Deck 18: Marketing Strategies for Emerging Markets

Question 1

An emerging market company would be a defender when:

A)its assets are transferable.
B)there is little pressure to globalize.
C)industry pressure is high.
D)assets are only valuable in the home market.
E)both b and d

Answer 1

E

Question 2

Emerging markets:

A)cannot afford the most modern products
B)are often innovative in service offerings, offering a wider variety
C)embrace new products quickly
D)have low time-to-takeoff for new products
E)all of the above

Answer 2

B

Question 3

Which of these does not describe the BRIC nations?

A)They consist of Brazil, Russia, India and China.
B)They have large populations.
C)They constitute almost 15 percent of world GDP.
D)They are developed countries.
E)All have growing economies.

Answer 3

D

Question 4

BOP stands for:

A)a type of music common to developing countries.
B)bottom of the pyramid.
C)bottom of the pile.
D)boost our profits.
E)none of the above

Question 5

Because emerging markets have underdeveloped infrastructure:

A)they cannot afford the best products from MNCs.
B)they do not have to overcome legacy technology and can leapfrog it.
C)they are more eager to adopt new products.
D)R&D efforts are centered in these markets to generate new ideas.
E)distribution channels will be easier to set up.

Question 6

Which of the following nations is not a member of the Next Eleven?

A)Malaysia
B)Indonesia
C)Egypt
D)Mexico
E)Nigeria

Question 7

Emerging markets can be found in which of the following areas?

A)Africa
B)Asia
C)Latin America
D)Eastern Europe
E)All of the above

Question 8

After China, the country with the largest shopping malls in the world is:

A)United States
B)Thailand
C)Turkey
D)Canada
E)Malaysia

Question 9

Rapid scale-up of new champions:

A)doesn't occur because capital is in short supply.
B)by absorbing larger rivals.
C)is achieved by investing more than smaller rivals.
D)can only be done with the help of outside loans from such as the World Bank.

Question 10

Companies from the emerging markets are proving to be surprising challengers to older, larger MNCs.Which of the following would you recommend as an MNC strategic response?

A)Invest in growing mass markets of developing countries.
B)Partner with companies from the emerging markets.
C)Buy out smaller rival firms in the emerging markets.
D)Consider developing countries as more than just manufacturing sites.
E)All of the above

Question 11

Emerging market champions:

A)avoid new technology because it is too expensive.
B)use a combination of old technology and cheap labor for a competitive advantage.
C)leapfrog to the newest technologies to offer quality products.
D)copy MNC products to avoid problems with product development.
E)try to avoid innovation.

Question 12

When competing with the new champions from emerging markets, MNCs:

A)should give up-the new champions have cheaper labor and the latest technology
B)can ignore the new champions-they are only effective in emerging markets
C)should focus on the high end of the market and leave the rest to the local companies
D)sometimes buy out local rivals and use them to challenge the new champion in the home market
E)none of the above

Question 13

One strategy used by the new champions to succeed in major markets is:

A)reviving old technology to save money
B)copying the same model as MNCs from developed markets but with cheaper items
C)employing the latest technology
D)training staff in foreign companies first
E)both a and d

Question 14

The Next Eleven:

A)are countries largely based in Latin America
B)consists of a diverse group of emerging markets.
C)constitute their own trade bloc.
D)are all located in Asia.
E)none of the above

Question 15

When would emerging market companies use a dodge strategy?

A)when its assets are transferable
B)when there is little pressure to globalize
C)when industry pressure is high
D)when assets are only valuable in the home market
E)both c and d

Question 16

Jollibee competes in which industry around the world?

A)theme parks
B)entertainment
C)fast food
D)children's clothing
E)shoes

Question 17

MNCs are being threatened by new champions from the emerging markets.Which of the following strategies is not recommended for them?

A)Continue to use low cost sourcing in emerging markets.
B)Sell only goods developed by home country R&D in emerging markets.
C)Ignore emerging market branding strategies as being too elementary.
D)Do not invest in the mass markets of emerging economies as they will never amount to much revenue.
E)None of the above are suggested.

Question 18

Jollibee is a major international player that has its headquarters in _____.

A)Malaysia
B)Indonesia
C)China
D)Philippines
E)India

Question 19

Which of the following brands has not been bought by firms in emerging markets?

A)Land Rover
B)IBM PC
C)Ferrari
D)Budweiser
E)Jaguar

Question 20

The BRIC nations:

A)are all rich in natural resources.
B)are small countries with high income economies
C)are expected to surpass the GDP of the G7 nations within 20 years.
D)constitute a trade bloc.
E)none of the above

Question 21

Selling obsolete goods in emerging markets:

A)runs a risk of consumer backlash
B)should not be used because cutting edge products are often most highly favored in emerging markets.
C)May have been more effective in a pre-internet age
D)all the above

Question 22

Which of the following is not a reason why distribution is difficult in emerging markets?

A)Local and rural areas can be hard to reach.
B)Rural retailers often carry only a single brand for each category
C)Distribution needs vary between urban and rural areas
D)Distribution tends to be more labor intensive than in developed markets
E)Local distributors' interest in the same goals as the MNC are aligned

Question 23

Probably the least effective product design option is:

A)no adaptation-sell what we already make.
B)to sell our normal products at premium prices.
C)to sell a stripped down version of a normal good.
D)to extend the product life cycle by selling obsolete goods abroad.
E)All of the above are equally effective.

Question 24

The pricing strategy most likely to succeed in emerging markets is:

A)very low prices that everyone can afford-large volume makes up for low margins.
B)premium pricing only-establish the image of quality and save money on not having to adapt the product for local sale.
C)cater to the growing middle class and raise prices as income goes up.
D)saturate all price points with different products and make money at all levels.
E)All of the above are equally viable.

Question 25

Backward innovation offers:

A)copies of low-price competitor products for an emerging market
B)a stripped-down version of the product that is sold in developed markets
C)use of older technology to produce a lower price product
D)reverse engineering to copy competitors
E)all the above

Question 26

Hindustan Unilever pursued the following strategy to expand its market share in India.

A)retained the low unit price concept only for shampoo
B)focused its efforts on the BOP masses
C)supported a brand portfolio to cover a wide range of segments
D)concentrated on the urban population for sales
E)offered a wide variety of brands to tightly segment the market

Question 27

A package characteristic with perhaps greater significance in emerging markets than developed countries is _____.

A)refrigeration
B)sustainability
C)safety
D)variety of sizes
E)metal containers

Question 28

The BOP:

A)constitutes a majority of the world's population, at 4 billion people.
B)generates $2 an hour in wages.
C)is found mostly in the western hemisphere.
D)does not offer opportunities for MNCs.
E)is a viable market for only small firms with very cheap products.

Question 29

Which of the following is not a common risk when entering emerging markets?

A)product piracy
B)enforcing property rights
C)well-developed marketing infrastructure
D)antitrust laws
E)government intervention

Question 30

Entry strategies for emerging markets include _____.

A)export
B)licensing
C)joint venture
D)direct investment
E)all of the above

Question 31

Compared to developed countries, segments in emerging markets are

A)Enormous
B)much courser, less fine level of segmentation
C)harder to reach because media options are not as well developed
D)less wealthy
E)all of the above

Question 32

Why is being a first-mover attractive in emerging markets?

A)Pent-up demand may lead to high initial sales.
B)Governments are eager to offer concessions to first-movers.
C)Early entrants get best access to key marketing resources.
D)Marketing dollars generate higher productivity.
E)All of the above

Question 33

There are many reasons why a company might prefer to be a follower in a new market, not a first entrant.Which of these is not one of those reasons?

A)reduced profits because the market is already gone
B)fewer pitfalls as the follower can see the mistakes of the first-mover
C)better developed marketing channels
D)competitive response from other MNCs and local competitors
E)none of the above

Question 34

Product policies that have been pursued when entering emerging markets include

A)no adaptation-the risks and expense are too great.
B)selling a narrow range of premium goods.
C)pursuing backward innovation.
D)anchoring the product entry with products near the end of their life cycle in the home market.
E)all of the above

Question 35

The risks of entering emerging markets:

A)are financial, but only in terms of getting paid promptly and in full.
B)are financial, but include both currency volatility and getting paid.
C)are marketing related only-we wouldn't enter a country where we couldn't get paid.
D)are marketing and currency volatility driven.
E)cover the entire spectrum of marketing and financial risks.

Question 36

Package design in emerging markets can ignore the feature of _____.

A)sturdiness
B)cost-effective materials freshness
C)sustainability
D)none of the above

Question 37

Bottom of the pyramid means:

A)difficult to reach markets
B)the lowest level of consumer involvement with your product.
C)the lowest satisfaction level of Maslow's hierarchy.
D)people earning less than $2.50 per day.

Question 38

A manually operated sewing machine would:

A)be a backward innovation.
B)be an example of a product life cycle extension.
C)be rejected in emerging markets as not being modern enough.
D)be too difficult to operate.
E)likely have the idea copied as soon as it hit the market.

Question 39

Hindustan Lever decided that its product line should include:

A)only products for the rich, so it could charge a premium.
B)products for all three major segments: affluent, middle income, and low income.
C)low income only, to capture the entire lower end as loyal customers for the future.
D)only the middle income, as they were ignored by other firms.
E)both the middle and upper income groups, as profit margins were viable there.

Question 40

When managing distributors in emerging markets, MNCs should:

A)pick partners with extensive local product-market knowledge.
B)choose partners with excellent English-speaking skills.
C)focus on entrepreneurs to build local good-will.
D)only enter markets with a company-owned distributor network.
E)select distributors who are competent working with MNCs.

Question 41

Most emerging market countries have a shortage of skilled labor but do have adequate raw materials and utilities.

Question 42

The bulk of the revenues earned by some MNCs come from emerging markets.

Question 43

The requests of market distributors seeking exclusive territories in emerging markets should:

A)be told yes, on a temporary basis.
B)often be denied, because this policy can retard rapid market development.
C)be ignored-we will set up a company-owned distribution network.
D)be told no territories exist-everyone can sell everywhere, and the winner gets the final contract.
E)none of the above

Question 44

Push strategies:

A)are less viable in emerging markets than pull strategies.
B)are never used in emerging markets because channels are in disarray.
C)work well in many countries because of the enormous channel power of distributors.
D)result in the MNC being cheated because channel members keep the incentives for themselves.
E)never reach consumers.

Question 45

Significant companies from emerging markets are leaders in which of these industries?

A)smart phones
B)computers
C)beer
D)cars
E)all of the above

Question 46

Iran is a member of the Next Eleven.

Question 47

Iraq is a member of the Next Eleven.

Question 48

Emerging markets are not a tempting target for MNCs.

Question 49

Loosely speaking, the countries that qualify as emerging are those that can be neither classified as developing, nor as developed.

Question 50

Transition economies are those that are moving from very poor to more developed.

Question 51

Populations in EMs tend to be fairly old in terms of the median age.

Question 52

Iran is one of the BRIC nations.

Question 53

Turkey is a member of the Next Eleven.

Question 54

Why might pull strategies aimed at consumers in emerging markets not be very successful?

A)Mass media may not reach all areas of a country evenly
B)Literacy can be uneven among targeted populations
C)Mass media can be less effective in the emerging markets with a wide range of customer groups and viewing habits.
D)All of the above apply.
E)None of the above apply

Question 55

Per capita income in emerging markets is catching up to the developed world.

Question 56

BRIC stands for "big, rich, independent countries".

Question 57

Which of the following is a reason why push strategies often succeed in emerging markets?

A)more frequent shopping than in developed countries
B)heavy reliance on retailer recommendations about brands
C)significant distributor power
D)numerous opportunities for brand switching
E)all of the above

Question 58

Direct selling in emerging markets:

A)is attractive because of the rapid growth of internet sales.
B)works for B2B sales, with the support of the internet.
C)is valuable in countries where face-to-face sales are common.
D)fills in for the absence of a suitable distribution infrastructure
E)all of the above

Question 59

For categories that are novel to the local consumers, marketing activities must accomplish several tasks:

A)raising brand awareness.
B)educating customers about product use and benefits.
C)creating brand image.
D)gaining loyalty.
E)all of the above

Question 60

The busiest McDonald's in the world is in China.

Question 61

One of the ten largest shopping malls in the world is in Iran.

Question 62

One of the ten largest shopping malls in the world is in Canada.

Question 63

India is experiencing changes in its income pattern from pyramid to diamond.

Question 64

Product piracy is not a problem in China.

Question 65

Distribution and media infrastructures in EM countries are largely underdeveloped.

Question 66

In most EMs, the bulk of consumption comes from branded products and services.

Question 67

One of the ten largest shopping malls in the world is in Thailand.

Question 68

Luckin Coffee in China does not accept cash.

Question 69

Hindustan Unilever is a major corporation doing business in India.

Question 70

In 2018, there were almost as many Chinese firms on the Fortune Global 500 list as there were US firms.

Question 71

Risk levels of entering emerging markets are higher than those for developed countries.

Question 72

China is one of the least diverse emerging countries.

Question 73

None of the ten largest shopping malls in the world is in the US.

Question 74

Labor costs in most EMs are much lower than in developed countries.

Question 75

MNCs cannot use products developed in emerging markets because the quality standards are too low to be transferred to MNC home markets.

Question 76

Most of the world's largest shopping malls are in Asia.

Question 77

No companies from emerging market countries have made it to the Fortune Global 500 list.

Question 78

Most emerging market countries have a fairly uniform population.

Question 79

Backward innovation and selling obsolete goods are different names for the same product strategy.

Question 80

Frugal engineering means making very cheap, low quality products so you can get the most profit.