Page 397 - Introduction to Business

CHAPTER 10 Developing the Promotion and Distribution Mixes 371

LEARNING OBJECTIVE 4 vending provides consumers with convenient locations
Discuss the ways in which sales personnel can to purchase products. Direct marketing involves solicit-
conduct themselves ethically. ing potential buyers to purchase a product or service
and allowing them to do so in the comfort of their own
A code of ethics for the selling profession includes not
homes or offices. Direct selling where salespeople call
misrepresenting their purpose, calling on prospects
on customers in their homes or offices also allows cus-
who can benefit by purchasing their product, not
tomers to purchase from home or office. Convenience
promising what the company can’t deliver, not dis-
is a major advantage of nonstore retailers.
paraging competitors’ products, answering all ques-
tions truthfully, making sure customers are satisfied,
LEARNING OBJECTIVE 7
handling all complaints and returns promptly and
Explain the difference between materials manage-
cheerfully, and observing all laws affecting selling.
ment and physical distribution.
LEARNING OBJECTIVE 5 Materials management is the movement of raw materi-
Distinguish between the channels of distribution for als, in-process materials, and semifinished goods to a
consumer products and for industrial products. manufacturer from a supplier. Physical distribution
involves the flow of finished products from manufac-
Fifty percent of all consumer products move from man-
turers to their customers.
ufacturers through wholesalers, then to retailers before
reaching the consumer. Another 45 percent flow from
LEARNING OBJECTIVE 8
manufacturers to retailers and then on to consumers.
Compare the advantages and disadvantages of the
Five percent flow directly from manufacturers to con-
five modes of transportation.
sumers, bypassing wholesalers and retailers. Eighty
percent of industrial products go directly from manu- Pipelines and water transportation possess the advan-
facturers to industrial buyers. The other 20 percent flow tage of low cost. Rail can move a wide variety of indus-
through wholesalers before reaching the industrial trial and consumer goods inexpensively. Truck trans-
buyer. portation offers shippers speed and flexibility. Air
transportation is the fastest but the most expensive.
LEARNING OBJECTIVE 6
Describe and give the advantages of using nonstore
retailers in channels of distribution.
Automatic vending, direct marketing, and direct selling
are the major types of nonstore retailing. Automatic

Chapter Questions tive is to have the company and its personnel and
products portrayed in a favorable light?
1. Do you think it is ethical for communities to out- 9. What are the major ways that publicity can con-
law billboards because they can ruin the scenery tribute positively to a company’s marketing
along major roads? effort?
2. What advantages exist for companies that choose 10. Carefully distinguish between advertising and
to exhibit their products at trade shows? sales promotion. What factors explain the
3. What are the four major responsibilities for sales- increased use of sales promotion by companies?
people? Which do you believe is the most impor- 11. What are the factors that would encourage a com-
tant? Why? pany to use channels of distribution? Why,
4. What is prospecting? Why is it important? instead, would they prefer to go direct?
5. Do you believe it is all right for salespeople in the 12. Discuss the contributions that brokers make to
pharmaceutical industry to give doctors free sam- the U.S. economy.
ples of their products? Why or why not? 13. Why do you think nonstore forms of retailing may
6. Improvement in productivity is mentioned as a be more important in some foreign countries
benefit of CASP programs. How would sales force than in the United States?
productivity be measured? 14. Identify the major difference between companies’
7. Do you agree with the code of ethics presented in materials management and physical distribution
the chapter for the selling profession? Are there operations.
any other ethical aspects that should be included? 15. Distinguish between private warehouses and pub-
8. Do you believe it is ethical for companies to have lic warehouses. What are the advantages of each
public relations departments whose major objec- for companies that need to store their products?

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