Ch. 16 international business

The expertise, competencies, and skills of established retailers in a nation, and their ability to sell and support the products of international business are referred to as channel exclusivity. True False

FALSE

The shorter the distribution channel, the more intermediaries there are that must be persuaded to carry the product for it to reach the consumer. True False

FALSE

In terms of the differences between countries with respect to distribution systems, there is a tendency for lesser retail concentration in developed countries. True False

FALSE

In which kind of retail system do a few retailers supply most of the market? A. Fragmented B. Dispersed C. Isolated D. Concentrated E. Exclusive

D. Concentrated

Which of the following has resulted in a dramatic shortening of product life cycles? A. Acceleration of the pace of technological change B. Lack of domestic competition C. Affluence of customers D. An increase in the number of educated consumers E. Removal of trade barriers

A. Acceleration of the pace of technological change

Which of the following factors constrains the globalization of markets? A. Differences in technical standards B. Uniform standard of living C. Cosmopolitan tastes and preferences D. Market segments that transcend national borders E. Convergence of cultures

A. Differences in technical standards

Which of the following is a definition of market segmentation? A. It refers to identifying distinct groups of customers whose needs, wants, and purchasing behavior differ from others. B. It refers to developing existing market segments and increasing market share within those segments. C. It refers to identifying the need for new products in existing markets and developing products for those markets. D. It refers to identifying new markets that can buy existing products. E. It refers to identifying the needs of a new market and developing new products for that market.

A. It refers to identifying distinct groups of customers whose needs, wants, and purchasing behavior differ from others.

Which of the following is an important attribute for a product development team to function effectively and meet all of its development milestones? A. It should be led by a "heavyweight" project manager who has high status within the organization. B. The team members should always be physically in diverse locations in order to cover multiple bases. C. It should have preset processes for communication and conflict resolution that are developed by top management. D. It should have at least three members from each key function included. E. Its team members should be a part of more than two cross-functional teams.

A. It should be led by a "heavyweight" project manager who has high status within the organization.

Which of the following is a characteristic of fragmented retail systems? A. Long channels of distribution B. Single-layer distribution systems C. Lower sales call to sales order ratio D. Relatively smaller sales force compared to concentrated retail systems E. Promotion of direct interaction between retailers and firms

A. Long channels of distribution

Which of the following factors helps a firm shorten channel length? A. The entry of large discount superstores B. A firm's insistence on dealing with wholesalers instead of manufacturers C. Fragmentation of a retail system D. A small sales force E. Smaller sales orders generated from sales calls

A. The entry of large discount superstores

Which of the following is true of choosing a distribution strategy? A. The optimal distribution strategy is determined by the relative costs and benefits of each alternative, which vary from country to country. B. A choice of distribution strategy does not determine which channel the firm will use to reach potential consumers. C. The channel length, the final selling price, and the firm's profit margin are completely independent of each other. D. The longer a distribution channel, the lower the aggregate markup. E. The longer a distribution channel, the lower the price consumers are charged for the final product.

A. The optimal distribution strategy is determined by the relative costs and benefits of each alternative, which vary from country to country.

The number of intermediaries between the product (or manufacturer) and the consumer is referred to as: A. channel length. B. channel quality. C. channel exclusivity. D. channel fragmentation. E. channel concentration.

A. channel length.

A push strategy is emphasized when: A. distribution channels are short. B. sufficient print and electronic media are available to carry the marketing message. C. consumers have a low level of literacy. D. the products being sold are consumer goods. E. professional services are being offered.

A. distribution channels are short.

Which industry is often thought of as one in which global standardization of the marketing mix is the norm? A. Electronics B. Retail C. Pharmaceutical D. Financial services E. Heavy machinery

D. Financial services

Which strategy refers to the means that a firm chooses for delivering a product to its consumer? A. Pull B. Distribution C. Push D. Communication E. Pricing

B. Distribution

Which retail system has many retailers, no one of which has a major share of the market? A. Concentrated B. Fragmented C. Focused D. Consolidated E. Exclusive

B. Fragmented

Which of the following communication strategies relies primarily on mass media advertising as opposed to personal selling? A. Telemarketing B. Pull strategy C. Push strategy D. Customized advertising E. Point-of-purchase advertising

B. Pull strategy

Which of the following is necessary for a firm to ensure profitable price discrimination? A. The firm must sell a standardized product. B. The firm must be able to keep its national markets separate. C. The firm must encourage other firms and competitors to engage in arbitration. D. Products sold by the firm must have same price elasticities of demand in different countries. E. Products must be sold in countries where a small change in prices produces a large change in demand.

B. The firm must be able to keep its national markets separate.

Who among the following asserted in an article in the Harvard Business Review that modern transportation and communications technologies are facilitating a convergence of certain tastes and preferences among consumers in the more advanced countries of the world? A. Gary Hamel B. Theodore Levitt C. Christopher Bartlett D. Peter Drucker E. C.K. Prahalad

B. Theodore Levitt

According to research, when do consumers usually use the country of origin as a cue when evaluating a product? A. When a firm tries to deemphasize its foreign origins B. When consumers lack detailed knowledge of a product C. When an advertising campaign stresses the positive performance attributes of a product D. When a limited number of messages compete with each other for consumers' attention E. When a firm resorts to personal selling instead of mass media advertising

B. When consumers lack detailed knowledge of a product

If a firm is unable to keep its national markets separate, individuals or businesses may undercut its attempt at price discrimination by engaging in: A. speculation. B. arbitrage. C. dumping. D. predatory pricing. E. forecasting.

B. arbitrage.

Pull strategies tend to be emphasized: A. for complex new products. B. for consumer goods. C. for industrial goods. D. when distribution channels are short. E. when few print or electronic media are available.

B. for consumer goods.

In terms of channel length, the more fragmented the retail system, the less expensive it is for a firm to make contact with each individual retailer. True False

FALSE

Which of the following is true of price discrimination as a part of international pricing strategy? A. The more competitors there are, the lesser consumers' bargaining power will be. B. The more competitors there are, the less likely consumers will be to buy from the firm that charges the lowest price. C. A firm may charge a higher price for its product in a country where competition is limited than in one where competition is intense. D. Many competitors cause low elasticity of demand. E. If a firm raises its prices above those of its competitors, consumers will refuse to switch to the competitors' products.

C. A firm may charge a higher price for its product in a country where competition is limited than in one where competition is intense.

Which of the following communication strategies relies primarily on personal selling rather than mass media advertising? A.Visual merchandising B. Pull strategy C. Push strategy D. Copy testing E. Standardized advertising

C. Push strategy

Other things being equal, the rate of new-product development seems to be greater in countries where: A. more money is spent on marketing instead of applied research. B. consumers demand cheaper products since they are not affluent. C. competition between firms is intense. D. pioneering costs outweigh the disadvantages of being a second mover. E. a large change in prices of a product only produces a small change in demand.

C. competition between firms is intense.

The members of a cross-functional team should have: A. low standing within their respective functions. B. the ability to put functional and national advocacy first. C. the ability to contribute functional expertise. D. the ability to solely focus on the ongoing work of their respective functions. E. the ability to work on several projects simultaneously.

C. the ability to contribute functional expertise.

Which of the following refers to the fact that a firm's pricing strategy in one market may have an impact on its rivals' pricing strategy in another market? A. Dumping B. Predatory pricing C. Leader pricing D. Multipoint pricing E. Price skimming

D. Multipoint pricing

Which of the following is true of price elasticity of demand? A. The price elasticity of demand is only defined by the competitive conditions in a country. B. Demand is said to be inelastic when a large change in price produces a large change in demand. C. Demand is said to be elastic when a large change in price produces a small change in demand. D. Price elasticity tends to be greater in countries with low income levels. E. The elasticity of demand is inversely proportional to the number of competitors offering a particular product.

D. Price elasticity tends to be greater in countries with low income levels.

Which kind of strategy do firms in consumer goods industries that are trying to sell to a large segment of the market generally favor? A. Push B. International C. Lag D. Pull E. Exclusive distribution

D. Pull

Which of the following is a factor that contributes to greater retail concentration in developed countries? A. The number of households owning televisions B. The number of families with two or more children C. An increase in the value of the currency of the country D. The number of households with refrigerators and freezers E. A decrease in per capita income

D. The number of households with refrigerators and freezers

In which of the following conditions does arbitrage occur? A. When a firm offers a product at low prices through discount coupons and promotions B. When a firm sells a product at higher prices to make a profit from relatively fewer sales C. When a firm imports products from a manufacturer and distributes them directly through retail outlets D. When a firm purchases products in a country where prices are lower and resells them in a country where prices are higher E. When a firm prices its products at the least cost, risking losses, in order to grab market share

D. When a firm purchases products in a country where prices are lower and resells them in a country where prices are higher

Which of the following is true of the influence of economic development on consumer preferences? A. The level of economic development does not impact consumer preferences as much as cultural difference does. B. Firms based in highly developed countries do not build extra performance attributes into their products. C. Consumers in less developed nations demand to have extra attributes built into products. D. Consumers in developed countries are often willing to sacrifice their preferred attributes for lower prices. E. Consumers in developed nations are willing to pay more for products that have additional features customized to their tastes.

E. Consumers in developed nations are willing to pay more for products that have additional features customized to their tastes.

Which of the following is an advantage of longer distribution channels? A. Decreased profit margins B. Lower markups C. Lower product prices D. Reduced selling costs in concentrated retail sectors E. Greater market access

E. Greater market access

A measure of the responsiveness of demand for a product to changes in price is known as: A. the demand to price ratio. B. demand and price dynamics. C. price-demand rigidity. D. demand function of pricing. E. price elasticity of demand.

E. price elasticity of demand.

A disadvantage of standardized advertising is that it increases the costs of value creation by spreading the fixed costs of developing the advertisements over many countries. True False

FALSE

Consumers in the most developed countries are often willing to sacrifice their preferred product attributes for lower priced products. True False

FALSE

Firms in consumer goods industries that are trying to sell to a large segment of the market generally favor a push strategy. True False

FALSE

A critical aspect of the marketing function is identifying gaps in the market so that a firm can develop new products to fill those gaps. True False

TRUE

A firm's ability to use a pull marketing strategy is limited in some countries by media availability. True False

TRUE

Dispersing research and development activities to many locations around the world allows a firm to stay close to the center of leading-edge activity to gather scientific and competitive information and to draw on local scientific resources. True False

TRUE

Firms vary their marketing mix from country to country depending on differences in national culture. True False

TRUE

The elasticity of demand for a product in a given country is determined by a number of factors, of which income level and competitive conditions are the two most important. True False

TRUE

There is generally a critical link among channel length, the final selling price, and the firm's profit margin because each intermediary in a channel adds its own markup to the products. True False

TRUE

Differences in government-mandated product standards can rule out mass production and marketing of a standardized product. True False

TURE