Chapter 16
A concentrated retail system is one in which there are many retailers, none of which has a major share of the market.
False
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.
False
A pull strategy refers to a marketing strategy that emphasizes personal selling rather than mass media advertising in the promotional mix.
False
Consumers in the most developed countries are often willing to sacrifice their preferred product attributes for lower priced products.
False
Firms can reduce the failure of product development by ensuring that research and development, marketing, and production functions work independently.
False
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.
False
In terms of pricing strategies, dumping occurs whenever an international firm sells a product for a price that is less than the price charged by domestic producers.
False
In terms of the differences between countries with respect to distribution systems, there is a tendency for lesser retail concentration in developed countries.
False
One benefit of a longer distribution channel is that it cuts selling costs when the degree of fragmentation of the retail sector is less.
False
Predatory pricing and experience curve pricing do not violate antidumping regulations.
False
Predatory pricing exists whenever consumers in different countries are charged different prices for the same product, or for slightly different variations of the product.
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.
False
Which of the following is true of the barriers to international communication?
Fewer firms vie for the attention of prospective customers in developing countries, thus the noise level is lower.
When managers in an international business consider market segmentation in foreign countries, they need to be cognizant of the differences between countries in the structure of market segments.
True
Algonquin Cosmetics is deciding on its marketing mix to enter Brazil. It is deciding on the means for delivering the product to the consumer. What strategy is Algonquin Cosmetics working on?
distribution
A push strategy is emphasized when
distribution channels are short
In the context of strategic pricing, _____ takes place whenever a firm sells a product for a price that is less than the cost of producing it.
dumping
What kind of demand is seen when a small change in price produces a large change in demand?
elastic
The sales manager for Smith Exports is deciding on the firm's distribution strategy in several markets. He wants to know which factor is likely to shorten channel length in a particular country. Which of the following factors helps a firm shorten channel length?
entry of large discount superstores
The Jacoby Winery from California's Sonoma Valley is trying to enter the wine market in France. To the company's surprise, it found the France wine distribution channel difficult to access as an outsider. Which kind of distribution channel is difficult for outsiders to access?
exclusive
If a firm prices low worldwide in an attempt to build global sales volume as rapidly as possible, even if this means taking large losses initially, what kind of strategy is it pursuing?
experience curve pricing
Which of the following pricing strategies can run afoul of antidumping regulations?
experience curve pricing
Which industry is often thought of as one in which global standardization of the marketing mix is the norm?
financial services
Pull strategies tend to be emphasized
for consumer goods.
Anson Apparel's marketing message in the United States is one of apparel for the rugged man who spends most of his time outdoors. While this marketing message has worked very well for the company, it is concerned about using the same marketing message in its new market of China. Which of the following factors limits Anson Apparel's ability to use the same marketing message in both the United States and China?
cultural differences
Cassidy Boeheim, the international sales manager for Knoll Home Products is trying to determine the channel length for Brazil, a market that the company hopes to enter. Which of the following is the most important determinant of channel length?
degree to which the retail system is fragmented
Which of the following is the most important determinant of channel length?
degree to which the retail system is fragmented
Pomeroy, Inc. is a major player in the U.S. consumer electronics markets. It sells radios, televisions, CD players, and a number of similar products. Its CEO believes that Pomeroy can go into international markets with the same product line that it offers in the U.S. Which of the following factors constrains Pomeroy, Inc.'s ability to sell a standardized product to a global market using a standardized marketing strategy?
differences in product and technical standards
Which of the following is true of price discrimination as a part of international pricing strategy
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 is an argument against standardized advertising?
Advertising regulations may block implementation of standardized advertising.
61. The Jacoby Winery from California's Sonoma Valley requires its retailers to educate customers about wines and help them make the right choice from a large array of brands. This is particularly more so in international markets, because American wines are relatively less well-known abroad. _____ refers to the expertise, competencies, and skills of established retailers in a nation, and their ability to sell and support the products of international businesses.
Channel quality
_____ is one factor that determines the optimal distribution strategy.
Channel quality
Gundogan Food Products is hoping to enter Maurinia, a developed country. They want to have a good understanding of consumer preferences in that country. Which of the following is true of the influence of economic development on consumer preferences?
Consumers in developed nations are willing to pay more for products that have additional features customized to their tastes.
Which of the following contradicts Theodore Levitt's arguments for the globalization of world markets?
Consumers in most developed countries do not sacrifice preferred attributes for lower prices.
While wines from the United States have won prizes in international blind taste tests, the perception of American wines is generally low in continental Europe, particularly France. _____ refers to the extent to which the place of manufacturing influences product evaluations.
Country of origin effects
_____ can constrain the globalization of markets.
Differences in technical standards
_____ allows a firm to educate potential consumers about the features of a product.
Direct selling
In persuading the CEO of Gundogan Food Products to carefully develop the company's international strategy, Daisy Armitage, its newly hired International Sales Manager, is a strong advocate of market segmentation. She has made various statements about market segmentation to the CEO. Which of the following is true of market segmentation?
For a segment to transcend national borders, consumers in that segment must have some compelling similarities along important dimensions.
Which of the following is true according to Theodore Levitt's article in the Harvard Business Review about the globalization of world markets?
Global corporations operate at low relative costs.
Which of the following is a statement made by Theodore Levitt about the globalization of world markets?
Global markets for standardized consumer products have emerged on a large scale of magnitude.
Which of the following is a drawback of a push strategy?
It can be expensive when the distribution channel is long.
Which of the following is true of multipoint pricing?
It involves aggressive pricing in one market to elicit a competitive response from a rival in another market.
Which of the following is true of price discrimination?
It involves whatever the market will bear.
What occurs when the retail sector is very concentrated?
It makes sense for a firm to deal directly with retailers, cutting out wholesalers.
Which of the following is a definition of market segmentation?
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?
It should be led by a "heavyweight" project manager who has high status within the organization.
Which of the following is an argument in favor of standardized advertising?
Many brand names are global.
Which of the following is true of Theodore Levitt's arguments concerning the globalization of world markets?
Modern transportation is facilitating a convergence of tastes and preferences among consumers in advanced countries of the world.
_____ 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.
Multipoint pricing
_____ is/are a potentially critical variable that can jeopardize the effectiveness of a firm's international communication.
Noise levels
_____ refers to the use of price as a competitive weapon to drive weaker competitors out of a national market.
Predatory pricing
_____ exists whenever consumers in different countries are charged different prices for the same product.
Price discrimination
Which of the following is true of price elasticity of demand?
Price elasticity tends to be greater in countries with low income levels.
_____ is/are an element of a firm's marketing mix.
Product attributes
Which of the following is true according to Theodore Levitt's article in the Harvard Business Review about the globalization of world markets?
Technology has led to the emergence of global markets for standardized consumer products.
Which of the following is necessary for a firm to ensure profitable price discrimination?
The firm must be able to keep its national markets separate.
Which of the following is true of choosing a distribution strategy?
The optimal distribution strategy is determined by the relative costs and benefits of each alternative, which vary from country to country.
Which of the following is true about channel quality?
The quality of retailers is variable in emerging markets and less developed nations.
_____ 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.
Theodore Levitt
Which of the following is a goal of market segmentation?
To optimize the fit between the purchasing behavior of consumers in a given segment and the marketing mix
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
A firm's ability to use a pull marketing strategy is limited in some countries by media availability.
True
A global marketing strategy that views the world's consumers as similar in their preferences is consistent with the mass production of a standardized output.
True
A technological innovation can make established products obsolete overnight.
True
Differences in government-mandated product standards can rule out mass production and marketing of a standardized product.
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
Firms vary their marketing mix from country to country depending on differences in national culture.
True
For a market segment to transcend national borders, consumers in that segment must have some compelling similarities along important dimensions such as age, values, and lifestyle choices.
True
Many international businesses try to counter negative source effects by deemphasizing their foreign origins.
True
Markets can be segmented by geography, demography, sociocultural factors, and psychological factors.
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
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
In which of the following conditions does arbitrage occur?
When a firm purchases products in a country where prices are lower and resells them in a country where prices are higher
The _____ has resulted in a dramatic shortening of product life cycles.
acceleration of the pace of technological change
Which of the following factors creates a potential market for new products?
affluent consumers
If a firm is unable to keep its national markets separate, individuals or businesses may undercut its attempt at price discrimination by engaging in
arbitrage
The number of intermediaries between the product (or manufacturer) and the consumer is referred to as
channel length.
Other things being equal, the rate of new-product development seems to be greater in countries where
competition between firms is intense.
Algonquin Cosmetics noticed that while India had a population of more than 1.2 billion people, the retail market was such that more than 95% of retail was through stand-alone stores that were not part of a chain. In other words, if Algonquin were to enter India, they would have to sell through more than a million independent retail stores. What kind of a retail system does India have for the products that Algonquin Cosmetics is trying to sell?
concentrated
When Algonquin Cosmetics looked at entering the Brazil market, it noticed that a few retailers supplied most of the market. What kind of a retail system does Brazil have for the products that Algonquin Cosmetics is trying to sell?
concentrated
Cassidy Boeheim, the international sales manager for Knoll Home Products found that Brazil has a long distribution channel. Upon investigation, she found that this was caused by a large number of wholesalers who entered the market to serve retailers. Which kind of retail systems tend to promote the growth of wholesalers to serve retailers, which lengthens distribution channels?
fragmented
The developing country of Nambodia has a retail system that has many independent retailers, no one of which has a major share of the market. What is Nambodia's retail system called?
fragmented
The Indian retail market is very fragmented with many small independent stores. The distribution structure in India typically involves two levels of distributors (large regional wholesalers and smaller city-wide wholesalers). All of these lead to India having a long distribution channel. Acme Products is concerned about India's long distribution channel for its products. Which of the following is a drawback of longer distribution channels?
greater aggregate markups
Which of the following is an advantage of longer distribution channels?
greater market access
Which of the following is a drawback of longer distribution channels?
higher prices charged to consumers
The United States has a very concentrated retail market with a few large national chains dominating the market. Which of the following is a factor that has contributed to greater retail concentration in a developed country like the United States?
increase in car ownership
If a firm favors a push strategy, using direct selling to educate potential consumers about the features of its products, what kind of products would it most likely sell?
industrial products
What kind of demand is seen when a large change in price produces only a small change in demand?
inelastic
Algonquin Cosmetics markets skin care products for teenage girls between sixteen and nineteen. In approaching its international markets, Algonquin believes that its target segment spans multiple countries, transcending national borders. Algonquin Cosmetics' target segment is called a(n) _____ segment.
intermarket
In deciding on the firm's distribution strategy in the United Kingdom, Arlene Smith of Wendell Products found that the country's retail sector was very concentrated. When the retail sector is very concentrated
it makes sense for a firm to deal directly with retailers, cutting out wholesalers.
One consequence of tight cross-functional integration between research and development (R&D), production, and marketing is
keeping development costs in check.
Which of the following is a characteristic of fragmented retail systems?
long channels of distribution
Elderly travelers as well as those who are physically challenged find it hard to climb stairs when they are allotted motel rooms which are not on the first floor. The Convenience Inn has succeeded in catering to this specific group of customers via its motels, all of which have one floor of rooms with no stairs to climb. Which of the following refers to The Convenience Inn's success in identifying distinct groups of consumers whose needs, wants, and purchasing behavior differ from others in important ways?
market segmentation
While curling as a sport was largely unfamiliar to the U.S. population, the large audience for the most recent Winter Olympics changed that. Studies indicated that there was a large group of people of a certain age group who liked the sport, who were eager to watch it, and were disappointed that mainstream U.S. television networks did not carry the sport except during the Olympics. Taking advantage of this gap, The Argyle Media Group successfully launched "Curling TV" - a 24-hour network dedicated to the sport. Which of the following refers to The Argyle Media Group's success in identifying distinct groups of consumers whose needs, wants, and purchasing behavior differ from others in important ways?
market segmentation
Harbinger Products competes in the branded consumer foods market. Since its domestic (U.S.) market is getting quite competitive, the company wants to expand internationally. The company's CFO, Bing Jones wants to sell the company's products "as-is" in foreign markets because he wants to minimize costs. Shayna Rodriguez, the company's marketing manager is vehemently opposed to this idea. She believes that the company has to address the product attributes, distribution strategy, communication strategy, and pricing strategy for each of the markets that the company is considering enter. What is Shayna Rodriguez referring to?
marketing mix
Milly Adams, the marketing manager for Nuance Cosmetics believes that in order for the company to succeed in international markets, it has to address the choices that it has about product attributes, distribution strategy, communication strategy, and pricing strategy in its targeted markets. What is Milly Adams referring to?
marketing mix
In the context of barriers to international communication, _____ refers to the amount of other messages competing for a potential consumer's attention.
noise
When Jones Foods decided to enter Germany, a highly developed market, it found that it competed with hundreds of brands. In terms of communication strategy, in highly developed countries such as Germany which is typically true?
noise is extremely high
Which of the following is a factor that contributes to greater retail concentration in developed countries?
number of households with refrigerators and freezers
Source effects are damaging for an international business when
potential consumers in a target country have a bias against foreign firms.
A measure of the responsiveness of demand for a product to changes in price is known as
price elasticity of demand.
Which kind of strategy do firms in consumer goods industries that are trying to sell to a large segment of the market generally favor?
pull
Which of the following communication strategies relies primarily on mass media advertising as opposed to personal selling?
pull strategy
Which of the following marketing strategies relies on access to advertising media?
pull strategy
Which of the following communication strategies relies primarily on personal selling rather than mass media advertising?
push strategy
The Jones Consumer Products Company wants to expand internationally. In order to do this successfully, the company's CEO, Meredith Jones believes that new products are vital. Which of the following functions of the Jones Consumer Products Company is required to create new products?
research and development
In terms of communication strategy, _____ refers to the situation when the receiver of a message evaluates the message based on the status or image of the sender.
source effects
The members of a cross-functional team should have
the ability to contribute functional expertise.
Gundogan Food Products manufactures and markets a wide range of dairy products. In the lead up to going international, the company's marketing and international sales staff is having a big debate with regards to the factors affecting product attributes for their business. In terms of the factors affecting product attributes, the impact of which of the following is particularly important for Gundogan Food Products?
tradition
The country of Jeenah was closed to foreign influences for almost one hundred years. Due to a deteriorating economic situation, the country recently opened up its market to foreign companies. All of a sudden, consumers in Jeenah faced an abundance of brand choices in various product categories, many of which were new products that locals had not heard of or used before. According to research, when do consumers usually use the country of origin as a cue when evaluating a product?
when consumers lack detailed knowledge of a product