International Marketing, 18e (Cateora)
Chapter 15 International Marketing Channels
1) The distribution process includes promotion of goods and services by sellers and resellers.
2) The behavior of channel members in the distribution process is the result of the interactions
between the cultural environment and the marketing process.
3) In an import-oriented distribution structure, supply often exceeds demand.
4) Traditional distribution channels in developing countries evolved from economies with a
strong dependence on imported manufactured goods.
5) In a traditional distribution structure, distribution systems are national rather than local in
scope.
6) In the traditional distribution structure in a developing country, independent agencies that
provide facilitating functions are nonexistent or underdeveloped.
7) A distinguishing characteristic of the Japanese distribution channel system is that it is
controlled by a few small local retailers.
8) The Japanese distribution structure is similar to ones found in the United States or Europe.
9) In the context of the distribution structure in Japan, it has been observed that Japanese
consumers favor cheaper prices over personal service.
10) As traditional channel structures are changing, importers and retailers are becoming less
involved in new product development.
11) In the context of distribution structures, one of Walmart’s strengths is its ability to work with
distributors one-on-one.
12) Globally, wholesaling shows a greater diversity in its distribution structure than does
retailing.
13) Direct marketing works well in affluent markets as well as in markets with underdeveloped
distribution systems.
14) Agent middlemen work on commission and do not take title to the merchandise.
15) Merchant middlemen tend to be more controllable than agent middlemen because they take
title to manufacturers’ goods.
16) The distribution channel process includes all activities, beginning with the manufacturer and
ending with the retailer.
17) Domestic middlemen offer many advantages for companies with large international sales
volume.
18) An export management company (EMC) functions as a low-cost, independent marketing
department with direct responsibility to the parent firm.
19) The WTO in 2003 ruled export management companies to be in violation of international
trade rules.
20) The Export Trading Company Act allows producers of similar products to form export
trading companies.
21) Trading companies provide the best means for intensive coverage of the market in Japan.
22) Using foreign-country middlemen moves the manufacturer away from the market and the
company becomes less involved with problems of language, physical distribution,
communications, and financing.
23) Channels of distribution often pose longevity problems as they tend to be small institutions.
24) 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.
25) Selecting a middleman is usually as simple as asking for a recommendation from a
company’s local manager.
26) Legal advice is not necessary when entering distribution contracts with middlemen.
27) Ideally, a website should be translated into the languages of the target market.
28) An e-vendor in a foreign market can generally ignore culture as an important variable
because the commerce is being done via the Internet, which is culturally insensitive.
29) A change of transportation mode can affect a change in packaging and handling, inventory
costs, warehousing time and cost, and delivery charges.
30) A physical distribution system involves only the physical movement of goods.
31) The ________ process includes the physical handling and distribution of goods, the passage
of ownership (title), and the buying and selling negotiations between producers and middlemen
and between middlemen and customers.
A) logistics
B) marketing
C) channel
D) distribution
E) control
32) In a ________ distribution structure, an importer controls a fixed supply of goods and the
marketing system develops around the philosophy of selling a limited supply of goods at high
prices to a small number of affluent customers.
A) domestic
B) traditional
C) manufacturer-oriented
D) service
E) customer-oriented
33) Which distribution structure is also known as a traditional distribution structure?
A) Export-oriented
B) Import-oriented
C) Manufacturer-oriented
D) Service-oriented
E) Customer-oriented
34) In an import-oriented distribution structure,
A) the importer–wholesaler traditionally performs most of the marketing functions.
B) the relationship between the importer and any middleman is similar to that found in a mass-
marketing system.
C) several independent agencies provide functions such as advertising, marketing research, and
financing.
D) the idea of a channel as a chain of intermediaries performing specific activities is common.
E) the distribution system is national in scope.
35) Distribution in ________ has long been considered the most effective nontariff barrier to that
market.
A) China
B) Japan
C) the U.S.
D) Western Europe
E) Canada
36) What group is considered to be the foundation of the Japanese distribution system?
A) consumers
B) brokers
C) manufacturers
D) small retailers
E) wholesalers
37) Which feature characterizes the business philosophy of Japanese distribution channels?
A) loyalty
B) direct sales
C) fast delivery
D) variety
E) price competition
38) In Japan, under the Large-Scale Retail Store Law, all proposals for new “large” stores were
first judged by the
A) Transport and Tourism Department.
B) Internal Affairs and Business Council.
C) Ministry of International Trade and Industry.
D) Health and Welfare Committee.
E) Local Retailers Union.
39) What makes Walmart’s transactions with suppliers highly efficient and lowers its cost of
operations?
A) clean business reputation
B) internal Internet-based system with suppliers
C) lack of competitors
D) outreach programs to placate small retailers
E) ability to influence foreign governments
40) General Motors, ________, and DaimlerChrysler have created a single online site called
Covisint for purchasing automotive parts from suppliers.
A) Toyota Motor Corporation
B) Honda Motor Company
C) Ford Motor Company
D) Nissan Motor Company
E) Hyundai Motors
41) The rate of change in retailing around the world appears to be directly related to the
A) literacy rate.
B) rate of inflation.
C) population growth.
D) speed of economic development.
E) currency exchange rate.
42) What is often the approach of choice in markets with insufficient or underdeveloped
distribution systems?
A) direct marketing
B) a big wholesale store
C) Internet selling
D) a discount house
E) television advertising
43) What has proven to be an important way to break the trade barrier imposed by the Japanese
distribution system?
A) direct sales through catalogs
B) large wholesale stores
C) street corner kiosks
D) Internet shopping
E) television advertising
44) Which group is frequently criticized for not representing the best interests of a manufacturer?
A) global wholesalers
B) trading companies
C) consumers
D) merchant middlemen
E) brokers
45) Which group takes title to manufacturers’ goods and assume the trading risks?
A) merchant middlemen
B) brokers
C) buying offices
D) export agent
E) agent middlemen
46) The channel process includes all activities, beginning with the manufacturer and ending with
the
A) wholesaler.
B) agent middlemen.
C) merchant middlemen.
D) retailer.
E) final consumer.
47) A disadvantage when using home-country middlemen as intermediaries in the distribution
process is the
A) large financial investment required.
B) limited control over the distribution process.
C) large managerial investments required.
D) limited number of retailers in the foreign country who can be reached.
E) large amount of commission.
48) How are global retailers like IKEA, Costco, and Walmart becoming major domestic
middlemen for international markets?
A) They maintain their core marketing approaches while localizing the array of products,
promotions, and other peripheral aspects of their operations.
B) They work under the names of the manufacturers and function as low-cost, independent
marketing departments with direct responsibility to the parent firms.
C) They have minimum investment costs as they do not commit to investing in company
personnel.
D) They serve as the producer’s export department but have a short-term relationship, cover only
one or two markets, and operate on a straight commission basis.
E) They offer reduction of export costs, demand expansion through promotion, trade barrier
reduction, and improvement of trade terms through bilateral bargaining.