Marketing Management Chap 6-8

48) Explain the differences between a role and status.

A role consists of the activities a person is expected to perform. Each role carries a status. For example, a senior vice-president has more status than a sales manager.

106) Which of the following is most likely to be successful when introduced in foreign markets as a straight extension? A) laundry detergent B) khaki pants C) dessert mixes D) digital camera E) condensed soup

D

11) The family in a buyer's life consisting of parents and siblings is the ________. A) family of procreation B) family of influence C) family of efficiency D) family of orientation E) purchasing family

D

103) The buying process begins when someone places an order with a sales representative.

FALSE

134) With respect to a consumer buying situation that involves variety-seeking behavior, the market leader generally encourages variety seeking by offering lower prices or deals.

FALSE

35) In general, a company prefers to enter countries that have high market attractiveness and high market risk, regardless of whether it possesses a competitive advantage.

FALSE

74) Sensory memory is the virtually unlimited repository where information that we encounter as we go through life ends up.

FALSE

82) Indirect exports are characterized by high investment, and therefore high risk.

FALSE

10) Luxury brands are usually not global because they target a niche market.

FALSE

100) In the business market, small sellers concentrate on reaching as many participants as possible because their chances of success are slim.

FALSE

125) Every consumer must pass through all five stages of the buying process when in a buying situation.

FALSE

132) When consumers evaluate the risks associated with a purchase, only real risks with a high likelihood of occurrence should be considered.

FALSE

145) Contracts are always sufficient to govern supplier transactions and prevent supplier opportunism.

FALSE

150) Anchoring heuristic comes into play when consumers base their predictions on the quickness and ease with which a particular example of an outcome comes to mind.

FALSE

159) The more favorable a country's image, the less prominently the "Made in..." label should be displayed.

FALSE

161) Country-of-origin perceptions, once formed, are very difficult to change.

FALSE

18) Companies enter the international market only when their domestic markets are saturated.

FALSE

26) Social class is the fundamental determinant of a person's wants and behavior.

FALSE

34) The behavior people exhibit as they pass through certain life-cycle stages, such as becoming a parent, is largely fixed and does not change over time.

FALSE

35) For an employee at an organization, an annual appraisal can be considered a critical life event that impacts his or her consumption behavior.

FALSE

38) The Organization for Economic Cooperation & Development (OECD) cautions that economic reforms have stagnated and ranks Russia as one of the most corrupt countries in the world.

TRUE

39) Systems selling is a key industrial marketing strategy in bidding to build large-scale industrial projects such as dams or pipelines.

TRUE

40) Sellers benefit from systems contracting through lower operating costs as a result of steady demand and reduced paperwork.

TRUE

41) A prime contractor provides a turnkey solution, so-called because the buyer only has to turn one key to get the job done.

TRUE

51) More than 90 percent of future population growth is projected to occur in the less developed countries.

TRUE

52) Nestlé, Unilever, and Modelēz get close to or above 40 percent of their total business coming from emerging markets.

TRUE

53) Smaller packaging and lower sales prices are often critical in markets where incomes are limited.

TRUE

68) Influencers influence the buying decision by helping define specifications and providing information for evaluating alternatives.

TRUE

39) A company that is planning to go global must decide on how many countries to enter and how fast to expand. A company's entry strategy typically follows one of two possible approaches. What are those approaches?

The approaches are waterfall approach and a sprinkler approach. The waterfall approach is when firms gradually enter countries in sequence. It allows firms to carefully plan expansion and is less likely to strain human and financial resources. The sprinkler approach entails entering many countries simultaneously. When first-mover advantage is crucial and a high degree of competitive intensity prevails, the sprinkler approach is better.

46) Culture is the fundamental determinant of a person's wants and behavior. The growing child acquires a set of values, perceptions, preferences, and behaviors through his or her family and other key institutions. What values are typical American young children exposed to?

According to the text, a child growing up in the United States is exposed to values such as achievement and success, activity, efficiency and practicality, progress, material comfort, individualism, freedom, external comfort, humanitarianism, and youthfulness.

50) What is brand personality and what are the five traits that have been linked to it?

Brand personality is the specific mix of human traits that may be attributed to a particular brand. Traits that have been associated with brand personality are sincerity, excitement, competence, sophistication, and ruggedness.

9) Social classes differ in media preferences, with upper-class consumers often preferring ________ and lower-class consumers often preferring television. A) movies B) radio C) video or computer games D) magazines and books E) music downloads

D

96) The buying process starts when the buyer recognizes a(n) ________. A) product B) advertisement for the product C) salesperson from a previous visit D) problem or need E) internal cue

D

102) According to Hofstede, cultures with weak uncertainty avoidance are best described as ________. A) collectivist B) hierarchical C) egalitarian D) risk-averse E) risk-tolerant

E

13) Marriage, childbirth, and divorce constitute the ________ that shape the consumption pattern of individuals. A) psychological life cycle B) product life cycle C) social status D) post-puberty cycles E) critical life events

E

24) WayToGrow Inc. is one of the most popular brands of toys in its home market. The company decides to expand its business abroad and its board of directors feel that instead of trying to establish its presence all at once in multiple markets, it is better to expand one country at a time. This would limit their risk and allow them to analyze customer response, after which they could expand to other similar countries. WayToGrow is following a ________ approach. A) shotgun B) continuous C) born global D) sprinkler E) waterfall

E

27) The total demand for many business goods and services is only minimally affected by price changes. Thus, this demand is ________. A) derived B) fluctuating C) accelerated D) multiple E) inelastic

E

63) The ________ says people have a general tendency to attribute success to themselves and failure to external causes. A) availability heuristic B) trait-role theory C) awareness set D) generalization theory E) hedonic bias

E

7) Which of the following is NOT a challenge associated with international marketing? A) Managers need to learn new languages and laws. B) Managers need to deal with volatile currencies. C) Managers face political and legal uncertainties. D) International markets are less safe. E) All of the above are challenges.

E

71) A company can enter a foreign market through a ________, which is a complete form of licensing in which the company offers a complete brand concept and operating system. A) contract manufacturing B) cooperative agreement C) management contract D) joint venture E) franchising arrangement

E

144) Elmer is focused on how much he likes the jingle for the advertised product and evaluates the product using his association of this brand with his positive feelings toward the song playing in the background. Explain how Elmer is processing the advertisement, using the elaboration likelihood model as a base.

Elmer is using what is described as peripheral route processing from the elaboration likelihood model. If he was focused on the message, or central brand claims, he would be using the central route.

72) When Chrysler decided to offer the PT Cruiser, they did so based on the recommendations of Ernest Dichter, who helped them unlock the code, or the unconscious meaning people give to a particular market offering.

FALSE

75) When State Farm uses consumer research to create a mental map of consumers that indicates that consumers perceive State Farm as conservative, safe, responsive, and convenient, they are interested in subliminal perceptions.

FALSE

76) According to Maslow's hierarchy of needs model, recognition, self-esteem, and status constitute a person's social needs.

FALSE

78) Perception depends only on the physical stimuli experienced by the person.

FALSE

80) Domestic-based export merchants seek and negotiate foreign purchases for a commission.

FALSE

44) A2Z Inc. is a producer of a huge variety of consumer goods, from soaps to shower gels, and shampoos to detergents. It is a market leader in the United States and is planning to tap the immense potential in the emerging markets. Market research, however, indicates that the Brazilian culture and society are substantially different from their American counterparts. If the company wants to target the masses, which of the following options is most likely to succeed? A) A2Z can use a price skimming strategy to increase market share. B) The company's existing strategies in the United States will work just as well in Brazil. C) A2Z can introduce smaller "sachets" of shampoos and detergents that are priced lower. D) The company can introduce large family packs of shampoos and soaps even if they are priced higher than competitors. E) A2Z can use a predatory pricing strategy to capture the market.

C

45) Which of the following causes a difference between marketing in developed countries and marketing in developing countries? A) The cost of production varies substantially between the developed and the developing world. B) The disparity between the rich and the poor in the developing world is reducing. C) There are substantial cultural differences between the developed and the developing world. D) Marketing in developing countries is far more expensive than in the developed world. E) The developing countries have more trade barriers in place than the developed countries.

C

5) Which of the following is a challenge in which business marketers differ from consumer marketers? A) understanding deep customer needs in new ways B) identifying new opportunities for organic business growth C) geographically concentrated buyers D) calculating better marketing performance and accountability metrics E) competing and growing in global markets, particularly China

C

52) In the exact moment you run out of laundry detergent and realize you need to pick some up at the store, you are in the ________ stage of the buying decision process. A) information search B) evaluation of alternatives C) problem recognition D) purchase decision E) postpurchase behavior

C

53) ________ assumed that the psychological forces shaping people's behavior are largely unconscious, and that a person cannot fully understand his or her own motivations. A) Abraham Maslow B) Frederick Herzberg C) Sigmund Freud D) John Cacioppo E) Karl Marx

C

58) When purchasing disposable surgical gowns, Mercy Hospital's vice president of purchasing analyzes whether the hospital should buy disposable gowns or reusable gowns. If the findings favor disposable gowns, then the operating-room administrator compares various competitors' products and prices and makes a choice. Surgeons influence the decision retroactively by reporting their satisfaction with the particular brand. In this situation, the surgeons perform the role of the ________. A) decider B) initiator C) user D) gatekeeper E) buyer

C

59) In which of the following is a person performing the role of an influencer? A) Dan decides on the product requirements and makes the final choice of suppliers. B) Luke has the authority to pick out the supplier and negotiate the terms of purchase. C) Liam heads the Tech team at LKG and provides information for evaluating the possible alternatives. D) LKG gets many calls from potential suppliers, and it is Leah's job to weed out the good prospects and refer them to others in LKG. E) Dana authorizes the actions of the deciders and buyers in LKG.

C

59) ________ is the tendency to interpret information in a way that will fit our preconceptions. A) Selective retention B) Cognitive dissonance C) Selective distortion D) Subliminal perception E) Selective embellishment

C

6) Services account for nearly ________ percent of global trade. A) 10 B) 15 C) 20 D) 25 E) 30

C

61) Indirect exports have two advantages for a firm: less investment and less ________. A) paperwork B) intrusion by the government C) risk D) competition E) customer suits

C

62) Anne is a frequent purchaser of Yoplait strawberry yogurt. For once, she decides to try a different flavored yogurt. Instead of trying out the flavors offered by competing brands, Anne selects a different flavor offered by Yoplait. Here, her past experience with the brand prompts her to make the choice. Anne's behavior can be best described as ________. A) fallacy of proposition B) associative networking C) generalization D) heuristic thinking E) self-actualization

C

64) ________ agree to manage a company's export activities for a fee. A) Cooperative organizations B) Domestic-based export agents C) Export-management companies D) Domestic-based export merchants E) Contract manufacturing organizations

C

7) Sometimes a rise of only 10 percent in consumer demand can cause as much as a 200 percent rise in business demand for products for the next period. This is an example of ________. A) inelastic demand B) direct purchasing C) fluctuating demand D) derived demand E) a straight rebuy

C

76) ________ occurs when customers are given a perspective or point of view that allows the firm to "put its best foot forward." A) Gatekeeping B) Commoditization C) Framing D) Rebuying E) Bartering

C

77) Newer, more strategically oriented purchasing departments have a mission. Which of the following most accurately describes that mission? A) Make the most profit possible and remain independent of entanglements. B) Approach every purchasing opportunity as means to create interdependency. C) Seek the best value from fewer and better suppliers. D) Outsource the supply function. E) Abandon all strategies except for systems selling and buying.

C

80) Which of the following is a step in the straight rebuy buyclass? A) problem recognition B) general need description C) product specification D) supplier search E) proposal solicitation

C

98) Which of the following is one of Hofstede's four cultural dimensions that differentiate countries? A) customer relationship management versus power distance B) strategic management versus marketing management C) weak versus strong uncertainty avoidance D) total quality management versus JIT deliveries E) marketing management versus customer relationships

C

99) Brands that meet consumers' initial buying criteria are called the ________ set. A) total B) awareness C) consideration D) choice E) decision

C

A) active information search B) information search C) heightened attention D) purchase decision E) dynamic information search

C

56) When deciding where to operate internationally, it often makes sense to operate in fewer countries, with a deeper commitment and penetration in each. Mention some of the criteria that a country should possess in order to be a viable and attractive investment destination.

Companies prefer to enter countries that rank high on market attractiveness, are low in market risk, and in which the company possesses a competitive advantage.

121) As part of the buyer selection process, buying centers must decide how many suppliers to use. What might motivate a buyer to use multiple sources?

Companies that use multiple sources often cite the threat of a labor strike as the biggest deterrent to single sourcing. Another reason companies may be reluctant to use a single source is that they fear they'll become too comfortable with the relationship and lose their competitive edge.

135) Identify three types of risk consumers might perceive in the context of purchasing a car.

Consumers might perceive physical risk (an unsafe car poses a safety risk to the physical well-being of the driver and passengers), a financial risk (the car might be overpriced or may decline in value so rapidly that it will have minimal resale value when the consumer tries to resell it), and a functional risk (the car may not perform to the expectations of the consumer). Students may identify other risks, including social, psychological, and time risks.

153) Heuristics can come into play when consumers forecast the likelihood of future outcomes or events. When would a consumer use an anchoring and adjustment heuristic?

Consumers will use this heuristic when the consumer arrives at an initial judgment and then makes adjustments of that first impression based on additional information.

164) Explain the country-of-origin effect.

Country-of-origin perceptions are the mental associations and beliefs triggered by a country. In an increasingly connected, highly competitive global marketplace, government officials and marketers are concerned with how attitudes and beliefs about their country affect consumer and business decision makers. They want to strengthen their country's image to help domestic marketers who export and to attract foreign firms and investors. Marketers want to use positive country-of-origin perceptions to sell their products and services.

42) Explain the differences between culture, subculture, and social class.

Culture is the fundamental determinant of a person's wants and behavior. Subcultures provide more specific identification and socialization of their members. Subcultures include nationalities, religions, racial groups, and geographic regions. Social class is a relatively homogeneous and enduring division in a society, that are hierarchically ordered and whose members share similar values, interests, and behaviors.

107) The expectancy-value model of attitude formation posits that consumers evaluate products and services by combining their ________. A) needs B) wants C) desires D) brand beliefs E) consuming attitudes

D

118) The problem with setting a uniform global price for a product is that ________. A) it allows intermediaries in low-price countries to reship their products to high-price countries B) the company would earn the same profits everywhere, regardless of the cost structure C) this strategy can price the product out of the market in countries where costs are high D) this strategy makes the price too high in poor countries and not high enough in rich countries E) it is ineffective for products that are homogeneous

D

135) The relationship between a company and its office supplies vendor where competition rather than cooperation is the dominant form of governance is probably best described as ________. A) basic buying and selling B) contractual transaction C) collaborative D) customer supply E) customer is king

D

4) A person's ________ consist(s) of all the groups that have a direct (face-to-face) or indirect influence on his/her attitudes or behavior. A) subculture B) family C) social class D) reference groups E) social networks

D

51) The starting point for understanding consumer behavior is the ________ model in which marketing and environmental stimuli enter the consumer's consciousness, and a set of psychological processes combine with certain consumer characteristics to result in decision processes and purchase decisions. A) self-reliance B) self-perception C) psychogenic D) stimulus-response E) projective

D

54) In the purchasing decision process, the ________ are those who have the power to prevent sellers or information from reaching members of the buying center. A) approvers B) buyers C) initiators D) gatekeepers E) deciders

D

57) When purchasing disposable surgical gowns, Mercy Hospital's vice president of purchasing analyzes whether the hospital should buy disposable gowns or reusable gowns. If the findings favor disposable gowns, then the operating-room administrator compares various competitors' products and prices and makes a choice. Surgeons influence the decision retroactively by reporting their satisfaction with the particular brand. In this situation, the operating-room administrator performs the role of the ________. A) gatekeeper B) initiator C) user D) decider E) influencer

D

59) Domestic-based export agents perform a valuable service for companies seeking to enter foreign markets. The primary function of these agents is to ________. A) carry on exporting activities on behalf of several producers B) buy the manufacturer's products and then sell them abroad C) buy foreign products and sell them in the domestic country D) seek and negotiate foreign purchases for a commission E) produce and export products to foreign countries

D

66) A well-known producer of breakfast cereals has decided to hire producers in different countries so that the cereals marketed under their brand are locally produced in the respective countries. This would not only appeal more to consumers who prefer domestically produced goods, but would also create jobs in the host-country enhancing the brand's image further. This is an example of ________. A) management contracting B) franchising C) greenfield venturing D) contract manufacturing E) straight extension

D

1) ________ is the study of how individuals, groups, and organizations select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants. A) Target marketing B) Mind mapping C) Consumer activism D) Consumer behavior E) Product differentiation

D

101) A consumer who uses Google to find comparative reports on new automobiles, is most likely using which of the following information sources for assistance? A) personal B) public C) experiential D) commercial E) under-the-radar

D

102) With respect to consumer decision making, the ________ set is the set of strong contenders from which one will be chosen as a supplier of a good or service. A) total B) awareness C) consideration D) choice E) decision

D

113) Jeremy is concerned about his selection of a new hair spray because he is concerned it will not perform as well as his usual brand, which may result in embarrassing, flat hair in front of others. The type of risk Jeremy perceives is ________ risk. A) physical B) time C) financial D) social E) psychological

D

115) If a company adapts or changes both a product and the communications, the company engages in a process called ________. A) straight extension B) product reinvention C) product adaptation D) dual adaptation E) full adaptation

D

116) A Gucci bag sells for $120 in Italy and $240 in the United States due to the differences in the costs of distributing the product in the two countries. This phenomenon is called a(n) ________ problem. A) opportunity cost B) market pricing C) tactical pricing D) price escalation E) transfer pricing

D

130) A ________ relationship is a cooperative one where the seller adapts to meet the customers' needs without expecting much adaptation or change in exchange. A) customer supply B) cooperative system C) bare bones D) customer is king E) collaborative

D

131) In the ________ category of buyer-supplier relationships, competition rather than cooperation is the dominant form of governance. A) basic buying and selling B) bare bones C) contractual transaction D) customer supply E) collaborative

D

14) Identify an economic circumstance that can greatly affect any product or brand choice. A) retirement B) values C) lifestyle D) borrowing power E) relocation

D

149) ________ accounting refers to the manner in which consumers code, categorize, and evaluate financial outcomes of choices. A) Cost B) Financial C) Behavioral D) Mental E) Factual

D

157) As a result of the ad campaigns depicting Brazil as a multicultural land of carnivals and beaches, any mention of the country makes people think of sun and sand. This is an example of ________. A) collectivism B) target market impact C) ethnocentric thinking D) country-of-origin effect E) cognitive dissonance

D

2) Which of the following is NOT true about Tata Nano? A) Its cost is three times India's annual per capita income. B) It targets the 7 million Indians who buy scooters and motorcycles every year. C) It has a negative stigma attached to it because it is considered a "cheap" car. D) It has received positive feedback for reminding people of the tuk-tuk. E) Some target customers were intimidated by Tata's showrooms.

D

25) Microsoft sold more than 60 million licenses and upgrades of Windows 8 in the first 10 weeks after its October 26, 2012, global launch. Marketing spanned 42 countries with TV, print, and banner ads, outdoor posters, and branded entertainment. They used a ________ approach for the launch. A) shotgun B) continuous C) born global D) sprinkler E) waterfall

D

26) The main risk in a ________ approach is the substantial resources needed and the difficulty of planning entry strategies for many diverse markets. A) shotgun B) continuous C) born global D) sprinkler E) waterfall

D

3) Which of the following can induce a firm to expand into the international arena? A) Consumer preferences in the domestic market vary widely. B) Average income level of domestic consumers is high. C) The firm operates in an industry that caters to the mass market. D) The firm finds that the domestic market is almost saturated. E) The firm is yet to achieve economies of scale even though the domestic market has potential.

D

30) In a ________ purchasing situation, the buyer wants to make some change to existing product specifications, prices, delivery requirements, or other terms. A) new rebuy B) regular buy C) straight rebuy D) modified rebuy E) new task

D

31) When first-mover advantage is crucial and a high degree of competitive intensity prevails, the ________ approach is better. A) waterfall B) born global C) rifle D) sprinkler E) franchisee

D

48) NAFTA is a free trade zone comprising of which of the following countries? A) Canada, Mexico, and South America B) Canada, Mexico, and Peru C) Mexico, South America, and the United States D) Canada, Mexico, and the United States E) Canada, Japan, and the United States

D

56) If you performed the role of the ________ in a buying center, you would be the person that has the power to prevent sellers or information from reaching other members of the buying center. A) initiator B) influencer C) decider D) gatekeeper E) approver

D

61) In which of the following is a person performing the role of a gatekeeper? A) Dan decides on the product requirements and makes the final choice of suppliers. B) Luke has the authority to pick out the supplier and negotiate the terms of purchase. C) Liam heads the Tech team at LKG and provides information for evaluating the possible alternatives. D) LKG gets many calls from potential suppliers, and it is Leah's job to weed out the good prospects and refer them to others in LKG. E) Dana authorizes the actions of the deciders and buyers in LKG.

D

62) Which of the following is true about the buying center? A) In a buying center, one person cannot play more than one role. B) A typical buying center has a maximum of five or six members. C) A buying center consists of only mid-level managers and below. D) It is the decision-making unit of a buying organization. E) Gatekeepers in a buying center are people who authorize the proposed actions of deciders or buyers.

D

78) GE Capital, GE's lending arm, uses ________ with financial institutions in South Korea, Spain, Turkey, and elsewhere to reach more geographic and technological markets and to diversify investments and risk. A) licensing deals B) direct investment C) indirect exporting D) joint ventures E) direct exporting

D

81) A new-task buyclass decision begins with which of the following steps? A) supplier search B) general need description C) product specification D) problem recognition E) proposal solicitation

D

86) With respect to e-procurement, Acosta, Ahold, Best Buy, Carrefour, Family Dollar Stores, and several other companies joined forces to form a ________ called 1SYNC to use their combined leverage to obtain lower prices for raw materials. A) manufacturer's co-op B) supplier's co-op C) middleman group D) buying alliance E) buying cabal

D

87) Plastics.com allows plastics buyers to search the best prices among thousands of plastics sellers. Plastics.com is an example of a(n) ________. A) buying alliance B) barter market C) systems seller D) vertical market E) auction site

D

88) On an online ________, prices change by the minute. A) buying alliance B) barter market C) systems seller D) spot market E) catalog site

D

90) Which of the following is an example of a functional hub? A) Plastics.com allows plastics buyers to search the best prices among thousands of plastics sellers. B) ChemConnect.com is an online exchange for buyers and sellers of bulk chemicals. C) SteelMart.com concentrates on steel buyers from the United States. D) SupplyLink.com offers manufacturers from different industries information on ensuring workplace safety. E) PaperTiger.com offers paper buyers a comprehensive look at the prices and quality in the paper market.

D

96) Through its dedicated research team, CISCO Systems Inc. has developed new value-added business solutions which enable its variant class-II capacitors to provide incremental productivity of 10 to 20 percent over its competitors. This is an example of the solutions to ________ form of solution selling. A) reduce customer costs B) decrease customer risks C) alter corporate culture D) enhance customer revenues E) partnerships

D

30) In a sprinkler approach to international expansion, ________. A) countries are entered when competition is limited B) countries are gradually entered sequentially C) countries in which the supply of raw material is greatest are entered first D) countries in which the demand for the product is greatest are entered first E) many countries are entered simultaneously

E

60) In which of the following is a person performing the role of an approver? A) Dan decides on the product requirements and makes the final choice of suppliers. B) Luke has the authority to pick out the supplier and negotiate the terms of purchase. C) Liam heads the Tech team at LKG and provides information for evaluating the possible alternatives. D) LKG gets many calls from potential suppliers, and it is Leah's job to weed out the good prospects and refer them to others in LKG. E) Dana authorizes the actions of the deciders and buyers in LKG.

E

66) The associative network memory model views long-term memory as ________. A) a subliminal perception B) the interplay of drives C) a strong internal stimulus impelling action D) a temporary and limited repository of information E) a set of nodes and links

E

69) Cognitive psychologists believe that memory is ________, so that once information becomes stored in memory, its strength of association decays very slowly. A) highly perceptual B) somewhat collective C) highly communicative D) often reflective E) extremely durable

E

82) In reordering office supplies, the only stages that the buyer passes through are the product specification stage and the ________ stage. A) problem recognition B) general need description C) order-routine specification D) supplier search E) performance review

E

95) GM employees work at large customer facilities to reduce materials-management spending. This is an example of the solutions to ________ form of solution selling. A) encourage partnerships B) alter corporate culture C) enhance customer revenues D) decrease customer risks E) reduce customer costs

E

97) Which of the following is considered to be a more advanced form of information search wherein the person might phone friends or go online to search for information about a product or service? A) heightened attention B) short-term memory processing C) subliminal processing of information D) long-term memory processing E) active information search

E

99) The United States imposed a duty of 44.99 to 47.59 percent on wind towers produced in China and Vietnam and imported to the United States after they found evidence both countries were selling them at below fair market value, or ________, the practice of charging less than its costs or less than it charges at home to win a market. A) arm's-length pricing B) gray marketing C) counterfeiting D) transfer pricing E) dumping

E

106) ________ are a person's enduring favorable or unfavorable evaluations, emotional feelings, and action tendencies toward some object or idea. A) Discriminations B) Values C) Beliefs D) Feelings E) Attitudes

E

112) If Ty chooses a smart phone simply because he perceives it to be rated highest on megapixels, which he believes is the most important attribute in a smart phone, he is using a(n) ________ to help make his purchase decision. A) compensatory model B) conjunctive heuristic C) elimination-by-aspects heuristic D) affect referral rule E) lexicographic heuristic

E

114) Companies can run the same marketing communications programs as used in the home market or change them for each local market, a process called ________. A) product communications B) market development C) dual adaptation D) diversification E) communication adaptation

E

119) ________ risk occurs if the product fails to perform up to expectations. A) Physical B) Financial C) Social D) Psychological E) Functional

E

128) If Ampex Support Systems is the single supplier for a local manufacturing company's MRO (maintenance, repair, operating) supplies and needs, Ampex Support Systems is considered as providing ________ for the manufacturer. A) guided selling B) purchasing support C) turnkey logistics D) decision support E) systems contracting

E

136) In the ________ category of buyer-supplier relationship, although bonded by a close, cooperative relationship, the seller adapts to meet the customer's needs without expecting much adaptation or change on the part of the customer in exchange. A) contractual transaction B) cooperative system C) collaborative D) mutually adaptive E) customer is king

E

151) The ________ market consists of schools, hospitals, nursing homes, prisons, and other institutions that must provide goods and services to people in their care. A) vertical B) nonprofit C) spot D) secondary business E) institutional

E

22) Ford Motors uses the ad caption "Magnify the Adventure" to promote its latest SUV, the Ford Endeavour. The ad features the car traveling through an uneven, rocky terrain. Within the context of Jennifer Aaker's brand personality analysis, Ford Endeavour is most likely to be strong on which of the following traits? A) sincerity B) intelligence C) imagination D) sophistication E) ruggedness

E

25) Marketers who target consumers on the basis of their ________ believe that they can influence purchase behavior by appealing to people's inner selves. A) time famine B) sophistication C) money constrain D) social class E) core values

E

29) Kenilworth Inc. is shifting from its rented four-room office to a standalone office building owned by the company itself. This can be classified as a ________. A) modified rebuy B) regular buy C) straight rebuy D) new rebuy E) new task

E

32) Jason Riggs' company is considered to be an in-supplier for a lawn mower manufacturer. However, recently the lawn mower company has put out a memo to in- and out-suppliers indicating that it would like to change product specifications and delivery schedules. Which of the following buying situations is most likely to be in operation given this data? A) straight rebuy B) single rebuy C) rakeback rebuy D) system buy E) modified rebuy

E

33) If you decided to go into the systems contracting business, which of the following categories would constitute your main area of expertise? A) computer applications B) database management C) manufacturing D) promotion management E) MRO (maintenance, repair, operating) supplies

E

34) According to Webster and Wind, businesspeople are buying ________. A) products B) solutions to the organization's economic and strategic problem C) solutions to their own need for achievement and reward D) A & C E) B & C

E

46) Regional economic integration is defined as the creation of trading agreements between ________. A) a firm and its suppliers and distributors B) firms targeting the same market C) individual firms in an industry D) related industries E) blocs of countries

E

49) Which of the following is true about buying centers? A) One person may play multiple roles. B) Several people can occupy the same role. C) A buying center typically has five or six members. D) A buying center can have dozens of members. E) All of the above are true.

E

5) Which of the following is a risk that firms must consider prior to expanding abroad? A) The domestic consumers prefer low-priced products. B) The market in the foreign country may be too similar to the domestic market. C) Consumers in the foreign country are very particular about the quality of the goods they consume. D) The foreign country has very low pollution control standards. E) The foreign country's business culture may be too different from the domestic country.

E

55) Which of the following theories developed by Frederick Herzberg distinguishes dissatisfiers from satisfiers? A) trait-role theory B) psychological constraint theory C) probability theory D) leadership model E) two-factor theory

E

8) Jason writes a weekly column in his school's newspaper about movies he has seen, books he has read, and concerts he has attended. His column provides information and opinions. Feedback from his fellow students is positive, and they are appreciative of the advice that is given. Which of the following would be the most apt description of the role played by Jason? A) silent majority B) protestor C) protector D) adapter E) opinion leader

E

9) Once a firm decides to enter the international market, what is the next step in the decision-making process? A) deciding on the marketing organization B) deciding on the marketing program C) deciding how to enter the market D) deciding how to adapt the product to the new market E) deciding which markets to enter

E

94) A supplier signs an agreement with a customer that states that $350,000 in savings will be earned by the customer over the next 18 months in exchange for a tenfold increase in the customer's share of supplies ordered by the customer. If the supplier achieves less than this promised savings, it will make up the difference. If the supplier achieves substantially more than promised, it participates in the extra savings. This is an example of ________. A) solution selling B) price fixing C) demand shifting D) systems buying E) risk and gain sharing

E

94) Your firm has decided to enter the international market with your product called "Trema," a new pocket organizer that can also be used as a cell phone. While discussing marketing plans, your CMO decides that no changes will be necessary in either the marketing mix or the product for export. What form of marketing strategy is the CMO advocating? A) distributive marketing program B) leveraged marketing program C) adapted marketing program D) engineering-driven marketing program E) standardized marketing program

E

95) In an adapted marketing program, the company ________. A) ensures that uniform practices are adopted across countries B) focuses more on brand image than consumer preferences C) ignores differences in the legal environment D) ensures the lowest cost marketing program is adopted E) tailors the marketing programs to each target market

E

98) Of key interest to marketers are the major informational sources to which the consumer will turn and the relative importance of each. Which of the following can be considered an experiential information source? A) consumer-rating organizations B) mass media C) acquaintances D) Web sites E) personal handling and examination

E

72) List the seven roles of people in a buying center.

1. Initiators — Users or others in the organization who request that something be purchased. 2. Users — Those who will use the product or service. In many cases, the users initiate the buying proposal and help define the product requirements. 3. Influencers — People who influence the buying decision, often by helping define specifications and providing information for evaluating alternatives. Technical personnel are particularly important influencers. 4. Deciders — People who decide on product requirements or on suppliers. 5. Approvers — People who authorize the proposed actions of deciders or buyers. 6. Buyers — People who have formal authority to select the supplier and arrange the purchase terms. Buyers may help shape product specifications, but they play their major role in selecting vendors and negotiating. In more complex purchases, buyers might include high-level managers. 7. Gatekeepers — People who have the power to prevent sellers or information from reaching members of the buying center. For example, purchasing agents, receptionists, and telephone operators may prevent salespersons from contacting users or deciders.

10) If a direct-mail marketer wished to direct promotional efforts toward the family of ________, efforts need to be directed toward parents and siblings of the family members. A) orientation B) procreation C) immediacy D) intimacy E) reference

A

100) Maria considers buying a car for herself, after she notices the advantages experienced by her best friend from his new car. Which of the following forms of stimulus has activated Maria's problem recognition process? A) external stimuli B) internal stimuli C) peer stimuli D) secondary stimuli E) marketing induced stimuli

A

105) Straight extension of the product means introducing ________. A) the product to the foreign market without any changes to the product B) the product to the foreign market with minor changes to the product C) the product to the foreign market with major changes to the product D) a customized product to the foreign market with a new marketing strategy E) a customized product to the foreign market with existing marketing strategy

A

117) When a marketer tries to alter a consumer's beliefs about a company's brand to get the consumer to rethink a purchase decision, the marketer is using ________. A) psychological repositioning B) competitive depositioning C) positioning D) repositioning E) biased positioning

A

120) Steve has only 20 minutes to have lunch. Although he really likes McDonald's, the line is very long and he is concerned that he will not have a chance to get through the line and eat his lunch before he is due back at work. Steve perceives ________ risk in going to McDonald's today. A) time B) functional C) physical D) psychological E) social

A

124) In India, where people often buy items like cigarettes one at a time because incomes are low and people shop daily because homes lack storage and refrigeration, ________ remains an important function of intermediaries and helps perpetuate long channels of distribution. A) breaking bulk B) jobbing C) type of transportation D) information sharing E) reinforcing policies

A

154) Which of the following is a major complaint of multinationals operating in Europe? A) each country shows favoritism toward its nationals B) volatility of spending due to economic swings and cycles C) required paperwork D) bureaucracy E) decision-making delays

A

40) "BRICS" is an acronym for ________. A) Brazil, Russia, India, China, and South Africa B) Bolivia, Russia, Indonesia, China, and South Africa C) Brazil, Russia, Indonesia, China, and South Africa D) Bolivia, Russia, India, Canada, and South Africa E) Bolivia, Russia, Indonesia, Canada, and South Africa

A

50) While choosing countries to invest in, companies often choose psychic proximity to their own country. Psychic proximity can best be defined as countries ________. A) in which the company feels comfortable with the language, laws, and culture B) that are located close C) that the home country's management team have visited D) that have no trade barriers E) with good infrastructure and stable political environment

A

54) Which of the following techniques was suggested by Freud to trace a person's motivations from the stated instrumental ones to the more terminal ones? A) laddering B) word association C) role playing D) casting E) selective attention

A

69) In which of the following modes of licensing does the firm hire local producers to produce the product, giving the company less control over the manufacturing process? A) contract manufacturing B) management contracts C) direct investment D) joint venture production E) greenfield venturing

A

78) Patrick J. Robinson and his associates have identified eight stages in the business buying-decision process. This model is called the ________ framework. A) buygrid B) buying/selling C) seller-centered D) commercial E) buy-analysis

A

8) Which of the following is the first stage of the internationalization process that can induce firms to enter the international arena? A) no regular export activities B) export via independent representatives (agents) C) establishment of one or more sales subsidiaries D) establishment of production facilities abroad E) adoption of a flexible exchange rate regime

A

103) A risk averse attitude is associated with high ________. A) uncertainty avoidance B) femininity C) power distance D) individualism E) collectivism

A

104) A(n) ________ puts people into a frame of mind, such as liking or disliking an object, moving toward or away from it. A) attitude B) belief C) feeling D) position E) stance

A

105) Marketers need to identify the hierarchy of attributes that guide consumer decision making in order to understand different competitive forces and how these various sets get formed. This process of identifying the hierarchy is called ________. A) market partitioning B) brand association C) market valuation D) market estimation E) market identification

A

109) With the ________ heuristic, the consumer sets a minimum acceptable cutoff level for each attribute and chooses the first alternative that meets the minimum standard for all attributes. A) conjunctive B) lexicographic C) elimination-by-aspects D) primary E) secondary

A

111) Product adaptation involves ________. A) altering the product to meet local preferences with no change in communication strategy B) altering the product to meet minimum acceptable standards C) altering both the product and the communication strategy to meet local preferences D) altering neither the product nor the communication strategy while entering a new market E) developing a new product and adapting the communication strategy to enter a new market

A

113) Forward invention is ________. A) creating a new product to meet a need in another country B) creating a new product to meet the need in the home country C) inventing products that are superior to competing offerings D) taking an existing product into a new market E) inventing something that as yet has no "market"

A

118) With the ________ heuristic, the consumer chooses the best brand on the basis of its perceived most important attribute. A) lexicographic B) conjunctive C) elimination-by-aspects D) availability E) representativeness

A

119) When companies are setting prices in different countries, the problem with setting a market-based price in each country is that ________. A) it allows intermediaries in low-price countries to reship their products to high-price countries B) the company would earn the same profits everywhere, regardless of the cost structure C) this strategy might price the product out of the market in countries where costs are high D) this strategy would make the price too high in poor countries and not high enough in rich countries E) it prevents the company from differentiating its products

A

121) A key driver of sales frequency is the product ________ rate. A) consumption B) disposal C) refusal D) utility E) option

A

122) Dumping occurs when a company ________. A) entering a foreign market charges either less than its costs or less than it charges at home B) entering a foreign market charges more than the price in its home market C) entering a foreign market charges prices that are lower than those charged by its competitors in this market D) sets its price equal to its average cost of production E) exports its products to a foreign country to increase its revenue in spite of excess demand in the home country

A

123) Orica Inc. competes in the market for commercial explosives. The company recently changed its business model from just selling explosives to managing an entire blast in a quarry. This customer-solution-based approach to the sale of explosives is an example of ________. A) systems selling B) straight rebuying C) customer referencing D) derived demand E) channel consolidation

A

125) Which of the following is likely if the distribution channel for a product in the foreign country is long? A) The foreign country buyers pay a high price. B) The consumer will pay arms-length price. C) The profit margin of the sellers increases. D) The intermediaries are motivated to reship the product to another country to earn higher profits. E) The seller can increase profit margins by charging a uniform price.

A

145) Which of the following products is most likely to be characterized by low involvement but significant brand difference? A) toothpastes B) digital cameras C) packet of salt D) a milk carton E) furniture

A

146) With the ________ heuristic, predictions of usage are based on quickness and ease of use. A) availability B) representative C) anchoring D) adjustment E) semantic

A

155) According to the General Services Administration Procurement Data Center, more than ________ million individual contract actions are processed every year. A) 20 B) 25 C) 30 D) 35 E) 40

A

158) The New Zealand Way program was an initiative by the government of New Zealand to raise awareness and attract tourists by showing the dramatic landscapes featured in "The Lord of the Rings" film trilogy. This is an example of a government trying to strengthen its ________. A) country-of-origin perceptions B) international subsidiaries C) internationalization D) contract manufacturing E) distributor relationships

A

16) Brand personality analysts identified the popular music channel MTV as daring, spirited, and highly imaginative. As per Jennifer Aaker's research, which of the following brand personality traits best suits MTV? A) excitement B) sincerity C) competence D) ruggedness E) sophistication

A

18) Consumers often choose and use brands that have a brand personality consistent with how they see themselves, also known as the ________ self-concept. A) actual B) ideal C) others' D) prohibitive E) suggestive

A

2) The ________ market consists of all the organizations that acquire goods and services used in the production of other products or services that are sold, rented, or supplied to others. A) business B) consumer C) e-commerce D) global E) domestic

A

2) Which of the following would be the best illustration of a subculture? A) a religion B) a group of close friends C) your university D) a fraternity or sorority E) your occupation

A

24) IKEA has achieved global recognition by offering consumers leading-edge Scandinavian furniture at affordable prices. IKEA is delivering value to consumers who are ________ constrained. A) money B) time C) brand D) value E) self-concept

A

24) Ultimately, the amount of steel sold to General Motors depends on the consumers' demand for GM cars and trucks. From the standpoint of the steel manufacturer, which of the following demand forms is most pertinent? A) derived demand B) inelastic demand C) geographic demand D) relational demand E) static demand

A

28) The purchasing department buys office supplies on a routine basis from a pre-approved list of suppliers. This type of purchase is classified as a ________. A) straight rebuy B) modified rebuy C) new task D) secondary purchase E) procure-to-pay

A

29) In a waterfall approach to international expansion, ________. A) firms enter countries gradually in a sequence B) firms enter those countries first where the demand for the product is greatest C) countries are entered based upon the availability of government subsidies D) firms enter those countries first where the supply of raw material is greatest E) countries are entered based upon ease of entry

A

43) Which of the following does NOT contribute to the custo Brasil ("the cost of Brazil") for businesses? A) Brazil had serious disputes with neighboring countries. B) Brazil's transportation costs are higher than other markets. C) Unloading a container is twice as expensive in India and takes three times longer than in China. D) Strict and costly labor laws inspire an underground economy that takes urban jobs. E) Crime and corruption are problems.

A

51) Timken achieved record revenue despite a recession by ________. A) shifting attention into heavy processing, aerospace and defense industries B) shifting attention into the auto industry C) lowering prices on bearings for a tractor manufacturer's medium-sized tractors D) avoiding sales of high priced bearings for large tractors E) all of the above

A

52) ________ is composed of all parties who participate in the purchasing decision-making process and share common goals and risks associated with their decisions. A) The buying center B) The marketing sales team C) Strategic management D) Engineering support E) The logistics center

A

58) Domestic-based export merchants ________. A) buy manufacturers' products and then sell them abroad B) manage a company's export activities for a fee C) buy foreign products and sell them in the domestic country D) seek and negotiate foreign purchases E) carry on exporting activities on behalf of several producers

A

60) Companies typically start their international foray with ________, which involves working through independent intermediaries who sell their products abroad. A) indirect exporting B) licensing C) franchising D) direct exporting E) joint ventures

A

62) James Franks lives in Miami. He buys local products from manufacturers in Miami and other parts of Florida and sells them abroad, mainly to Caribbean nations. Mr. Franks is a(n) ________. A) domestic-based export merchant B) domestic-based export agent C) cooperative agent D) export-management agent E) direct exporting agent

A

64) As Rita scans the yellow pages section of her phonebook looking for a florist, she sees several other products and services advertised. Though interesting on first glance, she quickly returns to her primary task of finding a florist. The items that distracted her from her initial search were most likely stored in which of the following types of memory? A) short-term memory B) long-term memory C) middle memory D) subconscious memory E) subliminal memory

A

67) ________ refers to the process in which information gets out of memory. A) Memory encoding B) Memory decoding C) Memory classification D) Memory retrieval E) Memorization

A

70) Toshiba, Hitachi, and other Japanese television manufacturers use ________ to service the Eastern European market. A) contract manufacturing B) management contracts C) direct investment D) joint venture production E) greenfield venturing

A

74) Which of the following is true about direct investment as a mode of international expansion? A) It allows a firm to retain full control over its investment. B) It yields lower returns than joint ventures. C) It involves the least amount of risk. D) It involves the least cost. E) It does not allow the firm to diversify.

A

75) Cisco had no presence in India before 2005, but it used a ________ approach and already opened a second headquarters in Bangalore to take advantage of opportunities in India and other locations such as Dubai. A) direct investment B) joint venture C) contract manufacturing agreement D) licensing agreement E) franchising agreement

A

79) According to Patrick J. Robinson, the eight stages in the business buying-decision process are known as ________. A) buyphases B) buybacks C) buyouts D) buyables E) buyoffs

A

8) Shoe manufacturers are not going to buy much more leather if the price of leather falls, nor will they buy much less leather if the price rises, unless they can find satisfactory substitutes. This is an example of ________. A) inelastic demand B) direct purchasing C) the acceleration effect D) a modified rebuy E) a straight rebuy

A

84) Business buyers may get new ideas at a trade show, see an ad, or receive a call from a sales representative who offers a better product or a lower price compared to the current in-supplier. These situations motivate the ________ stage. A) problem recognition B) general need description C) order-routine specification D) supplier search E) performance review

A

93) Robert Jennings consultants help farmers deliver an incremental animal weight gain of 8 to 12 percent over competitors. This is an example of solutions ________. A) selling to enhance customer revenues B) selling to reduce customer costs C) selling to decrease customer risks D) selling to simplify customer purchasing E) to provide better partnership

A

99) A ________ plan establishes a long-term relationship in which the supplier promises to resupply the buyer as needed, at agreed-upon prices, over a specified period of time. A) stockless purchase B) direct stock purchase C) defined contribution D) stock purchase E) share purchase

A

A) supply is important to the customer and there were procurement obstacles B) procurement is simple C) there are many undifferentiated vendors in the marketplace D) the customer is highly price sensitive E) the suppliers charge a premium for their products

A

139) Explain the differences between a belief and an attitude.

A belief is a descriptive thought that a person holds about something. An attitude is a person's enduring favorable or unfavorable evaluation, emotional feeling, and action tendencies toward some object or idea.

71) What is the composition of the buying center?

A buying center is composed of "all those individuals and groups who participate in the purchasing decision-making process, who share some common goals and the risks arising from the decisions." The buying center includes all members of the organization who play any of seven roles in the purchase decision process: initiators, users, influencers, deciders, approvers, buyers, gatekeepers. Buying centers usually include several participants with differing interests, authority, status, and persuasiveness. Each member of the buying center is likely to give priority to very different decision criteria.

145) International companies must decide how much to adapt their marketing strategy to local conditions. Identify and explain the two strategies companies can use.

A company foraying into the international market can choose between a standardized marketing program and an adapted marketing program. In the standardized marketing mix, no changes are made to the marketing mix when entering foreign countries. At the other end is the adapted marketing mix, where the producer adjusts the marketing program to each target market.

152) When companies sell their goods abroad, they face a price escalation problem. Define price escalation.

A firm must add the costs of transportation, tariffs, importer margin, wholesaler margin, and retailer margin, as well as the currency-fluctuation risk while selling the product in another country. Price escalation from these added costs and currency fluctuation risk might make the price two to five times as much in another country to earn the same profit for the manufacturer.

102) A performance review is the first step in the buygrid framework.

FALSE

104) Product value analysis is an approach to efficiency that studies whether components can be redesigned or made by more efficient methods of production without adversely impacting product performance.

FALSE

106) In buying alliances, participants offer to trade goods or services.

FALSE

11) Commoditization strengthens customer loyalty.

FALSE

111) Most performance reviews are conducted by outside auditing agencies to avoid bias and internal discrepancies.

FALSE

12) The World Trade Organization, consisting of 158 countries, works to erect entry barriers or regulations that limit free trade.

FALSE

12) The business market is essentially the same market as the consumer market.

FALSE

126) The buying process starts when the buyer decides to, or enters, a store or service provider's facility.

FALSE

127) A belief is a person's enduring favorable or unfavorable evaluation, emotional feeling, and action tendency toward some object or idea.

FALSE

128) If a society is collectivist, it would imply that the self-worth of the people is rooted in individual achievements.

FALSE

129) Straight extension means using an established product's brand name for a new item in the same product category.

FALSE

130) Product adaptation not only involves altering the product to meet local preferences, but also calls for a change in the communication strategy.

FALSE

130) With noncompensatory models of consumer choice, positive and negative attribute considerations usually net out.

FALSE

131) Forward invention refers to reintroducing earlier product forms that are well adapted to a foreign country's needs.

FALSE

144) The "customer is king" category of buyer-seller relationship is relatively simple, and one in which routine exchanges with moderately high levels of cooperation and information exchange occur.

FALSE

15) Services account for nearly 40 percent of global trade.

FALSE

156) A good illustration of a member of the institutional market would be Boeing because it is a member of the aviation institution structure.

FALSE

16) An increase in the demand for plant and equipment can lead to a much larger increase in consumer demand. This is known as the acceleration effect.

FALSE

160) Country-of-origin effects refer to the attitude anything produced by the home country is better than imported goods.

FALSE

163) The impact of country of origin is independent of the type of product.

FALSE

30) Secondary groups require continuous interaction to be effective and meaningful.

FALSE

31) When Ketan went to college he had a burning desire to join a social fraternity; for Ketan, the fraternity would be a dissociative group.

FALSE

32) A waterfall approach to entering foreign markets is described as entering countries simultaneously.

FALSE

33) The sprinkler approach is an entry strategy where a company gradually enters countries in sequence.

FALSE

36) Important developing or emerging markets include Brazil, Russia, India, Canada, and South Africa, often called "BRICS" for short.

FALSE

36) The buyer in a straight rebuy usually changes product specifications, prices, delivery requirements, or other terms.

FALSE

36) Whereas economic circumstances can have a profound effect on consumption, occupation does not impact how people spend their money and what they buy.

FALSE

37) According to the research conducted by Jennifer Aaker, one of the five traits of a product's brand personality is its physical structure.

FALSE

38) Most business buyers reject what is called systems buying from one seller.

FALSE

39) The five brand personality traits identified by Jennifer Aaker are consistently observed regardless of nationality or culture.

FALSE

40) A person's personality portrays the "whole person" interacting with his or her environment.

FALSE

41) Consumers who experience money constraints are prone to multitasking.

FALSE

54) Regional economic integration has intensified in recent years, which makes it more difficult for marketers to expand globally.

FALSE

63) People who authorize the proposed actions of deciders or buyers are initiators.

FALSE

65) The buying center is where consumers go to purchase their goods and services.

FALSE

66) With respect to the buying center, approvers are people who have the power to prevent sellers or information from reaching members of the buying center.

FALSE

67) Initiators are those who authorize the proposed action of deciders or buyers.

FALSE

70) Psychogenic needs arise from the physiological states of tension such as hunger or discomfort.

FALSE

70) Small sellers concentrate on multilevel in-depth selling instead of reaching the key buying influencers.

FALSE

80) Selective attention is the tendency to interpret information in a way that will fit our preconceptions.

FALSE

83) Consistent with the elaboration memory model, consumer brand knowledge in memory can be conceptualized as consisting of a brand node in memory with a variety of linked associations.

FALSE

84) When the licensor provides the licensee with a complete brand concept and operating system, the arrangement is called contract manufacturing.

FALSE

88) The main disadvantage of direct investment is that the firm loses access to the market in case the government of that country insists locally purchased goods have domestic content.

FALSE

112) Backward invention occurs when a firm ________. A) creates a new product to meet a need in another country B) reintroduces earlier product forms adapted to suit another country's needs C) invents products that are similar to competing offerings D) takes an existing product into a new market E) produces its own raw materials

B

115) A mobile phone manufacturing company observes that the main reason for an abrupt fall in sales volume is the unconventional design of their phones that consumers found inconvenient and unattractive. The findings prompt the company to adopt a new strategy. They redesigned the product models keeping the requirements of the end-user in mind. According to the expectancy value-model, the company's strategy can be termed as ________. A) psychological repositioning B) real repositioning C) competitive depositioning D) physiological depositioning E) prescriptive method

B

116) Ford believes its cars to be of higher quality than General Motor's but thinks that consumers wrongly believe the opposite. Ford might employ a(n) ________ strategy to change buyers' perceptions of its competition. A) real repositioning B) competitive depositioning C) psychological repositioning D) biased repositioning E) attribute repositioning

B

117) Trends Inc. produces and markets casual wear for men and women. The company wants to be a global brand and is planning to enter a few chosen markets across Europe and Asia. To accommodate the differences in purchasing power and costs of shipping goods to the retailers, the company has decided to use cost-based pricing in each country. In order to ensure that this strategy is successful, Trends must first make sure that ________. A) all the countries it is planning to enter have similar laws and regulations B) competing offerings in the different markets are not priced lower C) all competitors follow cost-based pricing D) its marketing communication targets rival firms in the respective markets to prove its superiority E) its transfer prices are high

B

12) When Gary was a high school student, he enjoyed rock music and regularly purchased hip clothing sported by his favorite rock band. However, five years later, when Gary became an accountant, his preference shifted toward formal clothing. Which of the following personal characteristics is likely to have had the most influence on Gary's preferences during his high school days? A) education B) age C) income D) gender E) physiological needs

B

120) When one unit charges another unit in the same company for goods it ships to its foreign subsidiaries, the charge is called a(n) ________ price. A) original B) transfer C) margin D) break-even E) customer value

B

124) Many business buyers prefer to buy a total solution to a problem from one seller. This process is also known as ________. A)s channel consolidation B) systems buying C) vertical buying D) horizontal buying E) supply buying

B

124) Richard Petty and John Cacioppo's ________ model, an influential model of attitude formation and change, describes how consumers make evaluations in both low- and high-involvement circumstances. A) introspective B) elaboration likelihood C) stimulus-response D) associative network memory E) expectancy-value

B

125) Which of the following is true about branding efforts at NetApp? A) The company's branding efforts were well organized in 2007. B) Landor created a new identity, architecture, and tagline for it in 2008. C) NetApp shows that business-to-business marketers do not need to worry about branding. D) Frankensites helped organize branding efforts. E) New Web sites for NetApp did not affect sales leads from inquiries.

B

86) Frederick Herzberg developed a two-factor theory that distinguishes dissatisfiers and satisfiers. How does Herzberg's theory affect sellers' marketing strategy?

Herzberg's theory has two implications. First, sellers should do their best to avoid dissatisfiers (for example, a poor training manual or a poor service policy). Although these things will not sell a product, they might easily unsell it. Second, the seller should identify the major satisfiers or motivators of purchase in the market and then supply them. These satisfiers will make the major difference as to which brand the customer buys.

148) Satisfying different consumer needs and wants can require different marketing programs. Name the four cultural dimensions that differentiate countries, as identified by Hofstede.

Hofstede identified four cultural dimensions that differentiate countries: 1. individualism vs. collectivism 2. high vs. low power distance 3. masculine vs. feminine 4. weak vs. strong uncertainty avoidance

126) As people in developing countries often prefer to buy in smaller quantities, ________ is one of the most important functions of intermediaries in developing countries and helps perpetuate the long channels of distribution, which are a major obstacle to the expansion of retailing. A) product adaptation B) breaking bulk C) diversification D) transfer pricing E) dual adaptation

B

133) The partners in ________ systems are united in operational ways, but neither demonstrates structural commitment through legal means or adaptation. A) mutually adaptive B) collaborative C) basic buying and selling D) customer supply E) cooperative

B

148) Ben always reaches for the bright blue and yellow box of Ritz crackers when he visits the snack food aisle in the grocery store. He rarely even reads the box or checks the price. Which of the following heuristics is most likely being used by Ben? A) availability B) representative C) anchoring D) adjustment E) semantic

B

15) ________ refers to a set of distinguishing human psychological traits that lead to relatively consistent and enduring responses to environmental stimuli. A) Image B) Personality C) Psychological transformation D) Lifestyle E) Acculturation

B

152) In most countries, ________ are the major buyers of goods and services. They typically require suppliers to submit bids and often award the contract to the lowest bidder. A) consumer packaged-goods companies B) government organizations C) health services vendors D) educational institutions E) households

B

153) What is the name of the database that is used to collect, validate, store, and disseminate data in support of government agency acquisitions? A) General Services Administration database B) Central Contractor Registration database C) Customer Value Assessment database D) Vendor-Managed Inventory database E) Proposal Solicitation database

B

19) Consumers often choose and use brands that have a brand personality consistent with how they think others view them, also known as the ________ self-concept. A) actual B) others' C) ideal D) dual E) perceptual

B

25) The demand for business goods is ultimately derived from the demand for ________. A) raw materials B) consumer goods C) services D) business solutions E) e-commerce

B

28) A2Z Inc. is a producer of a wide variety of consumer goods in Brazil. It has successfully captured a huge share of the domestic market and has been able to create a very strong brand. It is now considering a foray into foreign markets. Its board of directors decides to first try out some of its products in the neighboring country of Argentina. A2Z plans to eventually expand its presence in other countries, after they analyze the impact of their entry into the Argentine market. A2Z Inc. is following a ________ approach. A) born global B) waterfall C) sprinkler D) franchisee E) shotgun

B

42) ________ is the sixth largest economy in the world, and it is expected to move into fourth place by 2050, meaning it would economically be larger than countries like Germany, Japan, and the United Kingdom. A) South Africa B) Brazil C) Russia D) India E) China

B

49) ________ consumers drank an average of only 14 eight-ounce bottles of Coke in 2012, compared with an average of 241 bottles in Brazil and 745 bottles in Mexico, leading Coca-Cola to announce a $5 billion investment over 2012-2020. A) Venezuelan B) Indian C) Indonesian D) South African E) Chinese

B

5) A(n) ________ group is one whose values or behavior an individual rejects. A) aspirational B) dissociative C) membership D) primary E) procreational

B

53) In the purchasing decision process, the ________ are those who request that something be purchased. They may be users or others in the organization. A) users B) initiators C) influencers D) deciders E) approvers

B

56) At the top of Maslow's hierarchy of needs (shown as a pyramid in the text) are ________ needs. A) esteem B) self-actualization C) social D) safety E) physiological

B

57) Which of the following modes of entry into a foreign market involves the maximum commitment and risk? A) franchising B) direct investment C) joint ventures D) licensing E) direct exporting

B

58) ________ can work to the advantage of marketers with strong brands when consumers make neutral or ambiguous brand information more positive. A) Selective attention B) Selective distortion C) Selective retention D) Selective choice E) Selective embellishment

B

6) Joe is a computer service technician. People in his neighborhood usually depend on his suggestions for purchasing any computer accessory or hardware, as they believe that he has access to far more information on computer technology than the average consumer. The neighbors are also aware that Joe has the required knowledge and background for understanding the technical properties of the products. Within this context, Joe can be called a(n) ________. A) transactional leader B) opinion leader C) role model D) gate-keeper E) international marketer

B

6) Pittsburgh-based Consol Energy's coal business largely depends on orders from utilities and steel companies which, in turn, depend on broader economic demand from consumers for electricity and steel-based products like automobiles and appliances because of ________. A) fluctuating demand B) derived demand C) professional purchasing D) multiple buying influences E) multiple sales calls

B

61) ________ theory teaches marketers that they can build demand for a product by associating it with strong drives, using motivating cues, and providing positive reinforcement. A) Demand B) Learning C) Economic D) Psychological E) Demographic

B

63) Nash & Associates is a firm that takes care of all export procedures on behalf of its clients. In exchange for a fee, the firm acts as the liaison between domestic manufacturers and prospective foreign buyers. It has access to established distribution networks in other countries that domestic small-scale producers are unlikely to have, and facilitates communication between foreign importers and domestic producers. Nash & Associates is most likely a(n) ________. A) domestic-based export merchant B) domestic-based export agent C) cooperative organization D) export-management company E) direct exporter

B

65) After successfully exporting its products through export merchants, Boyes Inc. decides to take control of its exports. It sets up its own unit in the home country that takes care of all export-related activities. Boyes Inc. is most likely using ________. A) foreign-based distributors or agents B) a domestic-based export department C) export merchants in foreign countries D) export-management companies E) traveling export sales representatives

B

65) Betsy, a teenager, uses most of her after-school hours in either playing tennis or watching movies. She barely manages to concentrate on her lessons for a couple of hours before exams. Being questioned about her substandard performance in school, she points out the teacher's inability to complete the entire course during the school hours as the possible reason. Betsy's behavior is most likely to be associated with ________. A) generalization B) hedonic bias C) discrimination D) selective attention E) psychological repositioning

B

67) Which of the following statements is true about licensing? A) It is one of the most complex ways to engage in international marketing. B) The licensor gains entry into the new market at low risk. C) The licensee has no access to proprietary information. D) The licensee receives a fee or royalty. E) The only benefit for a licensee is the production expertise it gains.

B

68) Amtex electronics, a consumer products brand, frequently advertises its products inside supermarkets and retail stores to promote the process of memory ________ and stimulate purchase. A) verification B) retrieval C) decoding D) formation E) augmentation

B

68) Hotel chains such as Hyatt and Marriott sell a variation of the licensing agreement called ________ to the owners of foreign hotels to manage these businesses for a fee. A) greenfield venturing B) management contracts C) strategic alliance D) indirect exporting E) direct exporting

B

72) Which of the following can cause a firm to choose joint ventures as a mode of expansion into foreign markets? A) excellent managerial resources B) lack of sufficient finances C) lack of conflicting regulations in the host country D) preferences of target consumers in the host country E) psychic proximity of the host country

B

73) Identify a benefit of using a joint venture to enter a foreign market. A) It entails minimum risk. B) It provides access to an established distribution network in the host country. C) It yields the highest returns. D) It retains full control of its investment in the host country. E) It is the best strategy for countries with psychic proximity.

B

75) If you were an upper-level marketing executive of a large seller of trucks, which of the following strategies would be most appropriate in reaching buying center targets? A) Concentrate on key buying influencers. B) Use multilevel in-depth selling. C) Use trade-based promotions. D) Concentrate sales efforts on the support staff. E) Move all operations to the Internet.

B

76) Whirlpool took a 53 percent stake in the Dutch electronics group Phillips' home appliances business to leapfrog into the European market. This is an example of a ________. A) straight extension B) joint venture C) contract manufacturing agreement D) licensing agreement E) franchising agreement

B

77) Which of the following is NOT one of the ways direct exporting happens? A) overseas sales branch or subsidiary B) domestic-based export agents C) domestic-based export division D) traveling export sales representatives E) foreign-based distributors or agents

B

83) The approach to cost reduction that studies whether components can be redesigned or standardized or made by cheaper methods of production without adversely impacting product performance is termed as ________. A) maintenance, repair, and operating (MRO) B) product value analysis (PVA) C) vendor managed inventories (VMI) D) supplier performance management (SPM) E) supplier added value effort (SAVE)

B

89) With respect to e-procurement, which of the two types of e-hubs are Web sites organized around? A) vertical and horizontal hubs B) vertical and functional hubs C) functional hubs and organizational hubs D) supplier and user hubs E) manufacturer and supplier hubs

B

91) The ________ approach to consumer research asks customers to attach a monetary value to alternative levels of a given attribute. The value of a given configuration is determined by adding the average values of each of the given attributes. A) benchmarking B) compositional C) importance rating D) focus-group E) conjoint analysis

B

97) A standardized marketing program involves ________. A) adopting the strategy that best fits a given target market B) consistently using the communication and distribution channels that entail the lowest costs C) adjusting the product to suit market preferences D) changing the features of the product to accommodate the host country E) changing only the communication message to suit the different target markets

B

97) Praxair Limited is a supplier of synthetic graphite to a number of electrode manufacturers in the United States. Its customers have shifted their ordering responsibilities to Praxair and the company regularly monitors its customers' inventory levels and has taken responsibility for replenishing the supplies automatically through continuous replenishment programs. Which of the following systems do Praxair and its customers follow with respect to order-routine specification? A) Supplier Added Value Effort ($AVE) B) Vendor Managed Inventory (VMI) C) Direct Concentrated Buying (DCB) D) Supplier Performance Management (SPM) E) Product Value Analysis (PVA)

B

A) gatekeepers B) buyers C) initiators D) approvers E) deciders

B

Marketing Management, 15e (Kotler) Chapter 7 Analyzing Business Markets 1) ________ refers to the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers. A) Marketing channels B) Organizational buying C) Corporate retailing D) Brand auditing E) Inventory control

B

not — is called the ________ set. A) awareness B) total C) consideration D) choice E) inept

B

92) List and briefly define Maslow's Hierarchy of Needs.

Beginning with the most basic needs to the most advanced, the need structure is as follows: 1. physiological needs — food, water, shelter 2. safety needs — security, protection 3. social needs — sense of belonging, love 4. esteem needs — self-esteem, recognition, status 5. self-actualization needs — self-development and realization

108) Finnish cellular phone giant Nokia customized its 6100 series mobile phone for every major market in which it is present. In Asia, for example, the series came with higher ring volume so that it could be heard on the crowded Asian streets. This is an example of ________. A) straight extension B) forward invention C) regional version D) city version E) country version

C

126) Which of the following companies used the slogan, "The Power to Know®" to connect with C-level executives in the largest companies? A) Lincoln Electric B) NetApp C) SAS D) Medline E) Plexco

C

129) ________ is a key industrial marketing strategy in bidding to build large-scale industrial products such as dams, pipelines, etc. A) Systems contracting B) Systems buying C) Systems selling D) Solutions buying E) Turnkey logistics

C

147) A consumer tells another consumer, "Every time I eat at Big Bill's Steakhouse, I get poor service." Whether this is true or not, it is the consumer's perception. This is an example of consumers basing future predictions on the quickness and ease with which a particular example of an outcome comes to mind. This scenario would be an illustration of the ________ heuristic. A) discrimination B) differentiation C) availability D) screening E) representativeness

C

20) Consumers who are highly sensitive to how others see them and who choose brands whose personalities fit the consumption situation are called ________. A) change agents B) self motivators C) self monitors D) self adapters E) opinion leaders

C

23) ________ portrays the "whole person" interacting with his or her environment. A) Attitude B) Personality C) Lifestyle D) Self-concept E) Subculture

C

27) When innovation at Siemens enables the company to offer solutions that can make the generation of hydroelectricity more environment-friendly, the company will want to reap the benefits of being the first to introduce such a product across countries. In this case, which of the following approaches is likely to be the best approach to entering foreign markets? A) the rifle approach B) the continuous approach C) the born global approach D) the sprinkler approach E) the waterfall approach

C

4) Which of the following is true for business marketers? A) They deal with more and larger buyers than consumer marketers. B) They deal with more and smaller buyers than consumer marketers. C) They deal with fewer and larger buyers than consumer marketers. D) They deal with fewer and smaller buyers than consumer marketers. E) They deal with the same kind of buyers as consumer marketers.

C

4) Zodiac Inc. is one of the leading producers of designer bags in its country. The company is considering shifting some of its production to India. Which of the following could have prompted this move? A) People in India prefer imported designer bags. B) Zodiac can target a niche market of high-profile consumers who have a high income. C) Zodiac can improve its market share if it can offer better prices than its competitors. D) People in the home country have an ethnocentric approach. E) Market research indicates that Indian consumers have a low per-capita income.

C

47) Many US firms prefer to sell in Canada, England, and Australia — rather than in larger markets such as Germany and France — because they feel more comfortable with the languages, laws, and culture, which reflect the ________ between these countries and the United States. A) self-serving bias B) coincident development C) psychic proximity D) cognitive dissonance E) backward invention

C

50) Which of the following is true about industrial buying decisions? A) They are purely rational. B) They are purely emotional. C) They service both the organization's and the individual's needs. D) Top executives are never insecure about buying products. E) Individual needs legitimate the buying process and its outcomes.

C

60) Marketers embed covert messages in ads or packaging of which the consumers are not consciously aware, yet it affects their behavior. This technique employed by the marketers targets the ________ of a consumer. A) selective attention B) selective distortion C) subliminal perception D) voluntary attention E) selective retention

C

7) For a high school student, Tim is highly concerned about environmental issues. He is a strong supporter of the garbage recycling and afforestation campaigns taken up by the environmental activists in his neighborhood. He wants to become a full time volunteer for their upcoming wildlife protection program and has even saved money to contribute to the cause. This group of environmental activists can be categorized under which of the following reference groups? A) primary group B) secondary group C) aspirational group D) dissociative group E) cognitive group

C

74) Small sellers should first concentrate their marketing efforts on reaching ________. A) approvers B) initiators C) influencers D) users E) initiators

C

92) In the ________ method for assessing customer value, customers are asked how costs of using a new product compare to those of using an incumbent product. A) direct survey B) importance ratings C) field value-in-use assessment D) benchmarking E) conjoint analysis

C

98) Which of the following methods is most likely to be used by buyers to review the performance of chosen suppliers? A) The buyer may contact different suppliers and ask for their evaluations. B) The buyers may rate the end-users on several criteria using a weighted-score method. C) The buyer might aggregate the cost of poor performance to come up with adjusted costs of purchase, including price. D) The buyers may aggregate the opinions of various competitors and come up with the adjusted cost of supply. E) The buyers might adopt the Supplier Added Value Effort technique to calculate supplier efficiency.

C

1) What is a global firm? A) A firm that operates in one country and exports its goods and services to foreign countries. B) A firm that operates in more than one country and has a sales and marketing staff in those countries. C) A firm that operates in more than one country and captures R&D, production, logistical, marketing, and financial advantages not available to purely domestic competitors. D) A firm that sells its products and services across the world but restricts manufacturing to the home country. E) A firm that operates in more than one country but restricts the sale of its products to the home country.

C

101) According to Hofstede, cultures with low power distance are ________. A) collectivist B) assertive C) egalitarian D) risk-averse E) risk-tolerant

C

108) Gordon Jones is considering purchasing a computer from Best Buy. He has created a scale for rating eight different computers on three different characteristics. He plans to make a short list of only those computers that score at least a 7 on his scale on all three characteristics. Which of the following choice heuristics has he chosen? A) elimination-by-aspects heuristic B) lexicographic heuristic C) conjunctive heuristic D) anchoring and adjustment heuristic E) representativeness heuristic

C

109) In an attempt to tailor its products to suit the requirements of consumers in India, LG introduced the aero-comfort system. A remote control is programed to regulate both the air-conditioning and the ceiling fan. Consumers can switch off the AC and increase the ceiling fan's flow once the desired temperature is achieved. This not only increases convenience, but also cuts down electricity charges. LG's aero-comfort system is an example of which of the following? A) backward invention B) dual invention C) country version product D) straight extension E) communication adaptation

C

110) ________ are rules of thumb or mental shortcuts in the decision process. A) Attitudes B) Beliefs C) Heuristics D) Discriminations E) Biases

C

122) The level of engagement and active processing undertaken by the consumer in responding to a marketing stimulus is called ________. A) elaboration likelihood B) consumer disengagement C) consumer involvement D) variety seeking E) low involvement

C

123) Various governments force companies to charge the ________ price, which is charged by other competitors for the same or a similar product. A) gray market B) implicit C) arm's-length D) authorized E) contingent

C

127) Xerox offers a ________ approach to prospective clients when it offers a complete turnkey solution, including the operation and management of the client's information and communication need. A) guided selling B) fair trading C) systems buying D) cross-selling E) local purchasing

C

134) Value Central has a partnership of high trust and commitment with certain suppliers and gives them access to its sophisticated and detailed daily, individual store-based sales data. In exchange, those suppliers are responsible for managing Value Central's inventory of their products. This relationship is best described as ________. A) basic buying and selling B) contractual transaction C) collaborative D) customer supply E) customer is king

C

139) ________ investments are those expenditures tailored to a particular company and value chain partner. A) Diversified B) Pooled C) Specific D) Umbrella E) General

C

140) Which of the following is a form of cheating or undersupply relative to an implicit or explicit contract which usually takes place when buyers cannot easily monitor supplier performance? A) institutional sale B) business buying C) opportunism D) vertical integration E) contractual transactionism

C

17) The Marlboro Man was depicted in the advertisements of Marlboro cigarettes as a rugged outdoor, tough cowboy type. This was done to establish what is called ________. A) trademarking B) a brand name C) a brand personality D) co-branding E) a brand reference

C

21) Within the context of Jennifer Aaker's analysis, identify the brand personality that can be associated with a new product whose promotional messages consistently portray it as being reliable, intelligent, and successful. A) sincerity B) excitement C) competence D) sophistication E) ruggedness

C

26) A given percentage increase in consumer demand can lead to a larger percentage increase in the demand for plant and equipment necessary to produce the additional output. Economists refer to this as ________. A) derived demand B) inelastic demand C) the acceleration effect D) a straight rebuy E) the sales cycle

C

3) How can a marketer overcome the negative effects of commoditization? A) convince target consumers that the firm's products are as good as those of competitors B) convince target consumers that price is irrelevant in determining quality C) convince target consumers that the firm's products are different from those of competitors D) convince target customers that buying the highest-priced product is no guarantee of quality E) convince target customers that all the products in the market are equivalent

C

3) The relatively homogeneous and enduring divisions in a society, which are hierarchically ordered and whose members share similar values, interests, and behavior constitute a ________. A) culture B) subculture C) social class D) family E) group

C

31) The business buyer has to make the fewest decisions when involved in a ________. A) modified rebuy B) regular buy C) straight rebuy D) new rebuy E) new task

C

41) "CIVETS" is an acronym for ________. A) Columbia, Indonesia, Vietnam, Egypt, Turkey, and Syria B) China, India, Vietnam, Egypt, Turkey, and South Africa C) Columbia, Indonesia, Vietnam, Egypt, Turkey, and South Africa D) China, India, Vietnam, Egypt, Turkey, and Syria E) Columbia, Indonesia, Vietnam, Egypt, Turkey, and Saudi Arabia

C

91) Define a joint venture and list some of the advantages and disadvantages.

In a joint venture, foreign investors and local investors share ownership and control. A joint venture may be necessary or desirable for economic or political reasons. The foreign firm might lack the financial, physical, or managerial resources to undertake the venture alone; or the foreign government might require joint ownership as a condition for entry. Joint ownership has certain drawbacks. The partners might disagree over investment, marketing, or other policies. Joint ownership can also prevent a multinational company from carrying out specific manufacturing or marketing policies on a worldwide basis.

42) Illustrate the differences between a straight rebuy, a modified rebuy, and a new-task purchase.

In a straight rebuy, the purchasing department reorders on a routine basis and chooses from suppliers on an approved list. In a modified rebuy, the buyer wants to modify product specifications, prices, delivery requirements, or other terms. Lastly, in the new-task purchase, a purchaser buys a product or service for the first time.

93) Briefly describe the advantages of direct investment.

In direct investment, the firm: • secures cost economies in the form of cheaper labor or raw materials • strengthens its image in the host country because it creates jobs • develops a deeper relationship with government and consumers in the host country • retains full control over its investment • assures itself access to the market

43) What is a reference group? Describe three different types of reference groups that can have an impact on a consumer's purchasing behavior.

Reference groups consist of all the groups that have a direct (face-to-face) or indirect influence on attitudes or behavior. Types of reference groups that can impact a consumer's purchasing behavior include membership groups, primary groups, secondary groups, aspirational groups, and dissociative groups. Membership groups are the groups which have a direct influence on the person. Primary groups are the groups with whom the person interacts fairly continuously and informally, such as family, friends, neighbors, and coworkers. Secondary groups tend to be more formal and require less continuous interaction. Aspirational groups are those a person hopes to join; and dissociative groups are those whose values or behavior an individual rejects.

88) Explain the concept of selective retention and its association with marketing.

Selective retention says that consumers are likely to remember good points about a product we like and forget good points about competing products. Selective retention works to the advantage of strong brands. It also means that marketers need to use repetition in sending messages to their target markets to make sure their message is not overlooked.

90) Within the context of the Freudian theory, explain how the laddering technique can be used.

Shape, size, weight, material, color, and brand name can all trigger certain associations and emotions. A technique called laddering can be used to trace a person's motivations from the stated instrumental ones to the more terminal ones. Then the marketer can decide at what level to develop the message and appeal.

115) BEL is a small seller of specialized auto parts, while MES is a large seller of auto parts. Both firms want to approach the same car company with a view to supplying parts to it. How will their approaches differ?

Small sellers like BEL concentrate on reaching the key buying influencers in order to make the most effective use of their small sales force. Large sellers like MES go for multilevel in-depth selling to reach as many participants as possible to increase sales volumes and strengthen relationships.

23) Define the internationalization process' four stages.

Some companies don't act until events thrust them into the international arena. The internationalization process typically has four stages: no regular export activities; export via independent representatives (agents); establishment of one or more sales subsidiaries; and finally, establishment of production facilities abroad.

120) What do you understand by vendor-managed inventory (VMI)?

Some companies go further and shift the ordering responsibility to their suppliers in systems called vendor-managed inventory (VMI). These suppliers are privy to the customer's inventory levels and take responsibility for replenishing automatically through continuous replenishment programs.

20) Most companies would prefer to remain domestic if their domestic market were large enough. Yet several factors are drawing more and more companies into the international arena. List some of these factors.

Some of the factors are: • some foreign markets present higher profit opportunities • the company needs a larger customer base to achieve economies of scale • the company wants to reduce its dependence on any one market • the company decides to counterattack global competitors in their home markets • customers are going abroad and require international servicing

146) Vertical coordination can facilitate stronger customer-seller ties but at the same time may increase the risk to the customer's and supplier's specific investments. What are specific investments and why are they risky?

Specific investments are those expenditures tailored to a particular company and value chain partner. These might include investments in company-specific training, equipment, and operating procedures or systems. Because these investments are partially sunk, they lock the firm that makes them into a particular relationship. A buyer may be vulnerable to holdup because of switching costs; a supplier may be more vulnerable to holdup in future contracts because of dedicated assets and/or expropriation of technology/knowledge.

149) Some types of products travel better across borders than others. What types of products are most likely to be successful as straight extensions?

Straight extension introduces the product in the foreign market without any changes. It has been successful with cameras, consumer electronics, and many machine tools.

116) With reference to online buying, what are vertical markets? Give an example of a vertical market.

Student answers will vary. Companies buying industrial products such as plastics, steel, or chemicals or services such as logistics or media can go to specialized Web sites (called e-hubs). Plastics.com allows plastics buyers to search the best prices among thousands of plastics sellers.

119) Explain risk and gain sharing with the help of an example.

Student answers will vary. Risk and gain sharing can offset price reductions that customers request. Suppose Medline, a hospital supplier, signs an agreement with Highland Park Hospital promising $350,000 in savings over the first 18 months in exchange for getting a tenfold increase in the hospital's share of supplies. If Medline achieves less than this promised savings, it will make up the difference. If Medline achieves substantially more than promised, it participates in the extra savings.

112) Explain with examples, the concept of solution selling.

Student answers will vary. Solution selling approaches buyers from a solutions-to-problems approach rather than a product-purchase approach. Three forms include: 1. solutions to enhance customer revenues, e.g., Hendrix UTD has used its sales consultants to help farmers deliver an incremental animal weight gain of 5 percent to 10 percent over competitors 2. solutions to decrease customer risks, e.g., ICI Explosives formulated a safer way to ship explosives for quarries 3. solutions to reduce customer costs, e.g., W.W. Grainger employees work at large customer facilities to reduce materials-management costs.

136) Define sensory marketing and identify at least one consideration for each of the five senses.

Student Answers will vary. Sensory marketing is marketing that engages the consumer's senses to affect their perceptions, judgments, and behaviors. Touch is the first sense to develop and the last sense we lose with age. People vary in their need for touch, and Peck and Childers have developed a scale to capture those differences. In one application, high need-for-touch (NFT) individuals were more confident and less frustrated about their product evaluations when they could actually touch a product than when they could only see it. For low NFT individuals, touching did not matter one way or another. Written product descriptions helped alleviate the NFT's level of frustration, though only for more concrete product attributes (such as the weight of a cell phone). Smell — Scent-encoded information has been shown to be more durable and last longer in memory than information encoded with other sensory cues. People can recognize scents after very long lapses of time, and using scents as reminders can cue all kinds of autobiographical memories. Pleasant scents have also been shown to enhance evaluations of products and stores. Consumers also take more time shopping and engage in more variety seeking in the presence of pleasant scents. Sound (audition) — Marketing communications by their very nature are often auditory in nature. Even the sounds that make up a word can carry meanings. One study showed that Frosh-brand ice cream sounded creamier than Frish-brand ice cream. Language too can have its own associations. In bilingual cultures where English is the second language — such as Japan, Korea, Germany, and India — use of English in ads signals modernity, progress, sophistication, and a cosmopolitan identity. Ambient music in a store has also been shown to influence consumer mood, time spent in a location, perception of time spent in a location, and spending. Taste — Humans can distinguish only five pure tastes: sweet, salty, sour, bitter, and umami. Umami comes from Japanese food researchers and stands for "delicious" or "savory" as it relates to the taste of pure protein or monosodium glutonate (MSG). Taste perceptions themselves depend on all the other senses — the way a food looks, feels, smells, and sounds to eat. Thus many factors have been shown to affect taste perceptions, including physical attributes, brand name, product information (ingredients, nutritional information), product packaging, and advertising. Foreign-sounding brand names can improve ratings of yogurt, and ingredients that sound unpleasant (balsamic vinegar or soy) can affect consumers taste perceptions if disclosed before product consumption. Vision — Visual effects have been studied in detail in an advertising context. Many visual perception biases or illusions exist in day-to-day consumer behavior. For example, people judge tall thin containers to contain more volume than short fat ones, but after drinking from the containers, people actually feel they have consumed more from short fat containers than tall thin containers, over-adjusting their expectations. Even something as simple as the way a mug is depicted in an ad can affect product evaluations. A mug photographed with the handle on the right side was shown to elicit more mental stimulation and product purchase intent from right-handed people than if shown with the handle on the left side.

154) Your company manufactures travel bags and is keen on establishing its presence in the Indian market. If you were given the responsibility to decide the pricing strategy the company should use, what would you decide? Explain your answer.

Student answers will vary. However, they must bear in mind that India is an emerging country and presents its unique set of opportunities and challenges. Hence, strategies that have yielded impressive results in the United States may not be as successful in India. Targeting the affluent middle-class and the rich upper class, the company needs to know how competing products are priced in India. The best way forward would be to use a cost-based pricing strategy. This is because, if the distribution network is long and not as efficient, then it can add to the cost of making the product available to the consumer. However, a cost-based strategy would work well only if the company can ensure competitive prices even after accounting for higher distribution costs.

150) You work for a company that produces and markets apparel for men and women, and is planning to enter the Chinese market. If you were asked if the company should opt for a straight extension or a product adaptation, what would you choose, and why?

Student answers will vary. If a foreign apparel maker chooses to enter the Chinese market, they will have to choose product adaptation. A straight extension would imply no change in product or communication strategy. However, though an increasing number of people in China understand English, the company will probably have to make some changes in its marketing mix depending on what medium of advertising is more popular and can access more people. As far as the market offerings are concerned, clothes will have to be resized as the Chinese are short in stature, as compared to Americans. They may also have different preferences of color and design than their American counterparts.

144) "No matter which nation a person belongs to, people's inherent needs and requirements are essentially the same." Do you agree with this statement? How relevant is this statement in the context of marketing?

Student answers will vary. The statement may be true to the extent that the essential requirements, our physiological needs, are indeed the same. However, there is no denying that people's choices and preferences are shaped by the society they live in. No matter how much nations and regions integrate their trading policies and standards, each nation still has unique features. Its readiness for different products and services, and its attractiveness as a market, depend on its economic, political-legal, and cultural environments. In the context of marketing, therefore, it is important to understand these differences and identify the precise need a particular product or service satisfies to be able to position the product effectively. Straight extensions may not always work, nor will standardized communication strategies in countries that are significantly different.

147) Discuss three advantages of standardizing the marketing mix worldwide.

Students should identify any three of these. Standardizing the marketing mix: • helps the company achieve economies of scale in production and distribution • lowers marketing costs • increases power and scope • fosters consistency in the brand image • offers the company the ability to leverage good ideas quickly and efficiently • allows for uniformity in marketing practices

146) Discuss three disadvantages of standardizing the marketing mix worldwide.

Students should identify any three of these. Standardizing the marketing mix: • ignores differences in consumer needs, wants, and usage patterns for products • ignores differences in consumer response to marketing-mix elements • ignores differences in brand and product development and the competitive environment • ignores differences in the legal environment • ignores differences in marketing institutions • ignores differences in administrative procedures

44) Describe the practices of systems buying and systems contracting.

Systems buying involves buying a total solution to a problem from one seller. Systems contracting is a variant of systems selling in which a single supplier provides the buyer with his entire requirement for maintenance, repair, and operating supplies. During the contract period, the supplier manages the customer's inventory.

110) Companies are increasingly reducing the number of suppliers they utilize, and there is a trend toward single sourcing.

TRUE

13) Global firms plan, operate, and coordinate their activities on a worldwide basis.

TRUE

132) Communication adaptation occurs when companies change marketing communications for each local market.

TRUE

14) Given the highly competitive nature of business-to-business markets, the biggest enemy to marketers here is commoditization.

TRUE

142) Corporate credibility depends on corporate expertise, corporate trustworthiness, and corporate likability.

TRUE

151) Prospect theory maintains that consumers frame decision alternatives in terms of gains and losses according to a value function.

TRUE

64) "Toughies" are old school buyers who pit sellers against one another.

TRUE

85) Memory is a very constructive process. This means people do not remember information and events completely and accurately and often remember only bits and pieces that they fill in based on whatever else they know.

TRUE

10) The business market consists of all the organizations that acquire goods and services used in the production of other products or services that are sold, rented, or supplied to others.

TRUE

101) Framing occurs when customers are given a perspective or point of view that allows the firm to "put its best foot forward."

TRUE

105) On spot electronic markets, prices of products or commodities change by the minute.

TRUE

107) With respect to assessing customer value, in conjoint analysis customers are asked to rank their preference for alternative market offerings or concepts.

TRUE

108) One of the forms of solution selling is to provide solutions to enhance customer revenues.

TRUE

109) Risk and gain sharing can offset price reductions that customers request.

TRUE

11) A global profile is essential for firms like Prada, Gucci, and Louis Vuitton to profitably grow because the addressable market is small.

TRUE

128) The expectancy-value model of attitude formation posits that consumers evaluate products and services by combining their brand beliefs according to importance.

TRUE

129) If a company finds that a consumer has chosen a competitive product over their company's offering, one way to get the consumer back could be by developing a strategy wherein the company "shifts the buyer's ideals" on one or more levels.

TRUE

13) Business buyers often select suppliers who also buy from them.

TRUE

131) Volvo has the reputation of being one of the safest cars on the road. For those that value safety, Volvo would be the logical choice. This is an example of the lexicographic heuristic of consumer choice.

TRUE

133) If Kellogg's offered different varieties of breakfast cereals in India as compared to Australia, and also positioned its products differently in the two countries, then Kellogg's would be engaging in dual adaptation.

TRUE

133) Some brands have tapped into the hip-hop culture to market a brand in a modern multicultural way, as Apple did with its iPod.

TRUE

134) The use of media may require international adaptation because media availability varies from country to country.

TRUE

135) When companies sell on the Internet, price becomes transparent, and price differentiation between countries declines.

TRUE

136) If a company charges its subsidiary in a foreign country too low a transfer price, it can be accused of dumping.

TRUE

137) Gray market activities harm distributor relations, tarnish the manufacturer's brand equity, and undermine the integrity of the distribution channel.

TRUE

138) Web-crawling technology searches for counterfeit storefronts and sales by detecting domain names similar to legitimate brands.

TRUE

139) As required levels of distribution increase, so do customer prices relative to the importer's price.

TRUE

140) Coors brand slogan "Turn it loose" translated into Spanish was interpreted as "suffer from diarrhea," which is an example of why marketers may need to change brand elements when they launch products and services globally.

TRUE

141) Comparative advertising is not acceptable in Japan, and is illegal in India and Brazil.

TRUE

141) In buyer-seller relationships, the contractual transaction generally shows low levels of trust, cooperation, and interaction.

TRUE

143) One of the problems facing business-to-business on the Web is that many firms often impose more stringent requirements on their online business partners than they do on non-online partners.

TRUE

15) The business marketer normally deals with far fewer, large buyers than does the consumer marketer.

TRUE

157) The US government is the largest customer in the world.

TRUE

16) Most companies would prefer to remain domestic if their domestic market were large enough.

TRUE

162) People are often ethnocentric and favorably predisposed to their own country's products, unless they come from a less developed country.

TRUE

17) A global firm is a firm that operates in more than one country and captures R&D, production, logistical, marketing, and financial advantages not available to purely domestic competitors.

TRUE

18) The total demand for many business goods and services is inelastic; that is, not greatly affected by price changes.

TRUE

19) The first task of the internationalization process is moving a company from no regular exports to regular export activities.

TRUE

27) An example of a subculture would be a person's geographic region.

TRUE

28) Groups that have an indirect influence on a person's attitude or behavior can be a part of his or her reference groups.

TRUE

29) Members within a social class tend to behave more alike compared to members from two different social classes.

TRUE

32) A person's position in a group is defined in terms of role and status.

TRUE

33) Marketers need to be aware of the status-symbol potential of brands because people usually choose products which reflect their role and their actual or desired status in a society.

TRUE

34) It often makes sense to operate in fewer countries, with a deeper commitment and penetration in each.

TRUE

35) In the straight rebuy, "out-suppliers" try to get a small order and then enlarge their purchase share over time.

TRUE

37) Regional economic integration means companies are more likely to enter entire regions at the same time.

TRUE

37) The business buyer makes the fewest decisions in the straight rebuy situation and the most in the new-task situation.

TRUE

38) Brand personality is the specific mix of human traits that may be attributed to a particular brand.

TRUE

69) In the buying center, several people can occupy a given role such as user or influencer, and one person may play multiple roles.

TRUE

71) Sigmund Freud assumed that the psychological forces shaping people's behavior are largely unconscious, and that people cannot fully understand their motivations.

TRUE

73) In Maslow's Hierarchy of Needs, a sense of belonging and love are examples of social needs.

TRUE

77) According to Herzberg's two-factor theory, satisfiers will make the major difference as to which brand the customer buys.

TRUE

79) Once a company decides to target a particular country, it must determine the best mode of entry. Its broad choices are indirect exporting, direct exporting, licensing, joint ventures, and direct investment.

TRUE

79) People are more likely to notice stimuli whose deviations are large in relation to the normal size of the stimuli.

TRUE

81) Selective retention works to the advantage of strong brands.

TRUE

82) Because of selective retention, we are likely to forget about the good points of competing products.

TRUE

83) In licensing, the licensor issues a license to a foreign company to use an item of value for a fee or royalty.

TRUE

84) Brand associations consist of all brand-related thoughts, feelings, perceptions, images, experiences, beliefs, attitudes, and so on that become linked to the brand node.

TRUE

85) Management contracts offer foreign owners the opportunity to manage businesses for a fee.

TRUE

86) Contract manufacturing is one mode of licensing that allows a company to start faster, with the opportunity to form a partnership or buy out the local manufacturer later.

TRUE

87) The ultimate form of foreign investment is direct ownership of foreign-based assembly or manufacturing facilities.

TRUE

9) Organizational buying is the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.

TRUE

149) Researchers have found that buyer-supplier relationships can be classified into eight different categories. What category would be appropriate for a relationship where, although bonded by a close, cooperative relationship, the seller adapts to meet the customer's needs without expecting much adaptation or change on the part of the customer in exchange?

The appropriate category would be the "customer is king" category.

43) What are the three different types of buying situations faced by a typical business buyer?

The business buyer faces many decisions in making a purchase. Three types of buying situations are the straight rebuy, modified rebuy, and new task. • Straight rebuy: In a straight rebuy, the purchasing department reorders supplies such as office supplies and bulk chemicals on a routine basis and chooses from suppliers on an approved list. The suppliers make an effort to maintain product and service quality and often propose automatic reordering systems to save time. "Out-suppliers" attempt to offer something new or exploit dissatisfaction with a current supplier. Their goal is to get a small order and then enlarge their purchase share over time. • Modified rebuy: The buyer in a modified rebuy wants to change product specifications, prices, delivery requirements, or other terms. This usually requires additional participants on both sides. The in-suppliers become nervous and want to protect the account. The out-suppliers see an opportunity to propose a better offer to gain some business. • New task: A new-task purchaser buys a product or service for the first time (an office building, a new security system). The greater the cost or risk, the larger the number of participants, and the greater their information gathering, the longer the time to a decision.

46) Which type of buying situation would be preferred if the management wants to minimize decision-making time and effort.

The business buyer makes the fewest decisions in the straight rebuy situation and the most in the new-task situation. Hence, a straight rebuy situation would be preferable.

113) What are the methods available to the buyer to review the performance of the chosen supplier? What advantage does performance review offer to the buyer?

The buyer periodically reviews the performance of the chosen supplier(s) using one of three methods. The buyer may contact end users and ask for their evaluations, rate the supplier on several criteria using a weighted-score method, or aggregate the cost of poor performance to come up with adjusted costs of purchase, including price. The performance review may lead the buyer to continue, modify, or end a supplier relationship. Many companies have set up incentive systems to reward purchasing managers for good buying performance, in much the same way sales personnel receive bonuses for good selling performance. These systems lead purchasing managers to increase pressure on sellers for the best terms.

45) If you were a purchasing agent facing a modified rebuy situation, how would you describe that situation?

The buyer wants to modify product specifications, prices, delivery requirements, or other items. The modified rebuy usually involves additional participants on both sides.

147) Researchers have found that buyer-supplier relationships differed according to four factors: availability of alternatives; importance of supply; complexity of supply; and supply market dynamism. Based on these four factors, they classified buyer-supplier relationships into eight different categories. What are those categories?

The categories are: • basic buying and selling • bare bones • contractual transaction • customer supply • cooperative systems • collaborative • mutually adaptive • customer is king For additional information, see the specific chapter section.

19) Business markets have several characteristics that contrast sharply with those of consumer markets. Name and briefly characterize five of those characteristics.

The characteristics of business markets as compared to consumer markets are: • fewer, larger buyers • close supplier-customer relationship • professional purchasing • multiple buying influences • multiple sales calls • derived demand • inelastic demand • fluctuating demand • geographically concentrated buyers • direct purchasing See chapter section for brief characterizations.

55) Describe the custo Brasil ("the cost of Brazil").

The cost of transporting products eats up nearly 13 percent of Brazil's GDP, five percentage points more than in the United States. Unloading a container is twice as expensive as in India and takes three times longer than in China. Strict and costly labor laws have inspired a massive underground economy that McKinsey estimated accounted for as much as 40 percent of Brazil's gross domestic product, taking about half of all urban jobs. Crime and corruption are still problems.

20) Explain how fluctuating demand impacts business markets differently from consumer markets.

The demand for business goods and services tends to be more volatile than the demand for consumer goods and services. A given percentage increase in consumer demand can lead to a much larger percentage increase in the demand for plant and equipment necessary to produce additional output. Economists refer to this as the acceleration effect.

23) Explain the concept of derived demand.

The demand for business goods is ultimately derived from the demand for consumer goods. Consumer demand for business' end products drives their production. Production of those end products drives business demand for the inputs to those production processes.

141) How is the expectancy-value model used in the evaluation of alternatives as a consumer engages in a buying process?

The expectancy-value model of attitude formation posits that consumers evaluate products and services by combining their brand beliefs — the positives and negatives — according to importance. The model assists consumers in making choices.

group. We can distinguish between two family categorization in the buyer's life. Name the two families and their impact on buying behavior.

The family of orientation consists of parents and siblings. From parents a person acquires an orientation toward religion, politics, and economics and a sense of personal ambition, self-worth, and love. Even if the buyer no longer interacts very much with his or her parents, their influence on behavior can be significant. A more direct influence on everyday buying behavior is the family of procreation — namely, one's spouse and children.

22) Outline the major decisions that a firm must undergo in making a decision to market internationally.

The first step is deciding whether to go abroad; the second step is deciding which markets to enter; the third step is deciding how to enter each market; the fourth step is deciding on the marketing program; and the final step is deciding on the marketing organization.

142) Most brands are adapted to some extent to reflect significant differences in consumer behavior, brand development, competitive forces, and the legal or political environment. Identify the five international product and communication strategies available to firms that expand their businesses to foreign countries.

The five international product and communication strategies are as follows:

89) Once a company decides to target a particular country, it must determine the best mode of entry. Each of its market entry strategies involves more commitment, risk, control, and profit potential. List these market entry strategies in order from low risk to high risk.

The five modes of entry into foreign markets are as follows: 1. indirect exporting 2. direct exporting 3. licensing 4. joint ventures 5. direct investment The level of risk involved in each rises steadily, with indirect exports entailing minimum risk, and direct investment involving the maximum risk.

138) Through market research a consumer gathers information about the competing brands of a product and their features. The consumer then advances through four sets with respect to brands before a decision is reached. What are those four sets?

The four sets are: 1. total set 2. awareness set 3. consideration set 4. choice set

47) In systems buying, the US government often solicits bids from prime contractors. What do prime contractors do?

The government solicits bids from prime contractors who assemble the package or system. The contractor who was awarded the contract would be responsible for bidding out and assembling the system's subcomponents from second-tier contractors. Thus, the prime contractor provides a turnkey solution.

155) Define the gray market.

The gray market consists of branded products diverted from normal or authorized distribution channels in the country of product origin or across international borders.

159) Your organization is considering selling its products to the institutional market. What type of customers will you be making your appeals to?

The institutional market consists of schools, hospitals, nursing homes, prisons, and other institutions that must provide goods and services to people in their care.

93) Perception is the process by which an individual selects, organizes, and interprets information inputs to create a meaningful picture of the world. For a marketer, what is the key point of perception?

The key point is that perceptions can vary widely among individuals exposed to the same reality. In marketing, perceptions are more important than the reality, as it is perceptions that will affect consumers' actual behavior.

94) What does the learning theory teach marketers about demand for products?

The learning theory teaches marketers that they can build demand for a product by associating it with strong drives, using motivating cues, and providing positive reinforcement.

142) Describe the lexicographic heuristic used to make consumer choices.

The lexicographic heuristic is in use when the consumer chooses the best brand on the basis of its perceived most important attribute.

21) The business market consists of all the organizations that acquire goods and services used in the production of other products or services that are sold, rented, or supplied to others. List the major industries that make up the business market.

The major industries making up the business market are agriculture, forestry, and fisheries; mining; manufacturing; construction; transportation; communication; public utilities; banking, finance, and insurance; distribution; and services.

73) List the seven roles played by members of a buying center.

The roles are: 1. initiators 2. users 3. influencers 4. deciders 5. approvers 6. buyers 7. gatekeepers

114) Mason's is a supplier of specialty chemicals to a number of companies. The company previously supplied just three big clients, but the CEO is considering targeting the small business market. Selling to small businesses presents a huge opportunity, he says, but some board members disagree, saying it also presents huge challenges. Explain the challenges the firm might face in targeting small businesses.

The small business market is large and fragmented by industry, size, and number of years of operation. Additionally, small business owners are notably averse to long-range planning and have an "I'll buy it when I need it" decision-making style.

122) In the buygrid framework model, where the major stages of the industrial buying process are listed and characterized, supplier selection is an important process. What follows supplier selection and what occurs in this phase?

The step that follows supplier selection is order-routine specification. After selecting suppliers, the buyer negotiates the final order, listing the technical specifications, the quantity needed, the expected time of delivery, return policies, warranties, and so on.

153) What are the choices available to companies when setting prices to avoid price escalation problems?

The three choices that companies have to set prices in international markets are: 1. setting a uniform price everywhere 2. setting a market-based price in each country 3. setting a cost-based price in each country

148) As a seller in the business market, you have promised your customers that you have corporate credibility as one of your corporate goals. What three factors will have some bearing on whether you will be able to meet your goal and promise?

The three factors are: 1. corporate expertise 2. corporate trustworthiness 3. corporate likability In other words, a credible firm is seen as being good at what it does, it keeps its customers' best interests in mind, and it is enjoyable to work with.

87) People can emerge with different perceptions of the same object because of three perceptual processes. List and briefly describe these processes.

The three processes are selective attention, selective distortion, and selective retention. Selective attention occurs because a person cannot possibly attend to all the stimuli that he or she is exposed to during an average day. Some will be screened out. Selective distortion is the tendency to interpret information in a way that will fit our perceptions. Selective retention occurs because people will fail to register much information to which they are exposed in memory, but will tend to retain information that supports their attitudes and beliefs.

117) E-procurement Web sites are organized around two types of e-hubs. If you were in the advertising business and were seeking to take advantage of e-procurement, what type of e-hub should be constructed by your company?

The two types of hubs are vertical hubs (centered on industries such as plastics) and functional hubs (centered on functions such as advertising). Therefore, you would construct a functional hub.

151) Product adaptation alters the product to meet local conditions or preferences. Identify four levels of adaptation.

There are several levels of adaptation, including regional versions, country versions, city versions, and retailer versions.

21) What are the various risks that a company must consider before making a decision to enter foreign markets?

These risks are: • the company might not understand foreign customers' preferences and could fail to offer a competitively attractive product • the company might not understand the foreign country's business culture • the company might underestimate foreign regulations and incur unexpected costs • the company might lack managers with international experience • the foreign country might change its commercial laws, devalue its currency, or undergo a political revolution and expropriate foreign property

150) Explain the term opportunism with respect to business relationships.

When buyers cannot easily monitor supplier performance, the supplier might shirk or cheat and not deliver the expected value. Opportunism is "some form of cheating or undersupply relative to an implicit or explicit contract." It may entail blatant self-serving and deliberate misrepresentation that violates contractual agreements.

156) Describe the whole-channel concept of international marketing.

Many US manufacturers think their job is done once the product leaves the factory. They should instead note how the product moves within the foreign country and take a whole-channel view of distributing products to final users. The whole-channel concept consists of: • a seller • seller's international marketing headquarters • channels between nations • channels within foreign nations • final buyers Thus, there are three links between the seller and the final buyer. In the first, seller's international marketing headquarters, the export department or international division makes decisions about channels and other marketing activities. The second link, channels between nations, gets the products to the borders of the foreign nation. Decisions made in this link include the types of intermediaries (agents, trading companies), type of transportation (air, sea), and financing and risk management. The third link, channels within foreign nations, gets products from their entry point to final buyers and users.

90) Explain how marketers are using the Web for international business.

Marketers are using the Web to attract new customers outside their home countries, to support existing customers who live abroad, to source from international suppliers, and to build global brand awareness. These companies adapt their Web sites to provide country-specific content and services to their best potential international markets, ideally in the local language.

140) What do you understand by the term market partitioning?

Marketers need to identify the hierarchy of attributes that guide consumer decision making in order to understand different competitive forces and how these various sets get formed. This process of identifying the hierarchy is called market partitioning.

47) An opinion leader is the person in informal, product-related communications who offers advice or information about a specific product or product category, such as which of several brands is best or how a particular product may be used. According to the text, how do marketers try to reach opinion leaders?

Marketers try to reach opinion leaders by identifying demographic and psychographic characteristics associated with opinion leadership, identifying the media read by opinion leaders, and directing messages at opinion leaders.

91) Abraham Maslow sought to explain why people are driven by particular needs at particular times. Describe Maslow's hierarchy of needs. How does Maslow's theory help marketers?

Maslow's hierarchy of needs in order of importance are physiological needs, safety needs, social needs, esteem needs, and self-actualization needs. Maslow's theory helps marketers understand how various products fit into the plans, goals, and lives of consumers.

152) What is mental accounting? What, according to Thaler, are the core principles on which mental accounting is based? Explain with examples.

Mental accounting refers to the way consumers code, categorize, and evaluate financial outcomes of choices. Formally, it is "the tendency to categorize funds or items of value even though there is no logical basis for the categorization, e.g., individuals often segregate their savings into separate accounts to meet different goals even though funds from any of the accounts can be applied to any of the goals." According to Chicago's Thaler, mental accounting is based on a set of core principles: 1. Consumers tend to segregate gains. When a seller has a product with more than one positive dimension, it's desirable to have the consumer evaluate each dimension separately. Listing multiple benefits of a large industrial product, for example, can make the sum of the parts seem greater than the whole. 2. Consumers tend to integrate losses. Marketers have a distinct advantage in selling something if its cost can be added to another large purchase. House buyers are more inclined to view additional expenditures favorably given the high price of buying a house. 3. Consumers tend to integrate smaller losses with larger gains. The "cancellation" principle might explain why withholding taxes from monthly paychecks is less aversive than large, lump-sum tax payments — the smaller withholdings are more likely to be absorbed by the larger pay amount. 4. Consumers tend to segregate small gains from large losses. The "silver lining" principle might explain the popularity of rebates on big-ticket purchases such as cars.

158) One of the chief complaints from government decision makers is that vendors have not done their homework. What are some ways a vendor can avoid this perception?

Pay attention to cost justification, a major activity for government procurement professionals. Help government agencies see the bottom-line impact of products. Demonstrate useful experience and successful past performance through case studies, especially with other government organizations.

45) Each person has personality characteristics that influence his or her buying behavior. What does personality mean in terms of buying traits?

Personality is often described in terms of such buying traits as self-confidence, dominance, autonomy, deference, sociability, defensiveness, and adaptability. Personality can be a useful variable in analyzing consumer brand choices. The idea is that brands also have personalities, and consumers are likely to choose brands whose personalities match their own.

114) Even if consumers form brand evaluations, two general factors can intervene between the purchase intention and the purchase decision: one is unanticipated situational factors; what is the other factor? A) amount of purchasing power B) attitudes of others C) short-term memory capabilities D) ability to return merchandise E) the self-concept

B

121) Existence of gray markets leads to which of the following outcomes? A) They make the distribution channel stronger. B) They create a free-rider problem making legitimate distributors' investments in supporting a manufacturer's product less productive. C) Goods sold in grey markets are always counterfeit. D) Goods sold in grey markets come with standard product warranties. E) Taxes imposed on grey market products are very high.

B

123) A consumer is persuaded to buy a product by a message that requires little thought and is based on an association with a brand's positive consumption experiences from the past. In this situation, the consumer used a ________ route to arrive at this purchase decision. A) central B) peripheral C) behavioral D) subjective E) objective

B

127) If PepsiCo charges what each country could afford, ignoring cost differences from country to country, it would be using a(n) ________ price. A) uniform B) market-based C) cost-based D) escalation E) skimming

B

132) Which of the following relationships is characterized by much trust and commitment leading to a true partnership? A) mutually adaptive B) collaborative C) basic buying and selling D) customer supply E) cooperative systems

B

138) The type of buyer-supplier relationship in which buyers and sellers make many relationship-specific adaptations, but without necessarily achieving strong trust or cooperation, is referred to as ________. A) the customer is king B) mutually adaptive C) collaborative D) contractual transaction E) customer supply

B

57) ________ is the process by which we select, organize, and interpret information inputs to create a meaningful picture of the world. A) Consumption B) Perception C) Acculturation D) Assimilation E) Cognitive dissonance

B

85) Business marketers can stimulate problem recognition by ________. A) ensuring a presence in trade directories B) direct mail, telemarketing, and calling on prospects C) encouraging the Better Business Bureau to release statistics D) using consumer advertising E) conducting surveys of existing customers

B

96) When Kraft blends different coffees for the British (who drink coffee with milk), the French (who drink it black), and Latin Americans (who want a chicory taste), it is engaged in ________. A) straight extensions B) product adaptation C) retailer versions D) backward invention E) forward invention

B

100) In collectivist societies, ________. A) all property is owned by the government B) the self-worth of the individual is rooted more in the social system than in individual achievement C) the culture is dominated by the need to maintain low power distance and reduce income inequality D) the culture is dominated by a nurturing attitude as opposed to an assertive attitude E) people are highly risk-averse

B

103) A(n) ________ is a descriptive thought that a person holds about something. A) attitude B) belief C) desire D) feeling E) emotion

B

104) A market survey by LG revealed that Indians preferred not to mix vegetarian and non-vegetarian food items. Hence, LG refrigerators in India include a special convertible box with separate compartments to store and control the temperature of vegetarian and non-vegetarian food. This is an example of customizing ________ to local needs. A) advertising media B) product features C) packaging D) brand name E) labeling

B

107) For the launch of "Trema," your company's new pocket organizer that can also be used as a cell phone, the CMO has decided that the product can be launched in international markets without any changes in its features or the marketing strategy. This introduction can be described as a ________. A) dual adaptation B) straight extension C) product adaptation D) forward invention E) backward invention

B

110) Your firm has decided to enter the international market with your product called "Trema," a combination of a pocket organizer and cell phone. Even though the product has been a huge success in the home country, market research suggests some changes may be required before it can be introduced in Europe. Your CMO is of the opinion that the product requires certain extra features and the product will also have to be marketed differently. Your CMO is advocating ________. A) product invention B) dual adaptation C) straight extension D) forward adaptation E) product standardization

B

143) Name the three choices that companies have for setting prices in different countries.

Companies have three choices for setting prices in different countries: 1. set a uniform price everywhere 2. set a market-based price in each country 3. set a cost-based price in each country

92) Define psychic proximity and explain why it is important for companies engaged in exporting products.

It is sometimes seen that companies determine which markets to enter on the basis of psychic proximity. Many US firms prefer to sell in Canada, England, and Australia because they feel more comfortable with the language, laws, and culture. Companies should be careful in choosing markets according to cultural distance. Besides overlooking potentially better markets, they may only superficially analyze real differences that put them at a disadvantage.

118) KEK is a supplier of paper and paper products to several businesses. Name some contract restrictions that KEK can use to protect its margins when dealing with price-oriented buyers.

KEK can handle price-oriented buyers by setting a lower price but establishing restrictive conditions, such as: limited quantities, no refunds, no adjustments, and no services.

48) Systems selling is a key industrial marketing strategy in bidding to build large-scale industrial projects. Competition for these projects is fierce. What are the main areas of competition for these project engineering firms?

Primary competitive areas include: price, quality, reliability, and other attributes to win contracts.