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Exam 15: Distributing Products

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Question 81

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Marketing costs make up less than 25 percent of the total cost of the goods consumers buy.

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Question 82

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Wholesalers are marketing intermediaries who sell goods or services to ultimate consumers.

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Question 83

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Materials handling is that part of logistics that deals with moving goods within the warehouse,from the warehouse to the production floor,and to various work stations along the production process.

Mini-Case "We've got a number of important issues to discuss today," began Dee Stribyute as she opened the weekly marketing manager's meeting for Lite Bite Foods.Lite Bite is a producer of low fat,low calorie snack foods.The other managers attending the meeting were her two top assistants,Mark Etter and Rhea Taylor. "First,sales were hurt last year when we had to recall our almond chocolate bars because of concerns about contaminated ingredients.We've got our work cut out for us to recover from that setback.Many stores quit carrying our products,and even the ones that continued to do so put less emphasis on displaying and promoting them.We've got to get our products into as many stores as possible.Consumers shouldn't have to go all over town trying to find our snacks.We also need to make sure that our products are displayed and promoted in a way that attracts attention." Dee looked at her assistants,and saw that they seemed ready to make some proposals.However,she decided to get another important issue out on the table before stopping to discuss solutions,so she continued with her comments."The other big concern is the cost of moving our goods.Distribution costs are a major part of the overall cost of selling our goods.What can we do to make the flow of products from our kitchens to our ultimate consumers more efficient?" Having laid out her concerns,Dee sat down at the head of the table,saying to her assistants,"O.K.guys,I'm ready for suggestions." -After listening to all of the challenges and issues,Rhea said she wanted to propose a more sweeping change."Mark has already suggested doing some of the retailer's job for them.I say go even further-let's just do away with all of the intermediaries.We can perform all of their functions ourselves," she said.She went on to explain that,"Since we won't have to deal with intermediaries,my suggestion is bound to simplify the distribution process and cut costs dramatically." Rhea's suggestion:

Retailers such as jewelry stores,shoe stores,and bicycle shops are:

A channel of distribution consists of the marketing intermediaries who join together to transport and store goods in their path from producers to consumers.

A problem with the corporate distribution system is that the manufacturer has very little control over the operations of the retailers and other marketing intermediaries in the system.

__________ warehouses are used to gather and redistribute products.

Taken together,all of the organizations that move goods from the sources of raw materials to ultimate consumers is known as a:

Marketing intermediaries must charge a price for the functions they perform.Thus,a surefire way to reduce distribution costs is to eliminate marketing intermediaries from the channel of distribution.

Comstock Coal Distributors does not mine coal itself.In fact,the firm does not even store or handle coal.Instead,Comstock solicits orders for low sulfur coal from other firms,then purchases the required amount from suppliers and directs them to ship the coal to its customers.Comstock is a:

The Newsville City Press is a daily newspaper serving a city with a population of just over 200,000.The publishers have placed vending machines for their paper throughout Newsville and its suburbs.They also sell their papers at most of the supermarkets,convenience stores,bookstores,and drug stores in the area.The Newsville City Press uses an intensive distribution strategy.

The main way __________ differ from agents is that they do not develop long-term relationships with the buyers or sellers they assist.

Drop shippers are limited function wholesalers that typically put together many small shipments to form a single larger shipment.

Manufacturers are usually able to perform marketing functions such as transporting,advertising,and storing,faster and more cheaply than marketing intermediaries.

__________ utility is usually provided by producers rather than marketers.

__________ brings raw materials,packaging,other goods and services,and information from suppliers to producers.

The types of utility commonly provided by marketing intermediaries include:

Corinne is a marketing manager who specializes in logistical problems.In her position,Corrine is likely to focus mainly on managing the flow of goods,and leave issues about how to manage the flow of information to managers in other areas of marketing.

Marketing intermediaries concentrate on providing mainly form,time and place utility,while producers focus on the provision of possession,information,and service utility.