Deck 14: Marketing in the Global Firm

Question 1

Frequent business travelers with substantial disposable income are a global market segment targeted by various types of firms.

Answer 1

True

Question 2

Global positioning strategies typically increase marketing costs for firms because managers must reconfigure marketing techniques for each individual market.

Answer 2

False

Question 3

Standardized marketing approaches are easiest to undertake when the manufactured product has universal specifications.

Answer 3

True

Question 4

Varying income levels among nations usually necessitate that firms make price adjustments and product modifications.

Question 5

Globally branded products, such as Lego, MasterCard, and Sony, evoke a sense of consumer confidence, which allows firms to charge premium prices.

Question 6

Global new product planning teams first develop a brand for a national market and then internationalize the product instead of establishing a global brand from the outset.

Question 7

Global new product planning teams are increasingly being used by firms to develop global products and design solutions.

Question 8

The amount of control that firm managers have over setting prices in various foreign markets is considered an external factor of international pricing.

Question 9

The initial step in setting international prices is to determine the price of similar products from competitors and of other items in a firm's product line.

Question 10

When an exporter's home-country currency weakens in relation to a customer's currency, the exporter should redesign the product in order to eliminate costly and unnecessary features.

Question 11

Firms that participate in transfer pricing run the risk of legal problems if a subsidiary uses accounting procedures not approved by the host government.

Question 12

The majority of large and small international firms typically standardize the type and mix of advertising used in both foreign and domestic markets.

Question 13

Product demonstrations and free samples often require the use of an intermediary for success in a foreign market.

Question 14

Firms that employ direct marketing methods maintain no retail stores and only use the Internet for business transactions.

Question 15

The number of distributors that it takes to get a product from a manufacturer to the customer is called the channel length.

Question 16

Market segmentation is most likely useful to firms that need to do which of the following?

A) formulate unique products and services for global customers
B) create specialized sales techniques for foreign markets
C) devise marketing strategies for specific customer groups
D) acquire short-term product development strategies

Question 17

Which of the following is an example of a macro-level variable often used in global marketing strategies?

A) average family size
B) cultural similarities
C) personal political beliefs
D) standard home sizes

Question 18

A global market segment can best be defined as which of the following?

A) an international group of customers with common characteristics
B) a group of demographically similar customers from one country
C) a group of customers with similar economic backgrounds
D) an international group of customers with disposable income

Question 19

Which of the following is a characteristic of positioning?

A) product images evoke specific attributes for consumers
B) international consumers have identical purchasing habits
C) marketing campaigns appeal to all foreign consumers
D) individual markets share similar attributes and needs

Question 20

Why did Coca-Cola's management alter the positioning of Diet Coke in Japan?

A) Sales of Diet Coke exceeded sales of regular Coca-Cola.
B) Japanese consumers did not recognize the brand by another name.
C) Japanese consumers do not like products labeled "diet."
D) The Japanese language lacked an equivalent term for "diet."

Question 21

Taken together, the key elements of a company's marketing program are known by which of the following terms?

A) cross-marketing platform
B) product development approach
C) market positioning
D) marketing mix

Question 22

Adaptation can best be defined as which of the following?

A) changing a marketing program to make the elements completely uniform
B) altering a firm's organizational structure to facilitate internationalization
C) modifying marketing program elements to meet the needs of a specific market
D) varying a firm's products and services to meet distribution requirements

Question 23

A standardized marketing approach is most likely appropriate in which of the following industries?

A) textbooks
B) software
C) food
D) credit cards

Question 24

Which of the following will most likely be a result of standardization?

A) customer loyalty
B) cost efficiency
C) government compliance
D) niche marketing

Question 25

A global brand can best be defined as which of the following?

A) a brand with a complicated value-chain
B) a brand with a high rate of repeat customers
C) a brand with a varying marketing campaign
D) a brand with a standardized look and personality

Question 26

Adaptation is most appropriate in countries with which of the following characteristics?

A) unique cultural preferences
B) specific economic restrictions
C) stable currency exchange rates
D) efficient national infrastructures

Question 27

All of the following are reasons that firms might adapt their products or services except ________.

A) low consumer confidence
B) local packaging laws
C) consistent global brand
D) distinct cultural practices

Question 28

Which of the following is an advantage for firms that adapt a marketing program for an individual market?

A) Firms will rely less heavily on foreign market intermediaries for large sales.
B) Customers will have numerous products and services from which to choose.
C) Products and services will specifically meet the needs of customers in that market.
D) Governments will be more flexible towards firms that modify products and services.

Question 29

Adaptation is more costly than standardization because ________.

A) the firm is likely to lose customers when products are too adapted
B) products must be redesigned for numerous foreign markets
C) governments require firms to pay fees for altered products
D) intermediaries charge high commissions in foreign markets

Question 30

Brand equity can best be defined as the ________ of a brand.

A) value
B) visibility
C) consistency
D) credit

Question 31

Which of the following factors most likely helps facilitate the success of a mobile phone brand?

A) high gross national income
B) customer characteristics similar to those of the manufacturer's country
C) innovative features
D) low value-to-price ratio

Question 32

Which of the following is a strategy often employed by computer and automobile manufacturers in global product development?

A) developing specialized products suitable for the needs of individual markets
B) creating unique components and features that can be modified later by consumers
C) establishing manufacturing facilities in individual markets that build custom products
D) using standardized parts that can be assembled in different ways for many markets

Question 33

All of the following are characteristics of global new-product planning teams except ________.

A) involve employees with special expertise
B) develop country-specific marketing tactics
C) include geographically-diverse employees
D) assigned to develop international products

Question 34

What is a disadvantage for exporting firms that use foreign-based independent distributors?

A) inability to monitor exchange rate
B) lack of control over pricing strategy
C) culturally diverse marketing
D) global brand adaptation systems

Question 35

Firms that locate production facilities in major markets are most likely able to ________.

A) charge premium prices
B) use government incentives
C) standardize products
D) avoid exchange rate issues

Question 36

Which of the following is a strategy most likely employed by exporters faced with international price escalation?

A) Design products with technological features appealing to affluent consumers.
B) Enter into a joint partnership with a foreign competitor to save on supply costs.
C) Ship a product's parts and components to a foreign trade zone for assembly.
D) Streamline the organizational structure to eliminate unnecessary expenses.

Question 37

MNEs most likely engage in transfer pricing for which of the following reasons?

A) Managers want to maintain a steady stream of foreign-earned income in countries with strong currencies.
B) Firms want to generate additional sales by charging low prices to developing countries and high prices to advanced economies.
C) Management wants to maximize profitability by moving profits from a nation with high corporate taxes to one with low corporate taxes.
D) Firms want to maximize expenditures in countries with weak economies and shift the savings to advertising and transportation costs.

Question 38

Which of the following is a primary cause of gray market activity?

A) a firm's inability to control production and distribution costs
B) a significant difference in price between national distributors
C) a firm's decision to flood the market with substandard products
D) a large price difference between two countries for the same product

Question 39

Consumer receptiveness towards an advertised product most likely depends on which of the following?

A) culture and language
B) government leaders
C) media expenses
D) economic status

Question 40

Global ad agencies differ from other types of advertising agencies primarily because they ________.

A) concentrate on targeting local consumers and markets
B) have a deep knowledge of consumer characteristics in individual countries
C) have affiliates and offices in target markets
D) are not usually subject to advertising regulations imposed by national governments

Question 41

Which of the following should most likely be considered before initiating an international promotional activity?

A) What type of promotion was used in the United States?
B) What are the national restrictions or laws regarding coupons?
C) What is the literacy rate among consumers in this market?
D) Which advertising agency typically uses product demonstrations?

Question 42

Providing standardized service to global customers in any part of the world is known as which of the following?

A) global account management
B) international consulting
C) marketing communications
D) global organizational strategy

Question 43

Which of the following is most likely an advantage for firms that enter new markets through FDI?

A) The firm has the flexibility to change distribution intermediaries when needed.
B) The firm standardizes distribution methods and saves on freight expenses.
C) The firm uses the Internet to sell products directly to consumers at low prices.
D) The firm maintains control of the distribution and marketing in the target market.

Question 44

Amazon is an example of a firm characterized by which of the following?

A) "brick-and-mortar" book retailing
B) direct marketing
C) long distribution channels
D) face-to-face marketing communications

Question 45

Channel length can best be defined as which of the following?

A) the different government departments that charge fees for imports
B) the individuals involved in gray market business transactions
C) the number of intermediaries between the manufacturer and the retailer
D) the length of time it takes for goods to be developed and manufactured

Question 46

Refrigerator Adaptations
Cold-aire manufactures refrigerators from its facilities in the United States and China and ships them to retail stores around the world. Kitchen sizes vary around the world, and as a result, refrigerator sizes must vary as well. U.S. retailers want large refrigerators, while European and Asian retailers demand smaller units. Cold-aire manufactures over 20 different sizes and models of refrigerators, which often vary in size by only a few inches. Cold-aire managers are concerned that the firm is losing money because of all of the product adaptations. Cold-aire management is meeting to discuss the various cost-saving options for the firm.

-Which of the following questions would be more important for Cold-aire managers to evaluate when determining how the firm could reduce production costs?

A) How will consumers respond to a one-size-fits-all Cold-aire refrigerator?
B) Would Cold-aire managers be able to address standardization with home builders?
C) Can Cold-aire standardize its refrigerators and reduce the number of available sizes?
D) In what market should Cold-aire establish another manufacturing facility?

Question 47

Refrigerator Adaptations
Cold-aire manufactures refrigerators from its facilities in the United States and China and ships them to retail stores around the world. Kitchen sizes vary around the world, and as a result, refrigerator sizes must vary as well. U.S. retailers want large refrigerators, while European and Asian retailers demand smaller units. Cold-aire manufactures over 20 different sizes and models of refrigerators, which often vary in size by only a few inches. Cold-aire managers are concerned that the firm is losing money because of all of the product adaptations. Cold-aire management is meeting to discuss the various cost-saving options for the firm.

-Which of the following would most likely be a result of increased standardization from Cold-aire?

A) Cold-aire would increase the number of stocked components.
B) Cold-aire would open a facility to produce each refrigerator model.
C) Cold-aire would implement an international marketing campaign.
D) Cold-aire would hire fewer workers and pay lower wages.

Question 48

International Price Setting
The Comfy Couch Corporation (CCC) is a leading manufacturer of sofas, sectionals, and lounge chairs. Managers from the U.S.-based firm recently met a London retailer who expressed an interest in selling CCC lounge chairs in his stores. The retailer sells a number of different furniture brands in his stores, so CCC managers need to price their furniture appropriately if the firm is to be competitive in the European market.

-Which of the following questions would be more important to initially evaluate before setting a price for the lounge chairs exported to the United Kingdom?

A) What is the total price of a lounge chair including the cost of shipping it to London?
B) What is the average price that Londoners pay for upholstered lounge chairs?
C) How many lounge chairs are sold in London retail stores every year and at what price?
D) What are the current market conditions in England and the rest of the European Union?

Question 49

International Price Setting
The Comfy Couch Corporation (CCC) is a leading manufacturer of sofas, sectionals, and lounge chairs. Managers from the U.S.-based firm recently met a London retailer who expressed an interest in selling CCC lounge chairs in his stores. The retailer sells a number of different furniture brands in his stores, so CCC managers need to price their furniture appropriately if the firm is to be competitive in the European market.

-Which of the following should most likely be considered by managers before setting the price for the lounge chairs?

A) In what other markets could CCC export its high-priced line of furniture?
B) Will the London retailer be able to recommend appropriate intermediaries?
C) What type of pricing strategy best corresponds to the corporate goals of CCC?
D) What method of shipping would be most economical and suitable for CCC?

Question 50

International Price Setting
The Comfy Couch Corporation (CCC) is a leading manufacturer of sofas, sectionals, and lounge chairs. Managers from the U.S.-based firm recently met a London retailer who expressed an interest in selling CCC lounge chairs in his stores. The retailer sells a number of different furniture brands in his stores, so CCC managers need to price their furniture appropriately if the firm is to be competitive in the European market.

-If CCC managers employ rigid cost-plus pricing they will most likely be unable to adjust for which of the following factors?

A) English market conditions
B) shipping and handling costs
C) U.S. buyer demands
D) domestic production costs

Question 51

International Advertising
The Quik-Vac Vacuum Corporation manufactures small, inexpensive vacuum cleaners that work on re-chargeable batteries. Quik-Vac customers typically live in small apartments or other tight spaces where a large vacuum cleaner is unnecessary. Quik-Vac managers believe there is a market for the vacuums outside of the United States, especially in communities where living space is restricted. The Quik-Vac marketing department has been assigned the task of creating an advertising campaign to introduce Quik-Vac's offerings to global consumers.

-Before developing a print media campaign, what should the Quik-Vac marketing department most likely determine about a target market?

A) the number of homes with TVs
B) the percentage of people with radios
C) the availability of a global ad agency
D) the population's literacy rate

Question 52

International Advertising
The Quik-Vac Vacuum Corporation manufactures small, inexpensive vacuum cleaners that work on re-chargeable batteries. Quik-Vac customers typically live in small apartments or other tight spaces where a large vacuum cleaner is unnecessary. Quik-Vac managers believe there is a market for the vacuums outside of the United States, especially in communities where living space is restricted. The Quik-Vac marketing department has been assigned the task of creating an advertising campaign to introduce Quik-Vac's offerings to global consumers.

-Which of the following should most likely be considered before Quik-Vac representatives offer coupons for vacuum cleaners?

A) Quik-Vac batteries last four hours before needing re-charging.
B) They should determine the legality of such coupons in the target market.
C) Radio and television advertising can be costly in some markets.
D) Foreign intermediaries demand high fees for promoting products.

Question 53

International Advertising
The Quik-Vac Vacuum Corporation manufactures small, inexpensive vacuum cleaners that work on re-chargeable batteries. Quik-Vac customers typically live in small apartments or other tight spaces where a large vacuum cleaner is unnecessary. Quik-Vac managers believe there is a market for the vacuums outside of the United States, especially in communities where living space is restricted. The Quik-Vac marketing department has been assigned the task of creating an advertising campaign to introduce Quik-Vac's offerings to global consumers.

-Which of the following would most likely benefit Quik-Vac due to the firm's lack of experience in international markets?

A) using the Quik-Vac sales and marketing departments
B) advertising Quik-Vac products on the Internet
C) hiring OgilvyOne Worldwide, a global advertising agency
D) translating U.S. Quik-Vac commercials into other languages

Question 54

In a short essay, explain the purpose of positioning. How does a global positioning strategy assist firms participating in international business? Provide examples of firms that have positioned their products or services.

Question 55

What are three advantages to standardization? Explain your answer in a short essay.

Question 56

In a short essay, discuss four factors that would persuade firms to adapt elements of their marketing programs for individual markets. Provide at least one example to illustrate each reason.

Question 57

In a short essay, describe when standardization is likely to be used, and explain the benefits of standardization and global branding.

Question 58

In a short essay, describe how managers balance standardization with adaptation. Provide examples to illustrate your answer.

Question 59

In a short essay, explain why MNEs use global positioning strategies to win over consumers. Explain, too, why consumers prefer global brands. Provide examples of representative brands.

Question 60

How do firms develop products with international potential? In a short essay, describe how manufacturing firms use modular architecture in global product development. Provide examples of firms that have successfully employed global product development.

Question 61

In a short essay, discuss the three basic pricing strategies: rigid cost-plus pricing, flexible cost-plus pricing, and incremental pricing. How do firms employ each strategy? What are any advantages or disadvantages to each strategy?

Question 62

In a short essay, discuss three ways that gray market activity damages manufacturers of branded products.

Question 63

In a short essay, describe the role of global account management in international business. Provide an example of a firm that uses global account management.

Question 64

In a short essay, explain the concept of international price escalation, and discuss how distribution channel length affects international business transactions.