual

11.

Yukon Sportswear, a manufacturer of textile products, bought out the wholesaler that had been handling its distribution in Canada. This is an example of:

A) dual distribution.
B) reverse distribution.
C) a contractual channel system.
D) vertical integration.

12.

______________ means selling a product through only one wholesaler or retailer in a particular geographic area.

A) Exclusive distribution
B) Direct distribution
C) Intensive distribution
D) Multichannel distribution

13.

_____ means selling the right to use some process, trademark, patent, or other right for a fee or royalty.

A) Licensing
B) Management contracting
C) Joint venturing
D) Exporting

14.

Logistics, or physical distribution, is the ________________ part of the marketing mix.

A) Place
B) Production
C) Promotion
D) Product

15.

Physical distribution customer service level means all of the following EXCEPT:

A) Honda wants enough bumpers to build cars that day.
B) A vacationer wants Avis to have his rental car clean and ready when he arrives at the rental car counter.
C) Sears' shirts are priced at a fair value.
D) McDonald's has enough large cups so that customers can buy the larger size drinks which are on sale.

16.

The right physical distribution system should be based primarily on

A) the desired customer service level.
B) how customers store the product.
C) the physical characteristics of the product.
D) what is the lowest cost method of transportation for the product.

17.

The "total cost approach" to physical distribution management:

A) seeks to eliminate the storing function.
B) seeks to minimize the cost of transportation.
C) might suggest a high-cost transporting mode if storing costs could be reduced enough to lower total distribution costs.
D) ignores inventory carrying costs.

18.

Just-in-time (JIT) delivery:

A) Increases physical distribution costs for business customers.
B) Requires that a supplier be able to respond to the customer's production schedule.
C) Usually does not require e-commerce order systems and computer networks.
D) Means that deliveries are larger and less frequent.

19.

A _____ is the complete set of firms, facilities, and logistics activities that are involved in procuring materials, transforming them into intermediate or finished products, and distributing them to customers.

A) supply chain
B) physical distribution group
C) logistics partnership
D) just-in time group

20.

Which of the following products would have the lowest transporting costs as a percentage of the selling price?

A) Electronic equipment.
B) Chemicals and plastics.
C) Pharmaceuticals.
D) Sand and gravel.

21.

Which of the following statements about transporting by rail is True?

A) Rail transportation is the slowest mode of transportation.
B) Rail transportation is the least expensive mode of transportation.
C) Rail transportation is good for long-distance transportation of heavy, bulky items.
D) Railroads are most efficient at handling less-than-carload (LCL) shipments

22.

Regarding transporting by truck:

A) Trucks are best for moving large quantities of goods long distances.
B) Trucks are a very low cost mode of transportation.
C) Trucks are not reliable in meeting delivery schedules.
D) Trucks tend to provide fast delivery.

23.

Products that require a high frequency of scheduled shipments would be least suited to travel by

A) truck.
B) rail.
C) air.
D) water.

24.

In spite of high cost, high value, low-weight goods like high-fashion clothing and parts for the electronic industry are often shipped long distances by ____

A) rail.
B) water.
C) air.
D) pipeline.

25.

Air express companies place many small packages into specially designed cylinders that conform to the interior dimensions of a cargo airplane. This practice protects the smaller packages and helps to reduce distribution costs. The air express companies are practicing:

A) Containerization.
B) Piggybacking.
C) Freight forwarding.
D) Cylinderization.

26.

The railroad service which picks up truck trailers at a producer's location, loads them onto rail flatcars, hauls them close to the customer, and then delivers them to the buyer's door is:

A) truck service.
B) fast freight.
C) trailer service.
D) piggyback service.

27.

Inventory refers to

A) the amount of goods being stored.
B) minimizing storage costs.
C) the amount of goods being sold.
D) the marketing function of holding goods.

28.

When the manager of a local electronics store decides to offer its customers a gift-wrapping service for the holidays, this is a decision about:

A) Product
B) Place
C) Promotion
D) Price

29.

When the manager of a RadioShack electronics store decides to accept American Express credit cards from its customers, this is a decision about:

A) Product
B) Place
C) Promotion
D) Price

30.

Limited-line storesA) B) C) D)

A) specialize in certain lines of related products rather than a wide assortment.
B) carry anything they can sell in reasonable volume.
C) are a type of unconventional general store.
D) are larger stores that are organized into many separate departments and offer many product lines.

31.

Specialty shops generally:

A) want to be known for the distinctiveness of their product assortment and the special services they offer.
B) sell homogeneous shopping products.
C) are very good at speeding turnover.
D) carry complete lines--like department stores.

32.

The ____________ says that retailers should offer low prices to get faster turnover and greater sales volumes by appealing to larger markets.

A) Wheel of retailing theory
B) Production concept
C) Mass-merchandising concept
D) Sales concept

33.

A retail store that averages about $17 million in sales annually and specializes in groceries--with self-service and large assortments is a:

A) mass-merchandiser.
B) specialty shop.
C) convenience food store.
D) supermarket.

34.

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1. Marketing traditionally has been divided into a set of fourinterrelated decisions known as the marketing mix, or four Ps,including all of the following EXCEPT:
A. product
B. place
C. performance
D. promotion
E. price

2. Marketers want their firms to develop efficient operationsbecause this kind of efficiency:
A. usually leads to lower prices or greater pricingflexibility.
B. allows the firm to offer greater value to customers.
C. makes it easier to get the products customers want to them whenthey want them.
D. can lead to more attractive margins.
E. All of these

3. The Ethical Decision-Making Framework includes all of thefollowing steps EXCEPT:
A. identify issues.
B. promote the firm's corporate social responsibilityefforts.
C. gather information and identify stakeholders.
D. brainstorm and evaluate alternatives.
E. choose a course of action.

4. The centerpiece of the Marketing Environment Analysis Frameworkis:
A. green marketing.
B. corporate partners.
C. culture.
D. competitive intelligence.
E. consumers.

5. Most "big box" retailers regularly move products from one aisleto another. They also put personal care products in the pharmacyarea, many aisles away from the grocery products. They do thisbecause consumers who spend more time walking through the store arelikely to make:
A. impulse purchases.
B. limited problem solving decisions.
C. extended problem solving decisions.
D. ritual consumption purchases.
E. affective alternative decisions.

6. Edward, the leading salesperson for Harry's Honda dealership,began hearing customers asking for hybrid automobiles several yearsago. Edward alerted Harry, and Harry pre-ordered many Honda hybridsbefore they became available. In this case, the source of needrecognition was:
A. trade show demonstrations.
B. ads in trade journals.
C. customers.
D. the Internet.
E. suppliers.

7. One of the reasons marketers use loyalty segmentation is:
A. the high cost of finding new customers.
B. government tax incentives for loyalty.
C. accounting difficulties associated with identifying newcustomers.
D. rapid population increases.
E. the failure of micromarketing as a workable strategy.

8. Matt was passionate about Abercrombie & Fitch. It was theonly place he'd buy his clothes. If anyone asked him about clothes,he would talk for what seemed like hours about why he only shoppedthere. From a strictly marketing perspective, this word of mouth ispart of:
A. social insistence.
B. brand loyalty.
C. self-actualization.
D. motivation.
E. brand extension.

9. When Procter & Gamble added teeth whitening products underthe Crest brand, the firm was engaged in:
A. corporate branding.
B. brand extension.
C. brand licensing.
D. brand association.
E. perceived value branding.

10. By the time BMW and Mercedes Benz entered the mini-SUV market,there were many competitors, sales had peaked, and profits weredeclining. These firms entered the market during the ______________stage of the product life cycle.
A. introduction
B. leveling
C. maturity
D. growth
E. decline

11. By providing good customer service, firms __________ theirproducts or services.
A. eliminate the communication gap for
B. add value to
C. reduce the zone of tolerance for
D. reduce the empowerment cost associated with
E. increase the perishability of

12. Collecting information at the point of sale is astraightforward and inexpensive way to assess service quality, butthis approach will NOT be useful if:
A. customers cannot assess service quality, as in the case of oilchange or maintenance check.
B. decision-making managers do not get the results of thefeedback.
C. the person who rendered poor service is the same personcollecting the information.
D. customers are rushed and don't take the time to assess theservice.
E. All of these.

13. Ryan gave the manager of his convenience store a set ofbinoculars so she could see the gasoline prices charged by theother convenience store at that intersection. Ryan told the managerto always match the gasoline prices of the other store. Ryan isusing a _____________________ pricing strategy.
A. maximizing profits
B. target profit
C. target return
D. status quo
E. sales

14. At the break-even point:
A. costs are zero.
B. price is maximized.
C. profits are zero.
D. fixed costs are zero.
E. contribution per unit is zero.

15. For marketers to advertise a price as their ______________, theBetter Business Bureau recommends that at least 50 percent of thesales of a product occur at that price.
A. fixed price
B. zone price
C. regular price
D. leader price
E. cost-based price

16. Brenda is working on an automated re-ordering system which willelectronically re-order inventory for her shoe store as purchasesare made. Brenda is working on a supply chain management systemthat will:
A. provide products at the right time.
B. provide products at the right locations.
C. provide the right quantities.
D. minimize system-wide costs.
E. all of these.

17. A manufacturer of high-end products might consider sellingproducts in a warehouse club if:
A. there are no high-end shopping centers within a 100-mile radiusof the warehouse club.
B. the warehouse club has a good reputation.
C. the manufacturer is trying to increase market share.
D. the manufacturer overestimated demand or has a great deal ofreturned merchandise from other retailers.
E. the warehouse club wants to upgrade its image.

18. Because of the way _______________ buy merchandise, customerscan never be confident that the same merchandise will be in stockeach time they visit the store.
A. department stores
B. off-price retailers
C. discount stores
D. downstream value stores
E. category specialist stores

19. The basic goal of integrated marketing communications isto:
A. communicate the value proposition to the target market.
B. create desire.
C. manipulate consumers.
D. outspend competitors.
E. tell the world about your company.

20. The sender of an integrated marketing communication:
A. must work with the advertising specialists to ensure allrecipients interpret the message accurately.
B. can assess the manner in which receivers interpret the messagethrough gross rating points.
C. has little control over what meaning any individual receiverwill take from the message.
D. controls the meaning all receivers take from the message.
E. generally uses a rule-of-thumb interpretation index.

21. In the AIDA model:
A. advertising leads to interest, which hopefully leads to desireand then, action.
B. awareness leads to integration, which hopefully leads to desireand then, action.
C. awareness leads to interest, which hopefully leads to desire andthen, action.
D. awareness leads to interest, which hopefully leads to desire andthen, attention.
E. awareness leads to interest, which hopefully leads todetermination and then, action.

22. When Microsoft introduces a new version of its Windowsoperating system, it typically uses selected magazine, Internet,and direct mail advertising. This combination of advertisingoutlets represents Microsoft's:
A. niche buy.
B. advertising plan.
C. media mix.
D. track testing.
E. supply chain messaging.

23. _____________ advertising has the advantages of being highlytargeted and offering opportunities for personalization.
A. Television
B. Radio
C. Direct mail
D. Outdoor
E. Newspaper

24. In the United States, the regulation of advertising involves acomplex mix of laws and informal restrictions designed to:
A. protect consumers from deceptive practices.
B. stimulate domestic demand.
C. reduce international competition.
D. promote social marketing.
E. institutionalize pull strategies.

25. _________________ is a sales philosophy and process thatemphasizes a commitment to maintaining and investing in long-term,mutually beneficial business relationships.
A. Organizational buying
B. Cold calling
C. Psychographic selling
D. Relationship selling
E. Sales management

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