retailers or wholesalers. Consumers buy the product from intermediaries (see Figure 12.2 in the textbook).Question 3Afranchise organizationis defined as “a contractual vertical marketing system in which achannel member, called a franchisor, links several stages in the production-distribution process” (textbook, p. 405).There are three types of franchising organizations:Manufacturer-sponsored retailer franchise system:A manufacturer builds a network of retailers to distribute its product (e.g., car makers and their dealers). Manufacturer-sponsored wholesale franchise system: The franchisees are wholesalers and can distribute the manufacturer’s product to retailers (e.g., Coca-Cola Company and its bottlers).
Service-firm-sponsored retailer franchise system: This is the most common type of franchise. The franchisor and its franchisees deliver services to consumers in a uniform manner (e.g., restaurants, hotels). Question 4The three strategies regarding the choice of the number of intermediaries are intensive distribution, exclusive distribution, and selective distribution (see the textbook, pp. 412–413).Question 5International marketers face many additional complexities in designing their channels. Each country has its own unique distribution system that has evolved over time and changes very slowly. These channel systems can vary widely from country to country. Thus, global marketers must usually adapttheir channel strategies to the existing structures within each country. In some markets, the distribution system is complex and hard to penetrate, consisting of many layers and large numbers of intermediaries. At the other extreme, distribution systems in developing countries may be scattered, inefficient, or altogether lacking. Sometimes, customers or government regulation can greatly restrict how a company distributes products in global markets.Question 6The major logistics functions include the following:Warehousing:storing tangible goods while they wait to be sold Inventory management:maintaining the delicate balance between carrying too little inventory and carrying too muchTransportation: finding a transportation carrier to move the product from one point to another Logistics information management:deciding on how many and what types of warehousesare needed and where they will be located, how much inventory to carry, and which of the five main transportation modes to employ (truck, rail, water, pipeline, or air)
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