question

Marketing intermediaries (middlemen)

answer

Organizations that assist in moving goods and services from producers to businesses (B2B) and from businesses to consumers (B2C).

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Channel of distribution

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A whole set of marketing intermediaries, such as agents, brokers, wholesalers, and retailers, that join together to transport and store goods in their path (or channel) from producers to consumers.

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Agents/brokers

answer

Marketing intermediaries who bring buyers and sellers together and assist in negotiating an exchange but don't take title to the goods.

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Wholesaler

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A marketing intermediary that sells to other organizations.

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Retailer

answer

An organization that sells to ultimate consumers.

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Utility

answer

In economics, the want satisfying ability, or value, that organizations add to goods and services.

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Time utility

answer

Adding value to products by making them available when they're needed.

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Place utility

answer

Adding value to products by having them where people want them.

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Possession utility

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Doing whatever is necessary to transfer ownership from one party to another, including providing credit, delivery, installation, guarantees, and follow up service.

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Information utility

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Adding value to products by opening two-way flows of information between marketing participants.

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Service utility

answer

Adding value by providing fast, friendly service during and after the sale and by teaching customers how to best use products over time.

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Merchant wholesalers

answer

Independently owned firms that take title to the goods they handle.

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Rack jobbers

answer

Wholesalers that furnish racks or shelves full of merchandise to retailers, display products, and sell on consignment.

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Cash-and-carry wholesalers

answer

Wholesalers that serve mostly smaller retailers with a limited assortment of products.

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Drop shippers

answer

Wholesalers that solicit orders from retailers and other wholesalers and have the merchandise shipped directly from a producer to a buyer.

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Intensive distribution

answer

Distribution that puts products into as many retail outlets as possible.

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Selective distribution

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Distribution that sends products to only a preferred group of retailers in an area.

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Exclusive distribution

answer

Distribution that sends products to only one retail outlet in a given geographic area.

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Electronic retailing

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Selling goods and services to ultimate customers (e.g., you and me) over the internet.

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Telemarketing

answer

The sale of goods and services by telephone.

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Direct selling

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Selling to consumers in their homes or where they work.

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Direct marketing

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Any activity that directly links manufacturers or intermediaries with the ultimate consumer.

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Corporate distribution system

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A distribution system in which all of the organizations in the channel of distribution are owned by one firm.

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Contractual distribution system

answer

A distribution system in which members are bound to cooperate through contractual agreements.

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Administered distribution system

answer

A distribution system in which producer's manage all of the marketing functions at the retail level.

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Supply chain (value chain)

answer

The sequence of linked activities that must be performed by various organizations to move goods from the sources of raw materials to ultimate consumers.

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Supply-chain management

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The process of managing the movement of raw materials, parts, work in progress, finished goods, and related information through all the organizations involved in the supply chain; managing the return of such goods, if necessary; and recycling materials when appropriate.

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Logistics

answer

The marketing activity that involves planning, implementing, and controlling the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet customer requirements at a point.

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Inbound logistics

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The area of logistics that involves bringing raw materials, packaging, other goods and services, and information from suppliers to producers.

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Materials handling

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The movement of goods within a warehouse, from warehouse to the factory floor, and from the factory floor to various workstations.

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Outbound logistics

answer

The area of logistics that involves managing the flow of finished products and information to businesses buyers and ultimate consumers (people like you and me)

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Reverse logistics

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The area of logistics that involves brining goods back to the manufacturer because of defects or for recycling materials.

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Freight forwarder

answer

An organization that puts many small shipments together to create a single large shipment that can be transported cost-effectively to the final destination.

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Intermodal shipping

answer

The use of multiple modes of transportation to complete a single long-distance movement of freight.

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Channels of distribution help ensure:

answer

communication flows and the flow of money and title to goods.

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Why do we need marketing intermediaries?

answer

Intermediaries perform certain marketing tasks- such as transporting, storing, selling, advertising, and relationship building- faster and more cheaply than most manufacturers could.

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Describe how marketing intermediaries create exchange efficiency in the distribution system.

answer

Marketing intermediaries create exchange efficiency in the distribution system by reducing the number of transactions necessary to get the product to the buyer. Marketing intermediaries are perform these functions faster and more cheaply than a manufacturer could.

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Discuss the "value versus the cost" of intermediaries. In other words, is it cheaper to avoid intermediaries?

answer

Some people believe that if they could get rid of the intermediary they could reduce the cost of what they buy. However, if we got rid of a retailer, for example, we may be able to buy a product for a little less but we would still have to drive further and spend more time looking for the product. The value of intermediaries is that they make products available to us at times and places that are convenient for us. That often outweighs the cost they add to the product.

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What are three basic points to remember about middlemen?

answer

1. Marketing intermediaries can be eliminated, but their activities can't 2. Intermediary organizations have survived because they perform marketing functions faster and more cheaply than others can. 3. Intermediaries add costs to products, but these costs are usually more than offset by the values they create.

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List six utilities created by intermediaries.

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1. Form utility 2. Time utility 3. Place utility 4. Possession utility 5. Information utility 6. Service utility

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What kind of organization creates form utility? How is it created?

answer

Traditionally, producers rather than intermediaries have provided form utility by changing raw materials into useful products. Retailers and other marketers sometimes provide form utility as well.

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How does an intermediary add: -time utility -place utility -possession utility -information utility -service utility

answer

Time utility- intermediaries, such as retailers, add time utility to products by making them available when consumers need them. Intermediaries add place utility to products by placing them where people want them Intermediaries add possession utility by doing whatever is necessary to transfer ownership from one party to another; including providing credit. Intermediaries add information utility by opening two-way flows of information between marketing participants. Intermediaries add service utility by providing fast, friendly service during and after the sale and by teaching customers how to best use products over time.

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Which of the utilities is becoming the most important utility for retailers? Why?

answer

Service utility is rapidly becoming the most important utility for many retailers, because without it they would lose business to direct marketing.

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What is the difference between a "retail sale" and a "wholesale sale"?

answer

A retail sale is the sale of goods and services to consumers for their own use. A wholesale sale is the sale of goods and services to businesses and institutions, like schools or hospitals, for use in the business, or to wholesalers or retailers for resale.

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Distinguish between these merchant wholesalers: a. full-service wholesalers: b. limited-function wholesalers:

answer

a. Full-service wholesalers perform all the distribution functions b. Limited-service wholesalers perform only selected functions, but try to do them especially well.

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Identify the functions a full service wholesaler will perform: (8)

answer

1. provide a sales force to sell the goods to retailers and other buyers 2. communicate manufacturers' advertising deals and plans 3. Maintain inventory, thus reducing the level of the inventory suppliers have to carry 4. Arrange or undertake transportation 5. Provide capital by paying cash or quick payments for goods 6. Provide suppliers with market information they can't afford or can't obtain themselves 7. Undertake credit risk by granting credit to customers and absorbing any bad debts, thus relieving the supplier of this burden 8. Assume the risk for the product by taking title

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Three types of limited service wholesalers are:

answer

1. Rack jobbers 2. Cash-and-carry wholesalers 3. Drop shippers

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Describe how rack jobbers operate.

answer

Rack jobbers furnish rack or shelves full of merchandise, like music, toys, etc. They display the products and sell them on consignment, meaning they keep title to the goods until they're sold and then share the profits with the retailer.

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How does a cash and carry wholesaler function?

answer

Traditionally, retailers went to such wholesalers, paid cash, and carried the goods back to their stores- thus the term cash-and-carry.

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How does a drop shipper operate?

answer

They own the merchandise but don't handle, stock, or deliver it. That's done by the producer.

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How are agents and brokers different from merchant wholesalers?

answer

Agents and brokers bring buyers and sellers together and assist in negotiating an exchange. However, unlike merchant wholesalers, agents and brokers never own the products they distribute. Usually they do not carry inventory, provide credit, or assume risk. While merchant wholesalers earn a profit from the sale of goods, agents and brokers earn commissions or fees based on a percentage of the sales revenues.

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What is the difference between and agent and a broker?

answer

Agents maintain long-term relationships with the people they represent, whereas brokers are usually hired on a temporary basis. Brokers have no continuous relationship with the buyer or seller. Once they negotiate a contract between the parties, their relationship ends.

question

Describe the difference between manufacturer's agents and sales agents.

answer

Manufacturer's agents may represent several manufacturers in a specific territory. They often work in the automotive supply, footwear, and fabricated steel industries. Sales agents represent a single producer in a typically larger territory.

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Describe the role of a broker.

answer

Brokers have no continuous relationship with the buyer or seller. Once they negotiate a contract between the parties, their relationship ends.

question

Distinguish between the various types of retailers.

answer

The various types of retailers are: a. Department stores - sell a wide variety of products in separate departments b. Discount stores - sell many different products at prices below department stores c. Supermarkets - sell mostly food with other nonfood items like paper products d. Warehouse clubs - sell food and general merchandise in very large facilities; may require membership e. Convenience stores - sell food and other often needed items at convenient locations f. Category killers - sell a huge variety of one type of product; dominates a category of goods g. Outlet stores - sell general merchandise directly from the manufacturer at a discount h. Specialty stores - sell a wide selection of goods in one category

question

Describe the three retail distribution strategies: a. Intensive distribution: b. Selective distribution: c. Exclusive distribution:

answer

a. Intensive distribution: puts products into as many retail outlets as possible, including vending machines. convenience goods, candy, cigarettes, gum, and popular magazines b. Selective distribution: uses only a preferred group of the available retailers in an area. This selection helps ensure producers of quality sales and service. Appliances, furniture, and clothing. c. Exclusive distribution: is the use of only one retail outlet in a given geographic area. Retailer has exclusive rights to sell the product and is therefore likely to carry a large inventory, give exceptional service, and pay more attention to this brand than to others. Luxury auto manufacturers, producers or specialty goods.

question

What are six types of non-store retailing?

answer

1. Internet retailing 2. Telemarketing 3. Vending machines 4. Kiosks 5. Carts 6. Direct selling; multilevel marketing; direct marketing

question

The distribution strategy that places the product in as many retail outlet stores as possible is:

answer

Intensive

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Marketing....... assist in moving goods and services in either B2B or B2C channels of distribution.

answer

Intermediaries

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Materials handling the movement of goods:

answer

1. From warehouse to factory floor 2. To workstations in the factory 3. Within a warehouse

question

Forms of marketing utility:

answer

Form Utility: Assembling a computer from components Time Utility: Internet websites Place Utility: Gas stations Possession Utility: 48-month auto loans Service Utility: Software updates

question

Toys'R'Us and Office Depot are examples of the type of retailer known as:

answer

Category killer

question

The retail distribution strategy that sends products to only one retail outlet in a geographic area is:

answer

Exclusive

question

The type of utility that provides fast, friendly services during and after during and after the sale as well as teaching customers to use products over time is.

answer

Service utility

question

A department store is a retailer that sells:

answer

A wide variety of goods such as furniture, clothing, and housewares in separate departments.

question

A wholesalers sells to:

answer

1. retailers 2. hospitals 3. producers of goods and services

question

A person responsible for brining raw material, packaging, and other goods and services, and information from suppliers to producers is working in the field of ...... logistics.

answer

Inbound

question

A store that sells a wide selection of goods in one category is:

answer

Specialty store`

question

The activity that controls the planning, implementing, and controlling of the physical flow of materials and information from points of origin to points of consumption to meet customer requirements at a profit is:

answer

Logistics

question

When a firm is independently owned and and takes title of the goods they handle, they are said to be .... wholesalers.

answer

Merchant

question

The benefits of using a selective distribution strategy include:

answer

1. Ensuring producers of quality service for customers 2. Ensuring producers of a quality sales force

question

Direct Marketing: Direct Selling: Vending machines, kiosks, or carts: Telemarketing: Electronic retailing:

answer

-Direct Marketing:Selling activity that directly links intermediaries with the end consumer as in direct mail -Direct Selling: Selling to customers in their home or where they work -Vending machines, kiosks, or carts: Goods and services located where consumers want convenience items without the overhead of having a store -Telemarketing: Sale of goods or services by telephone -Electronic retailing: Selling goods and services over the Internet

question

A firms whose main purpose is to sell to other businesses, manufacturers, hospitals, who then resell the products or use them in a product or service that is resold is called a(n):

answer

Wholesaler

question

An organization that puts many small shipments together for different companies to create a large, cost-effective shipment is a(n):

answer

Freight forwarder

question

What is the type of utility added by marketing intermediaries who get products to a location where people want them?

answer

Place

question

Which form of logistics is being used when a customer sends a product back to the manufacturer because of defects or to have it recycled?

answer

Reverse Logistics

question

Organizations that assist in moving goods goods and services from producers to businesses (B2B) and from businesses to consumers (B2C) are called:

answer

1. Marketing intermediaries 2. Middlemen

question

Catalog sales and online sales are activities of.... marketing because they link ultimate consumers to manufacturers.

answer

Direct

question

The type of nonstore marketing that uses personal sales at parties to reach people at home or work is:

answer

Direct selling

question

A retailer that sells goods directly from the manufacturer at a discount, although some goods may be flawed, is a(n):

answer

Outlet store

question

The two-way flow of communication between marketing participants is called ...... utility.

answer

Information utility

question

A channel of distribution ensures what?

answer

1. Flow of money and title to goods 2. Correct assortment and quantities available as needed 3. Flow of communication throughout the channel

question

Rack Jobbers: Cash-and-carry: Drop shippers:

answer

Rack jobbers: Furnish shelves full of merchandise and set up displays Cash-can-carry: Offer limited assortments to retailers to be paid for at the time of purchase Drop shippers: Arrange shipment directly from producers to buyers

question

When something has the ability to satisfy a want, ability, or value to goods or services it is said to have:

answer

Utility

question

The set of marketing intermediaries such as agents, brokers, wholesalers, transportation companies, and retailers who together move goods from producers to to consumers to for a path is called a(n):

answer

Channel of distribution

question

Materials handling is the movement of goods:

answer

1. Within a warehouse 2. From warehouse to factory floor 3. To workstations in the factory

question

Selling goods and services to ultimate consumers over the Internet is known as .... retailing.

answer

Electronic

question

A discount store is one that sells:

answer

A wide variety of products at prices lower than department stores

question

Which form of utility is concerned with transferring ownership of a product or service from one party to another?

answer

Possession

question

An agent or broker:

answer

Brings sellers and buyers together

question

A warehouse club is a retailer that sells:

answer

Food and general merchandise and may require payment of membership fee to shop there.

question

A firm that solicits orders from retailers and other wholesalers and then arranges to have the merchandise shipped directly from the producer to the buyer is likely a(n):

answer

Drop shipper

question

Marketing intermediaries can be eliminated but their functions cannot because:

answer

1. title has to be transferred from producers to consumers 2. Functions such as assortment and transportation are still needed 3. the functions can be shifted elsewhere in the channel of distribution

question

What is the type of nonstore marketing that uses toll-free numbers to supplement online or catalog sales?

answer

Telemarkeing

question

The area of logistics that manages the flow of finished products and information to business buyers and ultimate consumers is:

answer

Outbound

question

The organizations that perform the functions needed to move goods and services between producers and those who us the products and services are called:

answer

1. Marketing intermediaries 2. Middlemen

question

A..... sells mostly food and and other nonfood products such as cleaning supplies and paper products without requiring a membership fee.

answer

Supermarket

question

The retail distribution strategy that sends products to only a few preferred retailers in an area is:

answer

selective

question

The marketing intermediary who sells to ultimate consumers is a(n):

answer

retailer

question

The wholesalers who serve mostly small retailers by offering a limited assortment of products are:

answer

Cash-and-carry wholesalers

question

A.... store is one that sells food and other frequently needed items at convenient locations and may be open all night.

answer

Convenience

question

When products are available when they are needed they are said to have.... utility.

answer

Time

question

Intensive distribution: Selective distribution: Exclusive distribution:

answer

Intensive distribution: Candy and gum Selective distribution: Furniture such as a sofa Exclusive distribution: Luxury autos

question

An advantage of participation in multilevel marketing for those who do the selling is:

answer

Low cost of entry

question

Wholesalers who perform only a few functions but do them especially well are:

answer

Limited-function wholesalers

question

An establishment that sells general merchandise and food in large facilities that may require a membership fee to shop there is called a(n):

answer

Warehouse club

question

A marketing activity such as telemarketing or catalogs that directly link the manufacturer or intermediaries with the ultimate consumer is:

answer

Direct marketing

question

What are marketing intermediaries called who sell to ultimate consumers?

answer

Retailers

question

The want satisfying ability, or value that organizations add to goods or services is:

answer

Utility

question

When marketers send products to only a few preferred retailers they are using a(n)...... distribution strategy.

answer

Selective

question

The distribution strategy that send products to only one retail outlet in a given geographic area is:

answer

Exclusive distribution

question

Marketing intermediaries create value in the channel of distribution by:

answer

1. Creating convenience of time and place 2. Performing marketing functions more quickly and cheaply 3. Reducing the number of exchanges needed

question

A department store is a retailer that sells:

answer

A wide variety of goods such as furniture, clothing, and housewares in separate departments.

question

Wholesalers who serve mostly smaller businesses who come in to pick up a few items, pay for them, and take them with them are know as ..... and....... wholesalers

answer

Cash-and-carry

question

The type of retailer that sells a huge variety of one type of product to dominate one type of good is a:

answer

Category killer

question

Agents, brokers, wholesalers, transportation companies, and retailers who move together move goods from producers to consumers form a path called a .... of .....

answer

Channel of distribution

question

A wholesalers who solicits orders from retailers and other wholesalers and then arranges to have the merchandise shipped directly from the producer to the buyer is a(n):

answer

Drop shipper

question

Which form of utility is added by marketing intermediaries who make products available when they are needed?

answer

Time

question

A marketing intermediary that sells to producers, institutions, or businesses is a(n):

answer

Wholesaler

question

Which type of utility provides fast, friendly assistance during and after a sale, as well as offering training in product usage over time?

answer

Service

question

Drop shippers typically handle products such as:

answer

- Coal - Lumber

question

A reason why marketing intermediaries such as transport companies and wholesalers have survived is that they:

answer

Add enough value to products to outweigh the added costs

question

Retail organizations in the United States are one of the major employers of:

answer

Marketing graduates

question

A firm that purchases goods from a manufacturer and sells those goods or products is considered a(n):

answer

retailer

question

Electronic retailing has changed the way consumers shop by:

answer

1. Offering shop from home convenience 2. Providing 24/7 access to information 3. Offering more information and choices

question

Using personal sales at parties to reach people at home or work is known as..... selling

answer

Direct

question

A brick-and-click store

answer

Is an existing retail store that adds online outlets

question

The marketing intermediaries who bring buyers and sellers together and help negotiate sales but do not take title to the goods are:

answer

agents and brokers

question

What is the type of organization that sells to other businesses, manufacturers, and hospitals who then resell the product or use it in a product or service that is resold?

answer

Wholesalers

question

Transporting an automobile manufactured in Japan by truck to a dock, then by boat to the United States and then by railroad and truck to an inland city in the United States would require.... shipping.

answer

Intermodal

question

Problems associated with electronic retailing have included:

answer

- Having sufficient inventory to meet demand - Responsiveness to complaints

question

Railroads are the best way to ship bulky items such as commodities, autos, and heavy equipment because, compared to other forms of transportations, railroads:

answer

- Are able to handle large quantities - Are high in flexibility of handling products - Reach many locations

question

The distribution channel created when independent contractors are recruited by upliners and then recruit downliners, all of whom receive commission, is called:

answer

Multilevel marketing

question

The marketing intermediaries who take title to the goods they handle but offer only some of the services of merchant wholesalers are:

answer

Limited-function wholesalers

question

A brick-and-click store is a traditional retail store that has added .... outlets

answer

online

question

Which is the second largest surface transportation mode because of their ability to deliver to more locations?

answer

Vans and trucks

question

Agents and brokers add value in marketing transaction by bringing buyers and sellers .... and by helping with ....

answer

together and negotiations

question

Combining multiple modes of transportation to complete a single long-distance movement of freight is known as:

answer

intermodal shipping

BUSN 101 CH.15 Distributing Products – Flashcards

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