Action Toys is thinking about terminating a distributor in an overseas market.What might the firm be liable for upon termination?
A)Compensating the various channel captains
B)The local goodwill the distributor has built up for the brand
C)All outstanding sales taxes
D)None of the above

Question

Quizplus · Accepted Answer

The local goodwill the distributor has built up for the brand. Terminating a distributor can harm the brand's reputation and relationship with customers in that market, which can result in loss of sales and market share. The distributor may have invested in marketing, advertising and promoting the brand in the region, thereby building goodwill and brand equity. The firm may be liable for compensating the distributor for the value of the goodwill and other assets associated with the brand.

Action Toys Is Thinking About Terminating a Distributor in an Overseas