Answer: International marketing channel – a marketing system that promotes the physical flow and ownership of products and services from producer to consumer, including producers, wholesalers, and retailers.

Answer: 

a. International distribution – the process by which products and services flow between producers, intermediaries, and consumers, including the transfer of ownership.

b. International logistics – the management of the flow of products and services among marketing channel members, including both upstream and downstream activities.

Answer: 

a. Intensive distribution

b. Selective distribution

c. Exclusive distribution

Answer: 

a. Cost

b. Coordination

c. Coverage

d. Cooperation

e. Control

Answer: 

a. A direct marketing channel relies on direct selling of a product or service to consumers or end users without the use of wholesalers, retailers, industrial agents, or industrial merchants. In a direct channel of distribution the product goes directly from the producer to the consumer.

b. When indirect channels are being used, the goods and services move through one or more intermediaries. Intermediaries are organizations that move products for producers to consumers and end users. In general, two types of intermediaries may be employed: agent and merchant middlemen. Agent middlemen do not take title or ownership of the products. Merchant middlemen assume title and ownership of the products being marketed. These organizations generally take possession of the products.

Answer: Agent middlemen do not take title or ownership of the products whereas merchant middlemen do take title or ownership of the products.

Answer: The concept of marketing channel length reflect the number of intermediaries a product gores through before reaching a consumer. While many channels are relatively short, using just a wholesale and a retailer, increasingly direct to consumer shipping, or direct marketing, has grown in usage due to cost savings. In some international context, channel length may be high due to the existence of many intermediaries.

Answer: 

a. Type of product

b. Price

c. Competition

d. Brand image

e. Desired product position

f. Target market

g. International considerations

• Available intermediaries

• Image of distributors
• Domestic versus foreign issue
• Legal restrictions
• Taxes on transportation and delivery

Answer: Integration refers to controlling steps in the market channel. For vertical integration, you move either forward, controlling retailing or distribution if a manufacturer, or backward, controlling manufacturing or distribution if a retailer. Horizontal integration involves acquiring competitors at the same level of the market channel. A retailer acquiring other retailers, or a manufacturer acquiring other manufacturers both count as examples of horizontal integration. Vertical marketing systems attempt to gain the coordinating benefits of vertical integration without the risk of ownership of the entire marketing channel. Instead, the producer, wholesaler, and retailer work together as a unified system to improve the marketing of the end product. 

Answer: A gray market is the practice of distributing products through distribution channels that are not authorized by the marketer of the product.

Answer: 

a. A push strategy focuses on providing intermediaries with incentives that will lead them to cooperate in marketing the product. Discounts, sales contests, training programs, and other methods entice the wholesaler or retailer to order in greater quantities, thereby pushing the product through the channel to the consumer. When customers find the product in the store and the salesperson is enthusiastic about the item, chances of generating greater sales improve. Hopefully stores will ‘push’ the products onto consumers.

b. A pull strategy means that the producer concentrates on stimulating consumer demand through extensive advertising and consumer promotions. The goal, building demand, leads others in the marketing channel to carry additional stock, because customers are asking for the product. When this occurs, the product has been pulled through the channel by the end users. Here you want the consumers to ‘pull’ the product onto store shelves.

Answer: There are numerous functions performed by marketing channel members. The examples in the book, found in table 13.4, are: 1) research market needs, 2) determine buyer needs and ability to purchase, 3) promote products to end users and channel members, 4) use financial and marketing incentives to increase purchases, 5) fulfill order-taking duties, 6) includes order entry, order fulfillment, and order delivery, 7) communicate with other channel members, 8) share information about customer buying patterns and preferences along with local market research information, 9) warehousing, inventory control, and materials handling, 10) store products until they are sold, keep track of items, move products within both the manufacturing and the warehousing systems, 11) address discrepancies of assortment, 12) manage demand for a wide array of products by consumers with producers’ desire to manufacture a limited array, 13) secure payment and extend credit, 14) provide reassurance that payment will be made and follow through with actual payment, 15) transport products to channel members and end users, and 16) select method of transportation.

Answer: 

a. Legitimate

b. Referent

c. Expert

d. Reward

e. Coercive

Answer: To successfully negotiate a dispute, the first stage is preparation. After collecting the information needed to be ready to negotiate, the second stage is relationship building. This should be guided by culture. Information gathering through conversation with the negotiation partner counts as stage three. Using that information, stage four, helps lead to a position to successfully start the bidding process. After bidding, which is stage four, the two or more parties close the deal for stage five. The last stage of the process is implementing the agreement.

Answer: 

• Milk in the United Kingdom
• Intensive distribution – marketers prefer this approach when the company offers products that appeal to a mass market of consumers. Many households need milk, it should be readily available for purchase from many outlets.
• Luxury jewelry in France
• Exclusive distribution – prestige products are often offered only through exclusive distribution.
• High end automobiles in Germany
• Selective distribution – very few retailers and strong relationships are developed among channel member.
• Cigarettes in the Mexico
• Intensive distribution – is often used for convenience products such as cigarettes

Answer: 

• School supplies
  • Costs – the supplies that local students need would need to be in stores – they need to be widely distributed so it is easy to buy these.
• Coordination – schools and teachers will need to communicate with schools who will need to communicate with their suppliers about what products they need in stock.
• Coverage – there should be an intensive strategy used.
  • Cooperation – trust needs to be established, if the right products are stocked consumers will buy them.
• Control – when shipping internationally producers lose some control – this can increase costs.
• Sports equipment
• Costs – sports equipment is often large and heavy. Costs associated with storing and delivering the goods will be incurred.
• Sports equipment is often seasonal and this will need to be communicated to channel members.
• Coverage – there should be a selective strategy used.
  • Cooperation – trust needs to be established
• Control – when shipping internationally producers lose some control – this can increase costs of shipping and keeping track of large/expensive items.
• Fast food
• Costs – transporting, storing and preparing fast food will need to be included in the costs. The food often needs to be transported and stored at a certain temperature so it doesn’t spoil, this can be expensive.
• Coordination is key among channel members so the food remains fresh and doesn’t spoil.
• Coverage – there should be an intensive strategy used.
  • Cooperation – trust needs to be established
• Control – when shipping internationally producers lose some control. Here they need to make sure food safety and quality is still taken care of.
• Perfume
• Costs – not only transporting the product, but the packing a perfume will be a cost.
• Channel members will need to coordinate to make sure there is an ample supply at department stores.
• Coverage – for designer perfume a selective strategy should be used.
  • Cooperation – trust needs to be established
• Control – when shipping internationally producers lose some control.

Answer: 

Table 13.4: Functions of International Marketing Channel Members

• Automobile manufacturers
• Disposable pens and cigarette lighters
• Exclusively distributed goods
• Selectively distributed goods

Answer: 

• Legitimate power exists most frequently in the form of contracts and formal agreements between marketing channel members. The leader can control what the other channel members do when selling TVs through written contracts.
• Referent power may be found when channel members desire to be associated or identified with a particular producer or product. Any retailer that wishes to carry the leader’s brand of TVs will defer to the referent power of the brand.
• Channel leaders are able to exert expert influence when channel members perceive the leader to be an expert in the marketing of the TVs
• One straightforward type of power in the international marketing channel is reward power. Producers are able to reward international marketing channel members by offering better profit margins, providing product incentives, and assigning exclusive channel member agreements with members. They can offer rewards associated with selling their brand of TVs.
• Coercive power will be present when a channel member can sanction other channel members for failure to perform various marketing duties. Quite commonly, reductions in discounts, allowances, or profit margins may be instituted by channel leaders as forms of coercion in the marketing channel. They can take away the rewards if the channel members do something wrong.