Marketing and Product Development Quiz
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Questions and Answers

What is a critical reason for prototype development in the product development process?

  • To reduce production costs
  • To enhance brand visibility
  • To finalize marketing strategies
  • To gain consumer feedback (correct)

    • Which factor primarily influences the choice of sales forecasting approach?

  • Marketing budget
  • Product life cycle (correct)
  • Target audience demographics
  • Production capacity

    • What does a positive marketing outcome trigger in product launching?

  • Global product launch (correct)
  • Implementation of new pricing strategies
  • Discontinuation of the product
  • Increase in production scale

    • Which statement accurately reflects the nature of counterfeit products?

    <p>They pose a significant threat to established trademarks.</p> Signup and view all the answers

    Why have counterfeit markets become so large compared to drug smuggling?

    <p>Greater profit margins in counterfeiting</p> Signup and view all the answers

    What major change occurred under the new USMCA regarding counterfeit products?

    <p>Removal of exemptions for transshipped products</p> Signup and view all the answers

    Which type of products is particularly prone to counterfeiting?

    <p>Consumer products with strong brand names</p> Signup and view all the answers

    What has been a significant issue regarding counterfeit products in Canada?

    <p>Major transshipment point for counterfeit goods</p> Signup and view all the answers

    What does the core product refer to?

    <p>The primary item being sold</p> Signup and view all the answers

    Which strategy is appropriate for a homogenous customer segment?

    <p>One Global Product Strategy</p> Signup and view all the answers

    What is a potential disadvantage of standardization in international marketing?

    <p>Products may lack uniqueness and exclusivity</p> Signup and view all the answers

    What is the primary purpose of product localization?

    <p>To avoid rejection of the product by local consumers</p> Signup and view all the answers

    How does adaptation differ from localization in product strategy?

    <p>Localization involves making products compatible with local systems</p> Signup and view all the answers

    What might be a consequence of failing to adapt a product for local markets?

    <p>Loss of potential customer interest</p> Signup and view all the answers

    What type of product strategy involves adding country-specific features to a common global platform?

    <p>Mass Customization Product Strategy</p> Signup and view all the answers

    Which of the following is NOT considered a disadvantage of standardization?

    <p>Lower production efficiency</p> Signup and view all the answers

    What effect does increased standardization of products typically have on a company's sales?

    <p>It leads to lost sales in several country markets.</p> Signup and view all the answers

    Which of the following is NOT a characteristic of company-level factors affecting product adaptation?

    <p>Government regulations</p> Signup and view all the answers

    What is meant by backward innovation in relation to economic development?

    <p>Simplifying products to cater to resource-constrained environments.</p> Signup and view all the answers

    Which factor is considered more culture-bound among product types?

    <p>Non-durable consumer products</p> Signup and view all the answers

    What is a primary consideration when determining if a brand can be global?

    <p>The brand's name and its perception outside the source country.</p> Signup and view all the answers

    What should a company consider when deciding to replace local brands?

    <p>Local country resistance to brand changes.</p> Signup and view all the answers

    What does a firm's incremental manufacturing costs do as it moves towards full standardization?

    <p>They decrease steadily.</p> Signup and view all the answers

    How is a brand defined?

    <p>A name, sign, symbol, or a combination that differentiates goods of sellers.</p> Signup and view all the answers

    What aspect of the channel design refers to the number of levels or different types of intermediaries?

    <p>Length</p> Signup and view all the answers

    In the 11 Cs Framework, which factor is considered exogenous?

    <p>Customer Characteristics</p> Signup and view all the answers

    Which of the following best describes a wide distribution channel?

    <p>Comprises a large number of institutions of each type</p> Signup and view all the answers

    What is crucial for company objectives in channel design?

    <p>Meeting profitability and market share goals</p> Signup and view all the answers

    Which of these is NOT a factor in the 11 Cs Framework for channel design?

    <p>Marketing Strategy</p> Signup and view all the answers

    What consequence does counterfeiting have on the firm’s sales?

    <p>Leads to lost sales as authentic products are marginalized</p> Signup and view all the answers

    Which of the following represents a serious danger of counterfeit pharmaceutical products?

    <p>They can pose health risks and lead to fatalities</p> Signup and view all the answers

    What is one of the strategies a company can implement to combat counterfeiting?

    <p>Educate consumers about counterfeit products</p> Signup and view all the answers

    What is a crucial component of distribution channels besides product flow?

    <p>Flow of information and titles</p> Signup and view all the answers

    What is a common characteristic of complex distribution channels?

    <p>They feature more varied participants and interactions</p> Signup and view all the answers

    Which option is NOT a method companies may use for international distribution?

    <p>Creating exclusive online sales platforms</p> Signup and view all the answers

    What is a significant drawback of having excessive counterfeit products in the market?

    <p>They can dilute the desirability of genuine products</p> Signup and view all the answers

    What impact does counterfeiting have on innovation within a firm?

    <p>Dampens the incentive for innovation</p> Signup and view all the answers

    What is a characteristic of the gray trade?

    <p>It occurs when intermediaries sell trademarked items without authorization.</p> Signup and view all the answers

    Which factor is NOT important in the selection of an intermediary?

    <p>Brand loyalty of the distributor.</p> Signup and view all the answers

    What is a primary effect of the gray trade on authorized channel members?

    <p>Creates intra brand competition.</p> Signup and view all the answers

    What type of pricing strategy does gray trade typically drive?

    <p>Low price, low service.</p> Signup and view all the answers

    What is a potential legal liability arising from gray trade?

    <p>Warranties that cannot be honored.</p> Signup and view all the answers

    Which of the following is NOT a criterion for distributor contracts?

    <p>Requirements for maintaining log books.</p> Signup and view all the answers

    What is a key challenge when communicating in international channels?

    <p>Distance complicates communication.</p> Signup and view all the answers

    What is one action companies can take against gray trade?

    <p>Engaging in supply interference by building distributor relationships.</p> Signup and view all the answers

    Which of the following describes the 'continuity' aspect in distribution relationships?

    <p>Building long-term partnerships and nurturing relationships.</p> Signup and view all the answers

    Which of the following best defines 'coverage' in the context of product distribution?

    <p>The geographical representation and quality of product presence.</p> Signup and view all the answers

    What is the primary goal of the Fade In Fade Out brand change strategy?

    <p>To gradually transition from the local brand to the global brand</p> Signup and view all the answers

    Which method is NOT part of the Stage Gate Process for global product development?

    <p>Market Launch Evaluation</p> Signup and view all the answers

    During the idea screening stage of the Stage Gate Process, which factor is evaluated?

    <p>The addressable market size</p> Signup and view all the answers

    Which of the following best describes 'Forewarning' in the context of brand changes?

    <p>An extensive notification about impending changes</p> Signup and view all the answers

    What is the first step in the global product development process?

    <p>Idea Generation</p> Signup and view all the answers

    What does the length of a distribution channel refer to?

    <p>The number of levels or different types of intermediaries in the channel</p> Signup and view all the answers

    Which of the following factors is included in the first three exogenous components of the 11 Cs Framework?

    <p>Customer Characteristics</p> Signup and view all the answers

    Which component of the 11 Cs Framework focuses on the profitability and market share goals of the company?

    <p>Company Objectives</p> Signup and view all the answers

    What does a wide distribution channel imply?

    <p>Multiple institutions of each type in the channel</p> Signup and view all the answers

    How are the last eight factors of the 11 Cs Framework described?

    <p>Controllable</p> Signup and view all the answers

    What is the main characteristic of a multi-domestic product strategy?

    <p>Different product for each region</p> Signup and view all the answers

    Which factor is likely to lead to the need for product modification in diverse markets?

    <p>Heterogeneous customer segments</p> Signup and view all the answers

    What is a primary advantage of product standardization in international marketing?

    <p>Cost savings in production</p> Signup and view all the answers

    What is the impact of failing to successfully adapt a product for local markets?

    <p>Exclusion from consumer consideration set</p> Signup and view all the answers

    What differentiates adaptation from localization in product strategy?

    <p>Localization focuses on matching local tastes and preferences</p> Signup and view all the answers

    What is one consequence of excessive reliance on a standardized product across all markets?

    <p>Vulnerability to local competitors</p> Signup and view all the answers

    Which example best illustrates the concept of mass customization in product strategy?

    <p>A clothing line specifically designed for different cultures</p> Signup and view all the answers

    What is a key disadvantage of standardization in terms of market appeal?

    <p>Standardized products may lack uniqueness</p> Signup and view all the answers

    What is the primary benefit of conducting focus groups during the concept research stage?

    <p>To gather spontaneous consumer reactions</p> Signup and view all the answers

    What determines the appropriate sales forecasting approach in product development?

    <p>The product life cycle</p> Signup and view all the answers

    What usually occurs after a promising sales forecast for a new product?

    <p>Production and test marketing</p> Signup and view all the answers

    Which factor contributes to the high prevalence of counterfeit products in the market?

    <p>Profit margins higher than those for legal drugs</p> Signup and view all the answers

    What major issue did Canada face regarding counterfeit products before the USMCA changes?

    <p>Exemption for counterfeit products transshipped into the US</p> Signup and view all the answers

    What is the primary economic impact of increasing standardization in a company's product offerings?

    <p>Loss of potential sales in diverse markets</p> Signup and view all the answers

    Which type of products is particularly vulnerable to counterfeiting?

    <p>Highly visible and well-branded consumer products</p> Signup and view all the answers

    How does the penalty for counterfeiting typically compare to drug smuggling?

    <p>It is often less severe</p> Signup and view all the answers

    Which factor is crucial in determining whether a brand can be successfully global?

    <p>The availability of the brand name legally in many countries</p> Signup and view all the answers

    What does 'backward innovation' refer to within the context of economic development?

    <p>Adapting high-end products for low-income markets</p> Signup and view all the answers

    What can be a primary reason for the large scale of counterfeit markets in comparison to other illegal trades?

    <p>Lower consumer awareness of counterfeits</p> Signup and view all the answers

    What is one potential consequence of cultural grounding in non-durable consumer products?

    <p>Increased customization costs</p> Signup and view all the answers

    Which of the following is NOT a characteristic of a firm's brand portfolio strategy?

    <p>Focus on a single global brand</p> Signup and view all the answers

    What is a primary reason companies might choose to retain local brands instead of replacing them?

    <p>Local brands have established customer loyalty</p> Signup and view all the answers

    How does the concept of cultural grounding specifically affect food products compared to industrial products?

    <p>Food products are more often adapted to local tastes</p> Signup and view all the answers

    What should companies consider regarding existing local brand names when implementing a globalization strategy?

    <p>The possibility of local brand resistance to change</p> Signup and view all the answers

    What is a major consequence of counterfeit products for firms regarding consumer perception?

    <p>Negative perception of the genuine products</p> Signup and view all the answers

    Which of the following best describes the effect of counterfeiting on a firm's operations?

    <p>Dampens the incentive for innovation</p> Signup and view all the answers

    What might be a significant strategy for a company to combat counterfeit products?

    <p>Educate consumers about the risks of counterfeits</p> Signup and view all the answers

    How does the presence of counterfeit drugs impact public health?

    <p>It is responsible for over 100,000 deaths annually</p> Signup and view all the answers

    What aspect of distribution channels is NOT commonly considered?

    <p>Type of raw materials</p> Signup and view all the answers

    Which of the following statements about distribution channels is true?

    <p>The distribution channel can change as market share builds</p> Signup and view all the answers

    Why might a company choose to work through independent intermediaries in foreign markets?

    <p>To leverage local market knowledge and networks</p> Signup and view all the answers

    What is one challenge that counterfeit products pose to innovation within a firm?

    <p>Reduces the firm's motivation to create new products</p> Signup and view all the answers

    Study Notes

    Global Product Strategy

    • A product is a complex combination of tangible and intangible elements distinguishing it from other market offerings.
    • Products consist of:
      • Core product: The product itself (e.g., car, laptop).
      • Augmented product: Additional services or benefits (e.g., warranty, software).

    Product Modification

    • Product modification is often necessary.
    • Options depend on whether customer segments are homogeneous or heterogeneous.
    • Homogenous Customer Segment: One global product strategy.
    • Heterogeneous Customer Segments:
      • Multi-domestic product strategy: Different product for each region.
      • Mass customization product strategy: Adds country-specific features to a common global platform (e.g., full-body swimwear for Muslim women).

    Standardization

    • Standardization: Selling the same product worldwide.
    • Advantages:
      • Cost savings in production (economies of scale).
      • Targeting global customer segments.

    Localization vs. Adaptation

    • Localization: Adapting a product to function in a specific foreign country.
      • Avoids initial rejection by customers.
      • Achieved by building compatibility with multiple systems (e.g., electrical plugs).
    • Adaptation: Modifying the product to better suit consumer tastes and preferences.
    • Factors influencing adaptation:
      • Country level characteristics (e.g., government regulations, economic development, climate, bilingual labeling).
      • Industry and firm characteristics (e.g., company resources, competition, product life cycle).
      • Product characteristics (e.g., degree of cultural binding, food products tend to be more culture-bound than industrial or tech products).

    Economics of Adaptation

    • Incremental manufacturing costs decrease as products become more standardized.
    • Increased standardization may lead to lost sales in some markets.
    • The cost of lost sales and manufacturing costs can be combined to determine the extent of product adaptation.

    Brand Strategies: Brand Portfolios

    • Brands identify goods and services from one seller or group of sellers.
    • Companies often have portfolios of local, regional, and global brands.
    • Companies employ brand strategies deliberately or as a result of mergers or acquisitions.
    • Considerations for global branding:
      • Does the brand name make sense outside the source country?
      • Is the name associated positively/negatively with a country?
      • Is the name available legally?
      • Does the brand complement existing global brands?
      • Should growth be limited to creating a regional brand?
      • Should local brands be replaced?
      • How do you change an existing brand?

    Brand Change Strategies

    • Fade In/Fade Out: Linking a global and local brand for a time, followed by dropping the local brand.
    • Endorsement Branding: Using one brand to introduce another.
    • Double Branding: Presenting both brands simultaneously during a transition period.
    • Summary Axing: Replacing the existing brand with a new one.

    Global Product Development

    • New products and modifications for customer needs.
    • Corporate objectives: Technical feasibility and financial profitability.
    • Stage Gate Process: A series of steps for product development, exemplified by:
      • Idea generation and screening.
      • Concept testing (using focus groups).
      • Sales forecasting.
      • Test marketing.
      • Global product launch.
    • The criteria used in the Stage Gate Process include:
      • Market - size and potential of the addressable market.
      • Technical - Feasibility of the product's manufacture, knowledge or partner needed.
      • Financial - Profitability analysis.

    Counterfeit Products

    • Counterfeiting is a significant problem for businesses.
    • Counterfeit goods result in:
      • Lost sales of authentic products.
      • Damage to the reputation of the intellectual property owners.
      • Increased costs for operations (monitoring counterfeit products). - increased cost of operation due to monitoring and policing the market for pirated products.
    • Counterfeiting is a serious problem. (example: pharmaceutical drugs kill over 100,000 people annually).

    Distribution Channels

    • Distribution channels are the sequence of firms involved in making products available to consumers.
    • Includes flows of information and titles.
    • Channel types: Simple and complex.
    • Channel changes as market share develops.

    Options for Global Distribution

    • Direct sales via field sales force (costly, but ongoing physical presence).
    • Utilizing foreign subsidiaries (ongoing physical presence).
    • Using independent intermediaries (e.g., distributors).
    • Outsourcing distribution to third-party companies.
    • Electronic distribution.

    Channel Design

    • Refers to the length and width of a channel.
    • Length: Number of levels of intermediaries.
    • Width: Number of institutions of each type within the channel.

    Control, Continuity, Communication, Intermediary Selection

    • Control: Losing control associated with using intermediaries.
    • Continuity: Long-term relationships needed.
    • Communication: Cultural and linguistic considerations.
    • Intermediary selection: Objectives and conditions for success. (Selection criteria: product experience, financial and physical resources, human resources, network and contacts, understanding of the market, geographic coverage, relationships).

    Distributor Contracts

    • Short-term contracts (less than 2 years).
    • Clear payment terms.
    • Defining products covered.
    • Responsibility and territory.

    The Gray Trade

    • Gray, or parallel, trade.
    • Products from authorized channels are sold through unauthorized intermediaries.
    • Reasons for gray trade: Price differences, limited availability in certain markets.
    • Negative impact: erosion of brand equity and strained relationships with authorized channel members.

    Channels Against Gray Trade

    • Supply interference.
    • Dealer interference.
    • Demand interference (e.g., educating customers about drawbacks of gray goods).
    • Strategic attack (create stronger customer reasons for buying from authorized dealers).

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    International Marketing: Global Product Strategy PDF

    Description

    Test your knowledge on key concepts in marketing and product development. This quiz covers topics such as prototype development, sales forecasting, counterfeit products, and strategies in international marketing. Assess your understanding of various strategies and regulations affecting product launch and management.

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