Chapter 11

Question 1

Physical Distribution

Answer 1

Activities that move finished goods from manufacturers to final customers, including order processing, warehousing, materials handling, transportation, and inventory control

Question 2

Direct Channel

Answer 2

A channel of distribution in which a manufacturer of a product or creator of a service distributes directly to the end customer

Question 3

Channel Intermediaries

Answer 3

Firms or individuals such as wholesalers, agents, brokers, or retailers who help move a product from the producer to the consumer or business user; “Middlemen”

Question 4

Breaking Bulk

Answer 4

Dividing larger quantities of goods into smaller lots in order to meet the needs of buyers

Question 5

Create Assortments

Answer 5

To provide a variety of products in one location to meet the needs of buyers

Question 6

Transportation and Storage

Answer 6

Occurs when retailers and other channel members move the goods from the production point to other locations where they can hold them until consumers want them

Question 7

Facilitating Functions

Answer 7

Functions of channel intermediaries that make the purchase process easier for customers and manufacturers

Question 8

Risk Taking Function

Answer 8

The chance retailers take on the loss of a product when they buy a product from a manufacturer because the product sits on the shelf because no customers want it

Question 9

Communication & Transaction Functions

Answer 9

Happens when channel members develop and execute both promotional and other types of communication among members of the channel

Question 10

Disintermediation

Answer 10

The elimination of some layers of the channel of distribution to cut costs and improve the efficiency of the channel

Question 11

Wholesaling Intermediaries

Answer 11

Firms that handle the flow of products from the manufacturer to the retailer or business user

Question 12

Independent Intermediaries

Answer 12

Channel intermediaries that are not controlled by any manufacturer but instead do business with many different manufacturers and many different customers

Question 13

Merchant Wholesalers

Answer 13

Intermediaries that buy goods from manufacturers (take title to them) and sell to retailers and other B2B customers

Question 14

Take Title

Answer 14

To accept legal ownership of a product and assume the accompanying rights and responsibilities of ownership

Question 15

Limited Service Merchant Wholesalers

Answer 15

Wholesalers that provide fewer services for their customers

Question 16

Merchandise Agents/Brokers

Answer 16

Channel intermediaries that provide services in exchange for commissions but never take title to the product

Question 17

Channel Levels

Answer 17

The number of distinct categories of intermediaries that make up a channel of distribution

Question 18

Distribution Intensity

Answer 18

The number of intermediaries at each level of the channel

Question 19

Conventional Marketing System

Answer 19

A multiple-level distribution channel in which channel members work independently of one another

Question 20

Vertical Marketing System

Answer 20

A channel of distribution in which there is formal cooperation among members at the manufacturing, wholesaling, and retailing levels

Question 21

Corporate VMS

Answer 21

A vertical marketing system in which a single firm owns manufacturing, wholesaling, and retailing operations

Question 22

Contractual VMS

Answer 22

A vertical marketing system in which cooperation is enforced by contracts (legal agreements) that spell out each member’s rights and responsibilities and how they will cooperate

Question 23

Retailers Cooperative

Answer 23

A group of retailers that establishes a wholesaling operation to help them compete more effectively with the large chains

Question 24

Franchise Organizations

Answer 24

A contractual vertical marketing system that includes a franchiser (a manufacturer or a service provider) who allows an entrepreneur (the franchisee) to use the franchise name and marketing plan for a fee

Question 25

Horizontal Marketing Systems

Answer 25

An arrangement within a channel of distribution in which two or more firms at the same channel level work together for a common purpose

Question 26

Intensive Distribution

Answer 26

Selling a product through all suitable wholesalers or retailers that are willing to stock and sell the product

Question 27

Selective Distribution

Answer 27

Distribution using fewer outlets than intensive distribution but more than exclusive distribution

Question 28

Channel Conflict

Answer 28

Incompatible goals, poor communication, and disagreement over roles, responsibilities, and functions among firms at different levels of the same distribution channel that may threaten a manufacturer’s distribution strategy

Question 29

Logistics

Answer 29

The process of designing, managing, and improving the movement of products through the supply chain. Logistics includes purchasing, manufacturing, storage, and transport

Question 30

Reverse Logistics

Answer 30

Includes product returns, recycling and material reuse, and waste disposal

Question 31

Order Processing

Answer 31

The series of activities that occurs between the time an order comes into the organization and the time a product goes out the door

Question 32

Warehousing

Answer 32

Storing goods in anticipation of sale or transfer to another member of the channel of distribution

Question 33

Distribution Center

Answer 33

A warehouse that stores goods for short periods of time and that provides other functions, such as breaking bulk

Question 34

Materials Handling

Answer 34

The moving of products into, within, and out of warehouses

Question 35

Transportation

Answer 35

The mode by which products move among channel members

Question 36

Inventory Control

Answer 36

Activities to ensure that goods are always available to meet customers’ demands

Question 37

Radio Frequency Identification (RFID)

Answer 37

Product tags with tiny chips containing information about the item’s content, origin, and destination

Question 38

Stock-Outs

Answer 38

Zero-inventory situations resulting in lost sales and customer dissatisfaction

Question 39

Just In Time (JIT)

Answer 39

Inventory management and purchasing processes that manufacturers and resellers use to reduce inventory to very low levels and ensure that deliveries from suppliers arrive only when needed

Question 40

Supply Chain

Answer 40

All the activities necessary to turn raw materials into a good or service and put it in the hands of the consumer or business customer

Question 41

Supply Chain Management

Answer 41

The management of flows among firms in the supply chain to maximize total profitability