Verified Test Bank Globalization Chapter 1 13th Edition

Student name:__________

1) What is Theodore Levitt’s contribution to international business?

2) What are the two main issues that managers must be aware of when considering market segmentation in foreign countries?

3) How do levels of economic development affect consumer behavior? What are the implications for marketing strategy?

4) What are the four main differences between distribution systems across countries?

5) What are the three factors that contribute to the trend toward greater retail concentration in developed countries? How have these factors promoted retail concentration?

6) What factors can jeopardize the success of a firm’s international communications?

7) Compare and contrast push strategies and pull strategies.

8) What are the arguments for standardized advertising across international markets?

9) Explain the concept of price elasticity of demand. What are its determining factors?

10) Differentiate between multipoint pricing and experience curve pricing strategies.

11) Explain briefly the regulatory influences on pricing.

12) What factors affect the rate of new-product development in countries?

13) Discuss the role of technology in new-product development, including the concept of “creative destruction.”

14) Discuss the notion of cross-functional teams and their role in cross-functional integration. What are the attributes that make a product development team successful?

15) The set of choices the firm offers to its targeted market is known as the

A) marketing mix.
B) marketing concept.
C) marketing strategy.
D) market promotion.

16) A major factor of success for new products is the closeness of the relationship between

A) finance and marketing.
B) marketing and R&D.
C) finance and materials management.
D) finance and R&D.

17) According to Levitt, which of the following statements is true?

A) Technology drives the world toward a converging commonalty.
B) There are accustomed differences in national preferences.
C) The multinational corporation operates in a number of countries at low relative costs.
D) The global corporation operates with resolute consistency at high relative costs.

18) The continuing persistence of _____ differences between nations acts as a major brake on any trend toward global consumer tastes and preferences.

A) technological and industrial
B) institutional and political
C) cultural and economic
D) GNP level and growth rate

19) The identification of distinct groups of consumers whose purchasing behavior differs from others in important ways is known as

A) market segmentation.
B) market penetration.
C) diversification strategy.
D) differentiation.

20) Marriott owns many brands of hotels, such as W Hotels, which is a luxury brand; Westin hotels, which is an upscale brand; and Fairfield Inns, which are midscale. Marriott is marketing its hotels based on

A) market segmentation.
B) market penetration.
C) diversification strategy.
D) differentiation.

21) If market segments transcend national borders

A) the company should develop unique products for each national market.
B) the company can view the global market as a single entity and pursue a global strategy.
C) a localization strategy would be appropriate.
D) consumers will have differing purchasing behavior in different nations.

22) The most important aspect of a country’s cultural differences, particularly important in foodstuffs and beverages, is the impact of

A) values.
B) traditions.
C) norms.
D) attitudes.

23) Consumers in highly developed countries value _____ as compared to their counterparts in less developed nations.

A) product price
B) product reliability
C) product attributes
D) product value

24) The process of identifying distinct groups of consumers whose purchasing behavior differs from others in important ways is known as

A) demographic analysis.
B) market segmentation.
C) product mix.
D) consumer behavior analysis.

25) Consumers in the most developed countries are

A) typically most interested in products that have been developed with the lowest common denominator in mind.
B) typically willing to sacrifice their preferred product attributes for lower prices.
C) often prefer globally standardized products.
D) often not willing to sacrifice their preferred attributes for lower prices.

26) Differences in _____ constrain the globalization of markets.

A) technical standards
B) measurement systems
C) manufacturing processes
D) energy costs

27) There is a tendency for greater retail concentration in

A) rural areas.
B) developed countries.
C) urban areas.
D) developing countries.

28) The number of intermediaries between the producer and the consumer is known as the

A) channel quality.
B) marketing mix.
C) channel length.
D) experience curve.

29) A channel is considered to be very short if the producer sells

A) through an import agent.
B) through a wholesaler.
C) through a retailer.
D) directly to the consumer.

30) Countries with _____ retail systems tend to have long channels of distribution.

A) fragmented
B) intermarket
C) concentrated
D) exclusive

31) _____ is one that is difficult for outsiders to access.

A) A concentrated retail system
B) An exclusive distribution channel
C) A private distribution channel
D) A fragmented retail system

32) The means a firm chooses for delivering the product to the consumer is its

A) communication strategy.
B) segmentation strategy.
C) product attributes.
D) distribution strategy.

33) The way a product is delivered is determined by the

A) firm’s entry strategy.
B) firm’s product positioning.
C) target market.
D) market segments.

34) In a concentrated retail system

A) there are many retailers who have a major share of the market.
B) there are many retailers, none of which has a major share of the market.
C) a few retailers supply a small segment of the market.
D) a few retailers supply most of the market.

35) A country with high car ownership, a large number of households with refrigerators, and a large number of two-income families tends to have

A) retail division.
B) retail dispersion.
C) retail concentration.
D) retail fragmentation.

36) A _____ retail system is one in which there are many retailers, none of which has a major share of the market.

A) concentrated
B) consolidated
C) focused
D) fragmented

37) Which of the following countries has a concentrated retail system?

A) China
B) the United States
C) Japan
D) India

38) _____ refers to the number of intermediaries between the producer (or manufacturer) and the consumer.

A) Channel length
B) Channel exclusivity
C) Channel quality
D) Channel speed

39) The Duchess and the Duke sells through an import agent, a wholesaler, and a retailer. In this case,

A) a long channel exists.
B) the retail system must be concentrated.
C) a short channel exists.
D) there is no channel.

40) Channel length is longer when a retail system is

A) concentrated.
B) fragmented.
C) decentralized.
D) globalized.

41) Which of the following statements about fragmented retail systems is true?

A) Countries with fragmented retail systems tend to have short channels of distribution.
B) The more fragmented the retail system, the less expensive it is for a firm to make contact with each individual retailer.
C) Fragmented retail systems tend to promote the growth of wholesalers to serve retailers.
D) When the retail sector is very fragmented, it makes sense for the firm to deal directly with retailers.

42) What kind of retail system does Japan have?

A) fragmented
B) direct
C) indirect
D) concentrated

43) With a concentrated retail sector

A) a relatively large sales force is required.
B) the orders generated from each sales call can be large.
C) there are long channels of distribution.
D) it is expensive for the firm to make contact with each individual retailer.

44) _____ distribution channel is one that is difficult for outsiders to access.

A) A selective
B) An intensive
C) An exclusive
D) A multichannel

45) When a channel is exclusive

A) the firm sells and distributes only high-end products.
B) it is controlled by market leaders or by firms who have a niche market.
C) the firm’s products are focused only on elite, upper class customers.
D) it is often difficult for a new firm to get access to shelf space in supermarkets.

46) Channel _____ 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.

A) exclusivity
B) knowledge
C) quality
D) skill

47) Which of the following statements about the choice of distribution strategy is true?

A) The longer a channel, the greater the aggregate markup, and the higher the price that consumers are charged for the final product.
B) If price is an important competitive weapon and if the firm does not want to see its profit margins squeezed, other things being equal, the firm would prefer to use a longer channel.
C) The shorter a channel, the greater the aggregate markup, and the higher the price that consumers are charged for the final product.
D) An international business must use shorter channels in countries where the retail sector is fragmented and longer channels in countries where the retail sector is concentrated.

48) In the 1960s, the Swedish vacuum manufacturer Electrolux successfully marketed vacuums in the United Kingdom with the slogan “Nothing sucks like an Electrolux.”
The informal United States meaning of the word sucks was well known in the United Kingdom at the time, and the company hoped the slogan, with its possible double entendre, would gain attention. When this slogan was used in the American market, it was a catastrophe. This is an example of

A) cultural differences.
B) religious differences.
C) source effects.
D) noise levels.

49) To overcome cultural barriers, companies should

A) develop products specifically for each market.
B) focus on universal needs.
C) focus only on international market segments.
D) develop cross-cultural literacy.

50) When the receiver of a message evaluates a message based on the status or image of the sender, _____ are said to have occurred.

A) sender effects
B) noise effects
C) source effects
D) communication effects

51) The extent to which the place of manufacturing influences product evaluations is known as

A) source effects.
B) country of origin effects.
C) noise effects.
D) location effects.

52) The “Swiss Made” label has leveraged several watchmakers (for example, TAG Heuer) for decades now. This is an example of a ____ effect.

A) linguistic
B) country of origin
C) noise
D) cultural

53) The probability of effective communications is reduced by

A) noise.
B) location effects.
C) country of origin effects.
D) source effects.

54) Which of the following statements about barriers to international communication is true?

A) Source effects occur when the receiver of the message evaluates the message on the basis of the location of the sender.
B) The best way for a firm to overcome cultural barriers is to use local input.
C) Source effects and country of origin effects are always negative.
D) Noise is extremely high in highly developed countries such as the United States.

55) When a firm emphasizes personal selling rather than mass media advertising in the promotional mix, the firm is using a ________ strategy.

A) standardized
B) pull
C) push
D) localized

56) Which of the following statements is true?

A) Firms in consumer goods industries that are trying to sell to a large segment of the market generally favor a push strategy.
B) Mass communication is costlier for firms in consumer goods industries that are trying to sell to a large segment of the market.
C) Direct selling may be the only way to reach consumers in poor nations with low literacy levels.
D) Firms that sell industrial products or other complex products favor a pull strategy.

57) A firm that depends more on mass media advertising to communicate the marketing message to potential consumers is using a ________ strategy.

A) pull
B) push
C) standardized
D) localized

58) A push strategy is appropriate when

A) there are many choices of electronic media.
B) the firm is selling consumer goods.
C) distribution channels are long.
D) the firm is selling complex new products.

59) A pull strategy should be used when

A) the firm is selling industrial products.
B) the distribution channels are short.
C) the distribution channels are long.
D) few print or electronic media are available.

60) Which of the following is an argument that supports global advertising?

A) Standardized advertising lowers the costs of value creation by spreading the fixed costs of developing the advertisements over many countries.
B) Because of concerns about the scarcity of creative talent, some feel that smaller efforts will produce better results than one large effort to develop a campaign.
C) Even though there are cultural differences between nations, a single advertising theme that is effective worldwide can be easily developed.
D) Standardized advertising may be implemented even in the face of advertising regulations.

61) French wine, Italian clothes, and German luxury cars all benefit from

A) source effects.
B) noise levels.
C) cultural preferences.
D) cultural differences.

62) When a company emphasizes personal selling, the company is probably using a ________ strategy.

A) standardized
B) push
C) localized
D) pull

63) A _____ strategy is generally favored by consumer goods firms that are trying to sell to a large segment of the market.

A) push
B) globalization
C) pull
D) localization

64) A firm may be prevented from using _____ because of advertising regulations.

A) corporate advertising
B) culturally significant advertising
C) marketing strategies
D) standardized advertising

65) The use of price as a competitive weapon to drive weaker competitors out of a national market is known as

A) experience curve pricing.
B) predatory pricing.
C) competitive pricing.
D) multipoint pricing.

66) When a company charges whatever the market will bear, the company is using

A) strategic pricing.
B) price discrimination.
C) a push strategy.
D) a pull strategy.

67) In order for price discrimination to be successful,

A) there must be a strong case for arbitrage.
B) national markets must be kept separate.
C) demand must be very elastic.
D) a large change in demand must be triggered by a small change in price.

68) _____ occurs when an individual or business capitalizes on a price differential for a firm’s product between two countries by buying the product in the country where the price is low and reselling it in the country where prices are higher.

A) Arbitrage
B) Strategic pricing
C) Price discrimination
D) Market pricing

69) A measure of the responsiveness of demand for a product to change in price is referred to as

A) arbitrage demand.
B) predatory pricing.
C) price elasticity of demand.
D) experience curve pricing.

70) If a _____ change in a price produces a _____ change in demand, then demand is said to be elastic.

A) small; large
B) small; small
C) large; small
D) large; large

71) Which of the following statements about price discrimination is true?

A) It exists whenever consumers in a country are charged different prices for the same product.
B) A necessary condition for profitable price discrimination is different price elasticities of demand in different countries.
C) It is the use of price as a competitive weapon to drive weaker competitors out of a national market.
D) It makes economic sense to charge the same prices across countries.

72) Which of the following is one of the important factors in determining the elasticity of demand for a product in a given country?

A) personal selling
B) logistics
C) operating revenue
D) income level

73) In a country where competition is limited,

A) prices will be low.
B) there will be low elasticity of demand.
C) prices will be high.
D) consumers’ bargaining power rises.

74) _____ pricing is the use of price as a competitive weapon to drive weaker competitors out of a national market.

A) Multipoint
B) Value-based
C) Experience curve
D) Predatory

75) _____ pricing 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) Multipoint
B) Experience curve
C) Predatory
D) Competitive

76) Drober Consulting is a large software service provider. The company has the largest market share in the industry. In order to restrain the smaller competitors in the market, the company sells some of its products at very low prices. This is an example of _____ pricing.

A) penetration
B) multipoint
C) predatory
D) experience curve

77) Dumping occurs whenever a firm sells a product

A) for a price that is less than the cost of producing it.
B) without paying the necessary regulatory charges.
C) for a price that is higher than the market rate.
D) by including a premium for the R&D activities of the firm.

78) Many firms pursuing _____ pricing strategy on an international scale will price low worldwide in attempting to build global sales volume as rapidly as possible, even if this means taking large losses initially.

A) a multipoint
B) an experience curve
C) a predatory
D) a competitive

79) A country can bring antidumping actions against an importer under

A) UNESCO.
B) the World Bank.
C) the FEC.
D) GATT.

80) _____ occurs whenever a firm sells a product for a price that is less than the cost of producing it.

A) Resale
B) Plunging
C) Bootlegging
D) Dumping

81) Which of the following is one of the four elements that constitute a firm’s marketing mix?

A) inventory accounting
B) product reengineering
C) reverse engineering
D) distribution strategy

82) The _____ industry is often thought of as one in which global standardization of the marketing mix is the norm.

A) financial services
B) IT
C) telecommunication
D) manufacturing

83) If a marketer asks, “Is the demand for the product among customers in the international market segments targeted similar to domestic demands?” then what element of the marketing mix is being addressed?

A) product strategy
B) pricing strategy
C) distribution strategy
D) communication strategy

84) _____ involves issues such as (1) translation of questionnaires and reports into appropriate foreign languages and (2) accounting for cultural and environmental differences in data collection.

A) Product research
B) Communication strategy
C) International market research
D) Product strategy

85) _____ is an international market research company based in London that works with more than half of the Fortune 500 companies.

A) Ipsos
B) Nielsen
C) NPD Group
D) Kantar

86) This step in international market research often relates to the cost of collecting primary data that can address the research problem and objectives directly versus using available secondary data.

A) assessing the costs and benefits of the research
B) collecting the data
C) defining the research objectives
D) determining the data sources

87) Other things being equal, the rate of new-product development seems to be greater in countries where

A) less money is spent on basic and applied R&D.
B) consumers are affluent.
C) underlying demand is weak.
D) competition is mild.

88) Tight cross-functional integration between R&D, production, and marketing can help a company to ensure that which of the following takes place?

A) Time to market is maximized.
B) Development costs are not a consideration in developing the best product.
C) New products are designed for ease of manufacture.
D) Product development projects are driven by internal needs.

89) Which of the following is an advantage of establishing cross-functional product development teams?

A) It reduces the need for collaboration within the development team.
B) It helps firms reduce the status differences between employees.
C) It facilitates integration between different functions in a firm.
D) It is one way to achieve cross-functional integration.

90) The increasing pace of _____ has resulted in a dramatic shortening of product life cycles.

A) manufacturing
B) distribution
C) market research
D) technological change

91) New-product development

A) results in high returns about 50% of the time.
B) has a high failure rate.
C) always earns enormous returns.
D) has a low failure rate.

92) Designing for manufacturing

A) decreases product quality.
B) increases costs.
C) can increase product quality.
D) not only increases costs, but also lowers product quality.

93) The need to integrate R&D and marketing to adequately commercialize new technologies poses special problems in the international business because

A) firms typically have all of their R&D centers in the home country.
B) commercialization means that the same version of a new product needs to be produced for all countries.
C) firms typically do not have their R&D centers in the same country as their production facilities.
D) commercialization may require different versions of a new product to be produced for various countries.

94) The set of choices the firm offers to its targeted markets is known as the marketing mix.

⊚ true
⊚ false

95) Four elements comprise the marketing mix: product attributes, distribution strategy, communication strategy, and pricing strategy.

⊚ true
⊚ false

96) Markets can be segmented in only one way—by sociocultural factors.

⊚ true
⊚ false

97) The structure of market segments may differ significantly from country to country.

⊚ true
⊚ false

98) Products sell well when their attributes match consumer needs.

⊚ true
⊚ false

99) Firms based in less-developed nations tend to build a lot of extra performance attributes into their products.

⊚ true
⊚ false

100) If a firm manufactures its product in a particular country, it can sell directly to the consumer, to the retailer, or to the wholesaler. The same options are not available to a firm that manufactures outside the country.

⊚ true
⊚ false

101) The four main differences between distribution systems worldwide are retail concentration, channel length, channel exclusivity, and channel quality.

⊚ true
⊚ false

102) In a concentrated retail system, there are many retailers, none of which has a significant share of the market.

⊚ true
⊚ false

103) An increase in car ownership, the number of two-income households, and the number of households with a refrigerator have all contributed to the more fragmented retail system found in developed countries.

⊚ true
⊚ false

104) Concentrated retail systems tend to promote the growth of wholesalers to serve retailers, which lengthens channels.

⊚ true
⊚ false

105) The more fragmented the retail system, the more expensive it is for a firm to make contact with each individual retailer.

⊚ true
⊚ false

106) The entry of large discount superstores such as Tesco and Carrefour has shortened channel length in some countries.

⊚ true
⊚ false

107) Import agents are typically limited to independent trading houses.

⊚ true
⊚ false

108) Source effects occur when the receiver of the message evaluates the message based on the context of the message.

⊚ true
⊚ false

109) A company that depends on mass media advertising to communicate its marketing message to potential consumers is using a push strategy.

⊚ true
⊚ false

110) A push strategy makes sense when distribution channels are short.

⊚ true
⊚ false

111) In highly developed countries, in the context of communication, noise tends to be low.

⊚ true
⊚ false

112) The longer the distribution channel, the more intermediaries there are that must be persuaded to carry the product for it to reach the consumer.

⊚ true
⊚ false

113) In a competitive market, prices have to be higher than in a market where the firm has a monopoly.

⊚ true
⊚ false

114) Elasticity of demand for a product in a given country is determined by income level and competitive conditions.

⊚ true
⊚ false

115) Predatory pricing 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.

⊚ true
⊚ false

116) Firms pursuing a multipoint pricing strategy on an international scale will price low worldwide in an attempt to build global sales volume as rapidly as possible.

⊚ true
⊚ false

117) “Creative destruction” makes it important for companies to stay on the leading edge of technology.

⊚ true
⊚ false

118) The rate of new-product development seems to be lesser in countries where more money is spent on basic and applied research and development.

⊚ true
⊚ false

119) Tight cross-functional integration among R&D, production, and marketing maximizes the time to market.

⊚ true
⊚ false

120) For a product development team to function effectively and meet all its development milestones, the team should be composed of at least one member from each key function.

⊚ true
⊚ false