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International Marketing, 18e (Cateora)
Chapter 14 Products and Services for Businesses
1) For firms producing products and services for industrial markets, the chief reason for
venturing abroad is the prospect of high profits with no risk.
2) The single most important difference between consumer and industrial marketing is the
cyclical swings in demand inherent in the latter.
3) Managers need to understand the concept of derived demand, particularly when they are
selling capital equipment and big-ticket industrial services.
4) Derived demand can be defined as demand that is not dependent on another source.
5) Industrial demand is unaffected by changes in consumer demand.
6) One of the ways that an industrial firm should manage the inherent volatility of the industrial
sector is by increasing advertising expenditure during booms.
7) The most significant environmental factor affecting the international market for industrial
goods and services is the degree of standardization.
8) The degree of economic development of a country can be used as a rough measure of the
country's industrial market.
9) In Stage 1 (the traditional society) of Rostow's five-stage model of economic development, the
most important industrial demand is labor.
10) In Rostow's five-stage model of economic development, countries in Stage 5 (the age of
mass consumption) are mostly service economies.
11) A country can leap several stages of economic development by using technology as
economic leverage.
12) One of the interrelated trends that spurred the demand for technologically advanced products
was the disintegration of the Soviet empire.
13) Good quality as interpreted by a highly industrialized market is the same as that interpreted
by standards of a less industrialized nation.
14) A product that exceeds performance expectations can also be considered to be of poor
quality.
15) A product whose design reflects the needs and expectations of the buyer—no more, no
less—is a quality product.
16) The lack of common standards for manufacturing highly specialized equipment is a problem
in international sales of industrial products.
17) The adoption of universal quality standards would mean that the perceptions of industrial
product quality would also be standardized.
18) While countries have standards for products produced within its borders, there are no such
standards that are applicable to imported goods.
19) The U.S. Department of Commerce has mandated that all U.S. government purchases use the
metric system.
20) The ISO 9000 certification guarantees that each product or service produced by a company is
of the highest quality.
21) To receive ISO 9000 certification, a company requests a certifying body to conduct a
registration assessment.
22) For many industrial products, the revenue from associated services exceeds the revenue from
the products themselves.
23) For international users of heavy construction equipment, the manufacturer's country of origin
is of primary importance in purchasing construction equipment.
24) A manufacturer who does not provide after-sales services and support could also be forgoing
the opportunity of participating in a lucrative aftermarket.
25) Communism is the most serious threat to the continued expansion of international services
trade.
26) A company website is the most important vehicle for selling industrial products, reaching
prospective B2B customers, and marketing in most countries.
27) Trade shows serve a much more important role in the U.S. than in other countries.
28) In difficult economic and political circumstances or otherwise, online trade shows are a more
than adequate substitute for physical trade shows or trade fairs.
29) The sales of industrial goods are driven by the buyer's need to make profits.
30) Relationship marketing shifts the focus away from price to service and long-term benefits.
31) Mai is a new international sales representative for an industrial supply company that is
focusing heavily on technology as a selling feature. She will learn that this strategy
A) will be a key selling feature in all markets.
B) will have the most impact in developing countries.
C) may not be appropriate for all countries.
D) will not make a big difference in the global market.
E) can be easily overcome by competitors.
32) Industrial markets differ from consumer markets in that
A) the demand for industrial goods is more volatile than the demand for consumer goods.
B) the market for industrial goods is insignificant in comparison to the market for consumer
goods.
C) industrial goods are marketed domestically whereas consumer goods are marketed
internationally.
D) industrial products are always more expensive than consumer products.
E) industrial products use the same level of technology for all products making it appropriate for
all countries whereas consumer goods need to be customized for each market.
33) What statement is true in industrial markets?
A) Demand is nonvolatile by nature.
B) Markets are unaffected by derived demand.
C) Industrial sellers tend to have small numbers of customers upon which they are more
dependent.
D) Sales of industrial goods are stable and do not fluctuate.
E) Professional buyers tend to undertake dissimilar investment actions to achieve the same goal.
34) What is a reason for marketing industrial goods abroad that does NOT necessarily apply to
consumer goods?
A) bypassing import tariffs
B) avoiding sales tax
C) reducing the volatility of demand
D) acquiring ISO certification
E) acquiring ACSI certification
35) What factor increases the volatility in demand in industrial markets?
A) Professional buyers in the industrial market tend to act in concert.
B) The demand for industrial goods is independent of changes in economic development.
C) Small, noncyclical swings in demand are inherent in industrial markets.
D) Experienced purchasers tend to make buying decisions independently.
E) The demand for industrial goods is highly inelastic.
36) For managers selling capital equipment and big-ticket industrial services, understanding the
concept of ________ is absolutely fundamental to their success.
A) availability heuristic
B) bank effect
C) Baskerville effect
D) derived demand
E) catapult demand
37) Derived demand can be defined as demand that is
A) independent of price.
B) independent of consumer wants and needs.
C) dependent on another source.
D) highly volatile.
E) highly responsive to factors other than price.
38) What can be used as a measure to manage volatility in industrial demand?
A) maintaining a narrow product line
B) reducing prices during booms
C) reducing advertising expenditures during booms
D) focusing on market share as a strategic goal
E) avoiding investment in foreign high-yield financial instruments
39) Why do German and Japanese firms generally do better than U.S. firms when it comes to
managing volatility?
A) Their emphasis is on beating competitors.
B) They value employees and stability more highly.
C) They maintain limited product lines.
D) They reduce prices faster and raise advertising expenditures during booms.
E) They consider market share to be a strategic goal.
40) What is perhaps the most significant environmental factor affecting the international market
for industrial goods and services?
A) the foreign exchange market
B) political conditions
C) the degree of industrialization
D) the level of domestic competition
E) global warming
41) What is the first stage of Rostow's five-stage model of economic development?
A) the traditional society
B) drive to maturity
C) preconditions for takeoff
D) takeoff
E) the age of mass consumption
42) In Stage 1 of Rostow's five-stage model of economic development,
A) the economy is primarily driven by the production of services.
B) the most important industrial demand relates to natural resources extraction.
C) infrastructure development is a primary requirement in the economy.
D) manufacturing of both semidurable and nondurable consumer goods has begun.
E) the focus is on low-cost manufacturing of a variety of consumer and some industrial goods.
43) What is characteristic of Stage 2 of Rostow's five-stage model of economic growth?
A) Industrial demand is mainly associated with natural resources extraction.
B) The goods demanded relate to equipment and supplies to support manufacturing.
C) The focus is more on low-cost manufacturing of a variety of consumer and some industrial
goods.
D) The focus is on design activities and the development of manufacturing techniques.
E) Infrastructure development is a primary need.
44) Which country is designated as being in Stage 2 of Rostow's five-stage model of economic
growth?
A) Russia
B) Germany
C) South Korea
D) Czech Republic
E) Vietnam
45) A country has reached a level of economic development where the manufacturing of both
semidurable and nondurable consumer goods has just begun. Also, the goods demanded relate to
equipment and supplies to support manufacturing. In which stage of Rostow's five-stage model
of economic growth does the country fit?
A) the traditional society
B) drive to maturity
C) preconditions for takeoff
D) takeoff
E) the age of mass consumption
46) Russia and Eastern European countries fit in which stage of Rostow's five-stage model of
economic growth?
A) the traditional society
B) drive to maturity
C) preconditions for takeoff
D) the age of mass consumption
E) takeoff
47) The industrialized economies in the ________ stage of Rostow's five-stage model of
economic development focus more on low-cost manufacturing of a variety of consumer and
some industrial goods. They buy from all categories of industrial products and services.
A) traditional society
B) drive to maturity
C) preconditions to takeoff
D) age of mass consumption
E) takeoff
48) In which stage of Rostow's five-stage model of economic growth do industrialized
economies such as Korea and the Czech Republic fit?
A) preconditions to takeoff
B) takeoff
C) traditional society
D) drive to maturity
E) the age of mass consumption
49) In which stage of Rostow's five-stage model of economic growth do highly-industrialized
countries like Japan and Germany fit?
A) traditional society
B) preconditions to takeoff
C) takeoff
D) drive to maturity
E) the age of mass consumption
50) Country X is most likely to be in the age of mass consumption according to Rostow's five-
stage model of economic development if
A) its economy is primarily driven by natural resource extraction.
B) the economy is moving away from agriculture and toward manufacturing.
C) the economy is driven by low-cost manufacturing.
D) it is primarily a service economy.
E) its economy is primarily agrarian.
