Global Marketing- Chapter 15

______ 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

Identify an accurate statement about online B2B marketing.

It is a cheaper way to process transactions.

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.

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

crisis

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.

What do export management companies need to survive?

immediate sales to earn them a commission

Online B2B marketing helps

increase inventory control.

What did the Export Trading Company Act accomplish?

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

What are the benefits of obtaining full-market coverage? (Check all that apply.)

- The product can become so well known that most people in the market will recognize it. - The company can claim a substantial share of the market.

Identify the features of export management companies. (Check all that apply.)

- They are independent companies but answer directly to the manufacturers. - They handle international marketing for manufacturers that do not have large global sales revenues.

What are the advantages of working with export management companies? (Check all that apply.)

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

What are the advantages of using middlemen in foreign lands? (Check all that apply.)

- 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.

Export management companies handle

- advertising and exhibiting the products. - shipping of products to customers. - studying the market.

When distribution channels are lengthened,

- control over price decreases. - control over outlet variety decreases. - control over volume decreases. - control over promotion decreases.

Before choosing middlemen, a company should consider

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

Logistics management involves the physical transportation of

- inventory that is ready to ship to customers. - raw materials. - merchandise that is being processed.

When a company wants to offer a wider selection of merchandise for its international marketing efforts, it sometimes adds products that work well with its original products. In these cases, the company is engaged in

- piggybacking. - complementary marketing.

Identify the facets of a physical distribution system. (Check all that apply.)

- plants and warehousing - transportation - inventories - packing of goods

Identify the measures to manage middlemen's activities. (Check all that apply.)

- reports - quotas - sending personnel from the company to visit the middlemen

Parent companies exert control over middlemen by monitoring

- services offered. - prices and payment of bills. - coverage of market. - sales volume. - advertising and profit.

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

- stay in touch via newsletters, for example. - offer sufficient financial compensation. - handle disputes with tact.

Select the benefits offered by Webb-Pomerene export associations. (Check all that apply.)

- 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 - advertise to build interest in products

When selecting a distribution channel, a company should consider

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

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

- they move and store merchandise. - they sell products as the representatives of the manufacturer. - they advertise products locally.

Why do firms undertake piggyback arrangements? (Check all that apply.)

- to offer more product lines - to enable their distribution systems to operate all year long

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

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

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

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.

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

Both work on commission.

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

Export Trading Company Act

Export management companies do not rely on sales volume for their compensation.

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

Channel patterns are constant and seldom undergo changes.

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

Distributing goods via the Internet is a form of indirect selling.

Reason: This statement is false. E-commerce is a form of direct selling.

Exporters cannot dismiss distributors who fall short of sales minimums.

Reason: This statement is false. 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.

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

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

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

Identify an accurate statement about piggyback arrangements.

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

A company's website should

be translated into the language of each country being targeted.

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.

Identify the six C's of channel strategy. (Check all that apply.)

character coverage control cost capital continuity

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.

A physical distribution system should be designed to

deliver merchandise at the lowest possible cost.

Which of the following middlemen are likely to be loyal to their vendors? (Check all that apply.)

distributors & dealers

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

When companies use foreign-country middlemen,

international marketers achieve more control over their distribution systems.

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

logistics management.

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

manufacturer's export agents.

A foreign sales corporation can be formed by

manufacturers and groups of businesses that export merchandise

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

manufacturers' retail stores.

A company can reduce channel cost by

marketing to the public through its own wholesalers.

Costs of maintaining channels

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

Investment Costs

money spent to set up a distribution channel

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.

Reducing the length of channels

reduces a company's cost.

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.

What do manufacturers receive from manufacturer's export agents?

selling services

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

soon stop selling those products

When distribution agreements are made with middlemen, firms must

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

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

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.

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.

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

use of distributors