BA 370 Midterm 2

The National Institutes of Health (NIH) sponsors medical foundations to conduct research to treat rare diseases. The research is then disseminated to the medical community, thus encouraging the development of drugs and therapies more quickly and at a lower cost than would be possible if the research were privately funded. This is an example of

AN R&D CONSORTIA To develop new product ideas, more and more firms have been joining an R&D consortia, or groups of other firms and institutions, possibly including government and educational institutions, to explore new ideas or obtain solutions for developing new products.

Brands can be owned by

ANY FIRM IN THE SUPPLY CHAIN Brands can be owned by any firm in the supply chain, whether manufacturers, wholesalers, or retailers. There are two basic brand ownership strategies: manufacturer brands and retailer/store brands.

The first step in the segmentation process is to

ARTICULATE THE VISION OR OBJECTIVES OF THE COMPANY'S MARKETING STRATEGY CLEARLY The first step in the segmentation process is to articulate the vision or objectives of the company's marketing strategy clearly.

To determine the market potential for its particular product or service, a firm should use

AS MANY METRICS AS IT CAN OBTAIN The market potential for a firm depends on many variables and no one metric can offer a complete picture of the economic environment in a country. To determine the market potential for its particular product or service, a firm should use as many metrics as it can obtain.

What aspect of the product is being described when a used-car salesperson explains that each car comes with a one-year extended warranty and a two-year maintenance plan?

ASSOCIATED SERVICES Associated services are the nonphysical aspects of the product, such as product warranties.

The service dimension called ________ refers to the ability of the firm's employees to convey trust and confidence.

ASSURANCE Assurance refers to employees' knowledge and courtesy and their ability to convey trust and confidence.

Which of the following is included in the five dimensions used by consumers to determine overall service quality?

ASSURANCE The five dimensions of service quality are reliability, assurance, responsiveness, empathy, and tangibles.

Marketers need to think about the product offer on three levels. Which of the following levels includes associated services such as warranties, financing, support, and after-sale service?

AUGMENTED PRODUCT The associated services, also called the augmented product line, include the nonphysical aspects of the product, such as product warranties, financing, product support, and after-sale service.

________ segmentation is the segmentation method most directly related to satisfying consumers' needs and wants.

BENEFIT Benefit segmentation groups consumers on the basis of the benefits they derive from products or services. Because marketing is all about satisfying consumers' needs and wants, dividing the market into segments whose needs and wants are best satisfied by the product benefits can be a very powerful tool.

One reason auto companies spend millions on racing cars is that they offer the opportunity to test new designs and technology under extreme conditions. Using the cars in a real-use setting provides an opportunity for ________ the product.

BETA TESTING Beta testing uses potential consumers who examine the product prototype in a real-use setting to determine its functionality, performance, potential problems, and other issues specific to its use. Participation in NASCAR and other racing organizations offers auto companies a chance to do this.

To reach more customers in India, which represents a vastly promising market but where the GDP is less than $2,000 per capita, Netflix offers subscription plans priced lower than those offered in the United States. This market is known as

BOTTOM OF THE PYRAMID In settings in which consumers earn very low wages, the market is known as the bottom of the pyramid. That is, there is a large, impoverished population that still wants and needs consumer goods but cannot pay the prices that the fewer, wealthier consumers in developed nations can.

One of the key characteristics of ________ sessions is that no idea should be immediately accepted or rejected.

BRAINSTORMING One of the key characteristics of a brainstorming session is that no idea can be immediately accepted or rejected.

Matilda developed a toothpaste using only natural ingredients, and she has been quite successful selling the product in health food stores and some grocery stores. She has recently developed a toothbrush using bamboo and natural components. Matilda is considering a ________, giving the toothbrush the same brand name as the toothpaste in order to create greater brand awareness.

BRAND EXTENSION If Matilda gives the toothbrush the same brand name as her existing toothpaste, this is a brand extension, adding a new product line (toothbrushes) to her existing brand.

Mariska is working to create greater brand awareness for her company's new line of sports bracelets. Which of the following is important for increasing brand awareness?

BRAND NAME The brand name, logo, packaging, and slogan are all important in creating brand awareness.

Jeremiah always buys Boar's Head cold cuts. He does not even consider alternatives. Jeremiah is a ________ customer.

BRAND-LOYAL Since Jeremiah does not consider other brands, he is brand-loyal.

Which of the following statements regarding brand loyalty is true?

BRAND-LOYAL CUSTOMERS ARE UNLIKELY TO SWITCH TO COMPETITOR'S BRANDS

In addition to extensive online and outdoor advertising, Under Armour has intensified its ______ efforts by signing Washington Nationals baseball star Bryce Harper to the biggest endorsement deal for an MLB player.

BRANDING In addition to extensive online and outdoor advertising, Under Armour has intensified its branding efforts by signing Washington Nationals baseball star Bryce Harper to the biggest endorsement deal for an MLB player.

Which BRIC country's economic growth in the 21st century can largely be attributed to the expansion of its literate population and the impositions of social programs that have allowed more than half of its 201 million citizens to enter the middle class?

BRAZIL Brazil's impressive economic growth in the 21st century largely can be attributed to the expansion of its literate population and the impositions of social programs that have allowed more than half of the 208 million Brazilians to enter the middle class.

Pioneer or breakthrough products

CAN CHANGE CONSUMER PREFERENCES Pioneer products establish a completely new market or radically change both the rules of competition and consumer preferences in a market.

A service is any intangible offering that involves a deed, performance, or effort that

CANNOT BE PHYSICALLY POSSESSED Services are intangible—they cannot be physically touched or possessed, as a pure product can.

Which country has embraced market-oriented economic development in spite of maintaining communist political ideals?

CHINA Since 1978, China's leadership, while maintaining communist political ideals, has embraced market-oriented economic development, which has led to startlingly rapid gains.

A U.S. firm is analyzing its business prospects in China. Marketing executives understand which of the following to be true of this potential market?

CHINA STRUGGLES WITH UNEQUAL ECONOMIC DISTRIBUTION China continues to suffer from drastically unequal economic distribution, which has led to a significant migrant workforce that subsists on part-time, low-paying jobs.

The ________ gap can be reduced by managing consumers' expectations and promising only what can be delivered or possibly even a little less.

COMMUNICATION A communication gap is the difference between promised and actual service. By making realistic promises, the firm can manage expectations.

Determining the selling price in the global marketplace is an extremely difficult task. Many countries still have rules governing the ________, including those that affect pricing.

COMPETITIVE MARKETPLACE

Four frequently used targeting strategies are the micromarketing, undifferentiated, differentiated, and __________ targeting strategies.

CONCENTRATED The four targeting strategies are micromarketing, undifferentiated, differentiated, and concentrated.

When Porsche filmed an advertisement in which its vehicles ran over the Great Wall of China, Chinese consumers were left more confused than intrigued. To address or avoid such issues, one important cultural classification scheme that firms can use is Geert Hofstede's cultural dimensions concept. Hofstede proposes that cultures differ on all of the following dimensions except

CONSERVATISM Hofstede's cultural dimensions offer a foundation for most research into culture: power distance, uncertainty avoidance, individualism, masculinity, time orientation, and indulgence.

Sometimes brand names become synonymous with a product itself. If that happens, the brand

COULD LOSE ITS TRADEMARK STATUS Companies whose brand names become synonymous with the product—like Kleenex tissues, Clorox bleach, Band-Aid adhesive bandages, and the Google search engine—must be vigilant in protecting their brand names because if they are used so generically, over time the brand itself can lose its trademark status.

Logan is working on a global marketing assessment team looking out well into the future to help determine the most attractive market areas around the world. He is evaluating market sizes and growth rates. Based on population growth rates in different regions, he should consider that

COUNTRIES WITH HIGH PURCHASING POWER TODAY MAY NOT CONTINUE TO SHOW THE SAME GROWTH IN THE FUTURE Today, developed countries are experiencing zero or no population growth, while most less developed nations are experiencing rapid population growth. The countries with the highest purchasing power today may become less attractive in the future for many products and services because of stagnated growth.

A tablet programmed with key customers' birthdates, wine preferences, and food allergies is a(n) ________ tool.

CRM Keeping track of customers' preference enhances the relationship and increases brand loyalty, all part of customer relationship management (CRM).

During the ________ stage of the product life cycle, firms either position themselves for a niche segment of diehard consumers or they completely exit the market.

DECLINE Firms with products in the decline stage either position themselves for a niche segment of diehard consumers or those with special needs or they completely exit the market.

Firms with products in the ________ stage either position themselves for a niche segment of diehard consumers or those with special needs or they completely exit the market.

DECLINE The product life cycle is made up of introduction, growth, maturity, and decline, which is the last stage. Here, to continue, products may be positioned for diehard consumers or those with special needs.

In services marketing, the saying "where the rubber meets the road" refers to whether or not a(n) ________ gap exists.

DELIVERY This refers to a delivery gap, a situation in which the employee knows what customers expect but fails to deliver to these expectations.Delivery gaps can be reduced when employees are empowered to spontaneously act in the customers' and the firm's best interests when problems or crises are experienced.

As soon as he saw one, Jose wanted a flat-screen television, but he was worried about making the wrong choice. He waited until there were alternatives in the market with lower prices and improved quality. Jose is part of the ________ diffusion of innovation group.

EARLY MAJORITY Jose has waited for a more competitive market with lower prices. The early majority group members don't like to take as much risk and therefore tend to wait until the bugs are worked out of a particular product or service.

The value of a brand is often calculated by assessing the

EARNING POTENTIAL OF THE BRAND OVER THE NEXT 12 MONTHS The value of a brand can be defined as the earning potential of that brand over the next 12 months.

The most common method of evaluating the economic health of a country is to use metrics that measure the country's ______.

ECONOMIC OUTPUT

A country with a trade surplus ______.

EXPORTS MORE GOODS THAN IT IMPORTS

Entering into a global franchise agreement exposes a company to higher risk than if the company had entered into direct investment in the country.

FALSE Franchising is a contractual agreement between a firm, the franchisor, and another firm or individual, the franchisee. In a global franchising agreement, this entails lower risks and requires less investment than if entering into direct investment in a country.

NASCAR redirected its marketing efforts when a survey indicated that almost 50 percent of its fans were female. This is an example of psychographic segmentation.

FALSE Segmentation by gender is demographic, not psychographic, segmentation.

A trade deficit means that a country ______.

IMPORTS MORE GOODS THAN IT EXPORTS

What is one of the main criteria used for determining how "good" a brand is, or how much equity it has?

PERCEIVED VALUE Brand awareness, brand loyalty, brand associations, and perceived value are the four primary criteria used to evaluate brand equity.

The complete set of all products offered by a firm is called its

PRODUCT MIX The product mix is the complete set of all the firms' offerings.

Byron traded in his old car for his heart's desire, a new Mustang convertible. The Mustang is considered a specialty product.

TRUE Luxury cars are specialty products because customers are willing to spend more effort to select just the right one.

The fact that the Apple iPad is easy to try—demo units are available at Apple stores as well as other retail stores—is helping it diffuse more quickly.

TRUE This refers to trialability, the ability to easily try a product for yourself. Trialability helps a product be adopted more quickly (i.e., to diffuse faster).

Which of the following statements about the Russian economy are true? (Choose every correct answer.)

The country's prospects as a consumer market are overall promising. A growing well-educated middle-class has a strong demand for products. The economy has repeatedly risen and fallen since the fall of the Soviet Union.

Purchasing Power Parity (PPP)

a theory that states that if the exchange rates of two countries are in equilibrium, a product purchased in one will cost the same in the other if expressed in the same currency

Gross Domestic Product (GDP)

the most widely used of these metrics, is defined as the market value of the goods and services produced by a country in a year

Because a market is saturated, firms may attempt to enter new geographical markets that may be less saturated. For example, pharmaceutical companies are realizing that they need to turn to ________ for continued growth in the coming years.

BRIC COUNTRIES Because a market is saturated, firms may attempt to enter new geographical markets, including international markets, that may be less saturated. For example, pharmaceutical companies are realizing that they need to turn to BRIC countries for continued growth in the coming years. While the U.S. and European markets are fairly saturated, the BRIC countries are expected continue to grow.

Beer marketers know that high-school-educated, working-class males from the ages of 25 to 40 make an attractive market for their products. This is a ________ segment of the beer market.

DEMOGRAPHIC Demographic segmentation groups consumers according to easily measured, objective characteristics such as age, gender, income, and education.

Boho Clothing an online trendy women's clothing site, targets college-educated women between 25 and 40 years old with average household income of $70,000 or more. This is a form of ________ segmentation.

DEMOGRAPHIC Demographic segmentation groups consumers according to easily measured, objective characteristics such as age, gender, income, and education.

Which of the following would be part of the launch of a new product?

DETERMINING THE MARKETING BUDGET FOR THE FIRST YEAR OF THE PRODUCT First, on the basis of the research it has gathered on consumer perceptions, the tests it has conducted, and competitive considerations, the firm confirms its target market (or markets) and decides how the product will be positioned. Then the firm finalizes the remaining marketing mix variables for the new product, including the marketing budget for the first year.

Brands can be extremely valuable domestically but challenging internationally. Companies can help overcome language difficulties in using brands by

DEVELOPING BRAND NAMES THAT HAVE NO PREEXISTING MEANING IN ANY KNOWN LANGUAGE To avoid the potential embarrassment that language confusion can cause, firms spend millions of dollars to develop brand names that have no preexisting meaning in any known language, such as Accenture (a management consulting firm) or Avaya (a subsidiary of Lucent Technologies, formerly Bell Labs).

Nenisha had developed an extremely successful advertising and promotion campaign for a client in the United States. The client wanted to roll out the same campaign to markets worldwide, but Denisha cautioned against doing this, most likely because

DIFFERENCES IN LANGUAGES, CUSTOMS, AND CULTURE MIGHT TAKE THE CAMPAIGN MEANINGLESS AND INEFFECTIVE IN SOME MARKETS When designing communication strategies for global markets, differences in languages, customs, and culture must be carefully considered. A campaign that works well in one country might be ineffective or even offensive in another.

Adidas Group owns Reebok, Rockport, and TaylorMade brands. Adidas uses the different brands to pursue a(n) ________ strategy.

DIFFERENTIATED TARGETING Firms using a differentiated targeting strategy target several market segments with a different offering for each.

________ offers the firm complete control over its operations in the foreign country.

DIRECT INVESTMENT Direct investment requires a firm to maintain 100 percent ownership of its plants, operation facilities, and offices in a foreign country, often through the formation of wholly owned subsidiaries.

ABC, Inc. wants to expand into the Central American market. It has the financial resources, wants to control business operations, and has had considerable success marketing to Hispanics in the United States. ABC will likely use ________ to expand into the Mexican market.

DIRECT INVESTMENT Direct investment is a market entry strategy in which the firm directly owns property and equipment in the foreign market. NCD has the resources and experience necessary for a firm contemplating direct investment; in addition, direct investment offers NCD the control of business operations that it seeks.

Stefan arrived at the hotel to find that, although he had a guaranteed reservation, the hotel had no rooms available. He became angry when the hotel made him a reservation at a more expensive hotel but refused to pay the difference in room rates. Stefan was upset because, in his opinion, the hotel's solution did not incorporate

DISTRIBUIVE FAIRNESS Distributive fairness pertains to a customer's perception of the benefits he or she received compared with the costs (inconvenience or loss). In this case, Stefan did not feel that he was compensated for the additional cost he had to bear due to the problem with his reservation.

After assessing the market growth potential and market competitiveness in Brazil for his company's baby products, Jaime wanted to evaluate market access. To do this, Jaime would consider

EASE OF ACCESSING OR DEVELOPING DISTRIBUTION CHANNELS AND BRAND FAMILIARITY Evaluation of profitability considers market growth, market competitiveness, and market access, along with focusing the assessments on the potential profitability of each segment, both current and future. Market access includes ease of developing or accessing distribution channels and brand familiarity.

________ means allowing employees to make decisions about how service is provided to customers.

EMPOWERMENT In the service context, empowerment means allowing employees to make decisions about how service is provided to customers. When frontline employees are authorized to make decisions to help their customers, service quality generally improves.

The first step in the STP process is to

ESTABLISH THE OVERALL STRATEGY OR OBJECTIVES The first step in the segmentation, targeting, and positioning process is to articulate the vision or objectives of the company's marketing strategy clearly.

Culture affects

EVERY ASPECT OF CONSUMERS' PURCHASE DECISIONS Culture affects every aspect of consumer behavior: why people buy; who is in charge of buying decisions; and how, when, and where people shop.

When a company decides to minimize risk and enter a global market by shipping its products to buyers in other countries, this is known as

EXPORTING Exporting means producing goods in one country and selling them in another. This entry strategy requires the least financial risk but also allows for only a limited return to the exporting firm.

Martine wants to sell her products in Europe, since they are doing well in the United States. She does not have a lot of capital and is risk-averse, so she most likely would choose to begin with

EXPORTING HER PRODUCTS Exporting is the least financially risky global entry strategy, so Martine most likely would choose this route.

Global expansion often begins with

EXPORTING OF GOODS Global expansion often begins when a firm receives an order for its product or service from another country, in which case it faces little risk because it has no investment in people, capital equipment, buildings, or infrastructure.

What are the four sets of criteria necessary to assess a country's market?

Economic analysis, infrastructure and technological analysis, governmental actions or inactions, and sociocultural analysis

When consumers associate a brand with a certain level of quality and familiar attributes, allowing consumers to make quick decisions, the brand

FACILITATES PURCHASING A brand can facilitate purchasing because the customer can quickly recognize it and decide whether or not to purchase it based on brand associations.

A customized mailbox for your house is an example of a convenience product.

FALSE A convenience product is a product for which the consumer is not willing to expend any effort to evaluate prior to purchase. A customized product such as a mailbox is a specialty product, which is a product toward which customers show a strong preference, such that they will spend time and effort searching for the best suppliers.

A product label is just a required sticker on a package.

FALSE A label is much more than a sticker on a package. It is a communication tool and many of the elements on the label are required by laws and regulations.

Although innovation strategies may not work in the long run, overriding short-term reasons compel firms to introduce new products and services.

FALSE Although innovation strategies may not always work in the short run—some estimates indicate that only about 3 percent of new products actually succeed—various overriding and long-term reasons compel firms to continue introducing new products and services.

Brazil is characterized by strong upper and lower classes, but the middle class has declined in recent years.

FALSE Brazil's impressive economic growth in the 21st century largely can be attributed to the expansion of its literate population and the impositions of social programs that have allowed more than half of the 208 million Brazilians to enter the middle class.

An effective global pricing strategy can be easily established by setting the same prices in every market around the world.

FALSE Determining the selling price in the global marketplace is an extremely difficult task. Many countries still have rules governing the competitive marketplace, including those that affect pricing.

On the diffusion of innovation curve, the first group of buyers who want to be the first on the block to have the new product are known as early adopters.

FALSE Early adopters are the second group of adopters of an innovation; innovators come first.

Global distribution networks that involve wholesalers, exporters, importers, and different transportation systems generally lower costs and prices for products.

FALSE Global distribution networks form complex value chains that involve wholesalers, exporters, importers, and different transportation systems. These additional intermediaries typically add cost and ultimately increase the final selling price of a product.

Renatta was employee of the month at Sonic Subs, primarily because she provided excellent customer service by serving food quickly. This relates to the reliability service dimension.

FALSE Helping customers and providing prompt service relates to responsiveness.

On the diffusion of innovation curve, the late majority is the final group of buyers who like to avoid change and rely on traditional products until they are no longer available.

FALSE Laggards are the last group of consumers to adopt a new product. They are consumers who like to avoid change and rely on traditional products until they are no longer available.

Of the various methods for segmenting, or breaking down, the market, demographic segmentation is the one that delves into how consumers actually describe themselves.

FALSE Of the various methods for segmenting, or breaking down, the market, psychographic segmentation is the one that delves into how consumers actually describe themselves.

Kellogg's sells many different breakfast cereals, including Corn Flakes, Rice Krispies, Frosted Flakes, Raisin Bran, and Special K. This is an example of the breadth of the Kellogg's product mix.

FALSE Product line depth (not breadth) equals the number of products within a product line, as in this question.

The marketing of services differs from the marketing of products because services are tangible and separable from the service provider.

FALSE Products are tangible and separable; services are not. A service is any intangible offering that involves a deed, performance, or effort that cannot be physically possessed.

In training service providers, service quality goals should be general to allow for the various needs of consumers.

FALSE Service quality goals should be specific in order to deliver consistently services that meet customers' expectations.

Tariffs artificially lower prices and make goods more competitive.

FALSE Tariffs are intended to make imported goods more expensive and thus less competitive with domestic products.

The BRIC countries are Bolivia, Russia, Italy, and China.

FALSE The BRIC countries are Brazil, Russia, India, and China.

The knowledge gap is where "the rubber meets the road," where the customer directly interacts with the service provider.

FALSE The delivery gap, not the knowledge gap, is where the rubber meets the road, where the customer directly interacts with the service provider.

Russia lags behind most European countries in use of the Internet.

FALSE The number of Russian Internet users, presently at 83 million, is growing at a rate of approximately 10 percent annually, and is already Europe's largest Internet market.

A complex product that is best described in writing will be difficult to explain to consumers who are unable to read. For this reason, a segment in which many consumers could not read would be considered unattractive because the consumers would not be responsive.

FALSE The problem here is not responsiveness, but reachability. The consumers might respond very well to the offer if they could receive the message; however, their failure to read will make it difficult to reach them with positioning messages. The best product or service cannot have any impact, no matter how identifiable or substantial the target market is, if that market cannot be reached (or accessed) through persuasive communications and product distribution.

The most common measure of market potential of an economy is a country's

GDP Gross domestic product (GDP), the most widely used of these metrics, is defined as the market value of the goods and services produced by a country in a year.

What is a major economic factor that a firm conducting an economic analysis of a country market must take into account?

GENERAL ECONOMIC ENVIRONMENT

Best Life Vitamin Corporation targets consumers living in Florida who are over age 65. Golden Years is using ________ segmentation.

GEODEMOGRAPHIC Geodemographic segmentation uses a combination of geographic, demographic, and lifestyle characteristics to classify consumers. This is an example of geodemographic segmentation because it has an element of geographic segmentation (residence in Florida) combined with demographic segmentation (age greater than 65).

Let's Dish is a meal-preparation service operating in three states. Customers visit a Let's Dish store to select and partially prepare their meals, which are then packaged for the freezer. At home, the customer can pull a meal out of the freezer and warm it in the oven or microwave. If Let's Dish wanted to expand into new areas of the United States, what segmentation method would probably be most useful in choosing new locations?

GEODEMOGRAPHIC SEGMENTATION Geodemographic segmentation is the best choice because Let's Dish needs to be located near its customers. It could compare demographic profiles for neighborhoods near successful current locations and seek out similar neighborhoods in other geographic areas.

Differences in weather and climate create opportunities for

GEOGRAPHIC SEGMENTATION Geographic segmentation organizes customers into groups on the basis of where they live. Climate and weather are two factors that create geographic differences and thus opportunities to segment a market by geographic region.

A strategic alliance is a type of ______ firms use to expand into the foreign market.

GLOBAL ENTRY STRATEGY

What is the process that causes an increased flow of goods, services, capital, people, information, and ideas across national borders?

GLOBALIZATION

Which term refers to a strategy in which firms sell a standardized product around the world but develop different promotional campaigns for different countries?

GLOCALIZATION

Darius is deciding whether to purchase brand-name sneakers or a less expensive store brand. He has purchased other shoes with the same brand name in the past but was only marginally satisfied. In this situation, Darius is likely to purchase the store-brand sneakers because they offer

GREATER PERCEIVED VALUE Since Darius' past experience with name brands has been marginal, he might prefer to buy the store brand, which is less expensive and might therefore provide better value.

Of the five strategies for entering new markets, direct investment creates the

GREATEST POTENTIAL RISK Direct investment requires a firm to maintain 100 percent ownership of its plants, operation facilities, and offices in a foreign country, often through the formation of wholly owned subsidiaries. This entry strategy requires the highest level of investment and exposes the firm to significant risks, including the loss of its operating and/or initial investments.

________ consists of GDP plus the net income earned from investments abroad (minus any payments made to nonresidents who contribute to the domestic economy).

GROSS NATIONAL INCOME

When Toyota introduced hybrid cars, there were waiting lists to buy them. Then Honda and a few other manufacturers entered the market, shifting the product life cycle for hybrid cars into the ________ stage of the product life cycle.

GROWTH As a few additional competitors moved into the hybrid car market, opening up production capacity for additional buyers, the hybrid market moved into the growth stage. The market becomes more segmented and consumer preferences more varied, which increases the potential for new markets or new uses of the product or service during the growth stage.

Innovators are a critical group of new product adopters because they

HELP THE PRODUCT GAIN MARKET ACCEPTANCE As the first group to adopt a new product, innovators help the product gain initial market acceptance.

The old restaurant saying "You are only as good as the last meal served" reflects the fact that services are

HETERONHENEOUS This saying refers to the heterogeneity, or variability, of services—the fact that they tend to vary by time, location, or service provider.

Although firms such as restaurants have difficulty controlling service quality from day to day, they do have control over

HOW THEY COMMUNICATE THE SERVICES THEY PROMISE Restaurants cannot control the prices they pay for ingredients or their customers' attitudes, but they can control their communication with customers, which will influence expectations and perceptions. Although firms have difficulty controlling service quality because it can vary from day to day and provider to provider, they have nearly constant control over how they communicate their service package to their customers.

Which of the following factors is included in gross national income (GNI) but NOT gross domestic product (GDP)?

INCOME FROM FOREIGN INVESTMENTS

Global distribution networks form complex value chains that ultimately ______ the final selling price of a product.

INCREASE

A publishing company plans to outsource its production-related tasks to a BRIC country. They are assessing opportunities and are attracted to this country due to its population of young, well-educated, technically-skilled workers who are fluent in English.

INDIA The well-educated, modern generation of India is largely fluent in English, and the highly skilled workforce holds great attraction for firms that hope to expand using local talent, especially in technical fields.

A company is assessing opportunities in the BRIC countries and determines that ________ is one of the youngest populations in the world and is increasingly adopting global attitudes.

INDIA With a median age of 28.1 years, India has one of the youngest populations in the world. Its young inhabitants increasingly are adopting global attitudes while living in growing urban centers and shopping at large malls.

Which of the following is currently a negative factor for foreign investment in India?

INDIA'S RETAIL ENVIRONMENT LACKS MODERN SUPPLY CHAIN MANAGEMENT FACILITIES AND SYSTEMS India's retail environment is still dominated by millions of small stores and lacks modern supply chain management facilities and systems.

Which statement about India's population is true?

INDIA'S WORKFORCE IS HIGHLY SKILLED, ESPECIALLY IN TECHNICAL FIELDS India's highly skilled workforce holds great attraction for firms that hope to expand using local talent, especially in technical fields.

Empowerment becomes more important when the service is

INDIVIDUALIZED When service is individualized, standards cannot predict every adjustment that might be needed for a specific situation. This is where empowering employees to determine the best way to meet customer needs is particularly important.

Which of the following criteria are necessary to assess a country's market? (Choose every correct answer.)

INFRASTRUCTURAL ANALYSIS SOCIOCULTURAL ANALYSIS ECONOMIC ANALYSIS

When considering global marketing opportunities in Bangladesh, Thomas asked the question, "How will we get it there?" Thomas is concerned about ________ capabilities in Bangladesh.

INFRASTRUCTURE Transportation—or "How will we get it there?"—is one aspect of infrastructure.

When considering global marketing opportunities in Bangladesh, Thomas asked the question, "How will we get it there?" Thomas is concerned about ________ capabilities in Bangladesh.

INFRASTRUCTURE Transportation—or "How will we get it there?"—is one aspect of infrastructure.

Which of the following is the correct sequence of new product adopters in the diffusion of innovation curve?

INNOVATORS, EARLY ADOPTERS, EARLY MAJORITY, LATE MAJORITY, LAGGARDS The diffusion of innovation curve spreads through the population over a period of time and generally follows a bell-shaped curve made up of innovators, early adopters, early majority, late majority, and laggards.

Liam relocated to take a new job, and when he got sick he needed to find a doctor. He discovered during the visit that he didn't like the one he had chosen, and he knew he'd never go back to that doctor. From a marketing perspective, his situation highlights one of the key differences between products and services, known as

INSEPARABILTY Because medical services are inseparable, the doctor's service was "produced" at the time of the visit, and Liam did not have the option of trying out different doctors before choosing the one to treat him. He therefore learned that he didn't like the doctor after he had already received treatment.

Jose was complaining to another member of the lawn crew, "I don't know how they expect me to do an adequate job. The mower doesn't work right, the trimmers are so dull they don't cut anything, and the rest of the equipment is so old that we can't get parts." Jose's company lacks the ________ workers need to be able to do a good job.

INSTRUMENTAL SUPPORT Jose is experiencing a lack of proper instrumental support—the systems and equipment required to deliver the service properly.

Automobile manufacturers could build cars specially designed for very short people (for example, under five feet), but it is likely that this segment

IS NOT SUBSTANTIAL Once the firm has identified its potential target markets, it needs to measure their size. If a market is too small (as in this example) or its buying power insignificant, it won't generate sufficient profits or be able to support the marketing mix activities.

One key feature of the value of a strong brand is that

IT CAN PROTECT THE FIRM FROM COMPETITION Over time and with continued use, consumers learn to trust certain brands. They know, for example, that they wouldn't consider switching brands and, in some cases, feel a strong affinity to certain brands.

If a firm promises more than it can deliver

IT CREATES A COMMUNICATION GAP A communication gap refers to the difference between the actual service provided to customers and the service that the firm's promotion program promises.

Marketers with successful brands sometimes hesitate to expand their brands because

IT IS COSTLY TO MAINTAIN MANY PRODUCT LINES, AND IT MIGHT WEAKEN THE BRAND'S MEANING Each product line involves some additional cost, and if too many product lines are associated with the same brand it can weaken the brand's meaning and reputation.

A company's product mix consists of

ITS VARIOUS PRODUCT LINES The product mix typically consists of various product lines, which are groups of associated items that consumers tend to use together or think of as part of a group of similar products or services.

Problems with which entry approach can arise when the partners disagree or if the government places restrictions on the firm's ability to move its profits out of the foreign country and back to its home country?

JOINT VENTURE

Jacques manages an upscale French restaurant in the Philadelphia area. His restaurant offers a few specials each evening in addition to its regular menu. Jacques has trained his servers to report comments and requests for items that have previously been offered only as specials. Jacques uses this information to reduce the ________ gap in services marketing.

KNOWLEDGE By collecting information about special requests, Jacques seeks to learn more about his customers' expectations. This should help close the knowledge gap. Firms need to match customer expectations with actual service through research.

Which of the following is the best example of a family brand?

KRAFT SINGLES AND KRAFT MAYO A firm can use its own corporate name to brand all its product lines and products, referred to as a family brand.

When entering their first foreign markets, firms typically take a(n) ______ approach.

LESS RISKY

When confronted with an angry and emotional customer, the best first step toward service recovery is to

LISTEN CAREFULLY AND WITH EMPATHY UNTIL THE CUSTOMER FEELS HE OR SHE HAS BEEN HEARD The best first step with an angry customer is to listen carefully and give the customer a chance to be heard.

Sometimes all that needs to be done to satisfy a customer complaint is to

LISTEN TO THE CUSTOMER In many cases, the customer may just want to be heard, and the service provider should give the customer all the time he or she needs to "get it out."

Service employees at the airlines' flight cancelation desks frequently encounter travelers who get emotional about canceled or delayed flights. The first thing these employees should do is to

LISTEN TO THE CUSTOMER The best first step with an angry customer is to listen carefully and give the customer a chance to be heard.

When Mario complained to his bank about the unprofessional behavior of one teller, the branch manager added a code into his accounts alerting all tellers that Mario was a valued customer and to provide whatever service he requests. The branch management included Mario in its __________ segmentation.

LOYALTY Firms have long known that it pays to retain loyal customers and Mario has been identified as a loyal customer to be handled via the marketing mix the bank has designed via loyalty segmentation.

Tariffs protect domestic producers by

MAKING IMPORTED PRODUCTS MORE EXPENSIVE A tariff, also called a duty, is a tax levied on a good imported into a country. In most cases, tariffs are intended to make imported goods more expensive and thus less competitive with domestic products, which in turn protects domestic industries from foreign competition.

When a marketer adjusts the marketing mix to give customers a clear, distinctive, desirable understanding of what the product does, the marketer is engaging in

MARKET POSITIONING The question describes market positioning.

Edmund has found that both commercial and residential real estate buyers respond positively to his marketing communication message. Edmund has identified ________ that respond similarly to his marketing efforts.

MARKET SEGMENTS Commercial and residential real estate buyers are two different market segments—groups of customers with similar wants and needs—that Edmund can target by designing a marketing mix for each.

A product in the ________ stage of the product life cycle has a high number of competitors and competitive products.

MATURITY A product in the maturity stage of the product life cycle has a high number of competitors and competitive products.

Melinda has used Olay beauty products for years, even though there are many competitors on the market. She plans to purchase a recently introduced micro-sculpting cream from Olay's Regenerist line. Olay is in the ________ stage of the product life cycle.

MATURITY Although P&G does come out with new variations of the Olay product, it is in the maturity stage as P&G must defend its market share against fierce competition.

During the ________ stage of the product life cycle, sales peak and profits begin to decline as competition becomes intense.

MATURITY Intense competition can lead to a decline in profits in the maturity stage.

By changing a standard from "be nice to customers" to "greet every customer, and if possible by name," a services marketing manager has created a(n) ________ goal.

MEASURABLE "Be nice" is not a measurable goal because it is vague, whereas "greet every customer" is specific and measurable.

________ products that create new markets can add tremendous value to firms.

NEW-TO-THE-WORLD Although new-to-the-world products can carry with them some risk, they also offer tremendous opportunities to add value.

Adidas Group owns Reebok and Rockport—both of which offer different types of shoes. Having a variety of brands allows Adidas to use a differentiated targeting strategy to

OBTAIN A BIGGER SHARE OF THE SHOE MARKET Adidas can adopt a differentiated targeting strategy, in which it builds a different marketing mix around each of its brands to serve a different target market. By doing so, Adidas can target a larger portion of the shoe market and gain a greater market share.

Which of the following segmentation methods is being used when M&M's offers special wedding-themed packaging for customized M&M's (imprinted with the names of the bride and groom)?

OCCASION SEGMENTATION Behavioral segmentation based on when a product or service is purchased or consumed is called occasion segmentation.

In the diffusion of innovation process, innovators enjoy taking risks and are regarded as highly knowledgeable. Marketers want to identify innovators because

OTHER CONSUMERS DEFER TO THEIR JUDGEMENT, CREATING THE OPPORTUNITY FOR WORD-OF-MOUTH REFERRALS As the first group to adopt a new product, innovators help the product gain initial market acceptance. Innovators may recommend the product to friends, creating word-of-mouth referrals.

Which of the following are reasons for the high failure rate of new products?

OVEREXTENDING A FIRM'S ABILITIES Why is the failure rate for new products so high? One of the main reasons is the failure to assess the market properly by neglecting to do appropriate product testing, targeting the wrong segment, and/or poor positioning. Firms may also overextend their abilities or competencies by venturing into products or services that are inconsistent with their brand image and/or value proposition.

In the product development process, what takes place between concept testing and market testing?

PERFORMING PRODUCT DEVELOPMENT The third stage of the product development process, between concept testing and market testing, is the actual development of the product.

When marketers state that services are ________, they are referring to the fact that services cannot be stored for use in the future.

PERISHABLE Services are perishable in that they cannot be stored for use in the future. This can make matching of demand and supply difficult.

The Apple iPod changed the way people listen to music, but it also created an entirely new industry devoted to accessories such as cases, ear buds, docking stations, and speakers. The Apple iPod is considered a

PIONEER PRODUCT Truly new product introductions, that is, new-to-the-world products that create new markets, can add tremendous value to firms. These new products, also called pioneers or breakthroughs, establish completely new markets or radically change the rules of competition as well as consumer preferences in a market.

Gross national income (GNI) consists of GDP

PLUS THE NET INCOME EARNED FROM INVESTMENTS ABROAD (MINUS ANY PAYMENTS MADE TO NONRESIDENTS WHO CONTRIBUTE TO THE DOMESTIC ECONOMY) Gross national income (GNI) consists of GDP plus the net income earned from investments abroad (minus any payments made to nonresidents who contribute to the domestic economy).

________ involves defining the firm's marketing mix variables so that target customers have a clear, distinctive, desirable understanding of the firm's offerings relative to competitors' offerings.

POSITIONING Market positioning involves a process of defining the marketing mix variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products.

Global pricing strategies should strive to be consistent with

POSITIONING STRATEGIES Competitive factors influence global pricing in the same way they do home country pricing, but because a firm's products or services may not have the same positioning in the global marketplace as they do in their home country, market prices must be adjusted to reflect the local pricing structure.

A ketchup bottle is an example of a ________ package.

PRIMARY The primary package is the one the consumer uses, such as a ketchup bottle. From the primary package, consumers typically seek convenience in terms of storage, use, and consumption.

________ fairness refers to the perceived fairness of the process with which a firm handles customer complaints.

PROCEDURAL With regard to complaints, procedural fairness refers to the perceived fairness of the process used to resolve them. Customers want efficient complaint procedures over whose outcomes they have some influence.

We often see advertisements touting a product as being made with natural ingredients or being long-lasting. Marketers using these types of promotions are positioning their products based primarily on

PRODUCT ATTRIBUTES Natural ingredients and long-lasting effects are examples of attributes that may be salient (important) to the target market.

If a new product concept gets positive evaluations from potential customers during concept testing, the next step for a firm is

PRODUCT DEVELOPMENT After concept testing, the next step in the product development process is the actual product development.

A university that has separate graduate and undergraduate admission offices recognizes that these are distinct

PRODUCT LINES Product lines are groups of associated items that consumers tend to use together or think of as part of a group of similar products or services. Graduate and undergraduate programs at most universities are distinct product lines, with each product line including multiple degrees.

Cultural differences such as food preferences, language, and religion also play a role in

PRODUCT STRATEGY PLANNING Cultural differences such as food preferences, language, and religion also play a role in product strategy planning.

Which of the following is considered part of the augmented product?

PRODUCT WARRANTY The actual product is made up of the brand name, quality level, packaging, and features and design. The product warranty is one of the associated services included in the augmented product.

Venicia is assessing market growth, market competitiveness, and market access for each segment she has identified. Venicia is assessing the ________ of each potential market segment.

PROFITABILITY Evaluation of profitability considers market growth, market competitiveness, and market access, along with focusing the assessments on the potential profitability of each segment, both current and future.

The growth phase of the product life cycle is always dynamic. Which of the following occurs in this phase?

PROFITS INCREASE AS ECONOMIES OF SCALE ARE ATTAINED The growth stage of the product life cycle is marked by a growing number of product adopters, rapid growth in industry sales, and increases in both the number of competitors and the number of available product versions.

A university using benefit segmentation and targeting students who want to get a degree quickly while still working full-time would most likely focus on

PROVIDING CLASSES AT CONVENIENT TIMES AND OFFERING ONLINE COURSES Benefit segmentation groups consumers on the basis of the benefits they derive from products or services. The benefit sought by the target market is speed and convenience of getting a degree; thus, convenient class times and the ability to take classes online would be important criteria.

Service providers often encounter rude and unreasonable consumers. Services marketing managers can reduce the delivery gap, even for these customers, by

PROVIDING SUPPORT AND INCENTIVES FOR THEIR EMPLOYEES One reason service jobs can be difficult is that service employees must remain pleasant and courteous even when customers are not. Managers can help frontline employees manage angry customers with courtesy by providing emotional support and incentives.

Baby Boomers represent a huge demographic segment for travel marketers. Baby Boomers are also heavily motivated by self-fulfillment, which creates the possibility of ________ segmentation.

PSYCHOGRAPHIC Segmentation based on self-values is a form of psychographic segmentation.

With access to the Internet nearly universal in the United States, many potential market segments have become more

REACHABLE A segment is reachable if it can be reached for marketing communication and product distribution. Internet access has opened up many new ways to reach consumers.

Darlene has identified four potential market segments for her Don't Do It Yourself handyman service. She will now evaluate whether or not each segment is attractive relative to all of the following except

REALISTIC When evaluating a segment's attractiveness, we consider whether the segment is substantial, responsive, profitable, reachable, and identifiable.

Darlene has identified four potential market segments for her Don't Do It Yourself handyman service. She will now evaluate whether or not each segment is attractive relative to all of the following except

REALISTIC When evaluating a segment's attractiveness, we consider whether the segment is substantial, responsive, profitable, reachable, and identifiable.

Which of the following can help suppliers save on the cost of a product?

REBRANDING When the costs of producing a product rise significantly, manufacturers are faced with either raising prices—something customers don't usually like—or reducing the amount of product sold in a package

Inkjet printers were a big improvement over the dot-matrix printers they replaced. Inkjet printers gained rapid acceptance in the marketplace primarily because of their

RELATIVE ADVANTAGE If a product or service is perceived to be better than substitutes, then the diffusion will be relatively quick. Inkjet printers offered a substantial relative advantage compared to dot-matrix printers.

Early personal computer users remember the cumbersome, user-unfriendly DOS system. When Apple introduced System 1 and Microsoft introduced Windows, both of which were much easier to use, these new products diffused rapidly because of their

RELATIVE ADVANTAGE If a product or service is perceived to be better than substitutes, then the diffusion will be relatively quick. These operating systems enjoyed a substantial relative advantage compared to DOS.

When choosing where to eat lunch, Bart's major service criterion is speed: being seated promptly and served his meal quickly. For Bart, ________ is the most important of the five service quality dimensions.

RESPONSIVENESS Responsiveness is the service quality dimension that considers promptness and the willingness to help customers.

Which of the following is currently a negative factor for foreign investment in Russia?

RUSSIA IS KNOWN FOR CORRUPTION, CREATING ETHICAL DILEMMAS FOR FIRMS Corruption is widespread in Russia, creating ethical dilemmas for firms trying to market their goods and services.

The owners of hotels whose services are produced and consumed at the same time know that consumers do not have the opportunity to try out their service before purchasing. Many hotels use ________ to overcome the problem of inseparability of services.

SATISFACTION GUARANTEES Inseparability refers to the fact that services are produced and consumed at the same time. This makes trial in advance of purchase difficult and often impossible. One solution is to offer satisfaction guarantees to minimize the risk of an initial purchase.

As it relates to positioning, a _________ displays the position of products or brands in the consumer's mind.

SEGMENTATION MAP The question describes a perceptual map, which displays, in two or more dimensions, the position of products or brands in the consumer's mind.

If you visit a Kentucky Fried Chicken restaurant in China, along with KFC's regular menu items, you will find congee, a rice porridge that can feature pork, pickles, mushrooms, and preserved egg, on the menu. This is an example of which global product strategy?

SELL TOTALLY NEW PRODUCTS OR SERVICES Congee would be a totally new product.

Exporting happens when a firm produces a product in its domestic plants and then ______.

SELLS IT IN A FOREIGN COUNTRY

Which of the following are current population trends that affect marketing strategy? (Choose every correct answer.)

STAGNANT OR DECLINING POPULATION IN DEVELOPED COUNTRIES RAPID POPULATION GROWTH IN LESS DEVELOPED COUNTRIES

If there is a difference between the firm's perceptions of customers' expectations and the service standards the firm has set, a ________ gap exists.

STANDARDS A lack of care in setting specific service standards can lead to a standards gap, which is the difference between the firm's perceptions of customers' expectations and the service standards it sets.

How do you calculate brand equity?

SUBTRACT THE SALES OF GENERIC BRANDED ITEMS IN A CATEGORY Brand equity is the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service.

It is almost impossible to watch a sporting event on television without seeing Nike's "swoosh" check mark, which is Nike's

SYMBOL The "swoosh" is a brand symbol associated with Nike. Most consumers know the Nike swoosh and would recognize it even if the word Nike did not appear on the product or in an advertisement.

Danielle was looking for a venue for her wedding reception. When she visited one potential location, she noticed that the landscaping was not complete, and there was stained carpet in the lobby. Which of the service quality building blocks caused Danielle to select an alternative venue?

TANGIBLES The "tangibles" building block of service quality refers to the appearance of physical facilities, equipment, personnel, and communication materials.

When shopping for a car you notice a significant price gap between domestic and imported cars, with the imported cars being much more expensive. This could be the result of

TARIFF A tariff, also called a duty, is a tax levied on a good imported into a country. In most cases, tariffs are intended to make imported goods more expensive and thus less competitive with domestic products, which in turn protects domestic industries from foreign competition.

Illegal subsidies offered by the EU to airplane manufacturer, Airbus, resulted in making products like French wine and European cheeses more expensive to purchase in the United States. In retaliation, the United States planned to introduce new _______ on EU products.

TARIFFS

When ________ are reduced, it is meant to bolster foreign trade.

TARIFFS When tariffs are reduced, it is meant to bolster foreign trade. For example, in 2017 many U.S. companies announced new deals with China totaling $250 billion. Later that year China cut tariffs on U.S. consumer goods and medicine by almost 10 percent, indicating China wanted to open up its markets more to American companies.

A tariff is a ______ imposed on a product imported into a country.

TAX

Which of the following are some details used to evaluate the general economic environment? (Choose every correct answer.)

THE GDP THE TRADE DEFICIT OR SURPLUS

The most important consideration when a firm chooses a global product strategy should be

THE NEEDS OF THE TARGET MARKET Just as with domestic marketing, all global marketing decisions should consider the needs of the target market.

Fiona is trying to determine whether the segments she is considering for her day care center will be profitable. Which of the following will specifically help her in this analysis?

THE NUMBER OF CHILDREN NEEDING DAY CARE IN THE IMMEDIATE AREA The number of children needing day care and the percentage of parents able and willing to send a child to day care are factors that will help determine the segment size. The fixed costs and price minus variable cost will help determine costs and profit margin. School-age siblings of day care center children are not relevant to the calculation unless the day care center also has an after-school program of some sort, and the question does not mention any such program. Similarly, home schooling, teen sports programs, and the number of live births forecast do not impact Fiona's immediate decisions.

A company has a new concept for a lightweight bicycle that can be easily folded and taken with you inside a building or on public transportation. The company is currently engaged in concept testing. The most important question during this phase of product development pertains to

THE RESPONDENT'S PURCHASE INTENTIONS IF THE PRODUCT WERE MADE AVAILABLE The most important question pertains to the respondent's purchase intentions if the product or service were made available.

Glocalization refers to

THE SELLING OF THE SAME PRODUCT OR SERVICE IN BOTH THE HOME-COUNTRY MARKET AND THE HOST COUNTRY One of the three potential global product strategies, glocalization refers to the selling of the same product or service in both the home-country market and the host country.

Which of the following sis a main component of a value proposition?

THE TARGET MARKET The value proposition consists of a brand/product name, a category or concept, and a unique point of difference or benefit. The price captures the value to the consumer.

Vanessa wants to position her financial services company. She can position her services according to

THE VALUE PROPOSITION Only the value proposition is an option to consider when positioning a product.

Why should marketers be aware of the BRIC countries?

THEY ARE LIKELY TO BE THE SOURCE OF MOST MARKET GROWTH The four BRIC nations seem to have the greatest potential for growth.

What is the problem associated with service quality standards such as "be nice" or "do what the customers want"?

THEY ARE NOT SPECIFIC Service providers cannot meet the firm's standards if provided with only general instructions (as in "do a good job"). Specific standards must be provided.

Global marketers typically find distribution in developing countries is more complex because

THEY MUST GO THROUGH MANY DIFFERENT TYPES OF DISTRIBUTION CHANNELS The number of firms with which the seller needs to deal to get its merchandise to the consumer determines the complexity of a channel. In most developing countries, manufacturers must go through many types of distribution channels to get their products to end users.

The complex value chains inherent in global distribution networks include which of the following? (Choose every correct answer.)

TRANSPORTATION SYSTEMS IMPORTERS AND EXPORTERS WHOLESALERS

When deciding how to promote his new medical oncology center, Dr. Smith decided that he did not need to throw a large grand opening reception. Instead, he promoted the center to the internal medicine doctors in the area, who were the doctors most likely to refer patients to the center. Dr. Smith was engaged in a concentrated targeting strategy.

TRUE A concentrated targeting strategy is one where the organization selects a single, primary target market and focuses all energies on providing a product to fit that market's needs. In this case, the local internal medicine doctors make up a single target market.

Adidas sells shoes, clothing, and athletic gear. These products represent the breadth of Adidas' products.

TRUE A firm's product mix breadth represents a count of the number of product lines offered by the firm.

For products like sugar or pepper, marketers should probably use an undifferentiated targeting strategy.

TRUE An undifferentiated targeting strategy, also called mass marketing, is appropriate when everyone can be considered a potential user of a product, and when the potential benefits are similar for most consumers. An undifferentiated strategy is used for many basic commodities such as pepper, salt, sugar, pencils and paper clips.

To determine if a new product is commercially viable, a firm can conduct premarket testing.

TRUE Firms conduct premarket tests before they actually bring a product or service to market to determine how many customers will try and then continue to use the product or service according to a small group of potential consumers.

Giant Food Stores in suburban Washington, DC, adjusts its ethnic food aisle offerings based on the ethnic groups living near each store. Giant Foods is using geodemographic segmentation.

TRUE Geodemographic segmentation uses a combination of geographic, demographic, and lifestyle characteristics to classify consumers.

Rafi wants information about the infrastructure in the countries his company is planning to export to, so he should gather information about the transportation and communications capabilities in each country.

TRUE Infrastructure is defined as the basic facilities, services, and installations needed for a community or society to function, such as transportation and communications systems, water and power lines, and public institutions such as schools, post offices, and prisons.

In most European countries, retailers can't sell below cost, and in others they can't advertise "before" prices if the product hasn't been sold at that price for two weeks.

TRUE Many countries still have rules governing the competitive marketplace, including those that affect pricing. For example, in most European countries, retailers can't sell below cost, and in others they can't advertise "before" prices if the product hasn't been sold at that price for two weeks.

Perceptual maps include positions of current brands as well as ideal points where a consumer segment would want a product to be.

TRUE Perceptual maps include consumers' perceptions of the positions of current brands; they also include ideal points. This makes it easy to visualize the distance between a brand's position and the ideal point, as well as similarities and differences between the images of different brands.

The zone of tolerance refers to the area between customers' expectations regarding their desired service and the minimum level of acceptable service.

TRUE Pertaining to the area between customers' expectations regarding their desired service and the minimum level of acceptable service, the zone of tolerance is the difference between what the customer really wants and what he or she will accept before going elsewhere.

Positioning strategies generally focus either on how the product benefits the consumer or on how it is better than competitors' products.

TRUE Positioning refers to communicating the unique value the product or service provides to its customers, and how it is better than or different from competitive products.

Firms that primarily sell products view service as a method to maintain a sustainable competitive advantage.

TRUE Services play a role in almost every firm's strategy, even those that primarily sell products.

Marriott Hotels trains its front desk employees to dress neatly and conservatively to project a professional image. This relates to the service dimension of tangibles.

TRUE The category of tangibles would include the appearance of facilities, equipment, personnel, and communication materials.

The most challenging part of applying the product life cycle concept is that managers do not know exactly what shape each product's life cycle will take.

TRUE The product life cycle is a general model of the life of a product; however, there is no way to know precisely what stage a product is in.

When Nanci selects a case of Dr. Pepper at the grocery store for her party, she is attracted by the holiday-themed box featuring green and white bells. What Nanci is seeing is referred to as the secondary package.

TRUE The secondary package is the wrapper or exterior carton that contains the primary package and provides the UPC label used by retail scanners. The packaging is used to attract the consumer's attention.

When purchasing a mobile phone, the product you are buying is more than just the phone.

TRUE The three components of a product are the core customer value, the actual product, and the associated services. In this case the associated services include the cellular service.

Even as growth in its gross domestic product has slowed, China maintains a thriving retail market of the same magnitude as the United States.

TRUE This is correct. China maintains a thriving retail market, of the same magnitude as that of the United States.

To maximize potential, segments and target markets can and should be defined by more than just geography.

TRUE This is correct. Just as firms adjust their products and services to meet the needs of national target markets, they must alter their marketing mix to serve the needs of global markets.

A product is anything that is of value to a consumer and can be offered through a voluntary marketing exchange.

TRUE This is true. A product is anything that is of value to a consumer and can be offered through a voluntary marketing exchange.

The failure rate for new products is high.

TRUE This is true. One of the main reasons the failure rate for new products is so high is the failure to assess the market properly by neglecting to do appropriate product testing, targeting the wrong segment, and/or poor positioning. Firms may also overextend their abilities or competencies by venturing into products or services that are inconsistent with their brand image and/or value proposition.

When consumers see their friends using an innovation, it often persuades them to try it too.

TRUE This refers to observability. When products are easily observed, their benefits or uses are easily communicated to others, which enhances the diffusion process.

Geert Hofstede's cultural dimensions concept focuses on six dimensions of ________ in a country.

UNDERLYING VALUES Hofstede's cultural dimensions attempt to classify underlying cultural values along six dimensions.

Microsoft's Windows operating system continues to dominate the market, even though it has been around for over 20 years. Windows will likely remain in the maturity stage of the product life cycle

UNTIL A SUPERIOR PRODUCT COMES ALONG TO REPLACE IT Products can stay in the maturity stage for a very long time, until a superior product comes along as a replacement.

Which of the following is a major trade agreement affecting global marketing?

USMCA The USMCA, the EU, and other RTAs (regional trade agreements) account for more than half of international trade.

Robin laughed at some of the cultural mistakes companies made in advertising and promotion in international trade while he was in school. Now he was trying to determine what had gone wrong with the campaign he had planned in Latin America for his company's product, and it didn't seem quite as amusing. He narrowed the issues to sociocultural factors. He was looking at both ________ and ________.

VISIBLE ARTIFACTS; UNDERLYING VALUES Sociocultural factors include visible artifacts like symbols and dress; they also include underlying values that can be more difficult to understand. Some of the other answers list one sociocultural factor (language, symbols, verbal communication) along with something that is not a sociocultural factor.

At the end of a brainstorming session, participants are often asked to

VOTE ON THE BEST IDEAS Brainstorming sessions often end with a vote to identify the best ideas or combination of ideas among those that were proposed. Those ideas that receive the most votes are carried forward to the next stage of the product development process.

When managers understand what their service providers are facing on a day-to-day basis by directly observing them and talking to customers, it is called management by

WALKING AROUND Unless the managers who make the service quality decisions know what their service providers are facing on a day-to-day basis, and unless they can talk directly to the customers with whom those service providers interact, any customer service program they create will not be as good as it could be. This is known as management by walking around.

Bev is assessing the results of a new product launch of a series of e-books for her bookstore. When evaluating the results, Bev is least likely to consider

WHY IT TOOK HER SO LONG TO CONSIDER THE NEW PRODUCT LINE The reasons behind any delays in introducing e-books would not be an important issue to consider during evaluation of results. All the others are good questions to ask.

When Jamie checked into his Orlando hotel, the front desk clerk informed him that his room would not be ready for another 20 minutes. Jamie didn't mind waiting; he had arrived well ahead of the standard check-in time and this wait time fell within his ________, the area between his expectations regarding desired service and the minimum level of service he will accept.

ZONE OF TOLERANCE The zone of tolerance is the difference between what a customer really wants and what the person will accept before going elsewhere.

When Camden Bank required all customers to use its online banking services, over 30 percent of its customers closed their accounts. In this scenario, Camden Bank's service fell outside customers'

ZONE OF TOLERANCE The zone of tolerance refers to the area between customers' expectations regarding their desired service and the minimum level of acceptable service—that is, the difference between what the customer really wants and what he or she will accept before going elsewhere. The fact that so many customers closed their accounts suggests that Buffalo Bank no longer offered service falling within most customers' zones of tolerance.

Gross National Income (GNI)

consists of GDP plus the net income earned from investments abroad (minus any payments made to nonresidents who contribute to the domestic economy)

Infrastructure

defined as the basic facilities, services, and installations needed for a community or society to function, such as transportation and communications system, water and power lines, and public institutions such as schools, post offices, and prisons

Globalization

refers to the processes by which goods, services, capital, people, information, and ideas flow across national borders

A country's infrastructure includes all of the following EXCEPT ______.

A CULTURE THAT ACCEPTS INNOVATION

__ is the shared meanings, beliefs, morals, values, and customs of a group of people.

CULTURE

Which global entry strategy has the highest degree of risk?

DIRECT INVESTMENT

An exchange rate quantifies how much a currency ______.

IS WORTH IN RELATION TO ANOTHER

What do the BRIC countries have in common?

THEY ARE EXPERIENCING SIGNIFICANT LEVELS OF ECONOMIC GROWTH The BRIC countries are Brazil, Russia, India, and China. All are experiencing significant economic growth.

Which two of the following are franchises? (Choose every correct answer.)

A MCDONALD'S RESTAURANT A HOLIDAY INN MODEL

When Cisco Systems Inc. of San Jose, California, and Tata Consultancy Services of Mumbai, India, entered into a relationship, they both continued to develop market-ready infrastructure and network solutions for customers, but they relied on each other to provide the training and skills that one or the other might have lacked. This relationship is best described as

A STRATEGIC ALLIANCE Strategic alliances refer to collaborative relationships between independent firms, although the partnering firms do not create an equity partnership; that is, they do not invest in one another.

The level of economic development, as well as differences in product and technical standards, helps determine the need for and level of product

ADAPTATION The strategy a firm chooses depends on the needs of the target market. The level of economic development, as well as differences in product and technical standards, helps determine the need for and level of product adaptation.

Gross domestic product is defined as the total market value of ______ produced by a country in a year.

ALL GOODS AND SERVICES