121) Existence of gray markets leads to which of the following outcomes?
A) They make the distribution channel stronger.
B) They create a free-rider problem making legitimate distributors’ investments in supporting a
manufacturer’s product less productive.
C) Goods sold in grey markets are always counterfeit.
D) Goods sold in grey markets come with standard product warranties.
E) Taxes imposed on grey market products are very high.
122) Dumping occurs when a company ________.
A) entering a foreign market charges either less than its costs or less than it charges at home
B) entering a foreign market charges more than the price in its home market
C) entering a foreign market charges prices that are lower than those charged by its competitors
in this market
D) sets its price equal to its average cost of production
E) exports its products to a foreign country to increase its revenue in spite of excess demand in
the home country
123) Various governments force companies to charge the ________ price, which is charged by
other competitors for the same or a similar product.
A) gray market
B) implicit
C) arm’s-length
D) authorized
E) contingent
124) In India, where people often buy items like cigarettes one at a time because incomes are low
and people shop daily because homes lack storage and refrigeration, ________ remains an
important function of intermediaries and helps perpetuate long channels of distribution.
A) breaking bulk
B) jobbing
C) type of transportation
D) information sharing
E) reinforcing policies
125) Which of the following is likely if the distribution channel for a product in the foreign
country is long?
A) The foreign country buyers pay a high price.
B) The consumer will pay arms-length price.
C) The profit margin of the sellers increases.
D) The intermediaries are motivated to reship the product to another country to earn higher
profits.
E) The seller can increase profit margins by charging a uniform price.
126) As people in developing countries often prefer to buy in smaller quantities, ________ is one
of the most important functions of intermediaries in developing countries and helps perpetuate
the long channels of distribution, which are a major obstacle to the expansion of retailing.
A) product adaptation
B) breaking bulk
C) diversification
D) transfer pricing
E) dual adaptation
127) If PepsiCo charges what each country could afford, ignoring cost differences from country
to country, it would be using a(n) ________ price.
A) uniform
B) market-based
C) cost-based
D) escalation
E) skimming
128) If a society is collectivist, it would imply that the self-worth of the people is rooted in
individual achievements.
129) Straight extension means using an established product’s brand name for a new item in the
same product category.
130) Product adaptation not only involves altering the product to meet local preferences, but also
calls for a change in the communication strategy.
131) Forward invention refers to reintroducing earlier product forms that are well adapted to a
foreign country’s needs.
132) Communication adaptation occurs when companies change marketing communications for
each local market.
133) If Kellogg’s offered different varieties of breakfast cereals in India as compared to
Australia, and also positioned its products differently in the two countries, then Kellogg’s would
be engaging in dual adaptation.
134) The use of media may require international adaptation because media availability varies
from country to country.
135) When companies sell on the Internet, price becomes transparent, and price differentiation
between countries declines.
136) If a company charges its subsidiary in a foreign country too low a transfer price, it can be
accused of dumping.
137) Gray market activities harm distributor relations, tarnish the manufacturer’s brand equity,
and undermine the integrity of the distribution channel.
138) Web-crawling technology searches for counterfeit storefronts and sales by detecting domain
names similar to legitimate brands.
139) As required levels of distribution increase, so do customer prices relative to the importer’s
price.
140) Coors brand slogan “Turn it loose” translated into Spanish was interpreted as “suffer from
diarrhea,” which is an example of why marketers may need to change brand elements when they
launch products and services globally.
141) Comparative advertising is not acceptable in Japan, and is illegal in India and Brazil.
142) Most brands are adapted to some extent to reflect significant differences in consumer
behavior, brand development, competitive forces, and the legal or political environment. Identify
the five international product and communication strategies available to firms that expand their
businesses to foreign countries.
143) Name the three choices that companies have for setting prices in different countries.
144) “No matter which nation a person belongs to, people’s inherent needs and requirements are
essentially the same.” Do you agree with this statement? How relevant is this statement in the
context of marketing?
145) International companies must decide how much to adapt their marketing strategy to local
conditions. Identify and explain the two strategies companies can use.
146) Discuss three disadvantages of standardizing the marketing mix worldwide.
147) Discuss three advantages of standardizing the marketing mix worldwide.
148) Satisfying different consumer needs and wants can require different marketing programs.
Name the four cultural dimensions that differentiate countries, as identified by Hofstede.
149) Some types of products travel better across borders than others. What types of products are
most likely to be successful as straight extensions?
150) You work for a company that produces and markets apparel for men and women, and is
planning to enter the Chinese market. If you were asked if the company should opt for a straight
extension or a product adaptation, what would you choose, and why?
151) Product adaptation alters the product to meet local conditions or preferences. Identify four
levels of adaptation.
152) When companies sell their goods abroad, they face a price escalation problem. Define price
escalation.
153) What are the choices available to companies when setting prices to avoid price escalation
problems?
154) Your company manufactures travel bags and is keen on establishing its presence in the
Indian market. If you were given the responsibility to decide the pricing strategy the company
should use, what would you decide? Explain your answer.
155) Define the gray market.
156) Describe the whole-channel concept of international marketing.
157) As a result of the ad campaigns depicting Brazil as a multicultural land of carnivals and
beaches, any mention of the country makes people think of sun and sand. This is an example of
________.
A) collectivism
B) target market impact
C) ethnocentric thinking
D) country-of-origin effect
E) cognitive dissonance
158) The New Zealand Way program was an initiative by the government of New Zealand to
raise awareness and attract tourists by showing the dramatic landscapes featured in “The Lord of
the Rings” film trilogy. This is an example of a government trying to strengthen its ________.
A) country-of-origin perceptions
B) international subsidiaries
C) internationalization
D) contract manufacturing
E) distributor relationships
159) The more favorable a country’s image, the less prominently the “Made in…” label should be
displayed.
160) Country-of-origin effects refer to the attitude anything produced by the home country is
better than imported goods.
161) Country-of-origin perceptions, once formed, are very difficult to change.
162) People are often ethnocentric and favorably predisposed to their own country’s products,
unless they come from a less developed country.
163) The impact of country of origin is independent of the type of product.
164) Explain the country-of-origin effect.