Suggested Answers to Discussion Questions
1. In what ways can channel intermediaries create utility for buyers?
The sidebar titled “A Case of Wine” contains several examples of the types of utility
identified in the chapter. Place utility is created by intermediaries who move the wine
from the place of production to the ultimate consumer. Form utility, including proper
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
incomes and limited access to traditional sources of credit are two customer
3. What is cherry picking? What approaches can be used to deal with this problem?
Cherry picking occurs when a channel member prefers to carry product lines with
proven demand from well-known manufacturers. Intermediaries tend to favor product
4. 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
5. Briefly discuss the global issues associated with physical distribution and
transportation logistics. Cite one example of a company that is making efficiency
improvements in its physical distribution.
One issue is finding the most cost-effective mode for moving goods between far-flung
global production, distribution, and retail units. Companies have a variety of
transportation options available: trucks provide flexibility and excellent coverage;
6. 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. Generally, in Japan and other Asia countries, a sense of respect, trust and