Deck 12: Global Marketing Channels

Question 1

Middlemen are in business to maximize their own profit and not that of the manufacturer.

Answer 1

True

Question 2

Place utility refers to the availability of a product or service when desired by a customer.

Answer 2

True

Question 3

Street vendors are considered distribution channels.

Answer 3

True

Question 4

A disadvantage to manufacturers for using a distributor's sales force is that it generally tends to increase costs.

Question 5

Middlemen often practice cherry picking which is highly advantageous to manufacturers attempting to break into a market with a new product.

Question 6

The degree of standardization of a product has no influence on channel design and strategy.

Question 7

Direct selling that bypasses wholesale intermediaries is a cost-effective means of serving large-volume retailers.

Question 8

The need for multiple channel intermediaries increases as the number of customers increases in a market.

Question 9

Direct involvement as a channel strategy requires incentives to be paid to independent channel agents.

Question 10

There is a need to delegate a large degree of independence to local channel agents because of the enormous variety of economic, social, and political environments internationally.

Question 11

Soft drinks are an example of a bulky product whose widespread availability is an important aspect of an effective marketing strategy.

Question 12

It is expensive and often impossible to terminate distributor and agent agreements.

Question 13

Two of the most important clauses in a distributor contract are the performance and cancellation clauses.

Question 14

Distribution channels in markets around the world are among the most highly uniform aspects of national marketing systems.

Question 15

Companies using direct distribution for consumer products rely on low gross margins to generate the revenue necessary to compensate salespeople.

Question 16

Bulky products require channel arrangements that minimize the number of times products change hands between channel intermediaries before reaching customers.

Question 17

Distribution channels are composed of coordinated groups of individuals or firms that add utility to a product or service.

Question 18

Indirect involvement as a channel strategy requires a company to establish franchised outlets.

Question 19

Termination can result in legal expenses.

Question 20

The starting point in selecting the most effective channel arrangement is a clear focus on a company's marketing effort in a target market.

Question 21

________ is the practice of middlemen taking orders from manufacturers whose products and brands are in demand so as to avoid any real selling effort for a manufacturer's products that may require push.

A) Gatekeeping
B) Informal fallacy
C) Cherry picking
D) Selection bias

Question 22

Which of the following is an example of having direct involvement when entering a competitive market?

A) using independent agents
B) using wholesalers
C) using distributors
D) using retail stores

Question 23

Companies sometimes establish retail outlets as a means of obtaining marketing intelligence rather than as a distribution strategy.

Question 24

In the case of direct involvement, a company that wants to enter a competitive market should ________.

A) establish franchised outlets in the new market
B) approach retailers selling substitute products in the new market
C) approach retailers selling complementary products in the new market
D) establish bonds with distributors or wholesalers in the new market

Question 25

The purpose of marketing channels is to create ________.

A) time utility
B) place utility
C) form utility
D) all of the above

Question 26

Half of Japan's cars are sold through door-to-door selling.

Question 27

Order handling refers to the process by which products are made available to a customer.

Question 28

In the case of franchise operations, a franchisor agrees to operate a business according to a plan defined by a franchisee and under a trade name owned by the franchisee.

Question 29

The larger a market, the less feasible it is for a manufacturer to use its own sales force to distribute industrial products.

Question 30

The low cost of a direct sales force acts as an incentive for establishing direct distribution in a new market.

Question 31

Which of the following statements is true of the influence of product characteristics on a company's channel strategy?

A) Products with low unit prices are usually sold using a company's sales force.
B) Products that are sold using direct distribution generally require narrow selling margins.
C) Perishability is an important product characteristic that influences channel strategy.
D) Bulky products are ideally distributed through direct-sales systems globally.

Question 32

Which of the following statements is true of the influence of customer characteristics on a company's channel strategy?

A) The need for multiple channel intermediaries decreases as the number of customers increases.
B) The need for multiple channel intermediaries is high during the early stages of market development.
C) The need for multiple channel intermediaries increases toward the last stages of market development.
D) The technique of direct selling is one of the most cost-effective means of serving large-volume retailers.

Question 33

Door-to-door selling is a relatively inexpensive form of distribution that requires low gross margins.

Question 34

A ________ is an organized network of agencies and institutions which, in combination, perform all the activities required to link producers with users to accomplish the marketing task.

A) fulfillment house
B) demand signal repository
C) general line of merchandise
D) channel of distribution

Question 35

Which of the following best explains form utility?

A) the availability of answers to questions about useful product features and benefits
B) the availability of a product that is processed, prepared, ready to use, and in proper condition
C) the availability of a product or service in a location that is convenient to a potential customer
D) the availability of a product or service when desired by a customer

Question 36

Japan has a characteristic distribution pattern where several layers of small wholesalers play an important role in the distribution of food.

Question 37

The process of disintermediation in the global distribution system has been declining at a steady rate.

Question 38

Door-to-door selling is growing in popularity in many countries at later stages of market development.

Question 39

When entering Japan, it is recommended that foreign companies offer better quality, lower price, or a distinctive positioning as a foreign product.

Question 40

The first step in becoming a global franchisor is to have a well-established and successful operation in a home market.

Question 41

Which of the following aids in indirect marketing?

A) wholesalers
B) manufacturer-owned stores
C) mail-order selling
D) door-to-door selling

Question 42

Which of the following statements is true of door-to-door selling?

A) It is a relatively inexpensive form of distribution.
B) It is growing in popularity in many countries at later stages of market development.
C) It fails to take advantage of and utilize local market strengths.
D) It requires high gross margins and can result in higher product prices.

Question 43

Which of the following involves a contractual agreement whereby a company grants the right to sell its goods and services to another company?

A) joint ventures
B) franchising
C) cross-licensing
D) acquisitions

Question 44

Which of the following terms is used to refer to large stores?

A) open shops
B) tuck shops
C) discounters
D) convenience stores

Question 45

How are industrial products distributed?

Question 46

While distributing industrial goods, the larger a target market, the more feasible it is for a manufacturer to ________.

A) rely on distributors or agents
B) increase the number of intermediary levels
C) use its own sales force
D) rely on a wholesaler's work force

Question 47

Which of the following is often the most effective and the only feasible way for a company to establish itself in a new market?

A) by setting up a direct sales force
B) by approaching a company producing substitute products
C) by providing special incentives to wholesalers
D) by providing special incentives to retailers

Question 48

What role does transportation play in distribution?

Question 49

Which of the following statements is true of transportation in the context of global product distribution?

A) Global firms fail to survive in a "two-speed world" that has a high growth rate and low per capita income.
B) Companies in low-growth markets need to deliver high volumes of low-cost products profitably with little infrastructure to support it.
C) Companies in high-growth markets need to develop innovative and cost-competitive logistics to surpass competitors without sacrificing profit margins.
D) A company with home-market competitive advantages in both upstream and downstream activities may be forced to reconfigure distribution activities to enter new global markets.

Question 50

Which of the following statements is true of global channel innovation?

A) Threshold levels of economic development are not required for supporting retailing methods.
B) Innovation takes place only in the most highly developed systems.
C) The ability of a system to adapt innovations has no relation to its level of economic development.
D) The actions of innovative individual firms alone can never accelerate the adaptation of innovation.

Question 51

Which of the following is a provision for customers to handle and select merchandise themselves in a store with minimal assistance from sales personnel?

A) self-service
B) self-reference
C) self-organization
D) self-offering

Question 52

Which of the following is an example of having indirect involvement when entering a competitive market?

A) using retail stores
B) using distributors
C) using manufacturer's own sales force
D) selling through company website

Question 53

________ refers to the coordination of production and distribution across markets.

A) Horizontal integration
B) Logistical integration
C) Vertical integration
D) Location intelligence

Question 54

How do customer characteristics influence channel design?

Question 55

The world's best-known franchises are ________.

A) advertising agencies
B) travel agencies
C) hotel chains
D) fast-food chains