International Distribution Systems Quiz

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Questions and Answers

In the distribution system model, which entity directly connects the manufacturer to the target countries?

Consumer

Wholesaler

Export firm (correct)

Importer

According to the provided diagram, what business model allows the manufacturer of electronic components to directly reach the consumer in a target country without intermediaries?

Through an export firm

Through a wholesaler

Through an own sales branch (correct)

Through an importer

What type of intermediary is explicitly shown as facilitating the movement of goods from a manufacturer to consumer in multiple country markets?

Supplier

Retailer

Agent

Importer and Wholesaler (correct)

In the cross-national distribution model depicted, which entity is positioned between the export firm and the final consumer?

Importer and Wholesaler (C) Signup and view all the answers

In the given distribution model, if a manufacturer wants to use independent parties for distribution in target countries, which entity would NOT be directly involved?

Own sales branch (D) Signup and view all the answers

What factor primarily influences a foreign company's choice of transportation mode?

The local market's economic development and infrastructure. (D) Signup and view all the answers

When entering a new market, what might a company need to do regarding transportation?

Significantly adjust its mode of transportation. (B) Signup and view all the answers

According to the content provided, what element is NOT mentioned regarding transportation?

Cost of transportation. (C) Signup and view all the answers

What is the main reason companies need to adjust their transportation modes in foreign markets?

Due to varying local economic and infrastructural scenarios. (B) Signup and view all the answers

What did Kotabe and Helsen (2011) highlight regarding global marketing management?

The influence of local conditions on transportation methods. (A) Signup and view all the answers

According to the provided diagram, which approach is generally considered the easiest for market entry?

Franchise (B) Signup and view all the answers

Based on the diagram, which market entry strategy would be the most challenging if the business is expanding into a culturally different market?

Chain acquisition (B) Signup and view all the answers

Which type of market entry strategy from the diagram is also associated with 'culturally close' entry?

Organic growth (C) Signup and view all the answers

According to the diagram, what market entry strategy is categorized as 'difficult to enter'?

Joint venture (D) Signup and view all the answers

Which market entry mode would you use if entering a culturally distant market but you don't want the difficulty of chain acquisition?

Joint Venture (D) Signup and view all the answers

Which of the following best describes a company utilizing a direct involvement channel strategy?

Operating its own online store for direct sales. (D) Signup and view all the answers

What is the primary difference between direct and indirect involvement in establishing distribution channels?

Direct handles all aspects of sales using its own channels, whereas indirect uses independent intermediaries. (D) Signup and view all the answers

Which of these best fits the description of a facilitator in a distribution channel?

A transportation company that moves goods. (D) Signup and view all the answers

According to the content, what must a company's channel strategy align with in each national market?

The company's competitive position and marketing objectives. (B) Signup and view all the answers

Which is the most accurate example or description of an intermediary in a distribution channel?

A wholesaler purchasing products. (B) Signup and view all the answers

Which of the following best describes the pricing strategy of a discount store?

Aggressive pricing focused on high sales volume. (C) Signup and view all the answers

What is a key differentiator between a department store and a discount store in terms of product assortment?

Department stores offer a broad and deep assortment. (C) Signup and view all the answers

Which retailer is characterized by a product mix under one roof?

Department store (D) Signup and view all the answers

Which of the following is the best example of a specialty retailer?

A boutique selling only women’s lingerie. (B) Signup and view all the answers

What is a key difference in the location strategy between department stores and discount stores?

Department stores use central locations; discount stores use suburban locations. (B) Signup and view all the answers

What is implied by a retailer having a 'narrow and shallow' assortment?

A limited number of product categories and very few variations within each. (C) Signup and view all the answers

Which of the following best describes the service model of a discount store?

Self-service approach with minimal staff assistance. (A) Signup and view all the answers

What does the term 'depth' refer to, in the context of product assortment?

The number of variations or options within a specific product category. (C) Signup and view all the answers

Which of the following elements is NOT considered a factor in channel decisions?

Financial forecasting (A) Signup and view all the answers

What does the term 'coverage' refer to in channel decisions?

The intensity of distribution, such as exclusive or selective (B) Signup and view all the answers

What is involved in the decision about the 'length' of the channel?

Deciding how many levels of distribution are used (A) Signup and view all the answers

Which of the following best describes 'contracting' in channel management?

Creating agreements with distributors (D) Signup and view all the answers

Which of the following is NOT a function of managing logistics within channel systems?

Screening intermediaries (C) Signup and view all the answers

What does 'motivating' refer to in the context of channel management?

Encouraging intermediaries to achieve sales targets (C) Signup and view all the answers

What aspect does 'controlling' refer to in distribution channels?

Monitoring the performance of distribution channels (A) Signup and view all the answers

Which element is essential for the physical movement of goods in channel systems?

Order handling (D) Signup and view all the answers

Study Notes

International Marketing Decisions: International Distribution

Distribution Policies
- Choosing the organizational format for foreign business is a key decision.
- Standardization of distribution channels is ideal but may face country-specific differences.
- Standardization allows transferring experience from similar channels in different countries.
- Identical distribution partners across countries can increase their power and create dependencies.
- Balancing standardization and differentiation is crucial in distribution management.

Channel Utility

Marketing channels create utility for customers.
Place utility is the availability of products/services in convenient locations.
Time utility is the availability at desired times.
Form utility involves processing and preparing products for ready use.
Information utility provides information about products/services.

Channel Decisions

External Determinants
- Customer characteristics like size, distribution, and shopping habits need consideration in determining channel decisions.
- Influenced by socio-cultural factors
- More geographically dispersed customers or smaller quantities of customers may result in channels that are longer.
- Product characteristics affect channels.
  - Low-priced, high-turnover products often use intensive distribution networks.
  - High-value or prestigious products may use selective distribution (fewer outlets).
  - Industrial goods require efficient transportation and warehousing.
- Nature of demand/location considerations.
  - Customers' experience and perceptions of the product may affect distribution channels.
  - Expectations about product availability at specific outlets (e.g., specialty stores).
  - Geographic environment and infrastructure impact channel design.
- Competitive considerations.
  - Competing products and channels may create barriers and require unique approaches for competitive advantages.
  - Agreements with wholesalers influence the choice of channels.
- Legal regulations impacting channel choices.
  - Specific local regulations (e.g., alcohol laws) constrain channel options.
Internal Determinants
- Decisions Concerning Structure of the Channel.
  - Types of intermediaries (alternative distribution channels).
  - Coverage (intensive, selective, or exclusive).
  - Channel length(number of intermediary levels).
  - Control resources (degree of integration)
  - Screening and selecting intermediaries..
  - Contracting (distributor agreements).
  - Motivation, control, and termination of contractual relationships.
- Managing and Controlling Distribution Channels.
  - Physical movement of goods through the system.
  - Order handling, transportation, and inventory management are important aspects of channel logistics.
  - Storage, warehousing.
Managing Logistics

Establishing Channels

Direct Involvement
- Company establishes its stores or sales force for control.
Indirect Involvement
- Utilizes independent agents, wholesalers, or franchise distributors for broader reach and reduced control.
Channel Strategy
- Aligning the chosen channel strategy with the company's competitive position and objectives in each market is a critical aspect.

Distribution Channels

Several types of intermediaries may be involved depending on the product/market needing.
- Merchants (wholesalers, retailers)
- Agents and brokers
- Facilitators (transportation, warehousing, banks)

Cross-national Distribution Design

Potential options for a manufacturer of electronic components in different target countries are presented in a diagram.
- Export firms, importers, and own sales branches are outlined as potential elements in cross national channels

Factors Influencing Channel Width

Channel width refers to the number and types of intermediaries involved in the distribution process.
Various factors influence channel width choice, including the type of product, its stage in the product life-cycle, its price, brand loyalty, and purchase frequency.

Adapting to Local Preferences

Local market characteristics (e.g., infrastructure, population density, preferences for stockpiling) influence channel selection

Retailing in Developing Countries

Consumers increasingly purchase goods in stores or kiosks or informal marketplaces such as "mom and pop" shops.

Global Retailing: Expansion

Expansion through organic growth, chain acquisitions, franchise agreements, or joint ventures to overcome cultural or distribution barriers or difficulties in new markets.

The Seven Rules for International Distribution

Selecting distributors – Don't be the chosen one.
Identifying suitable distributors based on their potential to develop new markets.
Treating local distributors as long-term partners rather than only for a short-term entry.
Supporting market entry through capital, managerial expertise, and proven marketing ideas.
Establishing clear marketing strategy control.
Requiring detailed market and financial performance data from distributors for accountability.
Establishing connections among distributors in different countries early in the process to leverage market knowledge.

Why Treating Intermediaries as Long-Term Partners is Important

Retailer boycotts of products can have severe repercussions on sale revenues and profits.
Examples include Edeka and Coop’s boycotts of Nestle products in Germany and Switzerland respectively.
Kaufland’s boycott of Unilever products occurred during the Christmas shopping period.

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Description

Test your knowledge on international distribution systems with this quiz. Explore key concepts related to how manufacturers reach global consumers, the role of intermediaries, and transportation considerations in cross-national markets. Perfect for students learning about distribution strategies in global business.