Chapter 17 Marketing Globally PDF

International Business, 17e, Global Edition (Daniels) Chapter 17 Marketing Globally 1) In international business, marketing is concerned with ________. A) disseminating the organizational culture of a firm across global subsidiaries B) identifying, measuring, and pursuing customer needs and market...

International Business, 17e, Global Edition (Daniels) Chapter 17 Marketing Globally 1) In international business, marketing is concerned with ________. A) disseminating the organizational culture of a firm across global subsidiaries B) identifying, measuring, and pursuing customer needs and market opportunities abroad C) maintaining a steady flow of product-based innovations D) interacting with global business leaders Answer: B Diff: 2 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 2) What is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges across national boundaries that satisfy individual and organizational objectives? A) globalization B) international marketing C) organizational design D) international management Answer: B Diff: 1 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 3) While deciding on market segmentation and product diversification, Svendsen Sport considers all of the following factors except ________. A) the type of water (fresh, saline, shallow, deep, stagnant, etc.) B) season C) the fish species and size D) availability of self-service in its company-owned stores Answer: D Diff: 3 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Diverse and multicultural work environments 1 Copyright © 2022 Pearson Education, Ltd. 4) International marketing differs from domestic marketing in that ________. A) marketing principles are different B) consumers prefer domestically made merchandise C) environmental variations require applying principles differently D) low prices are a more important competitive factor in foreign markets Answer: C Diff: 2 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Diverse and multicultural work environments 5) In comparing international and domestic marketing, it is best to state that ________. A) similar principles are at work B) mass-market orientations are most effective C) principles differ for product and price, but not for advertising D) the differences between them can be studied through gap analysis Answer: A Diff: 2 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Diverse and multicultural work environments 6) ________ is the process of dividing the firm's total customer base into homogeneous clusters in a way that allows management to formulate unique marketing strategies for each group. A) Brand management B) Customer relationship management C) Market segmentation D) Market diversification Answer: C Diff: 1 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 2 Copyright © 2022 Pearson Education, Ltd. 7) When selling a commodity for which there is little possibility of product differentiation, a company would likely use which of the following orientations internationally? A) sales orientation B) customer orientation C) production orientation D) strategic marketing orientation Answer: C Diff: 2 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 8) Companies using a sales orientation find their greatest ability to sell the same product in more than one country when ________. A) promotional programs are identical in each country B) the product is a household item C) consumer characteristics are similar D) the product has a low-price relative to incomes Answer: C Diff: 2 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 9) Which of the following would be an example of a customer orientation in international marketing? A) A cosmetics company bans animal testing of its products to gain goodwill. B) A fruit company brands the bananas it sells in foreign and domestic markets. C) A beer company makes non-alcoholic beer for a country that bans the sale of alcohol. D) A automobile parts manufacturer makes some components to the specifications of a foreign company. Answer: D Diff: 3 Skill: Application Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 3 Copyright © 2022 Pearson Education, Ltd. 10) Jen Homes adapts its marketing to foreign differences by making minor changes to bathrooms and outdoor patios. However, Jen Homes uses the same floor plans and exterior attributes in all countries to gain economies of standardization. Jen Homes most likely follows a ________. A) social marketing orientation B) strategic marketing orientation C) sales orientation D) production orientation Answer: C Diff: 2 Skill: Application Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 11) Which of the following BEST describes a company that follows a social marketing orientation? A) It considers political and safety dimensions of its products. B) It is a not-for-profit entity based in a developed country. C) It is a government-owned entity from an emerging economy. D) It generates sales to niche markets using social networking sites. Answer: A Diff: 2 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 12) ________ is the most common way of identifying market segments within a country. A) Demographics B) The Internet C) Gap analysis D) Psychographics Answer: A Diff: 2 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 4 Copyright © 2022 Pearson Education, Ltd. 13) Which of the following is most likely to occur when a firm segments markets by country? A) achieving objectives by following a sales orientation strategy within that market B) initially targeting the high-income consumers within that market C) overlooking similarities between different countries D) introducing multiple products to assess demand Answer: C Diff: 2 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 14) What is the most likely reason that sales to a mass market would be necessary for a company selling internationally? A) gaining economies in production and distribution B) earning initial sales in emerging economies C) eliminating excess domestic capacity D) gaining brand recognition Answer: A Diff: 2 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 15) When a company identifies a market segment on a global basis, such as a segment based on income, it will likely ________. A) encounter a similar percentage of the population in each country within that segment B) find that a niche market in one country may be a mass market in another C) find that the market in each country is so dispersed that distribution is difficult D) be aiming at a mass market in each country Answer: B Diff: 2 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 5 Copyright © 2022 Pearson Education, Ltd. 16) Which of the following is NOT one of the three personality traits that specifically affect international marketing? A) globalism B) materialism C) consumer ethnocentrism D) cosmopolitanism Answer: A Diff: 2 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 17) Consumer ethnocentrism, which refers to a preference for local over global, such as seeking out local alternatives when buying products and services Answer: TRUE Diff: 1 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 18) Cosmopolitanism, which refers to the importance of acquiring possessions as a means of self-satisfaction and happiness, as well as for the appearance of success. Answer: FALSE Diff: 1 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 19) International marketing is unlike domestic marketing because the basic principles are completely different. Answer: FALSE Diff: 1 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 6 Copyright © 2022 Pearson Education, Ltd. 20) The marketing approach a company takes internationally should be compatible with its overall aims and strategies. Answer: TRUE Diff: 2 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 21) Companies sell many undifferentiated commodities primarily on the basis of price because of universal demand. Answer: TRUE Diff: 1 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 22) A company may aim a product at a small share of its domestic market and then find many consumers abroad who will also buy it. Answer: FALSE Diff: 1 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 23) In a sales orientation, a company sells abroad what it sells domestically by assuming that consumers are sufficiently similar. Answer: TRUE Diff: 1 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 24) In a production orientation, a company focuses on efficiency and product quality when selling abroad. Answer: TRUE Diff: 1 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 7 Copyright © 2022 Pearson Education, Ltd. 25) Companies with social marketing orientations pay close attention to the potential environmental, health, social, and work-related problems that may arise when selling or making their products. Answer: TRUE Diff: 1 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 26) Passive exports involve the filling of unsolicited orders from abroad. Answer: TRUE Diff: 1 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 27) A company that adapts its marketing to foreign differences without deviating very much from its experience is following a customer orientation. Answer: FALSE Diff: 2 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 28) Under a strategic marketing orientation, a company considers potential environmental, health, social, and work-related problems from the sale of its products abroad. Answer: FALSE Diff: 2 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 29) The most common way of identifying market segments is through demographics. Answer: TRUE Diff: 2 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 8 Copyright © 2022 Pearson Education, Ltd. 30) A company may hold one or more elements of its marketing functions—prices, promotion, branding, and distribution—constant while altering the others. Answer: TRUE Diff: 2 Skill: Concept Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 31) In a short essay, discuss the international application of five common marketing orientations. Answer: a. Production orientation: Companies focus primarily on production—either efficiency or high quality—with little emphasis on marketing. There is little analysis of consumer needs; rather, companies assume customers want lower prices or higher quality. b. Sales orientation: A company tries to sell abroad what it can sell domestically on the assumption that consumers are sufficiently similar globally. A company may make this assumption because it lacks information about the foreign markets. This orientation differs from the production orientation because of its active rather than passive approach to promoting sales. c. Customer orientation: Management usually is guided by answers to questions such as "Should the company send some exports abroad?" "Where can the company sell more of Product X?" In contrast, a customer orientation asks "What can the company sell in Country A?" d. Strategic marketing orientation: Most companies committed to continual, rather than sporadic, foreign sales adopt a strategy that combines production, sales, and consumer orientations. Instead of merely trying to sell a domestic product abroad, the company adjusts this product to foreign needs. e. Social marketing orientation: Companies with social marketing orientations realize that successful international marketing requires serious consideration of potential environmental, health, social, and work-related problems that may arise when selling or making their products abroad. Diff: 3 Skill: Critical Thinking Objective: 17-1 Classify international marketing strategies in terms of marketing orientations, segmentation, and targeting AACSB: Application of knowledge 32) A company that makes its marketing program elements uniform, targeting an entire region with similar products, is demonstrating ________. A) customization B) segmentation C) standardization D) differentiation Answer: C Diff: 1 Skill: Concept Objective: 17-2 Discuss the pros and cons of country adaptation versus global standardization of products AACSB: Application of knowledge 9 Copyright © 2022 Pearson Education, Ltd. 33) ________ requires that an entirely new product be developed for the target market when many important differences exist between the home and target markets. A) Product invention B) Product adaptation C) Dual adaptation D) Dual extension Answer: A Diff: 1 Skill: Concept Objective: 17-2 Discuss the pros and cons of country adaptation versus global standardization of products AACSB: Application of knowledge 34) Why are MNEs criticized for exporting to developing countries the same products they sell in developed countries? A) The prices of the products are too low in developing countries. B) Many of the products are deemed to be unnecessary for low income consumers. C) The sales enhance local company failures in developing countries. D) Developing countries need local production rather than imports. Answer: B Diff: 2 Skill: Concept Objective: 17-2 Discuss the pros and cons of country adaptation versus global standardization of products AACSB: Ethical understanding and reasoning 35) Some critics complain that MNEs introduce and promote superfluous products in developing countries, causing consumers there to buy these products rather than things they need for their health. People answering this criticism have contended that ________. A) consumers don't buy things because of promotion B) the amount spent on so-called superfluous products is insignificant C) it is impossible to draw a line between people who can afford and people who can't afford these products D) these products serve to motivate people in developing countries to work harder Answer: C Diff: 2 Skill: Concept Objective: 17-2 Discuss the pros and cons of country adaptation versus global standardization of products AACSB: Ethical understanding and reasoning 10 Copyright © 2022 Pearson Education, Ltd. 36) Agreements on international product standards are hampered by all the following factors EXCEPT ________. A) the fact that standardization increases production costs B) consumer reluctance to change C) the cost of redesigning and retooling D) governments' desires to protect investments Answer: A Diff: 2 Skill: Concept Objective: 17-2 Discuss the pros and cons of country adaptation versus global standardization of products AACSB: Application of knowledge 37) What is the most likely reason that companies such as Gillette (razor blades) and 3M (scouring pads) sell products in smaller package sizes in some developing countries? A) Family size is small in those countries. B) Some governments require the smaller sizes. C) In those countries, many consumers lack sufficient cash to buy larger quantities. D) These are products for which the cost of altering package size is negligible. Answer: C Diff: 2 Skill: Application Objective: 17-2 Discuss the pros and cons of country adaptation versus global standardization of products AACSB: Reflective thinking 38) Critics complain that pharmaceutical research budgets emphasize non-debilitating conditions common in developed countries rather than life-threatening diseases common in developing countries. People answering this criticism have contended that ________. A) correction of developed country conditions, such as balding, are necessary to stimulate developing country innovations that push global economic growth B) very small portions of research budgets actually target these non-debilitating conditions C) by being located almost entirely in developed countries, pharmaceutical companies lack access to locations where they can study diseases such as malaria and sleeping sickness D) pharmaceutical companies cannot recoup expenses for research on some of the developing country problems, so governmental research centers and nonprofit foundations should handle this research Answer: D Diff: 3 Skill: Concept Objective: 17-2 Discuss the pros and cons of country adaptation versus global standardization of products AACSB: Ethical understanding and reasoning 11 Copyright © 2022 Pearson Education, Ltd. 39) Why might companies sometimes narrow the product line that they sell in a foreign country as compared to the product line they sell at home? A) Government restrictions typically limit how many products a company can sell locally. B) Selling cost per unit increases substantially when a company offers a broad product line. C) Not all products have sufficient demand in every market. D) Firms cannot sell products with product line gaps. Answer: C Diff: 3 Skill: Concept Objective: 17-2 Discuss the pros and cons of country adaptation versus global standardization of products AACSB: Application of knowledge 40) If a company's foreign sales per customer is small compared to those in its domestic market, it should most likely ________. A) introduce a larger family of products B) narrow the product line offered to the market C) reconfigure the product life cycle marketing strategy D) shift additional salespeople to the domestic market Answer: A Diff: 2 Skill: Concept Objective: 17-2 Discuss the pros and cons of country adaptation versus global standardization of products AACSB: Application of knowledge 41) There are more cost savings for international branding standardization than for international product standardization. Answer: FALSE Diff: 2 Skill: Concept Objective: 17-2 Discuss the pros and cons of country adaptation versus global standardization of products AACSB: Application of knowledge 42) Different country standards, such as safety regulations, add complexity to whether companies decide to use a globally standardized product. Answer: TRUE Diff: 1 Skill: Concept Objective: 17-2 Discuss the pros and cons of country adaptation versus global standardization of products AACSB: Application of knowledge 12 Copyright © 2022 Pearson Education, Ltd. 43) Although the broadening of product lines increases distribution efficiencies, too broad a line can create problems in selling. Answer: TRUE Diff: 2 Skill: Concept Objective: 17-2 Discuss the pros and cons of country adaptation versus global standardization of products AACSB: Application of knowledge 44) Explicit legal requirements, usually meant to protect consumers, cause companies to customize products for foreign markets. Answer: TRUE Diff: 2 Skill: Concept Objective: 17-2 Discuss the pros and cons of country adaptation versus global standardization of products AACSB: Application of knowledge 45) Religious differences can force a company to limit the standardization of product offerings globally. Answer: TRUE Diff: 1 Skill: Concept Objective: 17-2 Discuss the pros and cons of country adaptation versus global standardization of products AACSB: Application of knowledge 46) In a short essay, describe the various reasons for product alteration. Answer: a. Legal reasons: Explicit legal requirements are the most obvious reasons for altering products for foreign markets. The exact requirements vary widely by country, but are usually meant to protect consumers. One of the more cumbersome product alterations for companies is adjusting to different laws on packaging that protect the environment. Marketing managers must also watch for the indirect legal requirements that may affect product content or demand. b. Cultural reasons: Marketing managers find it difficult to determine in advance whether consumers in foreign markets will accept new or different products because of differences in consumer cultures. c. Economic reasons: If foreign consumers lack sufficient income, they may not be able to buy the product the MNE sells domestically. The company therefore may have to design a cheaper model. Even if a market segment has sufficient income to purchase the same product the company sells at home, differences in infrastructure may require product alterations. Diff: 3 Skill: Critical Thinking Objective: 17-2 Discuss the pros and cons of country adaptation versus global standardization of products AACSB: Application of knowledge 13 Copyright © 2022 Pearson Education, Ltd. 47) Diversity of international markets and currency instability have the greatest effect on ________. A) promotion B) pricing C) branding D) distribution Answer: B Diff: 2 Skill: Concept Objective: 17-3 Describe pricing complexities when selling in foreign markets AACSB: Application of knowledge 48) A company would most likely export at a price lower than its production and distribution costs in order to ________. A) use a skimming strategy abroad before using one domestically B) test a market before making a big commitment C) use a cost-plus strategy globally D) encourage gray market sales Answer: B Diff: 2 Skill: Concept Objective: 17-3 Describe pricing complexities when selling in foreign markets AACSB: Application of knowledge 49) Foreman Enterprises produces and sells a variety of products for the home. Foreman recently introduced a new detergent at a very low price with the hope that a high number of consumers will try it out. Foreman is most likely using a ________ strategy. A) cost-plus B) skimming C) penetration D) diversification Answer: C Diff: 2 Skill: Application Objective: 17-3 Describe pricing complexities when selling in foreign markets AACSB: Application of knowledge 50) Why does price escalation most likely occur in exporting? A) Companies rely on penetration price strategies. B) Companies rely on skimming price strategies C) Greater distances and more intermediaries increase distribution costs D) Uncertain currency value changes necessitate charging higher prices Answer: C Diff: 2 Skill: Concept Objective: 17-3 Describe pricing complexities when selling in foreign markets AACSB: Application of knowledge 14 Copyright © 2022 Pearson Education, Ltd. 51) Which of the following would LEAST likely be caused by a high inflation rate? A) rules against increasing export prices B) inability to quote prices in letters or catalogs C) difficulty making changes to vending machines D) necessity to set an equivalent value in a stable currency Answer: A Diff: 3 Skill: Concept Objective: 17-3 Describe pricing complexities when selling in foreign markets AACSB: Application of knowledge 52) What is the gray market? A) sales targeted to elderly consumers B) selling goods through unofficial distributors C) a legal black market run by governments D) selling counterfeit merchandise Answer: B Diff: 2 Skill: Concept Objective: 17-3 Describe pricing complexities when selling in foreign markets AACSB: Application of knowledge 53) Which of the following occurs when products are imported into a country legally but outside the normal channels of distribution authorized by the manufacturer? A) gray market B) parallel exporting C) black market D) price gouging Answer: A Diff: 2 Skill: Concept Objective: 17-3 Describe pricing complexities when selling in foreign markets AACSB: Application of knowledge 54) What is the LEAST likely reason that international companies are concerned about the gray market? A) undermining the long-term viability of the distributorship system B) causing a firm's operations in different countries to compete against each other C) requiring companies to make frequent price adjustments to capture the market D) preventing companies from charging what the market will bear in each country Answer: C Diff: 3 Skill: Concept Objective: 17-3 Describe pricing complexities when selling in foreign markets AACSB: Application of knowledge 15 Copyright © 2022 Pearson Education, Ltd. 55) Which of the following would most likely trigger a gray market? A) a firm has large price differences among different markets B) a firm prices its products almost equally in all markets C) products are illegal in one market but legal in another D) products are closely regulated by the government Answer: A Diff: 2 Skill: Concept Objective: 17-3 Describe pricing complexities when selling in foreign markets AACSB: Application of knowledge 56) Maximum prices are usually set to prevent companies from eliminating competitors and gaining monopoly positions. Answer: FALSE Diff: 2 Skill: Concept Objective: 17-3 Describe pricing complexities when selling in foreign markets AACSB: Application of knowledge 57) Country-to-country variations in demand and competition create natural segments and differences in pricing possibilities. Answer: TRUE Diff: 1 Skill: Concept Objective: 17-3 Describe pricing complexities when selling in foreign markets AACSB: Application of knowledge 58) Export prices generally rise by more than incremental transport and duty costs, thus exporters may have to lower margins to make sales. Answer: TRUE Diff: 1 Skill: Concept Objective: 17-3 Describe pricing complexities when selling in foreign markets AACSB: Application of knowledge 59) Market diversity, government intervention, and currency fluctuations complicate international pricing decisions. Answer: TRUE Diff: 2 Skill: Concept Objective: 17-3 Describe pricing complexities when selling in foreign markets AACSB: Diverse and multicultural work environments 16 Copyright © 2022 Pearson Education, Ltd. 60) A company that prices its products at a desired margin over cost is using a cost-plus strategy. Answer: TRUE Diff: 2 Skill: Concept Objective: 17-3 Describe pricing complexities when selling in foreign markets AACSB: Application of knowledge 61) When the currency value in the location where a company produces becomes stronger, the company most likely needs to adjust its margins downward to be competitive in export markets. Answer: TRUE Diff: 2 Skill: Concept Objective: 17-3 Describe pricing complexities when selling in foreign markets AACSB: Application of knowledge 62) E-commerce facilitates the ability of consumers to compare prices from different distributors, which will most likely result in lower prices on products. Answer: TRUE Diff: 2 Skill: Concept Objective: 17-3 Describe pricing complexities when selling in foreign markets AACSB: Application of knowledge 63) What is the gray market? Why are companies concerned about it? Answer: By selling goods through unofficial distributors, the gray market can undermine the longer-term viability of the distributorship system, cause a company's plants in different countries to compete with each other, and make it harder for companies to charge what the market will bear. Diff: 3 Skill: Critical Thinking Objective: 17-3 Describe pricing complexities when selling in foreign markets AACSB: Application of knowledge 17 Copyright © 2022 Pearson Education, Ltd. 64) How do foreign government regulations affect pricing and promotion for international businesses? Answer: Government regulations may directly or indirectly affect the prices that companies charge. International pricing is further complicated because of currency value fluctuations, differences in product preferences, price escalation in exporting, and variations in fixed versus variable pricing practices. In regard to promotion, what is legal advertising in one country may be illegal elsewhere. The differences result mainly from varying national views on consumer protection, competitive protection, civil rights promotion, standards of morality and behavior, and nationalism. For example, there are many products that some societies view as being in sufficiently bad taste that they restrict advertisement of them, such as whether they can be advertised on television and, if so, at what time. In terms of consumer protection, policies differ on the amount of deception permitted and what can be advertised to children. Diff: 3 Skill: Synthesis Objective: 17-3 Describe pricing complexities when selling in foreign markets AACSB: Diverse and multicultural work environments 65) What factors makes international pricing and distribution more complex than domestic pricing and distribution? Answer: International pricing is difficult because of different degrees of governmental intervention, greater diversity of markets, price escalation of exports, changing values of currencies, differences in fixed versus variable pricing practices, and relations with suppliers. MNEs also find distribution one of the most difficult functions to standardize internationally, for several reasons. Each country has its own distribution system, which an MNE finds difficult to modify because it is entwined with the country's cultural, economic, and legal environments. Some of the factors that influence the distribution of goods in a given country are citizens' attitudes toward owning their own store, the cost of paying retail workers, legislation restricting store sizes and operating hours, different effects of laws on chain stores and individually owned stores, the trust owners have in their employees, the efficacy of the postal system, the quality of the infrastructure system, and the financial ability to carry large inventories. Diff: 3 Skill: Synthesis Objective: 17-3 Describe pricing complexities when selling in foreign markets AACSB: Diverse and multicultural work environments 66) A promotional strategy designed to create buyer demand that will encourage channel members to stock a company's product is called a ________. A) pull strategy B) push strategy C) retrenchment strategy D) stability strategy Answer: A Diff: 2 Skill: Application Objective: 17-4 Recognize the pros and cons of using uniform promotional marketing practices among countries AACSB: Application of knowledge 18 Copyright © 2022 Pearson Education, Ltd. 67) Which of the following BEST depicts a push strategy for a U.S. company selling in Mexico? A) Tupperware selling through parties in homes B) Gillette selling razor blades through supermarkets C) KFC selling chicken dinners at its franchises D) Google advertising on television Answer: A Diff: 2 Skill: Application Objective: 17-4 Recognize the pros and cons of using uniform promotional marketing practices among countries AACSB: Application of knowledge 68) A push strategy for international sales is most likely preferable to a pull strategy when ________. A) there are few prohibitions on advertising B) the price of the product is high relative to incomes C) people rely on friends' opinions before buying a product D) literacy rates are high Answer: B Diff: 2 Skill: Application Objective: 17-4 Recognize the pros and cons of using uniform promotional marketing practices among countries AACSB: Application of knowledge 69) If Silk Industries is interested in creating buyer demand that will encourage channel members to stock its products, it should employ ________. A) a pull strategy B) a push strategy C) horizontal integration D) vertical integration Answer: A Diff: 2 Skill: Application Objective: 17-4 Recognize the pros and cons of using uniform promotional marketing practices among countries AACSB: Application of knowledge 19 Copyright © 2022 Pearson Education, Ltd. 70) A pull rather than a push strategy is most likely preferable when ________. A) self-service is not predominant B) the price of a product is high relative to incomes C) there are few governmental restrictions on advertising D) there are a large number of languages and a low literacy rate Answer: C Diff: 2 Skill: Application Objective: 17-4 Recognize the pros and cons of using uniform promotional marketing practices among countries AACSB: Application of knowledge 71) Promotion using direct selling techniques is ________. A) a pull strategy B) necessary where inflation is high C) a standardized advertising technique D) a push strategy Answer: D Diff: 1 Skill: Concept Objective: 17-4 Recognize the pros and cons of using uniform promotional marketing practices among countries AACSB: Application of knowledge 72) Which of the following BEST describes globally standardized advertising? A) a campaign that is identical in all markets B) a campaign that meets the legal and ethical standards of all countries C) a campaign that is similar but not identical from market to market D) a campaign that depends primarily on push rather than pull promotion Answer: C Diff: 2 Skill: Concept Objective: 17-4 Recognize the pros and cons of using uniform promotional marketing practices among countries AACSB: Application of knowledge 20 Copyright © 2022 Pearson Education, Ltd. 73) All of the following are possible advantages of globally standardized advertising programs EXCEPT ________. A) cost savings B) improvement of local-level quality C) avoidance of legal impediments D) faster entry into different markets Answer: C Diff: 2 Skill: Concept Objective: 17-4 Recognize the pros and cons of using uniform promotional marketing practices among countries AACSB: Application of knowledge 74) In advertisements aimed at different countries, companies sometimes use actors who do not speak, along with a voice and/or print overlay. What is the main reason for doing this? A) avoiding dubbing that does not correspond to lip movements B) altering themes and messages among countries C) meeting legal requirements on morality D) reaching a hearing- or sight-impaired audience Answer: A Diff: 2 Skill: Concept Objective: 17-4 Recognize the pros and cons of using uniform promotional marketing practices among countries AACSB: Written and oral communication 75) A push strategy is most likely preferable to a pull strategy when goods are sold using self-service distribution. Answer: FALSE Diff: 2 Skill: Concept Objective: 17-4 Recognize the pros and cons of using uniform promotional marketing practices among countries AACSB: Application of knowledge 76) A push strategy is most likely preferable to a pull strategy when the price of the product is high relative to incomes. Answer: TRUE Diff: 2 Skill: Concept Objective: 17-4 Recognize the pros and cons of using uniform promotional marketing practices among countries AACSB: Application of knowledge 21 Copyright © 2022 Pearson Education, Ltd. 77) A problem of advertising through media that reach multiple countries is that the product may not be available everywhere it is advertised. Answer: TRUE Diff: 2 Skill: Concept Objective: 17-4 Recognize the pros and cons of using uniform promotional marketing practices among countries AACSB: Application of knowledge 78) Standardizing advertising among countries increases costs by avoiding duplication of preparation. Answer: FALSE Diff: 1 Skill: Concept Objective: 17-4 Recognize the pros and cons of using uniform promotional marketing practices among countries AACSB: Application of knowledge 79) Standardization typically involves using the same ad agency globally. Answer: TRUE Diff: 1 Skill: Concept Objective: 17-4 Recognize the pros and cons of using uniform promotional marketing practices among countries AACSB: Application of knowledge 80) In a short essay, compare push and pull promotional strategies. Answer: Promotion may be categorized as push, which uses direct-selling techniques, or pull, which relies on mass media. Most companies use combinations of both marketing strategies. For each product in each country, a company must determine its total promotional budget as well as the mix of the budget between push and pull. Generally, the more tightly controlled the distribution system, the more likely a company is to emphasize a push strategy because it requires a greater effort to get distributors to handle a product. Also affecting the push-pull mix is the amount of contact between salespeople and consumers and the cost of products relative to incomes. Diff: 3 Skill: Critical Thinking Objective: 17-4 Recognize the pros and cons of using uniform promotional marketing practices among countries AACSB: Application of knowledge 22 Copyright © 2022 Pearson Education, Ltd. 81) In a short essay, discuss the standardization of two marketing components: advertising and distribution. Answer: In addition to reducing costs, advertising standardization may improve the quality of advertising at the local level, prevent internationally mobile consumers from being confused by different images, and speed the entry of products into different countries. Standardized advertising usually means a program that is similar from market to market rather than one that is identical in each. Some of the problems that hinder complete standardization of advertising relate to translation, legality, and message needs. Within the marketing mix, MNEs find distribution one of the most difficult functions to standardize internationally, for several reasons. Each country has its own distribution system, which an MNE finds difficult to modify because it is entwined with the country's cultural, economic, and legal environments. Diff: 3 Skill: Synthesis Objective: 17-4 Recognize the pros and cons of using uniform promotional marketing practices among countries AACSB: Application of knowledge 82) Which of the following was most responsible for the success of Svendsen Sport products? A) The products were mass-marketed through discount stores. B) Internet mail-order sales were developed when people had less time to shop. C) Products were developed to fit sustainability goals D) Brand awareness was developed through social media influencers. Answer: D Diff: 3 Skill: Concept Objective: 17-5 Explain the different branding strategies companies may employ internationally AACSB: Application of knowledge 83) Which of the following is NOT a problem when it comes to using a worldwide brand? A) Brand names may carry a different association in another language. B) Pronunciation may be difficult in another language. C) Acquired brand names cannot be legally changed. D) Pictogram alphabets need visual appeal in addition to phonetic appeal. Answer: C Diff: 2 Skill: Concept Objective: 17-5 Explain the different branding strategies companies may employ internationally AACSB: Application of knowledge 23 Copyright © 2022 Pearson Education, Ltd. 84) Gerber Foods is an MNE that sells baby food around the world. What product component will most likely be standardized by Gerber in all foreign markets? A) labeling B) ingredients C) brand name D) container size Answer: C Diff: 2 Skill: Concept Objective: 17-5 Explain the different branding strategies companies may employ internationally AACSB: Application of knowledge 85) Which of the following statements is most likely true? A) Consumers in most countries believe that imported products are better than locally made products. B) Brand names have little impact on perceptions about a product's country-of-origin. C) Consumers in most countries favor locally made products over imported products. D) A positive brand image helps overcome negative perceptions about a product's country-of-origin. Answer: D Diff: 3 Skill: Concept Objective: 17-5 Explain the different branding strategies companies may employ internationally AACSB: Application of knowledge 86) The importance of using a brand to convey the perception of whether a firm will deliver what it promises is more critical in ________. A) countries without strong trademark protection B) selling to mass markets than in selling to niche markets C) countries with strong cultural characteristics of uncertainty avoidance D) selling industrial products than final consumer products Answer: C Diff: 2 Skill: Concept Objective: 17-5 Explain the different branding strategies companies may employ internationally AACSB: Application of knowledge 87) A brand name can function as a form of intellectual property. Answer: TRUE Diff: 2 Skill: Concept Objective: 17-5 Explain the different branding strategies companies may employ internationally AACSB: Application of knowledge 24 Copyright © 2022 Pearson Education, Ltd. 88) A positive brand image cannot overcome negative perceptions of the country where the product is made. Answer: FALSE Diff: 2 Skill: Concept Objective: 17-5 Explain the different branding strategies companies may employ internationally AACSB: Application of knowledge 89) If a brand name becomes generic in one country, it becomes generic in other countries as well. Answer: FALSE Diff: 2 Skill: Concept Objective: 17-5 Explain the different branding strategies companies may employ internationally AACSB: Application of knowledge 90) Sometimes legal or cultural factors force a firm to alter the brand names under which it sells its products. Answer: TRUE Diff: 1 Skill: Concept Objective: 17-5 Explain the different branding strategies companies may employ internationally AACSB: Application of knowledge 91) Which of the following is NOT true about distribution concerns when marketing internationally? A) Geographic barriers may divide countries into very distinct markets. B) In some countries, few potential sales lie outside the large metropolitan areas. C) Each country has its own distribution system, making standardization of distribution difficult. D) Because most foreign consumers are easily presold by advertising messages, it is difficult to convince retailers to offer good service. Answer: D Diff: 3 Skill: Concept Objective: 17-6 Discern major practices and complications of international distribution AACSB: Application of knowledge 25 Copyright © 2022 Pearson Education, Ltd. 92) Acme Industries has a production facility in an area of India in which roads are poorly maintained and dangerous. What part of Acme's marketing mix do these conditions most likely affect? A) promotion B) branding C) product standardization D) distribution Answer: D Diff: 2 Skill: Application Objective: 17-6 Discern major practices and complications of international distribution AACSB: Application of knowledge 93) Which of the following is true concerning countries' distribution systems? A) They reflect the economic levels of countries, so countries at similar economic levels have similar distribution systems. B) They are difficult to change because they have evolved over time, reflecting countries' cultural, economic, and legal environments. C) They are more similar among countries than pricing and promotional systems are. D) When standardized, they offer more cost savings for international companies than when products are standardized. Answer: B Diff: 3 Skill: Concept Objective: 17-6 Discern major practices and complications of international distribution AACSB: Application of knowledge 94) Which of the following would most likely indicate that a company should handle its own distribution? A) high-volume sales and non-complex after-sales servicing B) local customers and low-tech products C) low sales volume and few business-to-business sales D) global customers and high technology Answer: D Diff: 2 Skill: Application Objective: 17-6 Discern major practices and complications of international distribution AACSB: Application of knowledge 26 Copyright © 2022 Pearson Education, Ltd. 95) Which of the following statements is important to companies in order for them to gain contracts with foreign distributors? A) Convince the distributors that the product and company are viable. B) Offer high margins so distributors will compete to get the account. C) Determine the distribution gap before signing a contract. D) Establish in-house distribution to demonstrate what is desired. Answer: A Diff: 2 Skill: Concept Objective: 17-6 Discern major practices and complications of international distribution AACSB: Application of knowledge 96) Distribution is the course–physical path or legal title–that goods take between production and consumption. Answer: TRUE Diff: 1 Skill: Concept Objective: 17-6 Discern major practices and complications of international distribution AACSB: Application of knowledge 97) Seasonal differences around the world enable MNEs to distribute weather-related sales, such as winter clothing, more evenly throughout the year. Answer: TRUE Diff: 1 Skill: Concept Objective: 17-6 Discern major practices and complications of international distribution AACSB: Diverse and multicultural work environments 98) Higher disposable income and technological advances help overcome many geographic constraints on product demand and distribution. Answer: TRUE Diff: 1 Skill: Concept Objective: 17-6 Discern major practices and complications of international distribution AACSB: Application of knowledge 99) When sales volume is high, a company usually must rely on external distributors to be more economical. Answer: FALSE Diff: 1 Skill: Concept Objective: 17-6 Discern major practices and complications of international distribution AACSB: Application of knowledge 27 Copyright © 2022 Pearson Education, Ltd. 100) When the company deals with global customers, especially the business-to-business market, sales may go directly to the global customer. Answer: TRUE Diff: 1 Skill: Concept Objective: 17-6 Discern major practices and complications of international distribution AACSB: Application of knowledge 101) In seeking to enter a foreign market, a company may find that distributors there are tied into exclusive arrangements with manufacturers that impede new competitive entries. Answer: TRUE Diff: 1 Skill: Concept Objective: 17-6 Discern major practices and complications of international distribution AACSB: Application of knowledge 102) When a company sells technologically advanced products to global customers, it is more likely to handle distribution itself. Answer: TRUE Diff: 2 Skill: Concept Objective: 17-6 Discern major practices and complications of international distribution AACSB: Application of knowledge 103) Gap analysis is ________. A) a method for estimating a company's potential sales by identifying segments it is not serving adequately B) an investment advisor's report on the future of one of the leading clothing retailers C) the leap-frogging of demand in many developing economies whereby consumers skip certain generations of products, buying the latest model instead D) an estimation of the disparity in incomes between the very rich and the very poor in a given market Answer: A Diff: 2 Skill: Concept Objective: 17-7 Illustrate how gap analysis can help in managing the international marketing mix AACSB: Application of knowledge 28 Copyright © 2022 Pearson Education, Ltd. 104) A company would most likely use gap analysis to ________. A) estimate market potential over a business cycle B) compare sales over time C) compare consumption potential with its own sales D) determine the best market niches to target Answer: C Diff: 2 Skill: Concept Objective: 17-7 Illustrate how gap analysis can help in managing the international marketing mix AACSB: Application of knowledge 105) Assume the per capita consumption of shoes is three pairs in Country A and two pairs in Country B. The difference probably means that there is a ________ gap in Country B. A) product line B) usage C) distribution D) competitive Answer: B Diff: 2 Skill: Application Objective: 17-7 Illustrate how gap analysis can help in managing the international marketing mix AACSB: Application of knowledge 106) Gap analysis can be used by companies to gain synergy among marketing activities in different countries. Which of the following is a benefit of this synergy? A) It allows companies to determine the allocation of marketing budgets among countries. B) It can be used to prevent sales via the gray market. C) By seeing the combined market potential among several countries, companies can determine whether there is sufficient demand to justify new product development costs. D) By analyzing the distribution gap, companies can better determine whether to handle other companies' imported products along with their own. Answer: C Diff: 3 Skill: Concept Objective: 17-7 Illustrate how gap analysis can help in managing the international marketing mix AACSB: Application of knowledge 29 Copyright © 2022 Pearson Education, Ltd. 107) Gap analysis refers to an estimation of sales potential caused by the disparity in incomes between developed and developing countries. Answer: FALSE Diff: 1 Skill: Concept Objective: 17-7 Illustrate how gap analysis can help in managing the international marketing mix AACSB: Application of knowledge 108) Gap analysis may show that the combined market potential among several countries may justify product development costs. Answer: TRUE Diff: 2 Skill: Concept Objective: 17-7 Illustrate how gap analysis can help in managing the international marketing mix AACSB: Application of knowledge 109) In a short essay, discuss gap analysis. Answer: Gap analysis is a method for estimating a company's potential sales by identifying reasons for not serving markets adequately. When sales are lower than the estimated market potential for a given type of product, the company has potential for increased sales. The distribution gap represents sales lost to competitors who distribute where the company does not. The product line gap represents sales lost to competitors who have product variations the company does not have. The competitive gap is the remaining unexplained sales lost to competitors who may have a better image or lower prices. Diff: 2 Skill: Concept Objective: 17-7 Illustrate how gap analysis can help in managing the international marketing mix AACSB: Application of knowledge 30 Copyright © 2022 Pearson Education, Ltd.