Deck 15: International Marketing Channels

Question 1

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

Answer 1

True

Question 2

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

Answer 2

True

Question 3

In the context of distribution structures, one of Walmart's strengths is its ability to work with distributors one-on-one.

Answer 3

False

Question 4

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

Question 5

The Japanese distribution structure is similar to ones found in the United States or Europe.

Question 6

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

Question 7

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

Question 8

Direct marketing works well in affluent markets as well as in markets with underdeveloped distribution systems.

Question 9

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

Question 10

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

Question 11

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

Question 12

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

Question 13

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

Question 14

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

Question 15

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

Question 16

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

Question 17

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

Question 18

Globally, wholesaling shows a greater diversity in its distribution structure than does retailing.

Question 19

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

Question 20

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

Question 21

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 22

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

Question 23

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 24

A change of transportation mode can affect a change in packaging and handling, inventory costs, warehousing time and cost, and delivery charges.

Question 25

Selecting a middleman is usually as simple as asking for a recommendation from a company's local manager.

Question 26

What makes Walmart's transactions with suppliers highly efficient and lowers its cost of operations?

A) clean business reputation
B) internal Internet-based system with suppliers
C) lack of competitors
D) outreach programs to placate small retailers
E) ability to influence foreign governments

Question 27

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) Hyundai Motors

Question 28

Channels of distribution often pose longevity problems as they tend to be small institutions.

Question 29

Which feature characterizes the business philosophy of Japanese distribution channels?

A) loyalty
B) direct sales
C) fast delivery
D) variety
E) price competition

Question 30

In 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 provide functions such as advertising, marketing research, and financing.
D) the idea of a channel as a chain of intermediaries performing specific activities is common.
E) the distribution system is national in scope.

Question 31

In Japan, under the Large-Scale Retail Store Law, all proposals for new "large" stores were 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 32

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

Question 33

Distribution in ________ has long been considered the most effective nontariff barrier to that market.

A) China
B) Japan
C) the U.S.
D) Western Europe
E) Canada

Question 34

What group is considered to be the foundation of the Japanese distribution system?

A) consumers
B) brokers
C) manufacturers
D) small retailers
E) wholesalers

Question 35

In the United States, if a middleman is terminated, the company is required to pay 1 percent of the middleman's average annual compensation multiplied by the number of years the middleman served as a final settlement.

Question 36

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

Question 37

The ________ process includes the physical handling and distribution of goods, the passage of ownership (title), and the buying and selling negotiations between producers and middlemen and between middlemen and customers.

A) logistics
B) marketing
C) channel
D) distribution
E) control

Question 38

Which distribution structure is also known as a traditional distribution structure?

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

Question 39

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

Question 40

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

Question 41

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 42

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

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

Question 43

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

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

Question 44

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

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

Question 45

Home-country middlemen are also known as ________ middlemen, and are located in the producing firm's country.

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

Question 46

What company offers a manufacturer's retail store?

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

Question 47

Which group is 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 48

________ offer one of the easiest routes to gain entrance into the complicated Japanese distribution system 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 49

How are global retailers like IKEA, Costco, and Walmart becoming major domestic middlemen for international markets?

A) They maintain their core marketing approaches while localizing the array of products, promotions, and other peripheral aspects of their operations.
B) They work under the names of the manufacturers and function as low-cost, independent marketing departments with direct responsibility to the parent firms.
C) They have minimum investment costs as they do not commit to investing in company personnel.
D) They serve as the producer's export department but have a short-term relationship, cover only one or two markets, and operate on a straight commission basis.
E) They offer reduction of export costs, demand expansion through promotion, trade barrier reduction, and improvement of trade terms through bilateral bargaining.

Question 50

What has proven 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 51

A ________ provides a selling service for a manufacturer, has a short-term relationship with the manufacturer, 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 52

Which arrangement is best 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 53

Which statement 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 smaller investment from the parent firm to get into international markets.

Question 54

What 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 55

IGP owned a large warehouse in England where it stored and distributed books. It was approached by a greeting card company in the U.S. to distribute those as well. Since the products would go into similar markets and IGP could make a profit on the distribution of the greeting card line, it decided to participate in

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

Question 56

Which group takes 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

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 58

A major goal of the Export Trading Company (ETC) Act was to

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

Question 59

A marketing manager of a firm with small international sales volume 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. What type of middleman would be the best choice for this marketing manager 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 60

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 61

What 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 62

What is one of the six Cs of distribution channel strategy?

A) communication
B) continuity
C) capacity
D) commission
E) contribution

Question 63

What 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 64

What subject area should be on the checklist of criteria for evaluating middlemen servicing a market?

A) flexibility
B) sensitivity
C) cultural empathy
D) productivity
E) breadth of knowledge

Question 65

In the context of the 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 66

Which mode 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 67

One way to get around the difficulty of full-market coverage in a country is to

A) seek significant penetration in major population areas.
B) avoid countries with multiple languages.
C) assess countries in terms of market segments, not geographic segments.
D) keep marketing efforts to highly developed areas.
E) focus on the use of one channel.

Question 68

Which mode of distribution in the foreign market will require a company to make the maximum financial investment?

A) export management companies
B) trading companies
C) export associations
D) direct sales force
E) complementary marketers

Question 69

What is one of the key elements in distribution decisions when it comes to choosing channels?

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

Question 70

A(n) ________ is a middleman 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

Which action should be taken when beginning the search for prospective middlemen?

A) short-listing the middlemen
B) studying the target market
C) evaluating the available financial resources
D) designing the sales force required
E) understanding the mission of the manufacturing firm

Question 72

What 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 73

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 74

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

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

Question 75

One reason 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 76

Most middlemen 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 a problem associated with which of the six Cs of distribution channel strategy?

A) character
B) continuity
C) control
D) cost
E) capital requirement

Question 77

Transporting and storing goods, breaking bulk, providing credit, local advertising, sales representation, and negotiations with middlemen most directly relate to which of the six Cs of the channel distribution strategy?

A) cost
B) control
C) coverage
D) character
E) continuity

Question 78

The closer the company wants to get to the customer in its channel contact,

A) the larger the sales force required.
B) the more routine the channel-building process becomes.
C) the more likely the company will use middlemen.
D) the more important it is to consult with trade organizations.
E) the more effective use of the Internet will be.

Question 79

________ are a type of domestic middleman.

A) Sole proprietors
B) Export management companies
C) Foreign distributors
D) Lessors
E) Joint ventures

Question 80

According to experienced exporters, what is the only effective way to select a middleman?

A) Conduct a background check on all the distributors available in the target market.
B) Issue a request-for-proposal to all distributors in the target market and evaluate their responses.
C) Consult other manufacturers of similar products and select the distributor recommended by them.
D) Consult trade organizations and select the distributor recommended by them.
E) Talk personally to ultimate consumers to find whom they consider to be the best distributors.