Certification Test Study Guide 2

Front

What is the channel of distribution for the wood products sold by Loggins Forestry and Mill Company to Henderson Wood Products and then to Franklin Construction Company?

Back

Producer to industrial distributor to industrial user

Answer explanation

In the example, Loggins is the producer because it grows the trees and mills the timber into usable units. Henderson is the industrial distributor (wholesaler) because it sells smaller amounts of the wood products to users such as the Franklin Construction Company. Franklin uses the wood products to build homes and office buildings. Homes and buildings are sold to the ultimate consumers. Agents are businesses or individuals who assist in the sale and/or promotion of products but do not buy them from the producer. Retailers purchase finished goods to resell to the consumer.

Front

What is one of the advantages to businesses of using electronic data processing and computerized inventory systems in the distribution function?

Back

saves time

Answer explanation

The advantage of using new technology in the distribution function is that it saves time. The use of computerized inventory systems allows businesses to keep track of exactly how much inventory is in stock at any one time, and the use of electronic data processing allows businesses to place orders electronically, which shortens the order cycles. The new technology allows businesses to communicate instantly, place orders when needed, and receive the goods quickly. This reduces the amount of inventory they need to carry because they can quickly obtain whatever they need. The technology also helps increase turnover by identifying excess inventory that should be marked down in order to sell. Increased overhead would be a disadvantage to businesses.

Front

Distribution channel members that behave in an ethical, socially responsible manner often work together to protect the environment by reducing energy consumption and decreasing

Back

excessive packaging

Answer explanation

Social responsibility is the duty of businesses to contribute to the well-being of society. Being socially responsible is behaving in an ethical manner. Protecting the environment is one way to exhibit social responsibility. When channel members work together to reduce the energy (e.g., fuel) and packaging (e.g., plastic wrapping) they use to move products through the distribution system, they are being ethical and socially responsible. They are also being ethical when they recycle, communicate eco-friendly messages, and compost waste materials, which are activities that help the environment.

Front

Why is it important for a business to coordinate distribution with its promotional activities?

Back

to guarantee a sufficient supply of advertised items

Answer explanation

Businesses coordinate distribution with their promotional activities in order to make sure that sufficient quantities of items are available when they are advertised. If a business plans to promote a certain item or offer it at a special price, the business must make sure that an adequate supply will be on hand to meet consumer demand. Businesses may lose customers if they advertise items that are not available because they failed to make the necessary distribution plans. Businesses do not coordinate distribution with promotional activities in order to charge higher prices for delivery service, arrange the most economical method of transportation, or establish a relationship with one intermediary.

Front

One way that a manufacturer can foster positive relationships with its channel members is by

Back

providing training programs

Answer explanation

Positive channel relationships require collaboration among channel members. Collaboration involves sharing relevant information, setting mutually beneficial goals, and developing a team-oriented attitude. Channel leaders have the most power or leverage in the channel, and can implement tactics to foster positive relationships. Providing channel members with product training programs helps channel members be successful in selling the products. Encouraging a competitive culture among channel members, using aggressive tactics, and selling directly to end users are more likely to create conflict and have a negative impact on channel relationships.

Front

A large corporation wants to gather information on its biggest competitor's product development plans. Should the corporation advertise and hold interviews for nonexistent jobs in order to get information from the competitor's employees?

Back

No, this strategy for gathering information is unethical

Answer explanation

It is unethical to advertise and interview for jobs that do not exist in order to get information from a competitor's employees. The competitor's employees may indeed have useful information and may be willing to share it in order to secure a job, but this method of gathering information is neither fair nor ethical.

Front

Why do some businesses' servers place a "cookie" on a visitor's hard drive when the visitor accesses the business's website?

Back

to track usage

Answer explanation

Some businesses' servers place information, a "cookie," on a visitor's hard drive when the visitor accesses the business's website. The next time a user visits that site, the site's computer recognizes the user because of the cookie. Businesses use cookies to maintain visitor information and track how many times a user visits a specific website or buys a product. This type of data allows businesses to customize websites in order to appeal to the preferences and habits of the consumers who are visiting their sites. The use of cookies does not ensure privacy, protect data, or eliminate theft.

Front

Which of the following is an example of an experimental study: reviewing customer diaries, test marketing a product, conducting a focus group, analyzing computer cookies

Back

test marketing a product

Answer explanation

Test marketing, which is the process of introducing a new product to a limited market to determine what its acceptance will be, is an example of an experimental study. Experiment is a research method that tests cause-and-effect relationships. Researchers use customer diaries and computer cookies to track customers' actions. Therefore, they are forms of observation. A focus group is a special kind of face-to-face interview that involves a group of individuals who are brought together to discuss a specific topic. Because they are face-to-face interviews, they fall into the survey method of data collection.

Front

Businesses must be careful when using external sources to obtain marketing-research information because the methods used to collect the data may be

Back

unreliable

Answer explanation

Marketers often use external sources (e.g., independent research agencies and news articles) to obtain information for marketing-research purposes. External sources provide marketers with secondary information, which is data collected for purposes other than the issue at hand. Because the business may not know exactly how the data were collected or analyzed, the business may not know if or how many errors occurred during the research process. If errors occurred during the research process, the information may be unreliable. Marketing researchers may collect secondary information in inflexible, intuitive, or unintentional ways, but it must be reliable to be useful to the business.

Front

"What are some unfulfilled needs in our target market?" is an example of a

Back

discovery-oriented decision problem

Answer explanation

"What are some unfulfilled needs in our target market?" is an example of a discovery-oriented decision problem. These problems ask "what?" or "why?" Strategy-oriented decision problems ask "how?" or "which?" A unit of analysis is the entity or element that is being studied in market research (e.g., individual, household, etc.). Relevant variables are the types of information studied in a marketing research project (e.g., brand awareness, customer satisfaction, etc.).