DISCUSSION QUESTIONS
12-1. In what ways can channel intermediaries create utility for buyers?
The major categories of channel utility are:
place utility (the availability of a product or service in a location that is convenient to
a potential customer),
12-2. What factors influence the channel structures and strategies available to global marketers?
Factors include customer characteristics, product characteristics, middleman
characteristics, and environmental characteristics. In Latin America, low per-capita
Although many wineries also engage in direct sales, either via delivery service or by
selling to visitors, exporting wine necessitates use of intermediaries who, as described,
12-3. Compare and contrast the typical channel structures for consumer products and industrial
products.
Consumer channels tend to exhibit more variety and be longer (have more intermediaries)
compared with industrial channels. This is due in part to the fact that there are typically
12-4. Identify the different forms of retailing, and cite an example of each form. Identify retailers
from as many different countries as you can.
The standard retail classifications are covered in the chapter. Students should be able to
identify and describe the attributes of each type, e.g., department store, specialty retailer,
12-5. Identify the four retail market expansion strategies discussed in the text. What factors
determine the appropriate mode?
The four strategies include organic, franchise, chain acquisition, and joint venture. The
combination of factors affecting choice of mode is shown in the matrix: culturally
12-6. Many global retailers are targeting China, India, and other emerging marketing. In terms
of the strategies described in Figure 12-4, what would be the most likely entry strategies for
these countries?
Figure 12-4 shows a matrix that defines markets and countries as either: Culturally close,
difficult to enter, culturally distant, and easy to enter. The strategies for companies trying
12-7. What special distribution challenges exist in Japan? What is the best way for a non-
Japanese company to deal with these challenges?
In Japan, exclusive distribution arrangements can keep some competitors out of the
market. As noted in the Chapter 11 discussion of keiretsu, Japan’s unique form of
industrial groups also creates a strong sense of interdependence among Japanese
CASES
Case 12-1: Can Walmart Crack the Retail Code in India?
Overview: The vast majority of Indian retail activity is conducted in cramped stalls with about
50 square feet of floor space. There have been many calls for regulatory reform, and some
observers believe organized retailing will grow at a rate of 30 to 35 percent in the next few years.
For now, however, some members of the ruling National Congress Party are concerned about the
impact of organized retail on the millions of small-scale, “mom-and-pop” stores.
In India, Walmart must do much more than just set up wholesale and retail stores. It is trying to
transform India’s agriculture sector by using its hyper efficient practices to improve productivity
and speed the flow of produce and other goods. Walmart and a partner, Bayer Cropscience, work
with farmers to improve yields and quality. In addition, Walmart has begun bypassing traditional
middlemen by signing up farmers and sending its own refrigerated trucks to the farms. One
reason farmers like working with Walmart: The global giant pays the farmers promptly.
Mike Duke, Walmart’s CEO, appears undaunted by the challenges his company faces.
12-8. What are the biggest obstacles facing Walmart and other foreign retailers in India?
The government has demanded that foreign retailers invest $100 million in India, with at
least half the money going to so-called “back end” operations and infrastructure including
12-9. Summarize some of the elements in India’s political, economic, and cultural environments
that can impact the market opportunity there.
Western-style, big-box retailing is anathema to many Indian activists and policymakers,
who fear that Walmart will drive some of India’s millions of shopkeepers out of business.
12-10. Review Figure 12-4. Which quadrant of the matrix applies most directly to India? Why?
India would be in Quadrant B – culturally distant and difficult to enter. Using a joint-
venture to enter India can be interpreted to show the how difficult it will be to succeed.
12-11. Going forward, to what degree will Walmart be required to adapt its business model in
India?
Case 12-2: FAIL! Tesco Strikes Out in the United States
Overview: In its home market, Tesco operates more than 2, 300 stores in four formats. While the
U.S. market entry was limited to small neighborhood markets, Tesco raised eyebrows with an
ambitious plan to establish its own distribution network. Management was confident it had
identified an opportunity. The small-store format made it unlikely that Tesco would encounter the
type of backlash that has been directed at Walmart in some communities
12-12. What are the keys to Tesco’s success in the competitive global retailing industry?
Research, market segmentation, and adapting its formats to the consumers in the various
countries that they do business. For example, Tesco has four formats in the United
12-13. Which of the market-entry strategies identified in the chapter was Tesco using in the
United States? Do you think this was the appropriate strategy?
understanding the American consumer, it was not the appropriate strategy to use.
12-14. Assess the challenges facing CEO Dave Lewis. What steps must he take to address the
price issue and reconnect with customers?
Dave Lewis not having retail experience will not work against him. Social media is a tool