Chapter 10: International Product and Service Strategies
TRUE/FALSE
1. The initial International Product Life Cycle addressed four levels of country development.
2. In the growth stage of the IPLC, manufacturing moves abroad, and the product is imported to the home
country and other industrialized countries.
3. Products are usually developed in emerging markets, characterized by a high level of education and
lower labor costs than industrialized countries.
4. During the introduction stage of the IPLC, products are developed in industrialized countries.
5. In order to quickly recover the high costs of product development and launching, products are
marketed to consumers in emerging markets.
6. The growth stage is characterized by increasing competition and new product variants being offered to
the market.
7. At the end of the growth stage of the IPLC, the product is standardized.
8. The growth stage of the IPLC is characterized by a leveling of profits and a slowdown in sales growth
as the product is adopted by most target consumers.
9. The maturity stage of the IPLC is characterized by a decline in sales growth.
10. Production is moved to low-cost countries in the maturity stage of the product life cycle.
11. Manufacturing moves to developing countries in the growth stage of the IPLC.
12. Having an international presence during the decline stage of the IPLC, particularly in developing
countries, is important.
13. One of the main benefits of going international and engaging in international marketing is the ability
of a firm to extend the product life cycle.
14. The product portfolio of a firm is usually diversified into products that are in different stages of the
product life cycle.
15. The product width is the total number of brands in the product mix.
16. The product mix is the total number of product lines the company offers.
17. The product depth refers to the number of different offerings for a particular brand.
18. The first step in the new product development process is to conduct a conjoint analysis.
19. Most product and service firms are driven by the production concept.
20. The Freeplay Energy with its windup radio is an example of a marketing-focused company.
21. Competition limits the ideas for new products or services.
22. In the process of screening new product ideas, it is best to consider both the extent to which the
product fits with the target consumers, as well as with the overall mission of the organization.
23. At the idea-generation stage, a checklist is usually developed to screen for product ideas that do not
meet these criteria.
24. Conjoint analysis is typically used in the business analysis stage of new product development.
25. Nine out of ten new products fail.
26. Controlled test marketing is usually conducted by a research firm in an industrialized country.
27. Simulated test marketing is open to competitive sabotage.
28. Multinational companies usually limit test marketing to their home countries.
29. The most important factor of an international product launch is often high service quality.
30. New items in an existing product line for a company are likely to have the higher success rate than
“new to the world” type products.
31. Continuous innovations create new industries or new standards of management, manufacturing and
servicing.
32. Endoscopic surgery is an example of a radical innovation.
33. Continuous innovations cause a great deal of disruption for consumers and often involve new
industries or new standards of management.
34. Most of the innovation taking place today is discontinuous.
35. Generally, the diffusion rate tends to be faster in “lag” countries.
36. The later the product or service is introduced in a lag country, the faster the adoption rate.
37. To be successful, a new product or service must offer a relative advantage compared with the other
offerings available on the market.
38. To be successful, a new product must be compatible with the needs of consumers.
39. A new product or service must be observable (or communicable to others) and have a high trialability.
40. Countries where the product or service is first introduced and adopted are referred to as lag countries,
and countries where the product or service is adopted at a later stage are known as lead countries.
MULTIPLE CHOICE
1. Which of the following is not a level of country development in international product life cycle
theory?
a.
Developing or middle-income
b.
Less-developed or low-income
c.
Advanced, developed, or high-income
d.
Each of the above is part of the IPLC theory.
2. At which stage of the international product life cycle does manufacturing typically move to developing
countries?
a.
Introduction
c.
Maturity
b.
Growth
d.
Decline
3. During which stage of the international product life cycle do international sales become crucial for the
firm?
a.
Introduction
c.
Maturity
b.
Growth
d.
Decline
4. In which stage of the product life cycle are products most likely to be developed in industrialized
countries?
a.
Introduction
c.
Maturity
b.
Growth
d.
Decline
5. Which stage of the product life cycle is characterized by the introduction of new product variants?
a.
Introduction
c.
Maturity
b.
Growth
d.
Decline
6. Which stage of the product life cycle is characterized by a rapid increase in competition?
a.
Introduction
c.
Maturity
b.
Growth
d.
Decline
7. Toward the end of which stage of the product life cycle does the firm focus on developing economies
of scale?
a.
Introduction
c.
Maturity
b.
Growth
d.
Decline
8. In which stage of the product life cycle are standards likely to be established?
a.
Introduction
c.
Maturity
b.
Growth
d.
Decline
9. Which stage of the international product life cycle is usually the longest stage?
a.
Introduction
c.
Maturity
b.
Growth
d.
Decline
10. Which stage of the international product life cycle is characterized by a leveling of profits and a
slowdown in sales growth?
a.
Introduction
c.
Maturity
b.
Growth
d.
Decline
11. In which stage of the product life cycle are products likely to be imported to the home country from
the firm’s foreign operations?
a.
Introduction
c.
Maturity
b.
Growth
d.
Decline
12. Which of the following is not an example of a bridge offering?
a.
Escada
c.
DKNY
b.
Ann Klein II
d.
Emporio Armani
13. The complete assortment of the products that a company offers to its target international consumers is
the
a.
product width.
c.
product depth.
b.
product mix.
d.
product assortment.
14. The total number of products in a product line is known as the
a.
product length.
c.
product depth.
b.
product width.
d.
product assortment.
15. The extent to which the different product lines are related, use the same distribution channels, and
have the same final consumers is known as
a.
product length.
c.
product depth.
b.
product consistency.
d.
product assortment.
16. The total number of product lines that the company offers is the:
a.
product length.
c.
product depth.
b.
product width.
d.
product assortment.
17. Lipton tea comes in at least three variants: Lipton Yellow Label, Lipton Ice Tea, and Lipton Brisk.
This is an example of:
a.
product length
c.
product depth
b.
product width
d.
product variety
18. The first step in the new product development process is:
a.
competitive analysis.
c.
screening new product ideas.
b.
idea generation.
d.
business analysis.
19. Haagen Dazs’ idea to introduce its Dulce de Leche ice cream in the United states came from which
source?
a.
Consumers
c.
Channel members
b.
Competition
d.
Consultants
20. Which of the following is not considered to be unfavorable in the new product screening process?
a.
Targeting new customers
c.
Meeting new service requirements
b.
Using new channels
d.
All of the above are unfavorable.