Question

The Straight Laced Shoes Company has a production base in the United States of America but wants to access the Mexican retail market. A Mexican company called Bienvenidos is employed to make introductions to several major Mexican retail outlets. Straight Laced then sells its footwear directly to these retail outlets. In this scenario, what role has Bienvenidos played?

a. Distributor
b. Marketing subsidiary
c. Agent

Answer 1

Bienvenidos played the role of an agent for the Straight Laced Shoes Company, by making introductions to major Mexican retail outlets, thus allowing Straight Laced to sell its products directly in Mexico.

Step-by-step explanation:

In the scenario described, the Mexican company Bienvenidos facilitated introductions for the Straight Laced Shoes Company to major retail outlets in Mexico. Hence, Bienvenidos has taken the role of an agent. As an agent, it does not buy or take ownership of the goods, unlike a distributor. Instead, it represents Straight Laced in the Mexican market under an agency agreement, which typically means it earns a commission on sales generated from the introductions it makes. This approach allows Straight Laced to directly access the retail market without having to set up its own physical presence or subsidiary within Mexico.