CH 16

Coca-Cola's "Share a Coke" campaign in Australia reflects : Which element in the marketing mix was affected by Coca-Cola's campaign to share happiness by giving someone a personalized can of Coke? Which type of strategy best characterizes Coca-Cola's communication strategy? Coca-Cola's "Share a Coke" campaign targeting millennials can best be described as segmenting the market by __________ factors.

a standardized product with a customized message.(when they added names to the bottles) promotion A pull strategy demographic

Lisbeth's company has grown quickly internationally and she needs to hire someone who can help her assess all the data of the current business operation and use it to create strategies to help the company continue to grow in the future. Lisbeth needs to hire an individual who has experience in _____.

business analytics **the knowledge, skills and technology that allow for the exploration as well as deeper investigation of a company's international business strategies and activities to gain insight and drive future strategy development and implementation.

What are the four elements that make up a firm's marketing mix?

- distribution strategy - communication strategy - product attributes - pricing strategy

High failure rates of new product development projects are linked to which three reasons? (Check all that apply.)

- Development of technology for which demand is limited. - Failure to adequately commercialize new technology. - inability to manufacture a new product cost effectively

When all other factors are equal, what two conditions foster a greater rate of new-product development in a country?

-Affluent (having a lot of money) consumers -Intense competition

What are three arguments in support of global advertising?

-One large advertising effort will produce better results. -Many brand names are global. -Significant economic advantages

If a product is considered a bundle of attributes, what would be two attributes of a tube of toothpaste?

-Size of container -Flavor of toothpaste

What are four examples of communication channels a company can use?

Advertising Sales promotion Social media Direct selling

Why is it especially important to integrate R&D and marketing when involved in international business?

It may be necessary to create different versions of a product for various countries. **to do this, the firm must build close links between its R&D centers and its various country operations

In which type of distribution channel is it more likely for the consumer to end up paying a higher price for the final product?

Long **each intermediary in a channel adds its own markup. The longer a channel, the greater the aggregate markup, and the higher the price that consumers are charged for the final product. A firm that cares about profit margins being squeezed, would prefer to use a short channel.

Renata told the marketing department that a pull strategy should be implemented to sell the new line of footwear. Which communication strategy should the department use?

Mass media advertising

Jose's company decided to implement a push strategy for its new line of health care products. Based on this, what strategy will the company most likely use?

Personal selling aka direct selling *A push strategy emphasizes personal selling rather than mass media advertising in the promotional mix. Although effective as a promotional tool, personal selling requires intensive use of a sales force and is relatively costly. A pull strategy depends more on mass media advertising to communicate the marketing message to potential consumers. Firms in consumer goods industries that are trying to sell to a large segment of the market, generally favor a pull strategy. Mass communication has cost advantages for such firms, thus; they rarely use direct selling. Exceptions can be found in poorer nations with low literacy levels, where direct selling may be the only way to reach those consumers

What is an argument in favor of standardized advertising?

Standardized advertising lowers the cost of value creation by spreading the costs of ad development over many countries. ** second, one large effort to develop a campaign will produce better results than 40-50 smaller efforts. Third, many brand names are global. Many international firms want to project a single brand image to avoid confusion caused by local campaigns.

What is the most important aspect of cultural differences that companies need to recognize when marketing to another country?

Tradition *EX: hamburgers do not do well in Islamic countries where the consumption of meat is forbidden by Islamic law. The impact of tradition, reflects itself in the differences in traditional eating habits

True or false: When creating a product development team, if possible, all members should be in the same physical location.

True

The knowledge, skills, and technology that allow for the exploration of a company's international business strategies to gain insight and affect future strategies is called _____.

business analytics

In a _____ retail system, most of the market is supplied by a few retailers.

concentrated

When a few retailers supply the majority of the market, it reflects a ______ retail system.

concentrated In some countries, the retail system is very concentrated, but is fragmented in others. In a fragmented retail system - there are many retailers, none of which has a major share of the market.

The replacement of the transistor by the microprocessor is an example of ______.

creative destruction **the result of accelerated technology has been a dramatic shortening of product life cycles. Technological innovation is both creative and destructive. An innovation can make established products obsolete overnight. EX: microprocessors were developed in the 1970's and the market for transistors declined rapidly. The microprocessor created yet another set of new product opportunities. This "creative destruction" unleashed by technological change makes it critical that a firm stays on the leading edge of technology.

The frozen food division of Nestlé sells fish cakes and fish fingers in Great Britain, but focuses on marketing beef bourguignon and coq au vin in France. This reflects how Nestlé is taking ______ into account when selling products in each country.

cultural differences

A(n) ______ strategy, created by the management of a manufacturing business, specifies how the firm intends to transfer its products to intermediaries, retailers, and end consumers.

distribution

Marshall Marine delivers its products to retail stores which then sells the products to consumers. In this scenario, delivering products to the retail stores represents the company's _____ strategy.

distribution

When a firm sells a product for less than production cost, the company is implementing the practice known as ______.

dumping

Shiver Refrigerators Inc. manufactures a line of refrigerators with no extra features like an ice-maker or a deli drawer. These units are sold in less developed nations where a consumer has less income to spend on a high-end appliance. This scenario demonstrates how _____ can influence consumer behavior.

economic development *for ex: firms based in highly developed countries like the US, tend to build a lot of extra performance attributes into their products. And these attributes are not usually demanded by consumers in less developed nations. For most consumer durables, product reliability may be a more important attribute in less developed nations, where such a purchase may account for a major proportion of a consumer's income than it is in advanced nations

In order for predatory pricing to work, a firm should be

in a profitable position in another national market. **Predatory pricing is the use of price as a competitive weapon to drive weaker competitors out of a national market. Once the competitors have left the market, the firm can raise prices and enjoy high profits. For this to work, the firm must normally have a profitable position in another national market, which it can use to subsidize aggressive pricing in the market it is trying to monopolize. Historically, many Japanese firms were accused of pursuing such a policy.

The systematic collection, recording, analysis, and interpretation of data to provide knowledge for decision making in a global company is the definition of international _____.

market research **international market research, in comparison to domestic market research, involves 1.) translation of questionnaires and reports into appropriate foreign languages and 2.) accounting for cultural and environmental differences in data collection.

Ryan's department is responsible for assessing the distribution and pricing strategies for the company's main product lines. This department is responsible for two elements of the ______.

marketing mix 4 elements that constitute a firm's marketing mix: product attributes, distribution strategy, communication strategy, and pricing strategy (these are also known as the 4 P's : product, place, promotion and price)

John's Mattresses is now selling its products in Spain. It has priced its line of mattresses very low in the hopes that it will drive away weaker competitors. This is an example of

predatory pricing.

Consumer demand for a craft beer increases after the manufacturer lowers the cost of the beer. This is an example of _____.

price elasticity **price elasticity is a measure of the responsiveness of demand for a product to change in price

After the company lowered the cost of its men's suits, sales increased by 30 percent. This demonstrates the concept of

price elasticity of demand **price elasticity of demand is a measure of the responsiveness of demand for a product to change in price. Demand is said to elastic when a small change in price produces a large change in demand. It is said to be inelastic when a large change in price produces only a small change in demand

A(n) _____ can be viewed as a bundle of attributes.

product *EX: the attributes that make up a car include power, design, quality, performance, fuel consumption and comfort Attributes of a hamburger: taste, texture, size Hotel: quality, comfort, service, atmosphere ** Products sell when their attributes match consumer needs (and when prices are reasonable)

For most companies, there is a critical link among channel length, the final selling price, and the company's

profit margin

Charles works for a company that makes toothpaste. He realizes that the best way to advertise the product line to the international market is through mass media advertising because it will reach more consumers. He knows it would be impossible to reach every consumer with a personal sales call. He recognizes that his company should use a ______ communication strategy.

pull

If a company chooses to use mass media advertising rather than personal selling as a communication strategy, it is engaging in a _____ (push or pull)

pull

When a company sells consumer goods, such as shampoo and lotion, it would be common for the company to use a (push or pull?) strategy.

pull **Firms in consumer goods industries that are trying to sell to a large segment of the market generally favor a pull strategy. Mass communication has cost advantages for such firms; thus, they rarely use direct selling. Exceptions can be found in poorer nations with low literacy levels, where direct selling may be the only way to reach consumers Firms that sell industrial products or other complex products favor a push strategy. Direct selling allows the firm to educate potential consumers about the features of the product.

Market ______ is a tool companies use when trying to identify distinct groups of consumers whose purchasing behaviors differ from that of other consumers.

segmentation

Jim's shoe company manufactures shoes and sells them directly to the consumer. In this situation, the channel length can be described as

short. **channel length refers to the number of intermediaries between the product (or manufacturer) and the consumer. If the producer sells directly to the consumer, the channel is very short. If the producer sells through an import agent, a wholesaler, and a retailer, then a long channel exists. The most important determinant of channel length is the degree to which the retail system is fragmented. Fragmented retail systems tend to promote the growth of wholesalers to serve retailers, which lengthens channels.

Since the Industrial Revolution, product life cycles have

shortened dramatically

Despite minor variations in its menu from country to country, McDonald's is usually described as a company that follows a ______ strategy in international markets.

standardized **some customization of the marketing mix is normal. Certain strategies vary from country to country

True or false: For most consumer durable goods, product reliability may be a more important attribute in less developed nations.

true

When Margo learned that the inventory levels were still at 90 percent, she instructed the sales team to sell the product 35 percent lower than production costs to bring the inventory down to acceptable levels. This demonstrates the idea of

dumping. **Dumping occurs when a firm sells a product for a price that is less than the cost of producing it. Most regulations, however, define dumping more vaguely. For example, a country is allowed to bring antidumping actions against an importer under Article 6 of GATT, as long as 2 criteria are met: sales at "less than fair value" and "material injury to a domestic industry" The problem with this terminology is that it does not indicate what fair value is. The ambiguity has led some to argue that selling abroad at prices below those in the country of origin, as opposed to below cost, is dumping.

When a company uses a (push or pull?) strategy, it emphasizes personal selling rather than mass media advertising.

push

Following a month-long social media attack on German imports, German electronic manufacturers decided to implement an advertising campaign to negate the attack and reassure U.S. consumers that German-made electronics were of the highest quality and relied on U.S. parts to complete the product. Which international communication barrier did the German electronic manufacturers address?

Source effects **source effects occurs when the receiver of the message (potential consumer) evaluates the message on the basis of status or image of the sender. Source effects can be damaging for an international business when potential consumers in a target country have a bias against foreign firms.

Theodore Levitt believed that _____ was driving the world toward a converging commonality.

Technology

True or false: A company would need to account for cultural differences in data collection when conducting international market research.

True ** International market research differs from domestic market research in that it would need to account for cultural differences

Heidi's company works through an import agent to get their products to retailers throughout Europe. In this situation, there are two intermediaries between the manufacturer and the consumer—this refers to the

channel length.

As noted in the text, although American Express may sell the same basic charge card service worldwide, differences in national regulations require it to vary aspects of its ______ strategy from country to country.

communication

A company relies on a ______ to advise prospective customers about the attributes of a product.

communication strategy A number of communication channels are available to a firm, including social media, direct selling, sales promotions, and various forms of advertising. A firm's communication strategy is partly defined by its choice of channel. However, the number of channels available today has also resulted in companies having less control over the messaging that they try to do regarding their products and services.

Scientific research, demand conditions, and ______ conditions all contribute to stimulating ideas for new products.

competitive

Members of a product development team should be comprised of individuals from

each key function in the company.

A proliferation of retailers in a given market would be found in a ______ retail system.

fragmented

Corinne reported to the management team that since there were so many retailers supplying the product, none of them held a major share of the market. This is an example of a ______ retail system.

fragmented

Levitt promoted the idea that the success of companies like McDonald's and Coca-Cola that sell essentially the same products everywhere reflects the

globalization of markets and brands.

Problems with cost-effectively manufacturing a new product is one reason for the (low or high?) rate of new product development failure.

high **The reasons for such high failure rates are various and include development of a technology for which demand is limited, failure to adequately commercialize promising technology, and inability to manufacture a new product cost effectively

Rasheed's report outlined that consumers living on the West Coast had purchased 80 percent more of the company's line of "green" products as compared to consumers living in the southeastern part of the country. His report identifying specific groups is an example of

market segmentation **refers to identifying distinct groups of consumers whose needs, wants and purchasing behavior differ from others in important ways. Markets can be segmented in numerous ways: geography, demography (age, gender, income, education level, race), sociocultural factors (social class, values, religion, lifestyle choices) and psychological factors (personality). Since different segments exhibit different needs, wants and patterns of purchasing behavior, firms often adjust their marketing mix from segment to segment.

It is (less or more?) important to integrate R&D and marketing when dealing with international business.

more **the need to integrate R&D and marketing to adequately commercialize new technologies poses special problems in the international business bc commercialization may require different version of a new product to be produced for various countries. To do this, the firm must build close links between its R&D centers and its various country operations.

When a consumer reads an advertisement and evaluates the content of the ad on the basis of the image of the company that placed the ad, he or she is being influenced by

source effects Source effects occur when the consumer evaluates the message on the basis of status or image of the sender. Source effects can be damaging for an international business when potential consumers in a target country have a bias against foreign firms : EX: a wave of "japan bashing" swept the United States in the early 1990s. Worried that US consumers might view its products negatively, Honda responded by creating ads that emphasized the US content of its cars to show how "American" the company had become.

After his company introduced a new line of hair dryers, Jeremy realized that the dryers could not be sold in Europe because the electrical adapters would not fit into the existing design. Jeremy's company failed to take into account ______ standards that limited globalization.

technical

While no longer an area of concern now that most people stream music, originally DVD equipment made in the United States would not play DVDs recorded on equipment made in Germany. This shows how _____ can influence consumer behavior.

technical standards