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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
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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?
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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
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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
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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
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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.
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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.
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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
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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.
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⊚ 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.
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⊚ 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
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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
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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.
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⊚ 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
Answer Key
Test name: chapter 18
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