46) What results when the retail sector is very concentrated?
A) It is more expensive for a firm to make contact with each individual retailer.
B) It makes sense for a firm to deal directly with retailers, cutting out wholesalers.
C) A relatively large sales force is required to deal with the retail sector.
D) The channels of distribution tend to be long.
E) The growth of wholesalers is promoted.
47) When determining her company’s distribution strategy in the United Kingdom, Caroline of
Peterson Products found that the country’s retail sector was very concentrated. How should her
company respond to this?
A) They should focus on contacting wholesalers.
B) They should deal directly with retailers, cutting out wholesalers.
C) They should hire a relatively large sales force to deal with the retail sector.
D) They should lengthen the channels of distribution.
E) They should promote the growth of wholesalers.
48) The sales manager for Jensen Exports is deciding on the firm’s distribution strategy in several
markets. He wants to find an area with a shorter channel length. Which factor is the best indicator
of this?
A) entry of large discount superstores
B) firm’s insistence on dealing with wholesalers instead of manufacturers
C) increased fragmentation of retail system
D) large sales force of competitor
E) smaller sales orders generated from sales calls
49) The Hopper Leg Winery from California’s Sonoma Valley is trying to enter the wine market in
France. To the company’s surprise, it found that the France wine distribution channel was difficult
to access as an outsider. Based on this, the market must have a(n) ________ distribution channel.
A) exclusive
B) intensive
C) formal
D) concentrated
E) fragmented
50) Lots-of-Light Lanterns manufactures emergency lighting systems and markets them in
underdeveloped countries that often lack easy access to electrical power. As the owner, LaTisha
Reynolds knows that to successfully enter a foreign market, the retailers will have to be educated
on how these products work. What factor is she considering?
A) channel exclusivity
B) channel quality
C) channel length
D) channel dominance
E) channel concentration
51) What is a characteristic of channel quality?
A) The quality of retailers is variable in developed nations.
B) The quality of retailers is more variable in emerging markets and less developed nations.
C) Channel quality refers to a measure of the number of intermediaries between the manufacturer
and the consumer.
D) An international business cannot establish its own distribution channel when the existing
channel quality is poor.
E) The lack of a high-quality channel does not impede market entry.
52) 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 a long distribution channel.
Homer Products is concerned about India’s long distribution channel for its products. What is a
drawback of longer distribution channels that could affect Homer Product’s decision?
A) higher profit margins
B) inability to enter exclusive distribution channels
C) lower selling costs in a concentrated retail sector
D) lower product prices
E) greater aggregate markups
53) What is a drawback of longer distribution channels?
A) diminished product production
B) inability to enter exclusive distribution channels
C) lower selling costs in a concentrated retail sector
D) higher prices charged to consumers
E) lower aggregate markups
54) One advantage of longer distribution channels is
A) decreased profit margins.
B) lower mark-ups.
C) lower product prices.
D) reduced selling costs in concentrated retail sectors.
E) greater market access.
55) What is a critical variable that can affect a company’s international communication?
A) channel length
B) market segmentation
C) import effects
D) noise levels
E) channel quality
56) 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 in China.
What factor limits Anson Apparel’s ability to use the same marketing message in both the United
States and China?
A) channel exclusivity
B) channel quality
C) cultural differences
D) concentrated retail systems
E) fragmented retail systems
57) While watching television, Jillian saw a commercial for a product that was “made in Taiwan.”
She immediately dismissed the product being advertised because the last item she bought that was
made there fell apart in just two weeks. What is affecting this advertising communication?
A) source effects
B) noise levels
C) predictive analytics
D) pull strategy
E) push strategy
58) Source effects are damaging for an international business when
A) promotional messages are used to stress the positive performance attributes of its product.
B) fewer firms compete for the attention of prospective customers in developing countries.
C) the firm’s marketing strategy emphasizes personal selling rather than mass media advertising.
D) potential consumers in a target country have a bias against foreign firms.
E) international businesses deemphasize their foreign origins.
59) 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.
A) Noise levels
B) Country of origin effects
C) Cultural barriers
D) Push strategies
E) Pull strategies
60) Kim will only buy cars from Japanese automakers because she thinks cars made in the United
States are of inferior quality. She has this belief even though she has never studied the ratings of
cars made in the United States. What type of communication barrier does this represent?
A) cultural barrier
B) country of origin effect
C) predictive analytics
D) prescriptive analytics
E) noise levels
61) In the context of barriers to international communication, ________ refers to the amount of
other messages competing for a potential consumer’s attention.
A) logistics
B) source effects
C) noise
D) standardized advertising
E) country of origin effects
62) When Happy Foods decided to enter the highly developed Italian market, it found that it
competed with hundreds of brands. In terms of communication strategy, Happy Foods should
remember that in a highly developed market,
A) noise is extremely high.
B) source effects are always positive.
C) country of origin effects are not applicable.
D) cultural barriers do not exist.
E) pull strategies are more important than push strategies.
63) When considering barriers to international communication, companies should be aware that
A) noise tends to increase the probability of effective communication.
B) source effects can be beneficial for an international business when potential consumers in a
target country have a bias against foreign firms.
C) many international businesses try to promote positive source effects by deemphasizing their
foreign origins.
D) fewer firms vie for the attention of prospective customers in developing countries, thus the
noise level is lower.
E) research suggests consumers use country of origin when evaluating a product, when they have
detailed knowledge of the product.
64) Which communication strategy relies primarily on personal selling rather than mass media
advertising?
A) prescriptive analytics
B) pull strategy
C) push strategy
D) predictive analytics
E) standardized advertising
65) A ________ strategy relies primarily on mass media advertising as opposed to personal
selling.
A) telemarketing
B) pull
C) push
D) customized
E) point-of-purchase
66) Super Chill Ice Cream Company has a new flavor and wants to promote it to as many people as
they can as quickly as possible. What kind of strategy should the company use?
A) push
B) lean
C) lag
D) pull
E) exclusive
67) If a firm favors a push strategy, using direct selling to educate potential consumers, which of
these products would it most likely sell?
A) professional services
B) food grains
C) consumer products
D) industrial products
E) standardized products
68) ________ allows a firm to educate potential consumers about the features of a product.
A) Direct selling
B) Mass media advertising
C) Pull strategy
D) Standardized advertising
E) Lag strategy
69) What is a drawback of a push strategy?
A) It can be expensive when the distribution channel is long.
B) It decreases interaction with consumers.
C) It does not allow consumers to be educated on the benefits of a complex product.
D) It is useful only in advanced nations where consumers are sophisticated and highly educated.
E) It can only be used to sell industrial products.
70) Companies that use a ________ marketing strategy rely on access to advertising media.
A) personal selling
B) direct selling
C) push
D) pull
E) prescriptive
71) A company would be likely to use a push strategy when
A) distribution channels are short.
B) sufficient print and electronic media are available.
C) consumers have a low level of literacy.
D) the products being sold are consumer goods.
E) professional services are being offered.
72) 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.
73) One argument in favor of standardized advertising is that
A) consumer tastes and preferences are universal.
B) a message that works in one nation will invariably work in every other country.
C) advertising regulations always support standardized advertising.
D) many brand names are global.
E) the costs of value creation may be increased by standardized advertising.
74) What is an argument against standardized advertising?
A) One large effort to develop a campaign fails to produce better results than 40 or 50 smaller
efforts.
B) It fails to make use of local talent available in other cultures.
C) Advertising regulations may block implementation of standardized advertising.
D) Royalties make it the most expensive form of advertising.
E) It increases the costs of value creation.
75) ________ exists whenever consumers in different countries are charged different prices for the
same product.
A) Penetration pricing
B) Premium pricing
C) Predatory pricing
D) Price discrimination
E) Price skimming
76) Marina is on vacation in Jamaica and buys a bottle of rum for about half the price she would
pay for the same bottle at home. The rum isn’t on sale in Jamaica but is priced lower because that’s
the price the market will bear. What is this an example of?
A) price discrimination
B) price skimming
C) predatory pricing
D) premium pricing
E) price fixing
77) What must occur 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.
78) Lisette owns a shoe store on the border of France. Due to price discrimination, she can buy
Louboutin leather boots in Italy at a lower cost than purchasing them from her local French
supplier, so once a month she drives to Italy and buys boots to resell at her store. What is this an
example of?
A) speculation
B) arbitrage
C) dumping
D) predatory pricing
E) modeling
79) Arbitrage occurs when a firm
A) offers a product at low prices through discount coupons and promotions.
B) sells a product at higher prices to make a profit from relatively fewer sales.
C) imports products from a manufacturer and distributes them directly through retail outlets.
D) purchases products in a country where prices are lower and resells them in a country where
prices are higher.
E) prices its products at the least cost, risking losses, in order to grab market share.
80) A measure of the responsiveness of demand for a product to a change in price is known as
A) the demand to price ratio.
B) purchasing power parity.
C) predatory pricing.
D) demand function of pricing.
E) price elasticity of demand.
81) A business is experiencing ________ demand when a small change in price produces a large
change in demand for a product.
A) elastic
B) inelastic
C) relative
D) rigid
E) dynamic