Deck 16: Effective International Distribution

Question 1

Establishing a sales or marketing subsidiary in the overseas country is an example of indirect exporting.

Answer 1

False

Question 2

Licensing is more applicable to services products than it is to physical goods.

Answer 2

False

Question 3

The most promising products for trading internationally via the internet are those:

A)Where existing intermediaries do not perform the traditional wholesaler functions due to the high cost of servicing small, diverse and geographically dispersed players
B)That have many buyers and sellers operating internationally
C)That can be placed on auction sites to attract the highest bidder
D)Where existing retailers are not taking advantage of the opportunities that the internet provides
E)All of the above

Answer 3

A

Question 4

A distribution channel is useful in that it:

A)Makes a product or service available in a convenient location
B)Advises the public about the product and its attributes
C)Packages the product in a form that the customer can use
D)Makes the product available when the consumer wants it
E)All of the above

Question 5

In international marketing, franchising involves allowing the overseas franchisee to access the manufacturer's:

A)Design and packaging
B)Production systems
C)Training methods
D)Brand name
E)All of the above

Question 6

When a manufacturer uses its established distribution network in a foreign country to sell another company's products this is referred to as:

A)Horizontal cooperation
B)Piggybacking
C)Vertical cooperation
D)International cooperation
E)None of the above

Question 7

Market development motives for foreign direct investment include:

A)Cost of factors of production
B)Diversification
C)Economies of scale
D)Product differentiation
E)All of the above

Question 8

Manufacturing overseas can take a variety of forms. These include:

A)Joint venture and acquisition
B)Assembly and contract manufacture
C)Franchising
D)All of the above
E)Options A and B only

Question 9

Overseas agents generally do not take title to goods exported to their market.

Question 10

Acquiring an existing operation, building or plant in an overseas location is referred to as:

A)Assembly
B)Strategic alliance
C)Contract manufacture
D)Joint venture
E)Acquisition

Question 11

Decisions on price setting in the international market involve establishing the minimum price the exporter is prepared to accept together with the maximum price the market is prepared to pay. What strategies could be used for determining this price?

Question 12

Discuss in detail the available options (methods) for an organisation wishing to expand overseas.

Question 13

Joint ventures are the most common form of overseas manufacture undertaken by Australian firms.

Question 14

In 'direct' exporting, an overseas export agent working on behalf of a producer sells the goods in the overseas market and will receive:

A)A commission on the sale, after taking ownership of the goods
B)A commission on the sale, without taking ownership of the goods
C)A monthly or annual retainer, and take ownership of the goods
D)A monthly or annual retainer, without taking ownership of the goods
E)Receive a wage or salary as a direct employee of the producer

Question 15

Why is the Daiso concept popular in Japan?

A) The company offers shoppers a very traditional shopping experiences.
B) The company concept includes charging a uniform price for all items in the store.
C) The company focuses on high prestige pricing.
D) The company offers unique products that are not used daily.
E) The company only focuses on the Japanese consumer.

Question 16

Which of the following are advantages of using 'direct' exporting via an overseas-based agent?

A)Direct contact with the overseas market
B)Increased control for the manufacturer
C)Improved access to marketing information
D)All of the above
E)Options B and C only

Question 17

Which of the following are alternative forms of distribution in a new international market?

A) Establishing a sales or marketing subsidiary in the new market
B) Sharing an existing distribution channel with a non-competing firm
C) Sharing an existing distribution channel with a competing firm
D) Options A and B only
E) Options A and C only

Question 18

In designing a distribution channel for the overseas market, decisions should be made with regards to:

A)Density and logistics
B)Length and width
C)Alignment
D)All of the above
E)Options A and B only

Question 19

A distribution channel's width refers to:

A)The number and type of intermediaries in the channel
B)The extent of coordination between members of the channel involved in getting the product to the final consumer
C)The exposure or coverage desired for the product to achieve profitable penetration of the overseas market
D)The number of products that it can distribute
E)The number of distribution levels necessary to get the product into the overseas market

Question 20

How has the growth of the internet changed distribution approaches for firms looking to expand internationally? What opportunities and threats do these changes present? Use examples in your discussion.

Question 21

Which of the following is NOT included in the government and legal constraints methods of regulating international distribution?

A)Control of intermediary functions resting with a specific group
B)Regulation related to store location
C)Turnover taxes
D)Liability legislation
E)Protection of small business

Question 22

The distribution system:

A)Is a major link between the company and its customers
B)Influences the company's ability to penetrate new markets
C)Influences the company's ability to execute marketing strategies
D)All of the above
E)Options B and C only

Question 23

When appointing an agent in international marketing, an agreement should be drawn up which clearly spells out:

A)The geographic boundaries within which the agent will operate
B)The products that will be represented
C)The price the agent should charge for the products
D)None of the above
E)Options A and B only

Question 24

Product attributes are not a major influence in either the distribution strategy or the design of channels.

Question 25

It is possible to have both supplier and intermediary domination within the same interaction.

Question 26

Which of the following are reasons why consumer goods tend to have longer channels?

A)Inclusion of intermediaries
B)Inclusion of wholesalers
C)Inclusion of retailers
D)All of the above
E)Options B and C only

Question 27

Costs most likely to be affected by differences between brick-and-mortar businesses and e-business companies are:

A)Order handling costs
B)Inventory costs
C)Promotion costs
D)All of the above
E)Options A and B only

Question 28

Whilst using intermediaries in foreign markets for distribution it is often easier for organisations to remain independent.

Question 29

What decisions need to be made in advance for designing international distribution channels and how might international marketing environmental elements influence these decisions?

Question 30

_______ strategy will be affected by the ________ health of the country.

A)Economic, physical
B)Distribution, physical
C)Economic, international
D)International, domestic
E)Distribution, economic

Question 31

Consumer goods tend to have longer distribution channels internationally than industrial goods.

Question 32

In general, the more economically developed a country is the longer the distribution channel is.

Question 33

Because the allocation of distribution costs will vary according to the relative power of the supplier and the intermediary, the greater the power of the intermediary:

A)The greater the likelihood that costs such as promotion and inventory carrying will be met by the exporter
B)The greater the likelihood that costs such as promotion and inventory carrying will be met by the intermediary
C)The less likelihood that costs such as promotion and inventory carrying will be met by the exporter
D)None of the above
E)Options A and C only

Question 34

When operating in international markets the selection of an agent is of prime importance. Of the following sources which would be suitable to gain information regarding agents:

A)Industry journals
B)Chambers of manufacturers
C)Chambers of commerce
D)All of the above
E)Options A and C only

Question 35

To create a positive operating environment and get the best out of an agent it is necessary to:

A)Keep communication up to date
B)Ensure that the agent is given company bulletins and other information
C)Respond promptly to queries
D)Have regular visits to the agent
E)All of the above

Question 36

In emerging markets, retail chains only account for 15 to 20% of total retail turnover.

Question 37

When control over the distribution of a product is important in the international market, the producer is more likely to establish:

A)Its own sales force
B)A network of agents
C)A network of distributors
D)Options A and C only
E)Options B and C only

Question 38

Create a hypothetical scenario where you are looking to establish distribution channels between Australia/New Zealand and a South American country. What are some of the cultural issues that might arise, and how would you manage them?

Question 39

An indicator of commitment is the manner in which it is intended to cover the selected international market.

Question 40

Cultural issues include physical distance, perceptual distance and attitudinal distance between buyer and seller.

Question 41

There are two issues that often arise with global distribution, the difficulty in achieving standardisation and the likely occurrence of grey markets.

Question 42

Discuss the management implications of selecting and managing a channel intermediary in another country.

Question 43

Developing distribution strategies for the international market place often involves dependence on intermediaries.

Question 44

Stage of economic development is a strong influence on the number of retailers in a country.

Question 45

In many Asian developing countries most retail takes place through:

A)Wholesalers
B)Small shops
C)Department stores
D)Roadside stalls
E)Options B and D only

Question 46

Two aspects of distribution standardisation are:

A)Process and program
B)Process and outcome
C)Process and channel
D)Process and structure
E)Process and element

Question 47

Grey marketing relates to the unauthorised:

A)Use of an intermediary to set an artificially high selling price
B)Use of government incentives to increase sales
C)Use of an intermediary to bypass government legislation
D)Distribution of a firm's product in a particular market
E)None of the above

Question 48

You are the international marketing manager for an Australian confectionary company that is looking to export into China, Hong Kong and Taiwan. Prepare a discussion paper on how you would go about selecting, appointing, maintaining and possibly terminating intermediaries for these markets.

Question 49

When selecting an agent or distributor overseas, it is important to select a firm whose size is larger than that of the exporting firm.

Question 50

It is necessary from the outset to reach a clear understanding with the distribution agent as to how his performance will be measured. This measurement could be on the basis of the:

A)Annual growth rates
B)Extent to which floor or shelf space has been secured for the product
C)Number of times inventory turns over per annum
D)Market share and sales volume
E)All of the above

Question 51

In product distribution, 'program' standardisation refers to the development of a uniform marketing mix for all international markets.

Question 52

Retailing practices are influenced by:

A)Level of education
B)The number of retailers in a market
C)Stage of economic development
D)All of the above
E)Options A and C only

Question 53

Of the marketing mix elements that are reviewed when deciding on whether to standardise or differentiate the marketing approach in an overseas market, distribution receives:

A)More attention than the other elements
B)Distribution is not one of the elements that gets reviewed
C)Less attention than the other elements
D)The same attention as the other elements
E)Due to the involvement of third party agents international distribution is considered separately from the marketing mix

Question 54

The nature of the shipment is influenced by the shape/size of items, overall volume and the perishable nature of the product and its packaging.

Question 55

The level of customer service provided to customers in overseas markets tends to be lower than in the domestic market.

Question 56

Explain the meaning of a 'grey market', and describe how such a market can be created. What steps might a firm take to reduce the opportunity for the creation of a grey market?

Question 57

Which of the following statements is true in regard to customer service in international markets?

A)The level of customer service tends to be equivalent to the domestic market
B)The level of customer service tends to be lower than in the domestic market
C)The level of customer service has many variations
D)The level of customer service is of less importance than in the domestic market
E)The level of customer service is generally higher

Question 58

Purchases by consumers of goods from imported sources via the internet often attracts import duties.

Question 59

Outline the key issues in global distribution. Give examples of how these impact the international distribution practices of Australian and New Zealand firms.

Question 60

When selecting and managing a channel intermediary in another country, there are several guidelines a company should consider. Which of the below is NOT one of these guidelines?

A)Maintain control over the marketing strategy for your product
B)Select distributors rather than them selecting you
C)Look for distributors with a track record of developing markets rather than those with a few good contacts
D)Treat local distributors as short-term vehicles of convenience
E)Create links between each of your national distributors

Question 61

Which of the following is NOT one of Hollensen's factors in making a transportation decision?

A)Cost of transport options
B)Type of product
C)Frequency of shipment
D)The reliability of the transportation link
E)Distance to location

Question 62

Using the comparison of major international transportation modes, evaluate its use for determining transportation of high-price goods.