Chapter 18 Global Marketing and R&D
True / False Questions
1.
The set of choices the firm offers to its targeted markets is known as the
marketing mix.
TRUE
The marketing mix is the set of choices the firm offers to its targeted
markets.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-01 Explain why it might make sense to vary the attributes of a product from country to country.
Topic: Introduction
2.
The marketing mix is comprised of product attributes, distribution strategy,
communication strategy, and pricing strategy.
TRUE
The four elements that constitute a firm’s marketing mix: product attributes,
distribution strategy, communication strategy, and pricing strategy.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Topic: Introduction
3.
The process of identifying distinct groups of consumers whose purchasing
behavior differs from others in important ways is known as consumer
behavior analysis.
FALSE
Market segmentation refers to identifying distinct groups of consumers
whose purchasing behavior differs from others in important ways.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-01 Explain why it might make sense to vary the attributes of a product from country to country.
Topic: Market Segmentation
4.
Markets can be segmented in only one way: by socio-cultural factors.
FALSE
Markets can be segmented in numerous ways: by geography, demography
(sex, age, income, race, education level, etc.), sociocultural factors (social
class, values, religion, lifestyle choices), and psychological factors
(personality).
AACSB: Analytic
Blooms: Remember
5.
The goal of market segmentation is to optimize the fit between the
purchasing behavior of consumers in a given segment and the marketing
mix, thereby maximizing sales to that segment.
TRUE
The goal is to optimize the fit between the purchasing behavior of
consumers in a given segment and the marketing mix, thereby maximizing
sales to that segment.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-01 Explain why it might make sense to vary the attributes of a product from country to country.
Topic: Market Segmentation
6.
The structure of market segments may differ significantly from country to
country.
TRUE
An important market segment in a foreign country may have no parallel in
the firm’s home country, and vice versa.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-01 Explain why it might make sense to vary the attributes of a product from country to country.
Topic: Market Segmentation
7.
Products sell well when their attributes match consumer needs.
TRUE
Products sell well when their attributes match consumer needs (and when
their prices are appropriate).
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-01 Explain why it might make sense to vary the attributes of a product from country to country.
Topic: Product Attributes
8.
Firms based in less-developed nations tend to build a lot of extra
performance attributes into their products.
FALSE
Firms based in highly developed countries tend to build a lot of extra
performance attributes into their products. These extra attributes are not
usually demanded by consumers in less developed nations, where the
preference is for more basic products.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-01 Explain why it might make sense to vary the attributes of a product from country to country.
Topic: Product Attributes
9.
Consumers in the most developed countries are typically willing to sacrifice
their preferred product attributes for lower prices.
FALSE
Consumers in most developed countries are often not willing to sacrifice
their preferred attributes for lower prices. Consumers in the most advanced
countries often shun globally standardized products that have been
developed with the lowest common denominator in mind.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-01 Explain why it might make sense to vary the attributes of a product from country to country.
Topic: Product Attributes
10.
Differences in technical standards constrain the globalization of markets.
TRUE
Differing government-mandated product standards can rule out mass
production and marketing of a standardized product. Differences in
technical standards also constrain the globalization of markets.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-01 Explain why it might make sense to vary the attributes of a product from country to country.
11.
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.
FALSE
The same options are available to a firm that manufactures outside the
country. Plus, the firm may decide to sell to an import agent, which then
deals with the wholesale distributor, the retailer, or the consumer.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-02 Recognize why and how a firm’s distribution strategy might vary among countries.
Topic: Distribution Strategy
12.
The four main differences between distribution systems are retail
concentration, channel length, channel exclusivity, and channel quality.
TRUE
The four main differences between distribution systems are retail
concentration, channel length, channel exclusivity, and channel quality.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-02 Recognize why and how a firm’s distribution strategy might vary among countries.
Topic: Distribution Strategy
13.
In a concentrated retail system, there are many retailers but none of them
have a significant share of the market.
FALSE
In a concentrated retail system, a few retailers supply most of the market.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-02 Recognize why and how a firm’s distribution strategy might vary among countries.
Topic: Distribution Strategy
14.
There is a tendency for greater retail concentration in developing countries.
FALSE
There is a tendency for greater retail concentration in developed countries.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-02 Recognize why and how a firm’s distribution strategy might vary among countries.
Topic: Distribution Strategy
15.
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.
FALSE
There is a tendency for greater retail concentration in developed countries.
Three factors that contribute to this are the increases in car ownership,
number of households with refrigerators and freezers, and number of two-
income households. All these factors have changed shopping habits and
facilitated the growth of large retail establishments sited away from
traditional shopping areas.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 18-02 Recognize why and how a firm’s distribution strategy might vary among countries.
Topic: Distribution Strategy
16.
The number of intermediaries between the producer and the consumer is
known as the channel length.
TRUE
Channel length refers to the number of intermediaries between the
Topic: Distribution Strategy
17.
A channel is considered to be long if the producer sells directly to the
consumer.
FALSE
If the producer sells directly to the consumer, the channel is very short. If
the producer sells through an import agent, a wholesaler, and a retailer, a
long channel exists.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-02 Recognize why and how a firm’s distribution strategy might vary among countries.
Topic: Distribution Strategy
18.
Concentrated retail systems tend to promote the growth of wholesalers to
serve retailers, which lengthens channels.
FALSE
Fragmented retail systems tend to promote the growth of wholesalers to
serve retailers, which lengthens channels.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-02 Recognize why and how a firm’s distribution strategy might vary among countries.
Topic: Distribution Strategy
19.
The more fragmented the retail system, the more expensive it is for a firm
to make contact with each individual retailer.
TRUE
The more fragmented the retail system, the more expensive it is for a firm
to make contact with each individual retailer.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-02 Recognize why and how a firm’s distribution strategy might vary among countries.
Topic: Distribution Strategy
20.
Countries with fragmented retail systems tend to have long channels of
distribution.
TRUE
Countries with fragmented retail systems tend to have long channels of
distribution, sometimes with multiple layers.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-02 Recognize why and how a firm’s distribution strategy might vary among countries.
Topic: Distribution Strategy
21.
The entry of large discount superstores such as Tesco and Carrefour have
shortened channel length in some countries.
TRUE
The business model of these retailers is in part based upon the idea that in
an attempt to lower prices, they cut out wholesalers and instead deal
directly with manufacturers.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-02 Recognize why and how a firm’s distribution strategy might vary among countries.
Topic: Distribution Strategy
22.
An exclusive distribution channel is one that is difficult for outsiders to
access.
TRUE
An exclusive distribution channel is one that is difficult for outsiders to
access.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-02 Recognize why and how a firm’s distribution strategy might vary among countries.
Topic: Distribution Strategy
23.
One benefit of a shorter channel is that it cuts selling costs when the retail
sector is very fragmented.
FALSE
One benefit of a longer channel is that it cuts selling costs when the retail
sector is very fragmented.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-02 Recognize why and how a firm’s distribution strategy might vary among countries.
Topic: Distribution Strategy
24.
Import agents are typically limited to independent trading houses.
FALSE
Import agents are not limited to independent trading houses; any firm with a
strong local reputation could serve as well.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-02 Recognize why and how a firm’s distribution strategy might vary among countries.
Topic: Distribution Strategy
25.
The best way for a firm to overcome cultural barriers is to develop cross-
cultural literacy.
TRUE
The best way for a firm to overcome cultural barriers is to develop cross-
cultural literacy.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-03 Identify why and how advertising and promotional strategies might vary among countries.
Topic: Communication Strategy
26.
Source effects occur when the receiver of the message evaluates the
message based on the status or image of the sender.
TRUE
Source effects occur when the receiver of the message evaluates the
message on the basis of the status or image of the sender.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-03 Identify why and how advertising and promotional strategies might vary among countries.
Topic: Communication Strategy
27.
Source effects and country of origin effects are always negative.
FALSE
Source effects and country of origin effects are not always negative. French
wine, Italian clothes, and German luxury cars benefit from nearly universal
positive source effects.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-03 Identify why and how advertising and promotional strategies might vary among countries.
Topic: Communication Strategy
28.
A company that depends on mass media advertising to communicate its
marketing message to potential consumers is using a push strategy.
FALSE
A push strategy emphasizes personal selling rather than mass media
advertising in the promotional mix. A pull strategy depends more on mass
media advertising to communicate the marketing message to potential
consumers.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-03 Identify why and how advertising and promotional strategies might vary among countries.
Topic: Communication Strategy
29.
When a company emphasizes personal selling, the company is probably
using a push strategy.
TRUE
A push strategy emphasizes personal selling rather than mass media
advertising in the promotional mix.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-03 Identify why and how advertising and promotional strategies might vary among countries.
Topic: Communication Strategy
30.
A push strategy is generally favored by consumer goods firms that are trying
to sell to a large segment of the market.
FALSE
Firms in consumer goods industries that are trying to sell to a large segment
of the market generally favor a pull strategy.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-03 Identify why and how advertising and promotional strategies might vary among countries.
Topic: Communication Strategy
31.
A push strategy makes sense when distribution channels are short.
TRUE
Push strategies tend to be emphasized for industrial products or complex
new products or when distribution channels are short and when few print or
electronic media are available.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-03 Identify why and how advertising and promotional strategies might vary among countries.
Topic: Communication Strategy
32.
A firm may be prevented from using standardized advertising because of
advertising regulations.
TRUE
Advertising regulations may block implementation of standardized
advertising.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-03 Identify why and how advertising and promotional strategies might vary among countries.
Topic: Communication Strategy
33.
In a competitive market, prices have to be higher than in a market where
the firm has a monopoly.
FALSE
Price discrimination involves charging whatever the market will bear; in a
competitive market, prices may have to be lower than in a market where the
firm has a monopoly.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 18-04 Explain why and how a firm’s pricing strategy might vary among countries.
Topic: Pricing Strategy
34.
When a small change in price produces a large change in demand, demand
is said to be inelastic.
FALSE
Demand is said to be elastic when a small change in price produces a large
change in demand; it is said to be inelastic when a large change in price
produces only a small change in demand.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 18-04 Explain why and how a firm’s pricing strategy might vary among countries.
Topic: Pricing Strategy
35.
The use of price as a competitive weapon to drive weaker competitors out
of a national market is known as predatory pricing.
TRUE
Predatory pricing is the use of price as a competitive weapon to drive
weaker competitors out of a national market. Once the competitors have
left the market, the firm can raise prices and enjoy high profits.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-04 Explain why and how a firm’s pricing strategy might vary among countries.
Topic: Pricing Strategy
36.
Pricing decisions around the world must be delegated to the managers of
various national subsidiaries.
FALSE
Pricing decisions around the world need to be centrally monitored though it
is tempting to delegate full responsibility for pricing decisions to the
managers of various national subsidiaries, thereby reaping the benefits of
decentralization.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
37.
The increasing pace of technological change has resulted in a dramatic
shortening of product life cycles.
TRUE
The pace of technological change has accelerated since the Industrial
Revolution in the eighteenth century, and it continues to do so today. The
result has been a dramatic shortening of product life cycles.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 18-05 Describe how the globalization of the world economy is affecting new-product development
within the international business firm.
Topic: New-Product Development
38.
To design the product so that it can be manufactured in a cost-effective
manner, the firm needs to build close links between R&D, marketing, and
manufacturing.
TRUE
The firm must apply technology to develop products that satisfy consumer
needs, and it must design the product so that it can be manufactured in a
cost-effective manner. To do that, the firm needs to build close links
between R&D, marketing, and manufacturing.
within the international business firm.
Topic: New-Product Development
39.
The rate of new-product development seems to be lesser in countries
where more money is spent on basic and applied research and
development.
FALSE
The rate of new-product development is greater in countries where more
money is spent on basic and applied research and development.
AACSB: Analytic
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 18-05 Describe how the globalization of the world economy is affecting new-product development
within the international business firm.
Topic: New-Product Development
40.
New-product development has a high failure rate.
TRUE
Although a firm that is successful at developing new products may earn
enormous returns, new-product development has a high failure rate.
AACSB: Analytic
Blooms: Remember
Difficulty: 1 Easy
Learning Objective: 18-05 Describe how the globalization of the world economy is affecting new-product development
within the international business firm.
Topic: New-Product Development