64.
The most important determinant of channel length is the degree to which a
retail system is ____.
A.
concentrated
B.
fragmented
C.
decentralized
D.
globalized
The most important determinant of channel length is the degree to which a
retail system is fragmented. Fragmented retail systems tend to promote the
growth of wholesalers to serve retailers, which lengthens channels.
65.
Which of the following statements about fragmented retail systems is true?
A.
Countries with fragmented retail systems tend to have short channels of
distribution.
B.
The more fragmented the retail system, the less expensive it is for a firm
to make contact with each individual retailer.
C.
Fragmented retail systems tend to promote the growth of wholesalers to
serve retailers.
D.
When the retail sector is very fragmented, it makes sense for the firm to
deal directly with retailers.
Fragmented retail systems tend to promote the growth of wholesalers to
serve retailers, which lengthens channels. The more fragmented the retail
system, the more expensive it is for a firm to make contact with each
individual retailer.
66.
What kind of retail systems do rural India and China have?
A.
Fragmented
B.
Direct
C.
Indirect
D.
Concentrated
In a country where there are more than a million small retailers, as in rural
India and China, to sell directly to the retailers, the firm would have to build
a huge sales force. This would be very expensive, particularly since each
sales call would yield a very small order. Accordingly, it makes economic
sense for the firm to sell to the wholesalers and the wholesalers to deal
with the retailers.
67.
With a concentrated retail sector:
A.
a relatively large sales force is required.
B.
the orders generated from each sales call can be large.
C.
there are long channels of distribution.
D.
it is expensive for the firm to make contact with each individual retailer.
A relatively small sales force is required to deal with a concentrated retail
sector, and the orders generated from each sales call can be large. Such
circumstances tend to prevail in the United States.
68.
A(n) ____ distribution channel is one that is difficult for outsiders to access.
A.
selective
B.
intensive
C.
exclusive
D.
multi-channel
An exclusive distribution channel is one that is difficult for outsiders to
access. This occurs because retailers tend to prefer to carry the products of
established manufacturers of foodstuffs with national reputations rather
than gamble on the products of unknown firms.
69.
When a channel is exclusive:
A.
the firm sells and distributes only high-end products.
B.
it is controlled by market leaders or by firms who have a niche market.
C.
the firm’s products are focused only on the elite, upper class customers.
D.
it is often difficult for a new firm to get access to shelf space in
supermarkets.
This occurs because retailers tend to prefer to carry the products of
established manufacturers of foodstuffs with national reputations rather
than gamble on the products of unknown firms.
70.
____ refers to the expertise, competencies, and skills of established
retailers in a nation, and their ability to sell and support the products of
international businesses.
A.
Channel exclusivity
B.
Channel knowledge
C.
Channel quality
D.
Channel skill
The expertise, competencies, and skills of established retailers in a nation,
and their ability to sell and support the products of international
businesses, is referred to as their channel quality. Although the quality of
retailers is good in most developed nations, in emerging markets and less
developed nations, channel quality is variable at best.
71.
Which of the following statements about the choice of distribution strategy
is true?
A.
The longer a channel, the greater the aggregate markup, and the higher
the price that consumers are charged for the final product.
B.
If price is an important competitive weapon and if the firm does not want
to see its profit margins squeezed, other things being equal, the firm
would prefer to use a longer channel.
C.
The shorter a channel, the greater the aggregate markup, and the higher
the price that consumers are charged for the final product.
D.
An international business must use shorter channels in countries where
the retail sector is fragmented and longer channels in countries where
the retail sector is concentrated.
Because each intermediary in a channel adds its own markup to the
products, there is generally a critical link between channel length, the final
selling price, and the firm’s profit margin. The longer a channel, the greater
the aggregate markup, and the higher the price that consumers are charged
for the final product. To ensure that prices do not get too high as a result of
markups by multiple intermediaries, a firm might be forced to operate with
lower profit margins.
72.
In the 1960s, the Swedish vacuum manufacturer Electrolux successfully
marketed vacuums in the United Kingdom with the slogan “Nothing sucks
like an Electrolux”.
The informal US meaning of the word ‘sucks’ was already well known in the
UK at the time, and the company hoped the slogan, with its possible double
entendre, would gain attention. When this slogan was used in the American
market, it was a catastrophe. This is an example of:
A.
cultural differences.
B.
religious differences.
C.
source effects.
D.
noise levels.
Cultural differences limit a firm’s ability to use the same marketing message
and selling approach worldwide. What works well in one country may be
offensive in another.
73.
To overcome cultural barriers, companies should:
A.
develop products specifically for each market.
B.
focus on universal needs.
C.
focus only on international market segments.
D.
develop cross-cultural literacy.
The best way for a firm to overcome cultural barriers is to develop cross-
cultural literacy. In addition to developing cross-cultural literacy, the firm
should use local input, such as a local advertising agency, in developing its
marketing message.
74.
When the receiver of a message evaluates a message based on the status
or image of the sender, ____ are said to have occurred.
A.
sender effects
B.
noise effects
C.
source effects
D.
communication effects
Source effects occur when the receiver of a message evaluates the
message on the basis of the status or image of the sender. Source effects
can be damaging for an international business when potential consumers in
a target country have a bias against foreign firms.
75.
The extent to which the place of manufacturing influences product
evaluations is known as ____.
A.
source effects.
B.
country of origin effects.
C.
noise effects.
D.
location effects.
Research suggests that the consumer may use country of origin as a cue
when evaluating a product, particularly if he or she lacks more detailed
knowledge of the product.
76.
The “Swiss Made” label has leveraged several watch-making companies
(for example, TAG Heuer) for decades now. This is an example of a ____
effect.
A.
linguistic
B.
country of origin
C.
noise
D.
cultural
The extent to which the place of manufacturing influences product
evaluations is known as country of origin effects.
77.
Which of the following is an example of a positive source effect?
A.
A 3M Post-it note
B.
A Dell laptop
C.
An Audi R8
D.
An Apple iPod
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. In such cases, it may pay a firm to emphasize its
foreign origins.
78.
The probability of effective communications is reduced by:
A.
noise.
B.
location effects.
C.
country of origin effects.
D.
source effects.
Noise refers to the other messages competing for a potential consumer’s
attention, and this varies across countries.
79.
Which of the following statements about barrier to international
communication is true?
A.
Source effects occur when the receiver of the message evaluates the
message on the basis of the location of the sender.
B.
The best way for a firm to overcome cultural barriers is to use local input.
C.
Source effects and country of origin effects are always negative.
D.
Noise is extremely high in highly developed countries such as the United
States.
Fewer firms vie for the attention of prospective customers in developing
countries; thus, the noise level is lower.
80.
When a firm emphasizes personal selling rather than mass media
advertising in the promotional mix, the firm is using a:
A.
standardized strategy.
B.
pull strategy.
C.
push strategy.
D.
localized strategy.
Although effective as a promotional tool, personal selling requires intensive
use of a sales force and is relatively costly.
81.
Which of the following statements is true?
A.
Firms in consumer goods industries that are trying to sell to a large
segment of the market generally favor a push strategy.
B.
Mass communication has cost advantages for firms in consumer goods
industries that are trying to sell to a large segment of the market.
C.
Direct selling may be the only way to reach consumers in poor nations
with low literacy levels.
D.
Firms that sell industrial products or other complex products favor a pull
strategy.
Exceptions can be found in poorer nations with low literacy levels, where
direct selling may be the only way to reach consumers.
82.
A firm that depends more on mass media advertising to communicate the
marketing message to potential consumers is using a:
A.
pull strategy.
B.
push strategy.
C.
standardized strategy.
D.
localized strategy.
Although some firms employ only a pull strategy and others only a push
strategy, still other firms combine direct selling with mass advertising to
maximize communication effectiveness.
83.
A push strategy is appropriate when:
A.
there are many choices of electronic media.
B.
the firm is selling consumer goods.
C.
distribution channels are long.
D.
the firm is selling complex new products.
Firms that sell industrial products or other complex products favor a push
strategy. Direct selling allows the firm to educate potential consumers
about the features of the product.