Deck 11: Managing International Distribution Operations and Logistics

Question 1

Home-country brokers do not carry title to the product.

Answer 1

True
Home-country brokers and agents bring international buyers and sellers together in the company's home country, and do not carry title to the product.

Question 2

Sogo shoshas are general trading companies in Japan.

Answer 2

True
Sogo shoshas, or general trading companies, offer their suppliers three primary services: specialization in providing intermediary services, risk reduction, and financial assistance.

Question 3

Agents and brokers are intermediaries that take title to and possession of the products they carry.

Answer 3

False
Merchant middlemen are intermediaries that take title to and possession of the products they carry. Agents and brokers, on the other hand, bring buyers and sellers together, but do not carry title to the products that they sell.

Question 4

Webb-Pomerene Associations are immune from antitrust prosecution.

Question 5

Building a channel is sometimes necessary in situations where there are no channels that conform to the needs of the company.

Question 6

Home-country middlemen typically provide all marketing services for firms that do not wish to enter the foreign market and/or do not have the capability to do so.

Question 7

A Norazi agent is an example of an export merchant.

Question 8

Merchant middlemen are intermediaries that take title to and possession of the products they carry.

Question 9

The Trading Company Act is a Japanese legislation promoting Japanese exports.

Question 10

Export merchants take title to the goods that they sell, but they do not take possession.

Question 11

The Trading Company Act was created to prevent international monopolies from forming.

Question 12

Cooperative exporters are large multinationals with substantial in-house know how and resources.

Question 13

The initial channel selection decision is very important since a company may be bound to that relationship and may not legally be allowed to change distributors.

Question 14

Companies relying on home-country middlemen relinquish their control of the marketing mix to their distributors in the target-market foreign country.

Question 15

A company that uses intermediaries in its own country is likely to be more involved in managing the marketing mix in the country where the target market is located.

Question 16

If a complementary exporter takes title to the complementary products that it distributes, then it is considered to be a complementary export agent.

Question 17

A company using intermediaries in the host-country is likely to have a presence there.

Question 18

Export management companies are generalized across industries and typically represent large companies in global markets.

Question 19

Part of a Webb-Pomerene Association member's income is exempt from U.S. income tax.

Question 20

It is often cheaper for a company to build its own channel than to use an established channel.

Question 21

Railways are used for the intercontinental transportation over long distances of high-weight, high-volume products that have a low per pound value

Question 22

Logistics account for about 27 percent of Singapore's GDP.

Question 23

Network marketing serves only as a retailing function.

Question 24

The U.S. Commercial Service enforces sanctions against certain countries for the purpose of enforcing national security and foreign policy interests.

Question 25

Railway transportation handles smaller shipments over shorter distances.

Question 26

The Bureau of Export Administration advances U.S. national security, foreign policy, and economic interests by regulating exports of products and technologies that could affect those interests.

Question 27

If price differences are not substantial, there will not be a gray market.

Question 28

The Bureau of Export Administration operates Export Assistance Centers which offer companies a range of export facilitation services.

Question 29

Network marketing companies are gaining access to emerging markets all over the world, and many continue to find potential in developed countries.

Question 30

The U.S. Trade and Development Agency funds feasibility studies, training, business workshops, and is directly involved in distribution in logistics.

Question 31

The Ex-Im Bank competes with commercial lenders and insurance firms.

Question 32

A comprador usually purchases commodity goods from the manufacturer to sell to the trade (wholesaler, retailer, business-to-business client) in the target market.

Question 33

Unlike in the case of counterfeit products, it is often not possible to fight gray markets through litigation.

Question 34

In the United States, international distribution and logistics involvement is shared by a number of different government agencies - most of which are affiliated with the U.S. Department of Agriculture.

Question 35

Railways remain the primary mode for intracontinental freight transportation.

Question 36

Waterways and railways are used for transporting over long distances high-weight, high-volume products that have a low per pound value, such as grains, gasoline, forestry products, cement, and fertilizers.

Question 37

Railways are a low-cost, lower-speed mode of transportation, and mobility is restricted to designated areas for freight handling.

Question 38

The Internet poses the greatest threat to freight forwarders and customs brokers.

Question 39

The International Chamber of Commerce International Court of Arbitration is the world's leading arbitral institution.

Question 40

Tankers, barges, and other freighters in the sea and inland waterways account for a substantial proportion of international traffic.

Question 41

Why did Coca Cola decide to create its own channels of distribution in Eastern Europe?

A)Existing channels were too expensive.
B)Existing channels had low operating efficiency.
C)Pepsi controlled the existing channels.
D)The government controlled the existing channels.

Question 42

Which of the following is an activity of export management companies?

A)Setting up a foreign sales corporation in the home country for export purposes
B)Representing the company at trade shows.
C)Managing greenfielding companies.
D)Export management companies provide all of the above activities.

Question 43

Which of the statements regarding home-country middlemen is accurate?

A)A company that uses home-country intermediaries is likely to be more involved in managing the marketing mix than companies that use host-country intermediaries.
B)Companies relying on home-country middlemen relinquish their control of the marketing mix to their distributors.
C)Home-country middlemen distribute the product but do not provide other marketing services for firms.
D)None of the above are true.

Question 44

____ are used for intracontinental transportation over long distances of coal, gasoline, forestry products, and grains.

A)Airways
B)Railways
C)Tankers, barges, and other sea freighters
D)Pipelines

Question 45

Which type of agent represents the manufacturer exclusively in a market?

A)Norazi agents
B)Manufacturer's representatives
C)Complementary export agents
D)Import jobbers

Question 46

Which type of merchant middleman usually purchases commodity goods from the manufacturer to sell to the trade in the target market?

A)Compradors
B)Complementary export agents
C)Parallel importers
D)Import jobbers

Question 47

Almost half of imports into the United States, in terms of dollar amounts, enter the country by

A)Airways
B)Railways
C)Tankers, barges, and other sea freighters
D)Pipelines

Question 48

Which statement is true regarding Webb-Pomerene Associations?

A)They are a way for firms to avoid double taxation.
B)Members are immune from antitrust prosecution.
C)They deal in illegal and/or gray market products.
D)They were created by the Export Trading Company Act in order to promote U.S. exports.

Question 49

Why was the Export Trading Company Act established?

A)To limit the monopoly like power of certain industries.
B)To regulate exports of products that affect for policy, such as weapons and technology products.
C)To encourage the formation of export trading companies in order to promote U.S. exports.
D)To eliminate double taxation of U.S. based firms exporting to or operating in foreign countries.

Question 50

Keiretsus are

A)agents that deal in illegal and/or gray market products.
B)export management companies used by Japanese firms.
C)families of firms with interlocking stakes in one another.
D)trading associations formed under the Webb-Pomerene Act.

Question 51

Activities of export management companies include all of the following except:

A)researching the international market.
B)representing the company at trade shows.
C)screening and selecting international distributors.
D)Export management companies provide all of the above activities.

Question 52

Which of the following is not an example of a sogo shosha?

A)Itochu Corp.
B)Mitsui
C)Mitsubishi
D)Toyota

Question 53

How are Honda, Sony, and Toyota creating difficulties for sogo shoshas?

A)Their keiretsu derived power is forcing sogo shoshas to reduce prices.
B)The companies are lobbying the Japanese government for sogo shosha reform.
C)The companies have set up their own direct export-sales networks.
D)The companies are using U.S. trading companies to distribute their products.

Question 54

There is currently a shift in sogo shosha activities to more

A)third-country trade.
B)participation in high-risk overseas mega projects.
C)increased participation in product areas requiring sophisticated distribution.
D)All of the above are true.

Question 55

According to the text, Amex Inc. is an example of which type of middleman?

A)Export management company
B)Manufacturer's export agent
C)Webb-Pomerene exporter
D)Import jobber

Question 56

____ are used for intercontinental transportation over long distances of high-weight, high-volume products that have a low per pound value.

A)Airways
B)Railways
C)Tankers, barges, and other sea freighters
D)Pipelines

Question 57

Which of the following actually takes title to the products that it sells?

A)Home-country brokers
B)Complementary export merchants
C)Manufacturer representatives
D)Export agents

Question 58

____ occurs when exporters agree to handle export functions for unrelated companies on a contractual basis.

A)Piggybacking
B)Network marketing
C)Parallel importing
D)Leap frogging

Question 59

What difficulty did Kraft face in its attempt to enter the Hong Kong market?

A)Existing distributors charged an exorbitant amount.
B)Kraft had to create its own distributorship since an existing channel was not available.
C)The Chinese government controlled the established channel.
D)Kraft was blocked from entry by competitors.

Question 60

What is a Norazi agent?

A)A parallel importer
B)A family of firms
C)A trading company in Japan
D)A complementary exporter

Question 61

Why might a can of Similac sell for about $25 in the U.S. but sell for about $9 in the Netherlands?

A)Similac may be trying to penetrate the Netherlands market.
B)The Dutch government might have required the company to sell at a low price.
C)The competition in the Netherlands may offer lower prices than in the U.S.
D)All of the above are possible reasons.

Question 62

Companies relying on _________________________ middlemen relinquish their control of the marketing mix to their distributors in the target-market foreign country.

Question 63

Which government agency guarantees loans and makes loans to international buyers of U.S. goods?

A)The International Trade Administration
B)The Bureau of Export Administration
C)The U.S. Commercial Service
D)The Export-Import Bank

Question 64

Grains, gasoline, forestry products, cement, and fertilizers can be transported by

A)Airways and trucks
B)Railways and trucks
C)Tankers, barges, and railways
D)Pipelines

Question 65

Webb-Pomerene associations engage in which the following tasks?

A)Consumer research for retailers in the home market.
B)Representing the company at trade shows.
C)Screening and selecting international distributors for different manufacturers in the home country.
D)Webb-Pomerene associations provide none of the above activities.

Question 66

According to the text, which method did Mercedes-Benz use to discourage parallel imports?

A)Mercedes charged the same retail price worldwide.
B)Mercedes informed consumers about he perils of buying parallel imports.
C)Mercedes took the parallel importers to court.
D)Mercedes complicated the repair and servicing process of the gray market automobiles.

Question 67

____ transport smaller shipments over shorter distances.

A)Airways
B)Railways
C)Trucks
D)Pipelines

Question 68

About a third of U.S. exports, in terms of dollar amounts, are transported by

A)Airways
B)Railways
C)Tankers, barges, and other sea freighters
D)Pipelines

Question 69

Which agency is responsible for the International Court of Arbitration?

A)The U.S. Department of Commerce
B)The International Chamber of Commerce
C)The Export-Import Bank
D)The World Trade Organization

Question 70

How do government agencies affect distribution in high-income, developed countries?

A)They are a promoter of national security interests.
B)They are a promoter of international involvement of firms.
C)Thin provide insurance for higher risk international ventures.
D)All of the above are true.

Question 71

Which agency in the U.S. Department of Commerce offers export assistance to international firms, and, in particular, to small to medium-size businesses by offering access to a market research data base?

A)The International Trade Administration
B)The Bureau of Export Administration
C)The U.S. Commercial Service
D)The Export-Import Bank

Question 72

____ is used for products that are low-volume and low-weight but high-value, such as jewelry and electronics.

A)Airways
B)Railways
C)Tankers, barges, and other sea freighters
D)Pipelines

Question 73

Which agency funds feasibility studies, training, business workshops, and technical assistance, aimed at infrastructure and industrial projects in developing countries?

A)The International Trade Administration
B)The Bureau of Export Administration
C)The U.S. Commercial Service
D)The U.S. Trade and Development Agency

Question 74

Which of the following is not a recommended way of fighting against parallel imports?

A)Create products for low markets that are not as attractive for up markets.
B)Complicate the repair and servicing process for gray market goods.
C)Inform consumers about the perils of buying gray market products.
D)All of the above are legitimate methods of fighting against parallel imports.

Question 75

Which method is most likely to eliminate the existence of parallel imports?

A)Eliminating price differences
B)Creating products for low markets that are not as attractive for an up-market
C)Complicating the repair process for gray market goods
D)Litigation

Question 76

Which government agency operates Export Assistance Centers?

A)The International Trade Administration
B)The Bureau of Export Administration
C)The U.S. Commercial Service
D)The Export-Import Bank

Question 77

In the United States, international distribution and logistics involvement is shared by a number of different government agencies. With which agency are most of the other agencies affiliated?

A)The International Trade Administration
B)The Bureau of Export Administration
C)The U.S. Department of Commerce
D)The Export-Import Bank.

Question 78

Which agency of the U.S. Department of Commerce advances U.S. national security, foreign policy, and economic interests?

A)The International Trade Administration
B)The Bureau of Export Administration
C)The U.S. Commercial Service
D)The Export-Import Bank

Question 79

____ provide a low-cost mode of transporting liquid or semi-liquid products from the source to the target market.

A)Airways
B)Railways
C)Tankers, barges, and other sea freighters
D)Pipelines

Question 80

What is the appropriate order for choosing a logistics provider?

A)Measure performance, evaluate bidders, express needs and wants, and create a win-win relationship.
B)Identify qualified providers, evaluate bidders and select the partner, develop an integration plan, and create a win-win relationship.
C)Develop an integration plan, identify qualified providers, evaluate bidders, and measure and analyze performance.
D)Express needs and wants, identify qualified providers, develop an integration plan, and select the partner.