Deck 13: Managing Global Distribution Channels

Question 1

Channel length refers to the number of sales outlets.

Answer 1

False

Question 2

Japan ranks number 2 among countries in overall dollar volume of direct sales.

Answer 2

True

Question 3

Terminating agreements with distributors is easier in Japan than in the United States.

Answer 3

False

Question 4

Since economic liberalization,the number of retail outlets in China has declined.

Question 5

Channel density refers to the number of intermediaries between the manufacturer and the consumer.

Question 6

Coca-Cola's decision to assist Unaids to distribute literature and testing kits is a special type of joint venture.

Question 7

A channel captain is the dominant member of the channel and is responsible for profitability of the entire channel.

Question 8

For short lead-time situations,slower modes of transportation are used.

Question 9

As distribution costs for a product increase,the cost of the final product decreases.

Question 10

Longer channels with powerful distributors give manufacturers more control over the entire distribution process.

Question 11

The financial incentive is one of the best options to keep channel members motivated.

Question 12

Japan only ranks number 18 among countries in overall dollar volume of direct sales.

Question 13

In locked-up channels,a newcomer cannot easily convince any channel member to add or drop products in spite of favorable market conditions.

Question 14

To reduce inventory levels,a number of companies have adopted just-in-time (JIT)deliveries of parts and components.

Question 15

Logistics costs are four times higher in China than in many developed economies.

Question 16

Business-to-business sales usually involve numerous intermediaries.

Question 17

Logistics costs include costs of maintaining the sales force,sales managers,and their travel expenses.

Question 18

The German embassy may be a good source of information on locating agents or distributors in Germany.

Question 19

Over-saturating a market with many distributors keeps distributors motivated.

Question 20

Highly technical products often require direct sales agents to improve sales.

Question 21

Direct marketing is popular in developing countries due to their excellent telecommunications infrastructure.

Question 22

Logistics costs are lower in China than in developed economies.

Question 23

Eliminating tariffs on VCRs will eliminate smuggling of VCRs.

Question 24

In developed countries,there is a trend towards fewer larger retailers.

Question 25

In managing the supply chain,most managers prefer speed of delivery over delivery reliability and customer service.

Question 26

German authorities ordered Wal-Mart to raise prices on a number of products.

Question 27

Competence in retail logistics allows retailers to contain costs and shorten procurement time enabling them to provide better service.

Question 28

In Latin America,small mom-and-pop stores account for about 25 percent of total in-store sales.

Question 29

German authorities ordered Wal-Mart to lower prices on a number of products.

Question 30

The highest market penetration of online purchasers is in the United States.

Question 31

In Japan,wholesalers may assist retailers with

A)financing.
B)product development.
C)marketing skills.
D)All of the above.

Question 32

Overall,U.S.retailers have entered foreign markets later than European and Japanese retailers.

Question 33

The highest market penetration of online purchasers is in Great Britain.

Question 34

Retailers that export their retail model virtually unchanged are called replicators.

Question 35

Retailers that export their retail model virtually unchanged are called reinventors.

Question 36

In Latin America,small mom-and-pop stores account for about 60 percent of total in-store sales.

Question 37

Wal-Mart has been successful in every foreign market it has entered.

Question 38

In Latin America,small mom-and-pop stores account for about 90 percent of total in-store sales.

Question 39

The highest market penetration of online purchasers is in South Korea.

Question 40

Smuggled goods are subjected to sales taxes,but they do not pay import tariffs.

Question 41

For products with short shelf lives,

A)long channels are preferred.
B)direct sales agents are required.
C)short channels are preferred.
D)All of the above

Question 42

In Japan,foreign firms are expected to

A)make the wholesaler the channel leader.
B)make the retailer the channel leader.
C)commit to long-term relationships with their distributors.
D)get the government's approval to add a wholesaler.

Question 43

In a piggyback agreement,

A)the manufacturer retains control over marketing strategies.
B)the distributor controls marketing strategies.
C)no one has channel control.
D)the manufacturer has no channel control.

Question 44

Under a piggybacking agreement,which part of the marketing mix does the manufacturer cede control?

A)Product
B)Promotion
C)Pricing
D)Distribution

Question 45

When a company does not find channel partners with sufficient interest to pioneer new products,the company can resort to

A)smuggling.
B)countertrade.
C)piggybacking.
D)parallel imports.

Question 46

More intense contact between an export manufacturer and its distributor in a foreign market will likely result in

A)a change in channel captain.
B)better performance by the distributor.
C)higher margins to the exporter.
D)higher margins to the importers.

Question 47

Piggybacking is common in which industry?

A)Cut flowers
B)Film
C)Pharmaceuticals
D)Fast food

Question 48

A common complaint by multinational corporations about distributors in developing countries is that

A)they want to be channel leaders.
B)they fail to invest in business growth.
C)there is too much channel conflict.
D)they are always haggling for higher margins.

Question 49

Wholesale channels are longest in

A)the United States.
B)Canada.
C)Germany.
D)Japan.

Question 50

A channel in which newcomers cannot easily convince any channel member to participate despite both market and economic reasons suggesting otherwise is called a ____ channel.

A)closed
B)locked-up
C)saturated
D)high density

Question 51

Locked-up channels are common in

A)Britain.
B)the United States.
C)Germany.
D)Japan.

Question 52

Channel alignment refers to

A)coordination between channel members.
B)being located close to channel partners.
C)being located faraway from channel partners.
D)being located along a straight line.

Question 53

What factor influences the selection of a transportation management system?

A)Transit time
B)Lead time
C)Transportation costs
D)All of the above

Question 54

Channel length refers to the

A)number of sales outlets.
B)physical flow of goods.
C)distance between manufacturer and retailer.
D)number of intermediaries between a firm and its customers.

Question 55

Since economic liberalization in China,

A)the number of retail outlets has increased.
B)the percentage of state-owned stores has increased.
C)state-owned stores have all been closed.
D)Both a and b

Question 56

Which is a source of foreign distributor information for U.S.firms?

A)IMF
B)U.S.Justice Department
C)U.S.Department of Commerce
D)WTO

Question 57

The cholesterol-lowering drug Lipitor enjoyed a successful launch in the United States due to a

A)rapid global roll-out.
B)piggybacking agreement.
C)strong channel captain.
D)selective distribution.

Question 58

Cancellation of distribution rights may be problematic in foreign markets due to

A)social norms.
B)local laws.
C)the cost involved.
D)All of the above.

Question 59

What can lead to channel conflict?

A)Excellent financial incentives
B)Making distributors more involved in marketing
C)Extensive training of distributors
D)Oversaturating the market with too many distributors

Question 60

Which is not a common source of foreign distributor information for U.S.firms?

A)Industry associations
B)Trade shows
C)U.S.Department of Commerce
D)WTO

Question 61

Wal-Mart has retreated from ____ and ____.

A)Mexico,China
B)Germany,China
C)Mexico,Germany
D)Germany,South Korea

Question 62

Which country heavily regulates door-to-door selling?

A)Germany
B)China
C)Russia
D)Saudi Arabia

Question 63

Retailers such as Ahold that expand globally by acquiring existing retail businesses that retain their independent identities are

A)replicators.
B)performance managers.
C)re-inventors.
D)global-local formatters.

Question 64

The highest penetration of on-line purchasers is found in ____.

A)China.
B)South Korea.
C)United Kingdom.
D)United States.

Question 65

In which foreign market has Wal-Mart been the most successful?

A)Brazil
B)Egypt
C)Germany
D)Mexico

Question 66

French Bakery Breads produces a product line with a short shelf life.In Mexico it should

A)choose exclusive distribution.
B)look for shorter channels.
C)NOT be a channel captain.
D)NOT sell to Wal-Mart.

Question 67

Canon Car Mirrors is planning on entering the Egyptian market and wants to achieve extensive distribution.It should expect

A)shorter channels.
B)longer channels.
C)exclusive coverage.
D)not to be channel captain.

Question 68

Which has not been a contributing factor to the expansion of international retailers?

A)Enhanced data communications
B)New forms of international financing
C)Lower governmental barriers to entry
D)Lower political risk

Question 69

In Latin America,small mom-and-pop stores account for ____ percent of total in-store sales.

A)10
B)25
C)60
D)90

Question 70

Retailers such as Starbucks that export their retail model virtually unchanged are called

A)replicators.
B)performance managers.
C)re-inventors.
D)global-local formatters.

Question 71

An example of a system that reduces inventory levels is the

A)global manufacturing system.
B)just-in-time system.
C)modular system.
D)None of the above.

Question 72

After trade liberalization,some smugglers turned to

A)counterfeiting.
B)money laundering.
C)Both a and b
D)None of the above.

Question 73

French Bakery Breads is planning on entering the Venezuelan market.Compared to the U.S. ,the firm should expect

A)longer channels.
B)shorter channels.
C)exclusive distribution.
D)larger average orders.

Question 74

IKEA,the Scandinavia furniture retailer,was not successful in

A)Europe.
B)the United States.
C)Asia.
D)None of the above.

Question 75

Texas Taffy is planning to enter Mexico using exclusive rather than extensive distribution.This decision should

A)shorter channels.
B)lengthen channels.
C)increase market coverage.
D)None of the above

Question 76

Retailers such as Carrefour that employ standardized back-end systems and processes while creating largely tailored retail formats for each overseas market are called

A)replicators.
B)performance managers.
C)re-inventors.
D)global-local formatters.

Question 77

What are the challenges faced by direct marketers in developing countries?

A)Large populations
B)Large middle classes
C)Poor telecommunications infrastructure
D)High disposable incomes

Question 78

U.K.-based Tottenham Tartans is planning to enter the U.S.market using exclusive distribution.It should expect

A)relatively short channels.
B)relatively long channel.
C)to be channel captain.
D)to minimize sales tax in the U.S.

Question 79

Cut flowers from Colombia that are sold in the U.S.market are most likely shipped by

A)air.
B)truck.
C)sea.
D)bus.

Question 80

In China,logistics costs are ____ times higher than in many developed countries.

A)2
B)4
C)10
D)None of the above