Question 1

Tin City bicycles is considering firing its distributor in a developing country.What advice would you give the firm?
A)Don't do it because you will have to compensate the distributor for brand equity.
B)Don't do it because you will have to compensate the distributor for initial channel costs.
C)Both a and b
D)None of the above

Accepted Answer

The answer of Tin City bicycles is considering firing its...

Question 2

Coco Discount Outlets plans to adopt a performance manager style of internationalization.It is unlikely that Coco will
A)move quickly into international markets.
B)keep tight control over its local management.
C)take advantage of its expertise in corporate finance.
D)acquire foreign retailers.

Accepted Answer

Coco Discount Outlets plans to adopt a performance manager style of internationalization, which means that it will keep tight control over its local management.

Question 3

Canon Car Mirrors is expecting to be channel captain in Japan.Nonetheless,it should expect to comply with
A)product design suggestions from its distributors.
B)pricing terms from its distributors.
C)delivery terms suggestions from its distributors.
D)None of the above

Accepted Answer

As a channel captain in Japan, Canon Car Mirrors will have the responsibility of leading and coordinating the distribution channels within the market. However, it does not necessarily mean that it will have to comply with the product design suggestions, pricing terms, or delivery terms from its distributors. Canon Car Mirrors will have the authority to set its own product design, pricing, and delivery policies based on its own strategies and objectives.

Question 4

Canon Car Mirrors wants to be channel captain in Brazil.As channel captain,it will need to budget for which costs?
A)Initial distribution costs
B)Maintenance distribution costs
C)Logistics costs
D)All of the above

Accepted Answer

As a channel captain, Canon Car Mirrors will need to budget for all distribution costs, including initial distribution costs, maintenance distribution costs, and logistics costs, in order to effectively manage and lead its channel partners in Brazil.

Question 5

Action Toys is thinking about terminating a distributor in an overseas market.What might the firm be liable for upon termination?
A)Compensating the various channel captains
B)The local goodwill the distributor has built up for the brand
C)All outstanding sales taxes
D)None of the above

Accepted Answer

The local goodwill the distributor has built up for the brand. Terminating a distributor can harm the brand's reputation and relationship with customers in that market, which can result in loss of sales and market share. The distributor may have invested in marketing, advertising and promoting the brand in the region, thereby building goodwill and brand equity. The firm may be liable for compensating the distributor for the value of the goodwill and other assets associated with the brand.

Question 6

LeBlanc Enterprises is considering a distributor for Japan.LeBlanc will be expected to
A)choose extensive distribution.
B)choose selective distribution.
C)choose exclusive distribution.
D)commit for the long-term.

Accepted Answer

In Japan, business relationships are highly valued and are often long-term commitments. This means that when entering the Japanese market, companies like LeBlanc Enterprises are expected to commit for the long-term to build trust and establish a strong partnership with their distributors or business partners. This approach is crucial for success in the Japanese market, where loyalty and long-term relationships are prioritized over short-term gains.

Question 7

French Bakery Breads wants to be channel captain in Mexico.It should
A)look for a very large wholesaler.
B)sell to Wal-Mart.
C)be prepared to relinquish control over its pricing in Mexico.
D)None of the above

Accepted Answer

Being a channel captain involves leading the distribution channel and exerting control over it, not necessarily relinquishing control over pricing or solely relying on large wholesalers or specific retailers like Wal-Mart.

Question 8

DISINT is a direct sales firm that markets cosmetics and women's accessories.DISINT is planning on entering Brazil.What advice would you give to the company?
A)They will face competition from other U.S.direct sales firms.
B)They will face competition from Brazilian direct sales firms.
C)Both a and b
D)Brazil closely monitors direct sales and once disallowed them for a 5-year period.

Accepted Answer

Both a and b are correct. DISINT will face competition from both other U.S. direct sales firms and Brazilian direct sales firms. It is important for the company to have a competitive strategy in place to differentiate themselves from competitors. Additionally, Brazil has a history of closely monitoring direct sales, and DISINT should ensure they are complying with all laws and regulations to avoid any potential issues.

Question 9

DISINT is a direct sales firm that markets cosmetics and women's accessories.DISINT is planning on entering Brazil.What advice would you give to the company?
A)Customers will pay more to buy the product from someone they know.
B)Women are not decision makers in Brazil.
C)Direct sales are virtually unknown in Brazil.
D)None of the above

Accepted Answer

Building personal relationships is highly valued in Brazil and customers are more likely to buy from someone they trust and know. Therefore, DISINT should prioritize building personal connections with customers through direct sales.

Question 10

Tunetoy wants to terminate its distributor in a developing country.Tunetoy may discover that termination is
A)difficult legally.
B)not culturally acceptable.
C)expensive.
D)All of the above

Accepted Answer

Terminating a distributor in a developing country may prove to be difficult legally due to unfamiliarity with local laws and regulations. Additionally, cultural differences may make termination not culturally acceptable, leading to backlash or negative consequences. Lastly, terminating a distributor may also be expensive due to costs associated with finding a replacement and potential legal fees. Therefore, all of the options presented are potential challenges that Tunetoy may face when trying to terminate its distributor in a developing country.

Question 11

Canon Car Mirrors plans on entering Brazil where a major wholesaler will be channel captain.Canon will need to budget for which costs?
A)Initial distribution costs
B)Maintenance distribution costs
C)Logistics costs
D)All of the above

Accepted Answer

When entering a new market, Canon Car Mirrors will need to budget for all of the mentioned costs - initial distribution costs, maintenance distribution costs, and logistics costs. Initial distribution costs may include transportation and fees to get products to the wholesaler. Maintenance distribution costs may include marketing and promotional efforts to increase sales. Logistics costs may include costs associated with shipping, storage, and inventory management.

Question 12

Karavel Foods is planning to piggyback in Chile on the distribution of CFG,a major Chilean packaged foods company.Karavel should expect CFG to
A)put the CFG name on Karavel products.
B)decide the pricing for Karavel products.
C)provide advertising for Karavel products.
D)None of the above

Accepted Answer

It is not typical for a company to put their name on products of another company, nor for that company to decide pricing or provide advertising for the other company's products. Therefore, Karavel should not expect any of these possibilities from CFG.

Question 13

Indopharm is planning to piggyback in Canada using the distribution of a U.S.pharmaceutical firm.Indopharm can expect the U.S.company to
A)keep the Indopharm name on the products.
B)decide the pricing of Indopharm products.
C)provide advertising for Indopharm products.
D)eventually restrict U.S.companies cannot provide piggyback services in Canada.

Accepted Answer

The U.S. company will likely keep the Indopharm name on the products to maintain brand identity while using its distribution network.

Question 14

Indopharm is planning to export to Taiwan and is investigating local distributors.A large,well-respected firm is interested,but this firm will likely become the channel captain.Is this good for Indopharm?
A)Yes.You always want a large firm to be your channel captain.
B)Yes.You always want a well-respected firm to be your channel captain.
C)No.Indopharm will lose control over is pricing.
D)It doesn't matter who the channel captain is.

Accepted Answer

When a large and well-respected firm becomes the channel captain, they often have a significant amount of power in the distribution channel. This can result in their setting the price, which may not be in line with Indopharm's desired pricing strategy. This can ultimately result in a loss of pricing control for Indopharm.

Question 15

French Bakery Breads is hoping to sell to Wal-Mart in Mexico.What should it expect?
A)Wal-Mart may be the channel captain.
B)Wal-Mart will want French Bakery Breads to be channel captain.
C)Wal-Mart will be totally different in Mexico than it is in the U.S.
D)Wal-mart is no longer in Mexico.

Accepted Answer

Wal-Mart is typically the channel captain in its distribution channels, meaning it holds the most power in the relationship and controls the flow of goods. French Bakery Breads should expect this to be the case if it sells to Wal-Mart in Mexico.

Question 16

Coco Discount Outlets plans to adopt a reinventor style of internationalization.It is unlikely that Coco will
A)employ standard back-end systems.
B)create stores largely tailored to each overseas market.
C)exploit its experience in retail logistics.
D)export its retail format virtually unchanged.

Accepted Answer

A reinventor style of internationalization involves adapting and tailoring the retail format to suit different markets, rather than exporting the format unchanged.

Question 17

Coco Discount Outlets plans to adopt a reinventor style of internationalization.It is likely that Coco will
A)employ standard back-end systems.
B)exploit its experience in retail logistics.
C)create retail formats largely tailored to each overseas market.
D)All of the above

Accepted Answer

A reinventor style of internationalization involves adapting significantly to local markets, which includes employing standard back-end systems for efficiency, exploiting existing expertise such as retail logistics, and creating retail formats that are tailored to each overseas market.

Question 18

U.K.-based Tottenham Tartans is planning to enter the U.S.market using exclusive distribution.This is a good idea if
A)the firm wants to avoid making any channel management decisions.
B)the firm wants their products to be widely available.
C)their brand is unknown in the U.S.
D)their brand already inspires consumer loyalty.

Accepted Answer

Exclusive distribution is often used by brands that already have a loyal customer base and want to maintain a high level of control over how their products are marketed and sold. It is not typically chosen to avoid channel management decisions or for brands that are unknown or want wide availability.

Question 19

Coco Discount Outlets plans to adopt a performance manager style of internationalization.It is likely that Coco will
A)move quickly into international markets.
B)take advantage of its expertise in corporate finance.
C)acquire foreign retailers.
D)All of the above

Accepted Answer

A performance manager style of internationalization typically involves moving quickly into international markets, leveraging expertise in areas such as corporate finance, and acquiring foreign entities to expand the business's footprint and capabilities.

Question 20

DISINT is a direct sales firm that markets cosmetics and women's accessories.DISINT is planning on entering Brazil.What advice would you give to the company?
A)Customers will expect to pay considerably less if they buy from someone they know.
B)Direct sales are culturally unacceptable in Brazil.
C)Direct sales appeals to Brazil's collectivist culture.
D)Direct sales appeals to Brazil's hierarchal culture.

Accepted Answer

Direct sales, also known as network marketing, tends to appeal to collectivist cultures like Brazil where people value interpersonal relationships, recommendations, and trust. As a new entrant, DISINT can leverage Brazil's collectivist culture to establish a network of distributors who can promote the products and build a customer base through word of mouth. DISINT should also prioritize building relationships with local customers and influencers to establish credibility and trust - this could include collaborating with local beauty bloggers, sponsoring events, or hosting product demonstrations. Offering discounts or special promotions to early customers can also help incentivize them to try the brand and spread the word.

Quiz 13: Managing Global Distribution Channels

Tin City bicycles is considering firing its distributor in a developing country.What advice would you give the firm?

Coco Discount Outlets plans to adopt a performance manager style of internationalization.It is unlikely that Coco will

Canon Car Mirrors is expecting to be channel captain in Japan.Nonetheless,it should expect to comply with

Canon Car Mirrors wants to be channel captain in Brazil.As channel captain,it will need to budget for which costs?

Action Toys is thinking about terminating a distributor in an overseas market.What might the firm be liable for upon termination?

LeBlanc Enterprises is considering a distributor for Japan.LeBlanc will be expected to

French Bakery Breads wants to be channel captain in Mexico.It should

DISINT is a direct sales firm that markets cosmetics and women's accessories.DISINT is planning on entering Brazil.What advice would you give to the company?

DISINT is a direct sales firm that markets cosmetics and women's accessories.DISINT is planning on entering Brazil.What advice would you give to the company?

Tunetoy wants to terminate its distributor in a developing country.Tunetoy may discover that termination is

Canon Car Mirrors plans on entering Brazil where a major wholesaler will be channel captain.Canon will need to budget for which costs?

Karavel Foods is planning to piggyback in Chile on the distribution of CFG,a major Chilean packaged foods company.Karavel should expect CFG to

Indopharm is planning to piggyback in Canada using the distribution of a U.S.pharmaceutical firm.Indopharm can expect the U.S.company to

Indopharm is planning to export to Taiwan and is investigating local distributors.A large,well-respected firm is interested,but this firm will likely become the channel captain.Is this good for Indopharm?

French Bakery Breads is hoping to sell to Wal-Mart in Mexico.What should it expect?

Coco Discount Outlets plans to adopt a reinventor style of internationalization.It is unlikely that Coco will

Coco Discount Outlets plans to adopt a reinventor style of internationalization.It is likely that Coco will

U.K.-based Tottenham Tartans is planning to enter the U.S.market using exclusive distribution.This is a good idea if

Coco Discount Outlets plans to adopt a performance manager style of internationalization.It is likely that Coco will

DISINT is a direct sales firm that markets cosmetics and women's accessories.DISINT is planning on entering Brazil.What advice would you give to the company?