Global Marketing Chapter 15

Identify an accurate statement about the Japanese distribution system.

It depends on an unusually large number of middlemen.

Select the roles that can be played by a foreign sales corporation.

a principal an agent working on commission (all of these)

In Japan, wholesalers typically act as ________ and extend the manufacturer's control through the channel to the retail level.

agent middlemen

Which of the following is not one of the six C's of channel strategy?

crisis

The behavior of channel members is the result of interactions between the ______ environment and the marketing process.

cultural

When selecting a distribution channel, a company should consider

how much money the product is worth. whether the product is apt to spoil easily. whether the sale of the product will involve a complex procedure. whether the product will require any sales service. the product's size. (all of these)

In regions where markets have not been developed very much, it is difficult for a product to achieve wide market coverage due to

insufficient distribution channels.

What do export management companies need to survive?

immediate sales to earn them a commission

Online B2B marketing helps

increase inventory control.

Logistics management involves the physical transportation of

inventory that is ready to ship to customers. merchandise that is being processed. raw materials. (all of these)

One reason channels of distribution often pose longevity problems is that most middlemen

have little loyalty to their vendors

Identify the scenario that best describes direct selling.

Grace Products Inc. sells its hair-care products through door-to-door campaigning.

Identify an accurate statement about online B2B marketing.

It is a cheaper way to process transactions.

Companies fully committed to foreign markets are buying server space and creating mirror sites, whereby a company has a voice mail or fax contact point in key markets.

Local Contact

Costs of maintaining channels

Money paid to the company's sales crew or to middlemen as they market the company's products

The Japanese distribution system is characterized by

a business philosophy based on a distinctive culture. laws that safeguard small retailers. dependency on numerous small middlemen. manufacturers who control the channels that distribute merchandise. (all of these)

Goods are sold and physically moved in

a distribution process.

A U.S. manufacturer is willing to assume the trading risk in a foreign country but maintains the right to establish policy guidelines and prices and to require its agents to provide sales records and customer information. What type of middleman should the company choose?

agent middlemen

Mary Kay's distribution pattern fits with the growth and optimism of India's consumer classes in part because it directly enables people to

become entrepreneurs.

Although Webb-Pomerene export associations are allowed to form business groups that export products, they are forbidden from

belonging to cartels.

Trading companies in developed countries

buy raw materials from developing countries.

In foreign countries, adequate market coverage may require

changing the way products are distributed.

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

complementary marketing

A multinational food and beverage company manufactures potato chips. On receiving positive feedback from consumers, it decides to launch a line of chip dip as well. This is an example of

complementary marketing.

The last people involved in the distribution channel process are the

consumers.

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?

continuity

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?

cost

Why type of distribution channel does Mary Kay use in India?

direct sellers

Home-country middlemen are also known as _____.

domestic middlemen.

The World Wide Web is used to sell industrial goods, in addition to consumer services and merchandise, via

e-commerce.

In regions where markets are already well developed, it is hard for a product to achieve wide market coverage because of

fierce competition from rival companies.

People or firms that provide international selling services for manufacturers are known as

manufacturer's export agents.

Identify a factor that improves supply-chain management.

online B2B marketing

Firms must establish _____ before choosing channel middlemen.

operational policies

Complementary marketing is also known as

piggybacking.

When consumers stop buying a brand for a particular period of time, middlemen tend to

soon stop selling those products.

Marketing services are sometimes provided by individuals located in a producing firm's home country. This arrangement is useful when

the seller does not want to invest the time and money required to develop a global marketing system.

The combined costs of all facets of a physical distribution system are called the

total cost.

Goods are collected, shipped, and sold from many countries by

trading companies.

What is part of a physical distribution system?

transportation mode

Direct selling is especially effective in markets that have

underdeveloped distribution systems.

Identify a factor that reduces the amount of money a firm must invest in channel management.

use of distributors

A company's website should

be translated into the language of each country being targeted.

In Japan, the distribution system is dominated by

small middlemen dealing with many small retailers.

Identify the correct statements about a traditional distribution structure.

A limited amount of merchandise is available. This type of distribution structure creates a seller's market. The merchandise is usually sold to wealthy people. The merchandise is sold locally, not nationally. (all of these)

Identify a similarity between an export management company (EMC) and a manufacturer's export agent (MEA).

Both work on commission.

Identify the accurate statements about a distribution process.

Commercial negotiations occur among producers, middlemen, and buyers. Ownership or title is passed. (all of these)

What did the Export Trading Company Act accomplish?

Companies have greater access to funding for international trade enterprises. Certain antitrust laws have been scaled back, allowing companies to form large, powerful joint ventures. Producers and suppliers are able to export their products more effectively. (all of these)

The consumer should be able to use a credit card number—by e-mail (from a secure page on the website), by fax, or over the phone.

Payment

Search engine registration, press releases, local newsgroups and forums, mutual links, and banner advertising are used to attract visitors to the website.

Promotion

A website and the product must be culturally neutral, which can be a problem when it comes to color. For instance, the color red is associated with socialism in

Spain

Robert wants to export goods manufactured by his company to a new foreign market. He needs to select a middleman. He discusses the matter with some experienced exporters. Which way of selecting a middleman are they most likely to suggest?

Speak to the consumers of the product personally to find whom they consider to be the best distributors.

What are the benefits of obtaining full-market coverage?

The company can claim a substantial share of the market. The product can become so well known that most people in the market will recognize it. (all fo these)

Which of the following statements are true of middlemen?

The main goal of merchant middlemen is to increase sales and profits on their merchandise. Agent middlemen provide sales records and customer information. (all of these)

How are small stores in Japan different from their counterparts in the United States?

They account for a larger percentage of total retail sales.

the seller makes the most profit when customers are buying about as much merchandise as the producer can supply.

They account for a larger percentage of total retail sales.

Identify the features of export management companies.

They handle international marketing for manufacturers that do not have large global sales revenues. They are independent companies but answer directly to the manufacturers. (all of these)

What are the advantages of working with export management companies?

They help companies avoid assigning their own employees and managers to foreign marketing efforts. They are paid on commission. They help companies penetrate foreign markets at a relatively small cost. (all of these)

One difference between an export management company (EMC) and a manufacturer's export agent (MEA) is that

an EMC is likely to stay with the same manufacturer for a substantially longer time.

In a traditional distribution structure, a limited amount of merchandise is controlled by

an importer.

Although India is a geographically large country, Mary Kay has only regional distribution centers and Mary Kay Beauty Centers in Delhi and Mumbai. This is most likely because, when compared with the rest of the country, they

are wealthy, populous cities.

The recent rapid change in retail markets around the world is apparently a result of

economic development.

Which of the following actions best describes an EMC's role in promoting a firm's goods?

exhibiting the client's products at international trade shows

The purpose of the Large-Scale Retail Store Law in Japan is to

protect the interests of small retailers.

Identify the measures to manage middlemen's activities.

quotas reports sending personnel from the company to visit the middlemen (all of these)

Reducing the length of channels

reduces a company's cost.

Online B2B enables companies to enhance their performance by

reducing procurement costs.

When selecting a product for piggyback distribution, a company must consider whether the item

will find market acceptance. is likely to make a large enough profit. enhances the existing product line. easily fits into the firm's existing distribution system. (all of these)

An Indian online jewelry store launches a line of wedding rings. However, it does not use some of the designs while promoting products in other countries. It made this choice because those designs are not popular in the new country markets. Identify the concept illustrated in this scenario.

Adaptation

Ideally, a website should be translated into the languages of the target markets. At a minimum, the most important pages of the site should be translated.

Adaptation

Identify a difference between agent middlemen and merchant middlemen.

Agent middlemen do NOT take title to merchandise. Merchant middlemen do. Merchant middlemen are more difficult to control than agent middlemen are. (all of these)

What legislation permitted the formation of export trading companies by producers of similar products?

Export Trading Company Act

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

False

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.

False

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

False

______ is set up in a foreign country or U.S. possession that can claim tax exemptions on income from the sale or lease of export property.

Foreign sales corporations

What are the advantages of using middlemen in foreign lands?

They help connect companies that make goods with the people who will buy them. They are better able to deal with difficulties arising from the distribution of products, funding, and foreign languages. (all of these)

Identify an accurate statement about distribution structures.

They start with producers and end with users.

Identify an accurate statement about merchant middlemen.

They take title to manufacturers' goods.

Identify an accurate statement about piggyback arrangements.

Usually merchants buy the products and resell them at a profit.

Select the benefits offered by Webb-Pomerene export associations.

advertise to build interest in products strike bargains to achieve better trading relationships establish prices and product standards form a group of businesses that can export merchandise at a lower cost (all of these)

Export management companies operate under the authority of the manufacturers as

affordable autonomous marketing organizations.

Drew's Corp., a baby-product manufacturing company, eliminated middlemen in its product distribution process. Instead, it entrusted the task to one of its managers. In this scenario, the company increased its

control over channels.

When distribution channels are lengthened,

control over outlet variety decreases. control over price decreases. control over volume decreases. control over promotion decreases. (all of these)

Before choosing middlemen, a company should consider

goals such as how much sales volume the venture needs to generate. how many people and how much money will be devoted to global marketing. markets that will be targeted, in specific countries and across broad regions. (all of these)

To ensure that middlemen will continue to be enthusiastic about selling its products, a company should

handle disputes with tact. offer sufficient financial compensation. stay in touch via newsletters, for example. (all of these)

If Mary Kay were to open more distribution centers around India to make it easier for its sales representatives to collect their products, it could affect delivery times, warehousing costs, and the cost of its product. This is an example of the ______ of physical distribution activities.

interdependence

It is particularly important for firms to maintain good rapport with their middlemen in countries where the most important cultural factor is _____.

relationships

The largest investment of funds is required when a firm

relies on its own sales force.

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

remove antitrust disincentives to export activities in the U.S..

Parent companies exert control over middlemen by monitoring

sales volume. advertising and profit. services offered. coverage of market. prices and payment of bills. (all of these)

What do manufacturers receive from manufacturer's export agents?

selling services

Export management companies handle

shipping of products to customers. advertising and exhibiting the products. studying the market. (all of these)

he distribution system is dominated by

small middlemen dealing with many small retailers.

________ is one of the six Cs of distribution channel strategy.

Continuity

The website must fit the uniqueness of a particular country's market and take the country's sensibilities into consideration.

Culture

For companies operating in the United States, shipping small parcels via surface mail is the most cost-effective, though it takes the longest time.

Delivery

True or false: Worldwide, retailing has been generally stagnant for the past couple of decades.

False Reason: Retailing around the world has been in a state of active ferment for several years, even in the least developed countries.

True or false: Distributing goods via the Internet is a form of indirect selling.

False Reason: E-commerce is a form of direct selling.

True or false: Export management companies do not rely on sales volume for their compensation.

False Reason: Export management companies usually work on commission. They are paid a percentage of the product's price.

True or false: Exporters cannot dismiss distributors who fall short of sales minimums.

False Reason: Falling short of minimums may be grounds for dismissal.

True or false: Piggybacking is not an effective way of increasing volume and profit for a carrier.

False Reason: Piggybacking is a useful, logical way of increasing sales (and therefore revenue) for both the piggybacker and the carrier.

True or false: Channel patterns are constant and seldom undergo changes.

False Reason: This statement is false. Channel patterns change with time, and distribution systems must change accordingly.

Identify the disadvantages of working with export management companies.

They usually cannot afford to invest enough money to achieve deep distribution of the product. If the product is not making much money, the company sometimes fails to promote it aggressively. (all of these)

True or false: A potential problem for a website designed for global markets is the different cultural reactions to color.

True Reason: Color is an important part of culture, and it poses a potential problem for websites designed for global markets.

The distribution philosophy of mass consumption tends to create a

buyer's market.

Identify the six C's of channel strategy.

capital continuity coverage cost character control (all of these)

With the Internet, an argument can be made that the ________ is in control of marketing and distribution globally.

consumer

GreenGo.com, an online store for gardening tools, launches a new version of its website in a different language. However, it displeases customers because the exact translations of certain phrases sound inappropriate. In this scenario, the e-vendor has overlooked

cultural norms.

Which of the following middlemen are likely to be loyal to their vendors?

dealers distributors (all of these)

A physical distribution system should be designed to

deliver merchandise at the lowest possible cost.

Direct selling is also known as _____ marketing.

direct

To improve the efficiency of their distribution systems, marketers around the world are experimenting with

direct marketing. selling via hypermarkets, shopping malls, and discount houses. door-to-door selling. selling via the Internet. (all of these)

An EMC can help firms get their product to foreign customers by handling which of the following items?

insurance shipping and customs documentation export declarations instructions for special export packing and marking (all of these)

Companies practicing complementary marketing have

international distribution channels.

When companies use foreign-country middlemen,

international marketers achieve more control over their distribution systems.

In import-oriented systems, distributions systems are ________ in scope.

local

The total distribution process of an international trade channel is handled through

logistics management.

What is a part of the relationship-oriented business philosophy that characterizes Japanese distribution channels?

loyalty

A foreign sales corporation can be formed by

manufacturers and groups of businesses that export merchandise.

Envy Corp., a textile company, launches a line of women's wear that is sold in stores owned by the company. These stores are examples of

manufacturers' retail stores.

When stores are owned by manufacturers and used as channels of distribution, those stores are known as

manufacturers' retail stores.

The first people involved in the distribution channel process are the

manufacturers.

A company can reduce channel cost by

marketing to the public through its own wholesalers.

Investment costs

money spent to set up a distribution channel

When distribution agreements are made with middlemen, firms must

specify what will be expected of the company and the middleman.

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

the larger the sales force required.

In Japan, a large store cannot stay open later in the evening without permission from

the prefecture government.

Throughout the world, traditional distribution channels are becoming more efficient, which has led to

the rise of mass merchandising. the emergence of e-commerce and supermarkets. the introduction of direct marketing and discounting. a preference for self-service. (all of these)

In a market where distribution is based on mass consumption,

the seller makes the most profit when customers are buying about as much merchandise as the producer can supply.

In a physical distribution process, it is important to keep track of how much money is being spent on each segment of the system. Otherwise

the total cost of the process might not be as low as it could be.

When a market has a traditional distribution structure, mass distribution and market penetration are not necessary, because

there is not enough product to meet customer demand.

Middlemen spend money (and therefore ultimately drive up the price of the merchandise) when

they sell products as the representatives of the manufacturer. they advertise products locally. they move and store merchandise. (all of these)

Why do firms undertake piggyback arrangements?

to offer more product lines to enable their distribution systems to operate all year long (all of these)

Identify the facets of a physical distribution system.

transportation packing of goods plants and warehousing inventories (all of these)