Exam 14: Marketing Channels and Supply-Chain Management

Pipelines are not one of the major transportation modes for moving goods between cities in the United States.

Marketing channels create several types of utility including time, place, possession, and form.

Manufacturers of convenience products such as chewing gum reach customers through thousands of retailers. What marketing channel are these manufacturers most likely to use?

Intensive distribution is appropriate for shopping products.

Eric is concerned about not having enough air conditioning units in inventory during June, July, and August so he keeps extra inventory to guard against stockouts during this critical period. Eric is keeping

Inventory decisions seldom have a strong impact on physical distribution costs and on the level of customer service provided.

A discount house can store and transport merchandise that is purchased directly from the producer, thus eliminating the need for a wholesaler. This is an example of vertical channel integration.

In a simple economy of five producers and five consumers, there would be ____ transactions possible without an intermediary and ____ transactions possible with one intermediary.

The overall safety stock, or inventory needed to prevent a stockout, depends on the general level of prices.

Refusal-to-deal arrangements involve a manufacturer that forbids an intermediary to carry products of competing manufacturers.

Scenario 14.2 Use the following to answer the questions.Star Supplies, Inc. manufactures commercial-grade floor cleaners, such as vacuums and floor polishers. The firm has recently begun manufacturing other janitorial-related product lines, such as paper products and chemical cleaners. Star Supplies distributes its products in two ways. It sells its vacuum, floor polisher, and janitorial supply products to an independent business that takes title to the products and then sells them to various small businesses throughout the region. Also, Star has a list of large businesses that it distributes to directly, on an as-needed basis. These businesses keep very little inventory and purchase janitorial supplies in small quantities. Recently, Star has decided to add two new service product lines-paper shredding and a uniform rental service. Clint Rodriguez, the marketing manager, is conducting a meeting to discuss the ways in which Star can strategically manage these new businesses. Star has the choice of marketing the paper shredding service to their large business clients, by picking up the paper as they drop off the other janitorial supplies, or they can buy a small paper shredding business and market to both large and small business customers. With regard to the uniform rental service, Star can either pick up and deliver the uniforms to the small businesses themselves, or contract that out to a third party -Refer to Scenario 14.2. When Clint suggested that Star consider purchasing a paper shredding business and then offer the service to its large and small business customers, he was suggesting a method called ____, where Star would be the ____.

Vertical channel integration

Anya, sales manager for Pacific Lumber, tells Ricardo, the firm's inventory manager, that the firm's failure to have adequate supplies of pressure-treated lumber on hand has cost the firm $175,000 in lost sales. This figure represents which of the following inventory management costs?

When Amazon.com introduced its Kindle FireHD, it was available through Amazon.com, Staples office supplies store, and a few other retailers. The Kindle FireHD was most likely distributed through the _____ of distribution.

Rob Stevens is the head of a company that produces computer software for production scheduling. The firm is small and presently does not generate enough volume to justify hiring a sales force. The firm is probably using ____ to maintain contact with the firms using its products.

Scenario 14.1 Use the following to answer the questions.Liz Claiborne, Inc. markets several different brands, under their own Claiborne name label, as well as others. Their primary brands, such as Liz Claiborne, Liz & Co, and DKNY, are sold to wholesalers. These brands are then available through retail department stores such as Kohl's and Macy's. Their wholesale-based brands division is positioned as customer-focused and cost-efficient. Their premium brands division includes labels such as Kate Spade, Juicy Couture, and Mexx. These premium brands are sold through stores that the Claiborne company owns. -Refer to Scenario 14.1. Liz Claiborne, Inc. uses which type of channel of distribution for its premium brands?

The driving force behind marketing channel decisions should be

The main objectives of physical distribution are decreasing costs while increasing customer service.

Convenience products usually are distributed intensively because sales of these products tend to have a direct relationship to availability.

The reorder point can be calculated by multiplying the usage rate by the order lead time and then adding in the number of safety stock.