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chapter 12
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Indicate whether the statement is true or false.
1. Agents for companies shipping products overseas who are chiefly involved with physical distribution
activities and documentation are called freight forwarders.
a.
True
b.
False
2. A diner complains to his server, Alyson, that his meal is not to his liking. Without consulting with her
manager, Alyson immediately tells the customer that he will not need to pay for the meal, and offers to bring
him a different entree at no charge. Alyson is an empowered employee.
a.
True
b.
False
3. The prices a company charges its overseas subsidiaries are known as transfer prices.
a.
True
b.
False
4. The increased demand for hair and skin care products with Argan oil illustrates how new product ideas can
come from unexpected sources.
a.
True
b.
False
5. International marketing managers have four main methods of promoting products and services in
international markets: advertising, personal selling, sales promotion, and distribution.
a.
True
b.
False
6. Product counterfeiting occurs when a company in a foreign country copies an American product as sells it as
the "real thing" without the U.S. marketer receiving any compensation.
a.
True
b.
False
7. Ironically, customer complaints can sometimes result in improved customer service.
a.
True
b.
False
8. Goldman Sachs estimates that the world's middle class is shrinking worldwide.
a.
True
b.
False
9. A study analyzing why households have stopped purchasing a company’s product would be an example of
marketing research.
a.
True
b.
False
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10. The step in the new product development process in which projections of potential revenues and profits for a
potential new product are made is referred to as concept testing.
a.
True
b.
False
11. A company’s international pricing mix involves consideration of four major objectives: performance
objectives, prevention objectives, maintenance objectives, and survival objectives.
a.
True
b.
False
12. As the case of Blockbuster indicates, products that have reached the decline stage in domestic markets are
unsustainable in emerging markets as well.
a.
True
b.
False
13. An adaptation approach to foreign markets means that the marketing strategies a company uses in its
international operations will be different than those used domestically.
a.
True
b.
False
14. The total number of units of a product that could possibly be sold by all companies doing business in a
specific international market is referred to as sales potential.
a.
True
b.
False
15. There are two major markets within each foreign market that purchase products and services: consumer
markets and industrial markets.
a.
True
b.
False
Indicate the answer choice that best completes the statement or answers the question.
16. A channel of distribution that purchases products from a company doing business in a foreign market and
then resells them to other buyers is called a(n) _____.
a.
freight back-warder
b.
freight forwarder
c.
agent
d.
public channel
e.
distributor
17. Nestle had success with its Maggi noodles in South Asia; subsequently they were introduced in Australia.
Nestle is using a(n) _____ strategy.
a.
vertical
b.
horizontal
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c.
backward
d.
forward
e.
reverse
18. Of the following, which is NOT an option for companies to consider when marketing their products
overseas?
a.
Selling the same domestic product overseas
b.
Modifying products for different countries and regions
c.
Developing new products for foreign markets
d.
Aligning with international companies and selling their products
e.
Incorporating all product differences into one design and developing a global product
19. _____ is frequently used as an overall measure of a nation’s income; it represents the total purchasing power
of a nation.
a.
GDP
b.
NLRB
c.
PPP
d.
PEP
e.
CAB
20. International shipments using different modes of transportation is called _____.
a.
freightlining
b.
overnight shipping
c.
hybridization
d.
right-timing
e.
intermodal transporter
21. Prices usually need to be reduced in the _____ stage of the product life cycle due to increased competition.
a.
maturity
b.
growth
c.
decline
d.
introduction
e.
commercialization
22. _____ potential refers to the total number of units of a product that could possibly be sold by all companies
doing business in a specific international market.
a.
Market
b.
Sales
c.
Vertical
d.
Horizontal
e.
Environmental
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23. An advantage of the _____strategy include is that it does not require an up-front investment.
a.
indirect
b.
direct
c.
agent
d.
public
e.
distributor
24. A(n)_____ strategy refers to the use of channels of distribution to market products and services to
international markets.
a.
indirect
b.
direct
c.
agent
d.
public
e.
distributor
25. _____ pricing objectives are used to keep competitors out of a foreign market.
a.
Performance
b.
Prevention
c.
Maintenance
d.
Survival
e.
Growth
26. _____ refers to performance of various aspects of customer service that meets customer expectations.
a.
Integrity
b.
Reliability
c.
Authenticity
d.
Trustworthiness
e.
Dependability
27. Shipping products to overseas markets in trailer-sized containers is called _____.
a.
pipelining
b.
freight forwarding
c.
containerization
d.
chunking
e.
virtual distribution
28. Executives at Mary Kay Cosmetics’ European operations are conducting a study analyzing why households
have stopped purchasing certain products. These executives are engaging in _____.
a.
business analysis
b.
a concept test
c.
marketing research
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d.
a marketing intelligence system
e.
a global product system
29. _____ refers to unauthorized importers reselling a manufacturer’s product in the manufacturer’s domestic
market at a price less than what the manufacturer charges in that domestic market.
a.
Counterfeiting
b.
Arm's length pricing
c.
Transfer pricing
d.
Dumping
e.
Gray marketing
30. Storage and transportation operations that are used in moving products to a foreign market are called _____.
a.
a freight back-warder
b.
a freight forwarder
c.
an agent
d.
a public channel
e.
physical distribution
31. Of the following, which is NOT an advantage of locating R&D facilities in foreign countries?
a.
The MNC can use the intelligence of foreign scientists and engineers.
b.
New products developed overseas are more likely to be attuned to the company’s overseas markets.
c.
Often, the technology developed overseas can be transferred back to the home country.
d.
It costs more to build R&D facilities overseas.
e.
Products originally developed for emerging markets can be successfully sold in developed markets.
32. _____ collects information at one specific time in order to help marketers make better decisions about their
overseas markets.
a.
Business analysis
b.
A concept test
c.
Marketing research
d.
A marketing intelligence system
e.
A global product system
33. The step in the new-product development process in which the new product idea is presented to a small
sample of the international market to gauge its reaction is called _____.
a.
a global product
b.
concept testing
c.
business analysis
d.
product development
e.
vertical publication
34. There are three major markets within each foreign market that can purchase products and services and needs
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to be analyzed: consumer markets, the industrial market, and _____ markets.
a.
sales
b.
environmental
c.
government
d.
gray
e.
reverse
35. _____ refers to a price in a foreign market that undercuts the prices of companies competing there.
a.
Performance price
b.
Product elimination
c.
Containerization
d.
Dumping
e.
Gray marketing
36. KFC sells a number of core items around the world, but offers other items tailored to specific markets. KFC
is following a(n) _____ strategy.
a.
standardization
b.
adaptation
c.
glocalization
d.
marketing research
e.
hybrid
37. Agents for companies shipping products overseas who are chiefly involved with physical distribution
activities and documentation are called _____.
a.
freight back-warders
b.
freight forwarders
c.
agents
d.
public channels
e.
physical distributors
38. The _____ market includes companies that purchase products and services such as equipment and
machinery, supplies, lubricants, consulting services, cleaning services, advertising, and so on.
a.
industrial
b.
environmental
c.
government
d.
gray
e.
consumer
39. Contests and sweepstakes, coupons, end-aisle displays in stores, sponsorships, and trade shows are all
examples of _____.
a.
personal selling
b.
advertising
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c.
sales promotion
d.
publicity
e.
distribution
40. What is the last step in the new-product development process?
a.
A global product
b.
Concept testing
c.
Business analysis
d.
Market testing
e.
Commercialization
41. In the _____ stage of the product life cycle, sales gradually increase, as do profits, which often are losses in
the early part of this stage.
a.
maturity
b.
growth
c.
decline
d.
introduction
e.
commercialization
42. _____ pricing objectives for international products and services include bottom-line goals such as net profit,
return on investment, market share, and penetration.
a.
Performance
b.
Prevention
c.
Maintenance
d.
Survival
e.
Growth
43. _____ refers to the percentage of purchases in a category a buyer gives to one vendor.
a.
Performance price
b.
Share of wallet
c.
Market share
d.
Arm's length price
e.
Transfer price
44. Of the following, which is NOT one of the major methods that can be used to promote products and services
in international markets?
a.
Personal selling
b.
Advertising
c.
Sales promotion
d.
Publicity
e.
Distribution
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45. Which is the most focused of advertising media?
a.
television
b.
radio
c.
newspapers
d.
magazines
e.
direct mail
Enter the appropriate word(s) to complete the statement.
46. A compromise strategy between standardization and adaptation is called ______.
47. _______ refers to a price in a foreign market that undercuts the prices of companies competing there.
48. _____ are magazines that target specific industries.
49. _______ refers to stories about a company, its products or services, and its executives that appear in media.
50. Shipping products to overseas markets in various-sized trailers is called _____.
51. _____ is the total number of units of a product that could possibly be sold by all companies doing business
in a specific international market.
52. The percentage of purchases in a category a buyer gives to one vendor is called ______.
53. ______ refers to aspect of customer service that allows employees to take care of customer problems
immediately without having to consult superiors.
54. International shipments using different modes of transportation refers to _____.
55. _______ is a formal, written procedure to determine which of a company’s products should be dropped.
Scenario – Bridgemont Industries
Bridgemont Industries has operated on a global basis for over fifty years. It is one of the world’s top rated
producers of batteries and is renowned for having excellent products and outstanding customer service. In fact,
the company is to receive a global award for its products and customer service expertise in the coming year.
Bridgemont is very proud of its employees and acknowledges that without their experience the company would
not be rated at the top. The top management has a special reward planned for each customer service
representative that will be presented at the global award ceremony in June. Bridgemont feels it is only fair to
share a portion of its profits with the ones who helped generate it.
56. Distribution of its products has never been a problem for Bridgemont Industries. Which one of the
following is a distribution method that is least likely to be used by Bridgemont?
a.
Use of an indirect strategy of distribution
b.
Use distribution channels already in place in the foreign marketplace
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c.
Use an agent
d.
Enlist the services of a foreign distributor
e.
Use local government distribution systems
Scenario – Atlantic Camera & Film Company
The Atlantic Camera & Film Company has been in operation since the early 1970s. Since its inception in
Detroit, Michigan, this company has risen to hold the 35th spot in the industry. Its reputation for excellent
service and exemplary products has gained this company international recognition. Atlantic currently sells over
two hundred product per week to customers from foreign nations.
Atlantic’s organizational leaders recently decided to begin more intense promotion of the company’s products
within the international marketplace. They realize this is a golden opportunity to move the company upward in
ranking within the industry. While the company will maintain production within the boundaries of the United
States, it plans to establish four distribution centers located around the world for its products. The plans include
building a distribution site in South America, Europe, Asia, and the Middle East.
57. The Atlantic Camera & Film Company realizes it has many challenges to face while undertaking its
international plan for growth. Which one of the following would be least likely to require the company to adapt
to differences in the foreign market arena?
a.
Most foreign countries use the metric system of measurement
b.
Items are often used differently or for different purposes by foreigners than by
U.S. citizens
c.
The U.S. maintains an English system of measurement
d.
A standardization strategy to be used by the company
e.
Electrical voltages and systems differ in foreign nations
Scenario – Bridgemont Industries
Bridgemont Industries has operated on a global basis for over fifty years. It is one of the world’s top rated
producers of batteries and is renowned for having excellent products and outstanding customer service. In fact,
the company is to receive a global award for its products and customer service expertise in the coming year.
Bridgemont is very proud of its employees and acknowledges that without their experience the company would
not be rated at the top. The top management has a special reward planned for each customer service
representative that will be presented at the global award ceremony in June. Bridgemont feels it is only fair to
share a portion of its profits with the ones who helped generate it.
58. When Bridgemont is selling its products in foreign markets, it must decide how to price them. Which of the
following is least likely to be a factor for consideration when it comes to pricing of products being sold in
foreign markets?
a.
Associated costs
b.
Attractiveness of competitive products
c.
How high the demand is for the product
d.
Competitive product prices
e.
Price of product in the U.S.
Scenario – Atlantic Camera & Film Company
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The Atlantic Camera & Film Company has been in operation since the early 1970s. Since its inception in
Detroit, Michigan, this company has risen to hold the 35th spot in the industry. Its reputation for excellent
service and exemplary products has gained this company international recognition. Atlantic currently sells over
two hundred product per week to customers from foreign nations.
Atlantic’s organizational leaders recently decided to begin more intense promotion of the company’s products
within the international marketplace. They realize this is a golden opportunity to move the company upward in
ranking within the industry. While the company will maintain production within the boundaries of the United
States, it plans to establish four distribution centers located around the world for its products. The plans include
building a distribution site in South America, Europe, Asia, and the Middle East.
59. Operations in foreign markets are new to the Atlantic Camera & Film Company. While they have made
sales within these markets before, the company has never had distribution points located within foreign
borders. Which one of the following is least likely to be of high concern to the company as it begins this new
endeavor?
a.
Conducting an international demographic survey
b.
Analyzing the international marketplace
c.
Deciding what types of markets to sell its product to
d.
Studying the income levels of the individuals within the company’s market area
e.
Discussing the endeavor with the World Trade Organization
60. Atlantic is striving to be as successful as possible within the foreign marketplace. All of the following are
options for the company to use in making product sales except which one?
a.
Sell the same domestic products in the foreign market
b.
Wait for the market to adapt to the products offered
c.
The product can be modified for different countries
d.
New products can be specially designed for foreign markets
e.
A new globally suited product can be designed
Scenario – Bridgemont Industries
Bridgemont Industries has operated on a global basis for over fifty years. It is one of the world’s top rated
producers of batteries and is renowned for having excellent products and outstanding customer service. In fact,
the company is to receive a global award for its products and customer service expertise in the coming year.
Bridgemont is very proud of its employees and acknowledges that without their experience the company would
not be rated at the top. The top management has a special reward planned for each customer service
representative that will be presented at the global award ceremony in June. Bridgemont feels it is only fair to
share a portion of its profits with the ones who helped generate it.
61. Bridgemont takes great pride in the expertise of its customer service staff. Which one of the following is
least likely to be an attribute demonstrated by this company’s customer service department?
a.
Arranging for on-time deliveries
b.
Avoid call-back when problems arise
c.
Warranty explanation
d.
Honest and reliable installation and service
e.
Accurate shipments
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62. Bridgemont is well versed in conducting operations in the foreign marketplace. All of the following except
which one represent methods the company could use to market its products in the foreign market arena?
a.
Advertising
b.
Trade shows
c.
Create negative company publicity
d.
Hold contests or sweepstakes
e.
Use face-to-face contact with buyers
63. “Channels of distribution have no role in international markets.” Do you agree with this statement? Defend
your position.
64. Describe the advantages and disadvantages of different methods of promoting products in international
markets.
65. Describe how new products are developed for international markets.
66. Explain the objectives that are applicable to international pricing decisions.
67. Select two aspects of international demographics and explain why this information is important to global
companies.
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Answer Key
1. True
2. True
3. True
4. True
5. False
6. True
7. True
8. False
9. True
10. False
11. True
12. False
13. True
14. False
15. False
16. e
17. e
18. d
19. a
20. e
21. a
22. a
23. a
24. a
25. b
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26. b
27. c
28. c
29. e
30. e
31. d
32. c
33. b
34. c
35. d
36. c
37. b
38. a
39. c
40. e
41. d
42. a
43. b
44. e
45. e
46. glocalization
47. Dumping
48. Vertical publications
49. Publicity
50. containerization
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51. Market potential
52. share of wallet
53. Empowerment
54. intermodal transportation
55. Product elimination
56. e
57. d
58. e
59. e
60. b
61. b
62. c
63. Student answers will vary.
64. Student answers will vary.
65. Student answers will vary.
66. Student answers will vary.
67. Student answers will vary.
