Unit 5 Study Guide

Which of the following is a benefit of channels of distribution:

• We can more easily obtain products from all over the world.
• Producers must spend more money.
• Retailers must spend more money.
• We spend more time looking for products we want.

Which of the following is an example of an industrial user:

• A parent buying a picture frame for his/her desk
• A hairstylist buying new scissors to perform haircuts
• A family buying a new home computer
• A teacher buying a book to read on vacation

What type of intermediary would purchase baseball bats from one producer, mitts from another, and balls from still another, and then sell an assortment to sporting goods stores?

• Agent
• Wholesaler
• Producer
• Retailer

Which of the following intermediaries never actually owns the products they promote and sell:

• Retailers
• Wholesalers
• Agents
• Industrial users

The use of intermediaries enables producers to make larger profits because intermediaries

• help to reduce the per-unit costs of goods.
• enable producers to use direct distribution.
• increase the number of retailer-to-producer contacts.
• may sell more than the producer could sell on its own.

Intermediaries buy large quantities of goods from producers and sell smaller quantities to other intermediaries or to consumers. The result is that intermediaries __________ their per-unit cost for goods.

• reduce
• increase
• control
• stabilize

Producers are able to match their production to the needs of consumers or industrial users because intermediaries:

• develop an assortment of goods.
• increase distribution costs.
• enable producers to promote goods.
• extend credit services to consumers.

An advantage for producers in using the producer-to-wholesaler-to-retailer-to-consumer distribution channel is that

• wholesalers do not take title to the goods.
• it enables them to control channel activities.
• wholesalers usually buy in large quantities.
• it enables them to reach large retailers directly.

What distribution channel is used for high-priced industrial goods when the producer does not have its own sale force?

• Producer to agent to user
• Producer to industrial distributor to user
• Producer to industrial user
• Producer to agent to industrial distributor to user

Which of the following services would be distributed by a producer-to-agent-to-consumer channel:

• Health care
• Vehicle repair
• Income tax preparation
• Travel planning