Ch 15: International Marketing Channels

Question 1

What are the 3 types of international channel of distribution structures?

Answer 1

1. Import Oriented (traditional)
2. Consumer oriented (push)
3. Integrated Logistics (pull)

Question 2

What are characteristics of import oriented structure in international channel of distribution? An example ?

Answer 2

Limited number of import middlemen control the channel

limited # of goods, high prices, small group rich customers

Seller’s market
ex: distribution of food in Bahamas by importers

Question 3

What are characteristics of consumer oriented structure in international channel of distribution?

Answer 3

NO single supplier dominates supply

Supply can be increased or decreased

Economies of scale in production

Buyer’s market

Producers use many distributors to PUSH goods to customers

Question 4

What are characteristics of integrated logistics structure in international channel of distribution?

Answer 4

DISTRIBUTORS control the channel

They use EDI

The process is now one of the “management of the supply chain”

Question 5

What are the 5 characteristics of the Japanese distribution system?

Answer 5

1. High density of middlemen
2. Channel control by manufactures (producers)– control the channel, push system
3. Business philosophy shaped by a unique culture
4. “Large-scale;e Retail Store Law” to protect the small retailer
5. Changes effected by the SII (Structural Impediments Initiative)

Question 6

What are the 4 ways in which Japanese manufacturers maintain control over their channel of distribution?

Answer 6

1. Inventory financing to middle men
   (bc carrying inventory is expensive)
2. Cumulative rebates to middlemen
   (if you buy meow, cheaper prices)
3. Merchandise returns of unsold goods
4. Marketing assistance of retailers:
   ( in- store displays, advertising, financial assistance for mkt)

Goal: keep distributors happy

Question 7

What are the buying habits of Japanese consumers?

Answer 7

1. Have brand loyalty
2. Prefer service and quality over price
3. Make small, frequent purchases in their neighborhood

Question 8

Under the original “Large-scale Retail Store Law,” who judged first on proposals for stores larger than 500 square meters in Japan (1)?

Answer 8

MITI
Ministry of international trade & industry judged first

Question 9

Under the original “Large-scale Retail Store Law,” Who also had to unanimously approve the plan (2)?

Answer 9

Local retailers must unanimously approve the plan

Question 10

Under the new “Large-scale Retail Store Location Act” in Japan, who is taken out of the approval process?

Answer 10

Took MITI (ministry of international trade & industry) out of the approval process

Question 11

What is the difference between an agent middleman and a merchant middleman?

Answer 11

Agent middleman: represent the principal rather than themselves
Merchant middlemen: take title to the goods and buy and sell their OWN account

Question 12

What is an Export Management Company (EMC)?

Answer 12

A consultant that comes in and becomes your export department. They offer services to countries that don’t have the ability to do exporting.

Question 13

What is “picky backing”

Answer 13

Complementary Marketing– using somebody else’s distribution channel to market your channel

Question 14

What is a norazi agent

Answer 14

smugglers

Question 15

What is usually the “quid pro quo” of an exclusive territory agreement when negotiating a contract with a middleman?

Answer 15

Exclusive dealing: if they will be your exclusive representative then they have ro promise they will only represent your products

Exclusive representative in exchange for exclusive dealing

Question 16

What is EDI and why does integrated logistics use it?

Answer 16

(Electronic Data Interchange) to coordinate all aspects of distribution (inventory control, warehousing, transportation)