Deck 15: International Marketing Channels

Question 1

The WTO in 2003 ruled export management companies (EMC)s to be in violation of international trade rules.

Answer 1

False
Explanation: The WTO in 2003 ruled foreign sales corporations to be in violation of international trade rules.

Question 2

The Export Trading Company (ETC) Act allows producers of similar products to form export trading companies in the U.S.

Answer 2

True
Explanation: The Export Trading Company (ETC) Act allows producers of similar products to form export trading companies. A major goal of the ETC Act was to increase U.S. exports by encouraging more efficient export trade services to producers and suppliers to improve the availability of trade finance and to remove antitrust disincentives to export activities.

Question 3

An export management company functions as a low-cost, independent marketing department with direct responsibility to the parent firm.

Answer 3

True
Explanation: Typically, the EMC becomes an integral part of the marketing operations of its client companies. Working under the names of the manufacturers, the EMC functions as a low-cost, independent marketing department with direct responsibility to the parent firm. The working relationship is so close that customers are often unaware they are not dealing directly with the export department of the company.

Question 4

Domestic middlemen offer many advantages for companies with large international sales volume.

Question 5

The channel process includes all activities, beginning with the manufacturer and ending
with the retailer.

Question 6

An import-oriented distribution structure prevails in the United States and other industrialized nations.

Question 7

One of Wal-Mart's strengths in distribution is its internal Internet-based system.

Question 8

In an import-oriented distribution structure, in most cases, supply exceeds demand.

Question 9

One of the distinguishing characteristics of the Japanese channel system is that the channel system is controlled by a few small retailers found in the country.

Question 10

Export management companies work under their own names.

Question 11

Agent middlemen take title to the goods and buy and sell on their own account.

Question 12

Merchant middlemen take title to manufacturers' goods and assume the trading risks, so they tend to be less controllable than agent middlemen.

Question 13

Retailing shows even greater diversity in its structure than does wholesaling.

Question 14

Another term for complementary marketing is piggybacking.

Question 15

The number of small retail stores is increasing in Japan.

Question 16

Channels in a distribution network have fixed structures in the short run.

Question 17

The Webb-Pomerene Act of 1918 allowed American business firms to join forces in export activities without being subject to the export trading companies Act.

Question 18

The distribution process includes promotion of goods and services by sellers and resellers.

Question 19

The Japanese consumers favor price over personal service.

Question 20

As modern channel structures continue to evolve importers and retailers are even becoming involved in new product development.

Question 21

_____ has long been considered the most effective nontariff barrier to the Japanese market.

A) Population in Japan
B) Distribution in Japan
C) Japanese culture
D) Cumbersome import and export procedures in Japan
E) Intense competition in Japan

Question 22

Which of the following does NOT contribute to explaining why Japan has a high number of small stores?

A) Population density
B) A tradition of frequent trips to the store
C) Emphasis on service
D) Freshness and quality expectations
E) Limited commercial real estate plots

Question 23

Which of the following distribution structures is considered as a traditional distribution structure?

A) Export-oriented
B) Import-oriented
C) Manufacturer-oriented
D) Service-oriented
E) Customer-oriented

Question 24

The foundation of the Japanese distribution system is the:

A) middleman.
B) intermediary.
C) manufacturer.
D) small retailer.
E) wholesaler.

Question 25

In the international business arena, which of the following is considered to be one of Wal-Mart's strengths?

A) Squeaky-clean reputation in the international arena
B) Internal Internet-based system
C) Ability to drive all other competitors out of a market
D) Ability to influence foreign governments
E) Outreach programs designed to placate small retailers

Question 26

_____ is/are often the approach of choice in markets with insufficient or underdeveloped distribution systems.

A) Direct selling
B) Big wholesale stores
C) Internet selling
D) Discount houses
E) Television advertising

Question 27

With respect to international marketing, ideally, a Web site should be translated into the languages of the target market.

Question 28

Which of the following statements is true regarding an import-oriented distribution structure?

A) Distribution systems are national in scope.
B) The relationship between the importer and any middleman in the marketplace is similar to that found in a mass-marketing system.
C) The idea of a channel as a chain of intermediaries performing specific activities and each selling to a smaller unit beneath it until the chain reaches the ultimate consumer is common in an import-oriented system.
D) Several independent agencies providing functions such as advertising, marketing research, financing are a part of this distribution structure.
E) An import-oriented distribution structure is considered as a traditional distribution structure.

Question 29

In a(n) _____ distribution structure, an importer controls a fixed supply of goods and the marketing system develops around the philosophy of selling a limited supply of goods at high prices to a small number of affluent customers.

A) export-oriented
B) import-oriented
C) manufacturer-oriented
D) service-oriented
E) customer-oriented

Question 30

Using foreign-country middlemen moves the manufacturer away from the market and the company becomes less involved with problems of language, physical distribution, communications, and financing.

Question 31

Which of the following have proved to be a successful way to break the trade barrier imposed by the Japanese distribution system?

A) Direct catalog sales
B) Large wholesale stores
C) Street corner kiosks
D) Internet shopping
E) Television advertising

Question 32

Sears, Roebuck and _____ of France have created GlobalNetXchange (www.gnx.com), a retail exchange that allows retailers and their suppliers to conduct transactions online.

A) Carrefour
B) 7-Eleven
C) Ito-Yokado
D) Plus
E) Tesco

Question 33

Which of the following is an area of emphasis that characterizes Japanese distribution channels?

A) Loyalty
B) Direct sales
C) Fast delivery
D) Variety
E) Intense focus on price

Question 34

In the U.S., if you terminate an agent, you are required to pay 10 percent of the agent's average annual compensation, multiplied by the number of years the agent served, as a final settlement.

Question 35

An e-vendor in a foreign market can generally ignore culture as an important variable because the commerce is being done via the Internet that is culturally insensitive.

Question 36

In Japan, under the Large-Scale Retail Store Law, all proposals for new "large" stores were first judged by the Ministry of ____.

A) Land, Infrastructure, Transport and Tourism
B) Internal Affairs and Communications
C) International Trade and Industry
D) Health and Welfare
E) Labor

Question 37

The distribution process includes all of the following EXCEPT:

A) physical handling of goods.
B) promotion of goods and services.
C) passage of ownership (title).
D) buying and selling negotiations.
E) physical distribution of goods.

Question 38

All the following statements are true regarding a Japanese market EXCEPT:

A) the costs of Japanese consumer goods are among the highest in the world.
B) manufacturers depend on wholesalers for a multitude of services to other members of the distribution network like financing, physical distribution etc.
C) the Japanese distribution structure supports long-term dealer-supplier relationships.
D) the Japanese market is characterized by the tradition of frequent trips to the store.
E) the Japanese consumers favor price over personal service.

Question 39

General Motors, ____, and DaimlerChrysler have created a single online site called Covisint (www.covisint.com) for purchasing automotive parts from suppliers, which is expected to save the companies millions of dollars.

A) Toyota Motor Corporation
B) Honda Motor Company
C) Ford Motor Company
D) Nissan Motor Company
E) TATA motors

Question 40

As channels grow longer, the ability of a manufacturer to control price, volume, promotion, and type of outlets increases.

Question 41

For companies seeking entrance into the complicated Japanese distribution system, _____ offer one of the easiest routes to success because they virtually control distribution through all levels of channels in Japan.

A) trade representatives
B) trading companies
C) brokers
D) export management companies
E) complimentary marketers

Question 42

Which of the following statements is true regarding an export management company (EMC)?

A) It acts as a middleman for firms with relatively large international volume.
B) EMCs work under their own names.
C) EMCs have direct responsibility to the parent company.
D) It acts as a middleman for companies willing to involve their own personnel in the international function.
E) EMCs seldom can afford to make the kind of market investment needed to establish deep distribution for products.

Question 43

Another term that is commonly used to describe the activities of complementary marketing is:

A) backhauling.
B) demand shifting.
C) piggybacking.
D) shape shifting.
E) skimming.

Question 44

Typically, which of the following arrangements are undertaken when a firm wants to fill out its product line or keep its seasonal distribution channels functioning throughout the year?

A) Price skimming
B) Using services of a trading company
C) Establishing a retail store
D) Using services of an export management company
E) Complimentary marketing

Question 45

Which of the following are frequently criticized for not representing the best interests of a manufacturer?

A) Global wholesalers
B) Trading companies
C) Manufacturer's representatives
D) Merchant middlemen
E) Agent middlemen

Question 46

A major trade-off when using home-country middlemen is:

A) the large financial investment required.
B) the limited control over the entire distribution process.
C) the large managerial investments required.
D) the limited number of retailers in the foreign country who can be reached through the home-country middlemen.
E) the large amount of commission charged by the home-country middlemen.

Question 47

With reference to a distribution channel, the channel process includes all activities, beginning with the manufacturer and ending with the ____.

A) wholesaler
B) agent middlemen
C) merchant middlemen
D) retailer
E) final consumer

Question 48

James Barker is the marketing manager of a firm which has small international sales volume. He is looking for a middleman who can take responsibility for promotion of the goods, credit arrangements, physical handling, market research, and provide information on financial, patent, and licensing matters while working under the name of his company. Which of the following would be the best choice for Mr. Barker if he wants to meet his objectives?

A) A manufacturer's export agent
B) An export merchant
C) A trade representative
D) An export management company
E) A complimentary marketer

Question 49

_____ take title to the goods and buy and sell on their own account.

A) Merchant middlemen
B) Brokers
C) Buying offices
D) Export agent
E) Agent middlemen

Question 50

All of the following statements are true regarding merchant middlemen EXCEPT:

A) they take title to manufacturers' goods.
B) they are more controllable by manufacturers than agent middlemen.
C) they assume trading risk.
D) they are primarily concerned with sales and profit margins on their merchandise.
E) they are frequently criticized for not representing the best interests of a manufacturer.

Question 51

Which of the following types of companies will most likely use the services provided by a home-country middleman?

A) Companies with large international sales volume
B) Companies which are experienced with the foreign markets
C) Companies which want to become involved with the complexities of international marketing
D) Companies which are willing make managerial investment in the distribution process
E) Companies which want to sell abroad with minimum financial commitment

Question 52

Specialization of this type of middleman in a given field often enables it to offer a level of service that could not be attained by the manufacturer without years of groundwork. This middleman acts under the name of the manufacturer as an independent marketing department. Identify the middleman in the discussion.

A) Webb-Pomerene export association
B) trading company
C) export management company
D) export agency
E) foreign sales corporation

Question 53

Which of the following represents a joint export ventures through which U.S. firms can take advantage of economies of scale, spread risk, and pool their expertise?

A) Manufacturers' export agents
B) U.S. trading companies
C) Manufacturers' Retail Stores
D) Export management companies
E) Complimentary marketers

Question 54

IKEA, Costco, and Sears Roebuck are examples of ____.

A) export management companies
B) trading companies
C) export associations
D) global retailers
E) complimentary marketers

Question 55

Retailing around the world has been in a state of active ferment for several years and the rate of change appears to be directly related to the ____.

A) literacy rate in the country
B) rate of inflation in the country
C) rate of population growth
D) stage and speed of economic development
E) dollar exchange rate for the currency of the country

Question 56

According to the text, which of the following countries has the largest number of retailers?

A) United States
B) Argentina
C) China
D) South Africa
E) Japan

Question 57

Another term for home-country middlemen is _____ middlemen.

A) uniform
B) agent
C) merchant
D) domestic
E) regional

Question 58

A major disadvantage of _____ is that they seldom can afford to make the kind of market investment needed to establish deep distribution for products because they must have immediate sales payout to survive.

A) export management companies
B) trading companies
C) export associations
D) global retailers
E) complimentary marketers

Question 59

What is the basic function of the Export Trading Company Act?

A) It allows U.S. companies to bypass tax laws with respect to international trading.
B) It allows producers of similar products to form export trading companies.
C) It allows companies to bypass trade barriers in foreign countries.
D) It allows companies to earn the highest possible profits in foreign countries.
E) It allows companies to combine export shipments within single containers.

Question 60

Which of the following statements is true regarding agent middlemen?

A) They take title to the merchandise.
B) They assume trading risk.
C) They are less controllable by manufacturers than merchant middlemen.
D) They are frequently criticized for not representing the best interests of a manufacturer.
E) They work on commission and arrange for sales in the foreign country.

Question 61

Which of the following modes of distribution affords the most control over the distribution channels but often at a cost that is not practical?

A) Complementary marketers
B) Direct sales force
C) Export associations
D) Trading companies
E) Export management companies

Question 62

Which of the following is NOT a type of domestic middlemen?

A) Manufacturers' Retail Stores
B) Trading Companies
C) Foreign distributors
D) Complementary Marketers
E) Export Management Companies

Question 63

A(n) _____ does not serve as the producer's export department but has a short-term relationship, covers only one or two markets, and operates on a straight commission basis and they do business in their own names rather than in the name of the client.

A) manufacturers' retail store
B) trading company
C) global retailer
D) manufacturer's export agent
E) complementary marketer

Question 64

Most middlemen have little loyalty to their vendors. They handle brands in good times when the line is making money but quickly reject such products within a season or a year if they fail to produce during that period. This is an example of problems associated with which of the following six Cs of channel strategy?

A) Character
B) Continuity
C) Control
D) Cost
E) Capital requirement

Question 65

Channel strategy is considered to have six specific strategic goals. These goals can be characterized as the six Cs of channel strategy. Which of the following is NOT one of these six Cs?

A) Cost
B) Coverage
C) Capacity
D) Character
E) Continuity

Question 66

One of the highest costs of doing business in China is the:

A) money required for the transportation of the goods.
B) amount of money and time required for obtaining the appropriate permits.
C) cost of local advertising.
D) capital required to maintain effective distribution.
E) cost of customizing the products for the Chinese market.

Question 67

In which of the following modes of distribution in the foreign market will a company have to make maximum financial investment?

A) Export management companies
B) Trading companies
C) Export associations
D) Direct sales force
E) Complimentary marketers

Question 68

In China, it is often necessary to use varied distribution forms to reach customers. If a company is using manufacturer's agents, a direct sales force, merchant wholesalers, and small retailers to sell goods to this massive market, which of the following Cs of channel strategy is receiving the attention of the company in its strategy process?

A) Cost
B) Control
C) Coverage
D) Capital
E) Continuity

Question 69

Sixty percent of the Japanese population lives in the _____ market area, which essentially functions as one massive city.

A) Tokyo-Nagoya-Osaka
B) Komaki-Tokoname-Kariya
C) Nagoya-Handa-Seto
D) Nishio-Okazaki-Inazawa
E) Inuyama-Nisshin-Takahama

Question 70

A variety of factors affect choice of channels in a foreign market. All of the following points should be addressed prior to the selection process EXCEPT:

A) identify specific target markets within and across countries.
B) specify marketing goals in terms of volume, market share, and profit margin requirements.
C) specify financial and personnel commitments to the development of international distribution.
D) identify control, length of channels, terms of sale, and channel relationships.
E) identify decision-making processes and languages of prospective middlemen.

Question 71

The WTO in 2003 ruled _____ to be in violation of international trade rules, thus starting a major trade dispute with the European Union that still simmers and occasionally sizzles.

A) foreign sales corporation
B) direct marketing partnerships
C) trading companies
D) export promotion company
E) Webb-Pomerene export associations

Question 72

The _____ allowed American business firms to join forces in export activities without being subject to the Sherman Antitrust Act.

A) Export Trading Company Act
B) Roebuck-Guillaume Act of 1936
C) Webb-Pomerene Act of 1918
D) North American Free Trade Agreement
E) Sarbanes-Oxley Act

Question 73

One of the key elements in distribution decisions includes ____.

A) the selection of optimum container sizes
B) volume discounts and rebates
C) the functions performed by middlemen
D) the foreign language local advertising modes
E) the target market culture

Question 74

A(n) _____ is an individual agent middleman or an agent middleman firm providing a selling service for manufacturers that normally covers only one or two markets and operates on straight commission basis.

A) complementary marketer
B) export management company
C) Webb-Pomerene export association
D) global retailer
E) manufacturer's export agent

Question 75

Companies with marketing facilities or contacts in different countries with excess marketing capacity or a desire for a broader product line sometimes take on additional product lines for international distribution. The formal name for this type of marketing is:

A) skimming.
B) backhauling.
C) complementary marketing.
D) export marketing.
E) demand shifting.

Question 76

One of the reasons that channels of distribution often pose longevity problems is that ____.

A) most middlemen do not maintain sufficient inventory to serve customers
B) some middlemen lack product knowledge resulting in low sales volume
C) most middlemen have little loyalty to their vendors
D) most middlemen tend to slow down distribution to extract higher commissions
E) most middlemen do not have sufficient knowledge of the target market

Question 77

According to the text, distribution channels vary depending on which of the following?

A) Distance from manufacturer
B) Language and dialect spoken in the target market
C) Available distribution intermediaries
D) The literacy levels in the target market
E) Per capita income in the target market

Question 78

According to the text, one of the critical elements associated with using a particular type of middleman is ____.

A) knowledge of the culture of the target market
B) number of employees
C) mode of transportation available for moving goods
D) influence over the target market
E) capital requirements

Question 79

A(n) _____ is a sales corporation set up in a foreign country or U.S. possession that can obtain a corporate tax exemption on a portion of the earnings generated by the sale or lease of export property.

A) Webb-Pomerene export association
B) trading company
C) export management company
D) export agency
E) foreign sales corporation

Question 80

The Webb-Pomerene Act of 1918 made it possible for American business firms to join forces in export activities without being subject to which of the following acts?

A) The Sherman Antitrust Act
B) The Federal Communications Act
C) The Federal Trade Commission Act
D) The Federal Food, Drug, and Cosmetic Act
E) The Robinson-Patman act