Which of the following statements regarding international distribution channels is correct?

Choose the correct code for the following statements being correct or incorrect.Statement I : A well-chosen marketing channel must be aligned to company's marketing strategy with respect to segmentation, targeting and positioning.Statement II : Marketing channels are set of interdependent organizations participating in the process of making the product available for the use of consumption. 

1. Both the statements I and II are correct.
2. Both the statements I and II are incorrect.
3. Statement I is correct, but II is incorrect.
4. Statement II is correct, but I is incorrect.

Answer (Detailed Solution Below)

Option 1 : Both the statements I and II are correct.

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Statement I: A well-chosen marketing channel must be aligned to the company's marketing strategy with respect to segmentation, targeting, and positioning.

Explanation: 

1. Segmentation, Targeting, and Positioning (STP) marketing is one of the most popular strategic marketing modules used by businesses today, and for good reason.
2. The STP model is an excellent embodiment of the gradual change in focus from a product-centric approach to a customer-centric approach, which enables companies to better understand who they are trying to reach and how to position themselves for success. 
3. STP marketing stands for segmentation, targeting, and positioning.
4. It is a three-step process that allows for the development of a specific and actionable marketing strategy.
5. The main principle behind the process is to segment your audience, target each segmented group according to their preferences and habits, and make positioning adjustments in your branding and marketing strategies to accommodate their needs and expectations.
6. The reason why the segmentation-targeting-positioning process is so effective is that it breaks down broader markets into smaller parts, making it easier to develop specific approaches for reaching and engaging potential customers instead of having to use a generic marketing strategy that would not be as appealing, or as effective.
7. Thus, the marketing channel and strategy should be well-aligned with the company's STP for effective success. Thus, the statement I is correct.

Statement II: Marketing channels are a set of interdependent organizations participating in the process of making the product available for the use of consumption. 

Explanation: 

1. ‘Marketing channels refer to an organized network of interconnected organizations and agencies involved in the process of making a product or service available to consumers.’
2. The marketing channels are interdependent business organizations.'
3. They are also known as the middlemen, intermediaries.
4. There are various forms of these intermediaries.
5. They bear a variety of names. They act as an interface between the firm and its customers.
6. They facilitate the producers and ensure a smooth flow of products/services to the customers.
7.  Richard M. Clewett views as – “it is the pipeline through which a product flows on its way to the consumers.
8. The manufacturer puts his product into the pipeline or marketing channel and various marketing people move it along to the consumers at the other end of the channel”.
9. Thus, statement II is correct.

Thus, option 1 is the correct answer.

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Take the quiz test your understanding of the key concepts covered in the chapter. Try testing yourself before you read the chapter to see where your strengths and weaknesses are, then test yourself again once you’ve read the chapter to see how well you’ve understood.

1. In marketing, ‘place’ is another term for location. True or false?

True

False

2. A supply chain is a network of businesses and organisations through which goods pass to get to their final destination. True or false?

True

False

3. The Internet has opened up new channels of distribution. True or false?

True

False

4. One of the primary functions of packaging is to protect goods in transit. True or false?

True

False

5. Services cannot be exported. True or false?

True

False

6. What is an alternative term for a distribution channel?

1. marketing channel
2. supply chain
3. marketing chain
4. place
5. distribution depot

Answer:

a. marketing channel

7. What is a distribution channel?

1. a group of distributors
2. a shop or other retail outlet
3. a product’s route through the supply chain
4. an electronic network
5. a means of transporting goods (e.g. lorry or train)

Answer:

c. a product’s route through the supply chain 

8. Rolex sells its watches through a number upmarket retail partners (e.g. department stores and jewellers) with comparatively few stores. What is this type of distribution strategy called?

1. selective distribution
2. exclusive distribution
3. marketing distribution
4. mass distribution
5. prestige distribution

Answer:

a. selective distribution 

9. What kind of intermediary is Tesco?

1. wholesaler
2. supplier
3. distributor
4. reseller
5. retailer

10. What is a warehouse club?

1. a storage facility rented out to small traders
2. a large store offering wholesale prices to members only
3. an online trading house
4. a social club for members of the distribution trade
5. a loyalty scheme for small retailers

Answer:

b. a large store offering wholesale prices to members only 

11. What are businesses that represent, and sell goods on behalf of, other businesses in a specified market called?

1. resellers
2. traders
3. agents
4. stockists
5. legal representatives

12. What does EPOS stand for?

1. easy purchasing and ordering system
2. electronic purchase operating system
3. estimated product order shipment
4. exclusive products’ organisational standing
5. electronic point of sale

Answer:

e. electronic point of sale 

13. The International Chamber of Commerce has devised a set of rules for the interpretation of international terms and conditions. These rules set out how activities, costs and risks are to be split between the buyer and seller. What are they called?

1. Ts & Cs
2. ICC regulations
3. les regulations internationale
4. incoterms
5. core-GS

14. How many levels of intermediaries are there in a direct sales channel?

1. 0
2. 1
3. 2
4. 3
5. 4

15. Luxury goods such as high fashion and designer clothing would normally have very few, (possibly only one), distribution outlets. What is the term for this?

1. exclusive distribution
2. prestige distribution
3. selective distribution
4. unique distribution
5. targeted distribution

Answer:

a. exclusive distribution 

16. Tucker’s foods buy their fruit straight from the farm. They then make it into jam and other products and sell it on to wholesalers who in turn sell to retailers such as Sainsbury’s. How many levels are there in this supply chain?

1. 0
2. 1
3. 2
4. 3
5. 4

17. Dombey and Sons produce a sparkling drink from apples grown on their own farm. They employ a small French firm to sell the drink to wholesalers in France. This French firm is acting as:

1. a franchisee
2. a retailer
3. an agent
4. a warehouse
5. a logistics firm

18. Dizzy Designs make their clothes in the UK and then ship them to their own retail outlets in France, Spain and Germany. What kind of operation is this?

1. indirect export
2. direct export
3. home shipment
4. overseas manufacture
5. contract manufacture

19. According to many retailers, what are the three secrets to their business success?

1. product, price and place
2. product, product and product
3. location, location and location
4. service, smile and sizzle
5. people, process and physical evidence

Answer:

c. location, location and location 

20. What is the function of transporting and storing physical goods for the various members of the supply chain known as?

1. the buying centre
2. merchandising
3. traffic
4. inventory
5. logistics

21. Place, or distribution, is often summed up as getting the right ______ to the right place at the right time.

22. At each stage in the supply chain, ______ is added to the bought in product (i.e. it is transformed into something more desirable and so can command a higher price).

23. A ______ is one of a chain of shops that are individually owned but licensed by a larger company to sell their products (e.g. the Body Shop or Baskin Robbins). The larger company also provides expertise.

24. The ______ Mark shows consumers that the farmers that produced the products received a fair and stable price. They also have safe working conditions and stronger rights and treat the environment with care.

25. The use of different types of channel (e.g. high street stores as well as the internet) to reach the same potential target market is known as _____ distribution.

What are the 4 channels of distribution in international marketing?

Which of the following is a reason that producers use marketing channels and channel intermediaries?

Which of the following defines a just

Which of the following is true of a direct marketing channel?