Chapter 6: Consumer, Industrial, and Government Markets
TRUE/FALSE
1. Globalization reflects the spread of free-market capitalism.
2. Globalization implies that many nations are losing some autonomy as larger countries and corporations
extend their political power around the world.
3. In business-to-business markets, global customers seek to decentralize and vary the methods of
purchasing of raw materials, components, and finished goods.
4. Emerging markets are developed economies such as the United States and United Kingdom.
5. People all over the world consistently follow Maslow’s hierarchy of needs.
6. Norms remain the same across all countries.
7. In nations with weak institutional guidelines, corruption is often a factor that affects the
purchase behavior of organizational buyers.
8. Demographic factors have no influence on the tendency of consumers to discriminate against foreign
products.
9. Jake, a U.S. citizen, displays consumer ethnocentrism if he purchases electronic gadgets that are
manufactured in Japan.
10. Cosmopolitans are especially attractive targets for MNEs launching new products.
11. Industrial buyers are strongly influenced by globalization.
12. Industrial buyers in countries with high uncertainty avoidance cultures are more willing to try new
offerings from new market entrants.
13. Most emerging market countries have attained the mass consumption stage of economic development.
14. Inflation complicates the international buying process by distorting exchange rates and the cost of
capital.
15. The aim of competitive bidding is to avoid corruption that may accompany choosing suppliers based
on personal relationships.
16. The GPA’s main goal is to open government procurement to international competition.
17. Global account management (GAM) ensures that customers gain economies of scale by implementing
product differentiation for each of its worldwide operations.
18. Multinational firms can overcome a negative COO by having its product distributed through a
well-respected intermediary in the target market.
19. The ultimate goal of CRM is profit maximization for the firm.
20. If the anticipated cost is below a minimum threshold amount, the government is typically required to
open the contract to a public bidding process.
MULTIPLE CHOICE
1. Which of the following is true about globalization?
a.
It leads to the formation of heterogeneous, individual cultures.
b.
It leads to increasing trade barriers between nations.
c.
It restricts the spread of free-market capitalism.
d.
It implies that many nations are losing some autonomy.
2. _____ are individuals or organizational buyers that exhibit similar needs and tastes worldwide.
a.
Change agents
b.
Social entrepreneurs
c.
Ethnocentric consumers
d.
Global consumers
3. Which of the following characterizes the existence of a consumer culture?
a.
A large proportion of the population living under the poverty level
b.
Emphasis on autarky-based economies
c.
A perception of consumption as an undesirable activity that causes a drain on the economy
d.
Level and quality of consumption as an important criterion for judging other countries
4. Which of the following strongly influences a consumer’s ability to purchase goods and services?
a.
Legal factors
b.
Political environment
c.
Income level
d.
Sociocultural factors
5. Which of the following is true about developing markets?
a.
They comprise only high-income consumers.
b.
They represent the smallest market for an international marketer for the sale of goods and
services.
c.
Infrastructure is typically very good in these markets.
d.
Firms tend to devise novel business strategies to market in these countries.
6. Which of the following is an example of a developing market?
a.
Canada
b.
Germany
c.
Angola
d.
The United States of America
7. A(n) _____ is an internal force that orients a person’s activities toward satisfying a need or achieving a
goal.
a.
norm
b.
virtue
c.
motive
d.
intuition
8. Who proposed the hierarchy of needs theory?
a.
Abraham Maslow
b.
Douglas McGregor
c.
Frederick Herzberg
d.
David McClelland
9. According to Maslow’s hierarchy of needs, which needs have to be fulfilled before a consumer can
attempt to fulfill his safety needs?
a.
Love and belonging needs
b.
Physiological needs
c.
Esteem needs
d.
Self-actualization needs
10. Which of the following represents the highest level in Maslow’s hierarchy of needs?
a.
Esteem needs
b.
Physiological needs
c.
Self-actualization needs
d.
Safety needs
11. Which of the following is true about the relevance of Maslow’s hierarchy of needs to international
marketing?
a.
Need levels remain the same worldwide with regard to economic status, technology level,
and other factors.
b.
People all over the world consistently follow Maslow’s hierarchy of needs.
c.
In developing economies, people may forgo meeting some physiological needs or safety
needs in order to purchase higher-level products such as cell phones and automobiles.
d.
In countries that are characterized by substantial poverty, the focus is on satisfying
self-actualization needs.
12. _____ are accepted behaviors within a society or group.
a.
Norms
b.
Virtues
c.
Anomies
d.
Motives
13. Which of the following best describes conservatism?
a.
It is the tendency to spend excessively on purchasing goods to enhance consumers’ social
image.
b.
It is the tendency to prefer traditions and choices that have stood the test of time.
c.
It refers to a strong openness to acquiring goods from other countries.
d.
It is the tendency to view domestically produced goods as superior to those made in other
countries.
14. Karen loves to shop. She keeps herself updated about all the latest products introduced in the market.
She loves to spend on things as she believes possessing such goods enhances her self-image. She is
always envious about others’ possessions and never shares her possessions with others. Which of the
following cultural norms can be associated with Karen?
a.
Physicalism
b.
Materialism
c.
Subjective idealism
d.
Conservatism
15. Which of the following is a situational factor influencing the global consumer?
a.
The beliefs and attitudes based on the norms of reference groups
b.
The income of the consumer
c.
The sociocultural norms of a society
d.
The geographical location and climate of a place
16. Which of the following is true about the factors that influence buyer reactions to country of origin
(COO)?
a.
COO stereotypes remain the same irrespective of the origin of the judge and the category
of the product being judged.
b.
Consumers’ opinions remain the same irrespective of the national origin of the firm and
the location where its product is actually made.
c.
As the capacity of countries to perform well in specific industries improves, the COO
phenomenon varies over time.
d.
Demographic factors have no influence on the tendency of consumers to discriminate
against foreign products.
17. _____ is the tendency to view domestically produced goods as superior to those produced in other
countries.
a.
Conspicuous consumption
b.
Consumer ethnocentrism
c.
Narrowcasting
d.
World mindedness
18. Which of the following indicates consumer ethnocentrism?
a.
Serena purchases items only if they are approved by her sister.
b.
William buys only products that have the label “Made in U.S.A.,” as he considers it
unpatriotic to buy foreign goods.
c.
Kevin believes that the more he spends on purchasing things, the higher is his self-image
in the society.
d.
Stacey buys only imported products as she believes they are superior in quality.
19. _____ refers to a consumer’s interest in, and openness to, acquiring goods from other countries.
a.
World mindedness
b.
Conspicuous consumption
c.
Narrowcasting
d.
Consumer ethnocentrism
20. A(n) _____ is someone who maintains a network of links and personal contacts with those outside the
immediate community and is willing to venture into other cultures.
a.
ethnocentric consumer
b.
intrapreneur
c.
provincial consumer
d.
cosmopolitan
21. _____ refers to demand for raw materials, parts, and other inputs that depends on demand for some
other good.
a.
Derived demand
b.
Latent demand
c.
Effective demand
d.
Marginal demand
22. Which of the following refers to the expected functioning of a product relative to the cost to buy and
use it?
a.
Cost-plus pricing
b.
Premium pricing
c.
Cost-performance
d.
Inventory profit
23. Which of the following is true about the effects of culture on the global industrial buyer?
a.
In organizations with flat structures, the purchasing managers employ systematic
approaches, with substantial consistency and transparency.
b.
Industrial buyers across the world have similar attitudes toward risk.
c.
In low uncertainty avoidance countries, marketers must work hard to convince purchasing
managers to accept proposals from new vendors.
d.
High uncertainty avoidance cultures are more innovative and open to new approaches.
24. Which stage of economic development is associated with subsistence farming and the practice of
consumption of outputs by producers rather than trading them?
a.
Transitional stage
b.
Traditional society
c.
Mass consumption
d.
Take-off
25. When a country evolves beyond dependence on agriculture and begins to engage in simple
manufacturing of value-added goods, it is said to be in the _____ stage of economic development.
a.
traditional
b.
take-off
c.
mass consumption
d.
transitional
26. Which of the following is a feature of the take-off stage of economic development?
a.
Countries become thriving consumer and industrial economies with a substantial services
sector.
b.
Countries are characterized by subsistence activity in which output is consumed by
producers rather than traded.
c.
Countries emphasize the production of high-technology products and development of a
strong services sector.
d.
Producers specialize and begin to mass produce goods that can be exchanged
with trading partners worldwide.
27. Which of the following countries is in the drive to maturity stage of economic development?
a.
South Korea
b.
Brazil
c.
Vietnam
d.
China
28. The _____ stage of economic development is characterized by a thriving consumer and industrial
economy with a substantial services sector.
a.
transitional
b.
mass consumption
c.
traditional
d.
take-off
29. Which of the following characteristics about the government buyer is true?
a.
Selling to governments can be highly adhocratic.
b.
Most governments have a system for opening government purchases that exceed a certain
dollar value to international bids.
c.
Governments at the federal level are not involved in the purchase of goods and services.
d.
The nature of government procurement is the same worldwide.
30. A(n) _____ is a group of customers who share common characteristics across numerous national
markets.
a.
primary group
b.
distribution channel
c.
T-group
d.
global market segment
31. Which of the following refers to a strategy in which the offering is placed similarly in the minds of
buyers across an entire region or worldwide?
a.
Product differentiation strategy
b.
Micro-segmentation strategy
c.
Global positioning strategy
d.
Niche marketing strategy
32. Which of the following is true about global account management (GAM)?
a.
It sources different products and operations every time for its worldwide operations.
b.
It ensures the supplier speaks to the customer in one voice, reducing the possibility for
miscommunication.
c.
It results in increasing costs and lower efficiencies.
d.
It results in customers dealing with a number of global account executives or teams.
33. Which of the following strategies is employed by firms to overcome consumer ethnocentrism and the
COO phenomenon?
a.
Offering lower quality products
b.
Charging lower prices
c.
Producing the good in a poor country where labor charges are the least
d.
Partnering with lesser-known companies abroad
34. _____ refers to collecting, storing, and analyzing customer data to develop and maintain two-way
relations between the firm and key customers.
a.
Total quality management
b.
Warehousing management
c.
Customer relationship management
d.
Operations management
35. Which of the following best describes public tendering?
a.
It refers to the transfer of ownership of the business from the government to the private
sector.
b.
It refers to the tendency of the public to view domestically produced goods as superior to
those produced in other countries.
c.
It refers to the public’s interest in, and openness to, acquiring goods from other countries.
d.
It refers to the purchasing of products and services on behalf of a government agency or
other public entity.
ESSAY
1. Identify the characteristics for the existence of consumer culture.
2. What are the various factors that influence buyer reactions to country-of-origin (COO)?
ANS:
3. Briefly explain the process of public tendering.