Deck 15: International Marketing Channels

Question 1

In a traditional distribution structure, distribution systems are national rather than local in scope.

Answer 1

False
Explanation: In the traditional distribution structure, distribution systems are local rather than national in scope.

Question 2

The Japanese distribution structure is similar to the one found in the U.S. or in Europe.

Answer 2

False
Explanation: The Japanese distribution structure is different enough from its U.S. or European counterparts that it should be carefully studied by anyone contemplating entry.

Question 3

Merchant middlemen tend to be more controllable than agent middlemen because they take title to manufacturers' goods.

Answer 3

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

Question 4

As traditional channel structures are changing, importers and retailers are also becoming involved in new product development.

Question 5

In the context of the different kinds of middlemen, in 2003, the WTO ruled export management companies to be in violation of international trade rules.

Question 6

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

Question 7

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

Question 8

A distinguishing characteristic of the Japanese distribution channel system is that it is controlled by a few small retailers found in the country.

Question 9

In the context of retail patterns, direct marketing works well in affluent markets as well as in markets with underdeveloped distribution systems.

Question 10

In an import-oriented distribution structure, supply often exceeds demand.

Question 11

Domestic middlemen are most likely to be used when the marketer desires to minimize financial and management investment.

Question 12

In the context of the distribution structure in Japan, it has been observed that Japanese consumers favor cheaper prices over personal service.

Question 13

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

Question 14

Traditional channels in developing countries evolved from economies with a strong dependence on imported manufactured goods.

Question 15

Agent middlemen work on commission and do not take title to the merchandise.

Question 16

In the context of distribution structures, one of Walmart's strengths is its ability to influence foreign governments.

Question 17

The behavior of channel members in the distribution process is the result of the interactions between the cultural environment and the marketing process.

Question 18

In the traditional distribution structure, independent agencies that provide facilitating functions are nonexistent or underdeveloped.

Question 19

In the context of distribution patterns, wholesaling shows a greater diversity in its structure than does retailing.

Question 20

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

Question 21

In Japan, under the Large-Scale Retail Store Law, all proposals for new "large" stores are first judged by the _____.

A) Transport and Tourism Department
B) Internal Affairs and Business Council
C) Ministry of International Trade and Industry
D) Health and Welfare Committee
E) Local Retailers Union

Question 22

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

Question 23

Export management companies work under their own names.

Question 24

In the U.S., if a middleman is terminated, the company is required to pay one percent of the middleman's average annual compensation, multiplied by the number of years the middleman served, as a final settlement.

Question 25

A physical distribution system involves only the physical movement of goods.

Question 26

Which of the following statements is true of the Japanese market?

A) The costs of Japanese consumer goods are among the lowest in the world.
B) Manufacturers are independent of wholesalers for a multitude of services to other members of the distribution network.
C) The Japanese distribution structure supports long-term dealer-supplier relationships.
D) Japanese law favors the establishment of large retail stores.
E) Japanese consumers favor price over personal service.

Question 27

Which of the following characterizes the business philosophy of the Japanese distribution channels?

A) Loyalty
B) Direct sales
C) Fast delivery
D) Variety
E) Price competition

Question 28

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 29

Legal advice is not necessary when entering distribution contracts with middlemen.

Question 30

Which of the following statements is true of a traditional distribution structure?

A) The distribution system is national in scope.
B) The relationship between the importer and any middleman 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.
D) Independent agencies providing functions such as advertising, marketing research, and financing are a part of this distribution structure.
E) The marketing system develops around the philosophy of selling a limited supply of goods at high prices to a small number of affluent customers.

Question 31

In a _____ 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) domestic
B) traditional
C) manufacturer-oriented
D) service
E) customer-oriented

Question 32

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 33

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

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

Question 34

_____ are considered to be the foundation of the Japanese distribution system.

A) Consumers
B) Brokers
C) Manufacturers
D) Small retailers
E) Wholesalers

Question 35

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

A) The Japanese population
B) The Japanese distribution structure
C) Japanese culture
D) The Japanese import and export procedure
E) Intense competition in Japan

Question 36

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

A) The importer-wholesaler traditionally performs most of the marketing functions.
B) The relationship between the importer and any middleman is similar to that found in a mass-marketing system.
C) Several independent agencies providing functions such as advertising, marketing research, financing are a part of this distribution structure.
D) The idea of a channel as a chain of intermediaries performing specific activities is common.
E) This distribution system is national in scope.

Question 37

Ideally, a website should be translated into the languages of the target market.

Question 38

Which of the following is true of the distribution process?

A) It does not involve the physical handling and distribution of goods.
B) It includes activities related to the promotion of goods and services.
C) The ownership title remains with the distributor even on completion of the transaction.
D) It includes buying and selling negotiations.
E) The behavior of channel members is not affected by the cultural environment.

Question 39

Trading companies provide the best means for intensive coverage of the market.

Question 40

Channels of distribution often pose longevity problems.

Question 41

The distribution 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 42

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 43

In the context of distribution patterns, the rate of change in retailing around the world appears to be directly related to the _____.

A) literacy rate
B) rate of inflation
C) population growth
D) speed of economic development
E) currency exchange rate

Question 44

Which of the following has proved to be an important way to break the trade barrier imposed by the Japanese distribution system?

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

Question 45

Which of the following statements is true regarding agent middlemen?

A) They take title to the merchandise.
B) They work on commission and arrange for sales in the foreign country.
C) Manufacturers cannot control them as they control merchant middlemen.
D) They do not represent the best interests of the manufacturer.
E) They assume trading risks.

Question 46

A major disadvantage of _____ is that they can seldom afford to make the kind of market investment needed to establish deep distribution for products.

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

Question 47

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) complementary marketers

Question 48

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 sales volume.
B) It operates under its own name while providing services to another firm.
C) It does not have direct responsibility to the parent firm.
D) It acts as a middleman for firms willing to involve their own personnel in international functions.
E) It calls for a minimum investment from the parent firm to get into international markets.

Question 49

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

A) Global wholesalers
B) Trading companies
C) Consumers
D) Merchant middlemen
E) Brokers

Question 50

Home-country middlemen are also known as _____ middlemen.

A) area
B) local
C) merchant
D) domestic
E) regional

Question 51

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

A) Clean business reputation.
B) Internal Internet-based system.
C) Ability to beat competitors.
D) Outreach programs to placate small retailers.
E) Ability to influence foreign governments.

Question 52

In the context of the different types of middlemen, which of the following is an example of a manufacturer's retail store?

A) Toys "R" Us
B) Walmart
C) Costco
D) Benetton
E) IKEA

Question 53

General Motors, _____, and DaimlerChrysler have created a single online site called Covisint for purchasing automotive parts from suppliers.

A) Toyota Motor Corporation
B) Honda Motor Company
C) Ford Motor Company
D) Nissan Motor Company
E) Tata Motors

Question 54

Which of the following was a goal of the Export Trading Company Act?

A) To allow U.S. companies to bypass tax laws with respect to international trading.
B) To remove antitrust disincentives to export activities.
C) To bypass trade barriers in foreign countries.
D) To earn the highest possible profits in foreign countries.
E) To combine export shipments within single containers.

Question 55

A disadvantage when using home-country middlemen as intermediaries in the distribution process is:

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

Question 56

_____ take title to manufacturers' goods and assume the trading risks.

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

Question 57

James Barker is the marketing manager of a firm with small international sales volume. He is looking for a middleman who can take responsibility for promotion of the company's products, credit arrangements, physical handling, and market research. Also, the middleman must be able to provide information on financial, patent, and licensing matters. In addition, the middleman should agree to work under the name of the firm. Which of the following types of middlemen 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 complementary marketer.

Question 58

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

A) Direct marketing
B) A big wholesale store
C) Internet selling
D) A discount house
E) Television advertising

Question 59

Which of the following statements is true regarding merchant middlemen?

A) They represent the best interests of a manufacturer.
B) They can be controlled better than agent middlemen.
C) They assume trading risks.
D) They work on commission and arrange for sales in the foreign country.
E) They do not take title to manufacturers' goods.

Question 60

Which of the following countries has the largest number of retailers?

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

Question 61

Which of the following is true of foreign sales corporations?

A) They are commonly called piggybackers.
B) They can only be related to a manufacturing parent and not an independent broker.
C) They virtually control distribution through all levels of channels in Japan.
D) They accumulate, transport, and distribute goods from many countries.
E) They can function as a principal or a commissioned agent.

Question 62

In the context of factors affecting choice of channels, 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 local advertising modes
E) the target market culture

Question 63

Which of the following is one of the six Cs of distribution channel strategy?

A) Communication
B) Continuity
C) Capacity
D) Commission
E) Contribution

Question 64

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 Trade Commission Act.
D) The Food, Drug, and Cosmetics Act.
E) The Robinson-Patman Act.

Question 65

A _____ provides a selling service for a manufacturer, has a short-term relationship, and operates on a straight commission basis.

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

Question 66

Which of the following factors affects the choice of distribution channels?

A) Distance from manufacturer.
B) Language spoken in the target market.
C) Available distribution intermediaries.
D) Consumer literacy levels.
E) Country's per capita income.

Question 67

Which of the following is a critical element associated with using a particular type of middleman?

A) Knowledge of the culture of the target market.
B) Number of employees.
C) Mode of transportation for moving goods.
D) Influence over the target market.
E) Cash-flow patterns.

Question 68

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) Complementary marketers.

Question 69

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 70

A(n) _____ is a domestic middleman 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) manufacturer's export agent
C) export management company
D) complementary marketer
E) foreign sales corporation

Question 71

_____ is an area that should be on a checklist of criteria for evaluating middlemen servicing a market.

A) Flexibility
B) Hypersensitivity
C) Cultural empathy
D) Productivity
E) Breadth of knowledge

Question 72

Which of the following arrangements are undertaken when a firm wants to keep its seasonal distribution channels functioning throughout the year?

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

Question 73

One of the reasons that channels of distribution often pose longevity problems is that most middlemen _____.

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

Question 74

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 distribution channel strategy?

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

Question 75

Companies with marketing facilities in different countries with excess marketing capacity 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

Which of the following is one of the highest costs of doing business in China?

A) Money required for the transportation of goods.
B) Money required for obtaining appropriate permits.
C) Cost of local advertising.
D) Capital required to maintain effective distribution.
E) Cost of customizing products for the Chinese market.

Question 77

Which of the following is a type of domestic middleman?

A) Sole proprietors.
B) Export Management Companies.
C) Foreign distributors.
D) Lessors.
E) Joint ventures.

Question 78

A(n) _____ is an individual agent middleman or an agent middleman firm providing a selling service for manufacturers that covers only one or two markets.

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

Question 79

In the context of types of domestic middlemen, the WTO in 2003 ruled _____ to be in violation of international trade rules, thus starting a major trade dispute with the European Union.

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

Question 80

Complementary marketing is commonly known as _____.

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