Deck 14: Products and Services for Businesses

Question 1

Even small changes in consumer demand can sharply affect industrial demand.

Answer 1

True
Explanation: Minor changes in consumer demand mean major changes in the related industrial demand.

Question 2

With respect to Rostow's five-stage model of economic development, countries in Stage 5 (the age of mass consumption) are mostly service economies.

Answer 2

True
Explanation: With respect to Rostow's five-stage model of economic development, countries in Stage 5 (the age of mass consumption) are countries where design activities are going on and manufacturing techniques are being developed, and they are mostly service economies.

Question 3

Derived demand can be defined as demand that depends on the size of the market for the good.

Answer 3

False
Explanation: Derived demand can be defined as demand dependent on another source. Thus, the demand for Boeing 747s is derived from the worldwide consumer demand for air travel services.

Question 4

The lack of common standards for manufacturing highly specialized equipment is a problem in international sales of industrial products.

Question 5

The degree of economic development can be used as a rough measure of a country's industrial market.

Question 6

The adoption of universal quality standards would mean that the perceptions of industrial product quality would also be standardized.

Question 7

A country is able to leap several stages of economic development by using technology as economic leverage.

Question 8

One of the most significant factors affecting the international market for industrial goods and services is the degree of standardization.

Question 9

The perception of quality, as perceived by highly industrialized and less-industrialized countries, is basically the same.

Question 10

The single most important difference between consumer and industrial marketing is the cyclical swings in demand inherent in the latter.

Question 11

One of the trends that spurred the demand for technologically advanced products was the disintegration of the Soviet empire.

Question 12

One of the ways that an industrial firm can manage the inherent volatility of the industrial sector is by increasing advertising expenditure during booms.

Question 13

The U.S. Department of Commerce has mandated that all U.S. government purchases are conducted using the metric system.

Question 14

For managers selling capital equipment and big-ticket industrial services, understanding the concept of kinked demand is absolutely fundamental to their success.

Question 15

Customizing a product to suit the specific needs of a market will enhance the quality of a product more than just selling products that use the latest technology.

Question 16

With respect to Rostow's five-stage model of economic development, in Stage 1 (the traditional society), the most important industrial demand is associated with labor.

Question 17

A product whose design reflects the needs and expectations of the buyer-no more, no less-is a quality product.

Question 18

While countries have standards for products produced within its borders, there are no such standards that are applicable to imported goods.

Question 19

A product that exceeds performance expectations can also be considered to be of poor quality.

Question 20

For firms producing products and services for industrial markets, a chief reason for venturing abroad is the prospect of high profits with little risk.

Question 21

Which of the following statements regarding the industrial goods market is true?

A) Industrial goods are marketed through the same channels as consumer goods.
B) Industrial goods are more standardized than consumer goods.
C) Industrial goods are meant for consumption by the buyer.
D) The industrial goods market is highly concentrated.
E) Marketing efforts in the industrial goods market are highly customized.

Question 22

Along with industrial goods, the most rapidly growing sector of U.S. international trade today consists of:

A) social services.
B) consumer products.
C) manufactured goods.
D) business services.
E) governmental services.

Question 23

Goods are likely to be standardized if:

A) they are being produced by the same firm.
B) the cost of producing each unit is the same.
C) their uses are the same across markets.
D) they are being sold to different income groups.
E) they are being sold in different countries.

Question 24

For many industrial products, the revenue from associated services exceeds the revenue from the products themselves.

Question 25

Demand in industrial markets differs from demand in consumer markets in that:

A) the demand for industrial goods is more volatile than the demand for consumer goods.
B) the market for industrial goods is smaller than the market for consumer goods.
C) the industrial goods market is less competitive than the consumer goods market.
D) industrial products are always more expensive than consumer products.
E) industrial products use the same level of technology for all products making it appropriate for all countries.

Question 26

The sales of industrial goods are driven by the buyer's need to make profits.

Question 27

For international users of heavy construction equipment, the manufacturer's country of origin and quick delivery of replacement parts are of major importance in purchasing construction equipment.

Question 28

In difficult economic and political circumstances or otherwise, online trade shows are a perfect substitute for physical trade shows or trade fairs.

Question 29

Trade shows are important channel of advertising for consumer goods.

Question 30

A company Web site is the most important vehicle for selling industrial products, reaching prospective customers, and marketing in most countries.

Question 31

Capitalism is the most serious threat to the continued expansion of international services trade.

Question 32

To receive ISO 9000 certification, a company requests a certifying body to conduct a registration assessment.

Question 33

Mary is a new international sales rep for an industrial supply company. She will learn that the inherent nature of industrial goods creates a market where:

A) firms engage in a high degree of customization.
B) most of the production and sale of a good takes place in the domestic market.
C) product and marketing mix standardization are commonplace.
D) the demand for the good produced is relatively predictable and stable.
E) the buyer seeks satisfaction from the product.

Question 34

Which of the following is an additional reason for marketing industrial goods abroad that does NOT necessarily apply to consumer goods?

A) Increasing sales and profits.
B) Extending product life cycles.
C) Reducing the volatility of demand.
D) Gaining exposure to more customers.
E) Keeping up with the competition.

Question 35

Industrial goods differ from consumer goods in that:

A) sales of consumer goods are highly responsive to changes in price.
B) industrial goods are highly customized.
C) the demand for industrial goods is largely derived demand.
D) sales of industrial goods are stable and do not fluctuate.
E) consumer goods are traded in the international market.

Question 36

Which of the following is a factor that exacerbates the volatility in demand in industrial markets?

A) Professional buyers in the market tend to act in concert.
B) The demand for industrial goods is independent of changes in economic development.
C) Small, noncyclical swings in demand are inherent in industrial markets.
D) Experienced purchasers tend to take buying decisions independently.
E) The demand for industrial goods is highly inelastic.

Question 37

Which of the following factors account for greater market similarities among industrial goods customers than among consumer goods customers?

A) The inherent nature of the product.
B) The motive of both groups of customers being individual satisfaction.
C) Government control over design specifications.
D) Industrial goods being associated with after-sales services.
E) The restriction on international sale of industrial goods.

Question 38

The ISO 9000 certification guarantees that each product or service produced by a company is of the highest quality.

Question 39

A manufacturer who does not provide after-sales services and support could also be foregoing the opportunity of participating in a lucrative aftermarket.

Question 40

For managers selling capital equipment and big-ticket industrial services, understanding the concept of _____ is absolutely fundamental to their success.

A) kinked demand
B) full cost pricing
C) cost plus pricing
D) derived demand
E) postponed demand

Question 41

Which of the following is characteristic of Stage 2 of Rostow's five-stage model of economic growth?

A) Industrial demand is mainly associated with natural resources extraction.
B) The goods demanded relate to equipment and supplies to support manufacturing.
C) The focus is more on low-cost manufacturing of a variety of consumer and some industrial goods.
D) The focus is on design activities and the development of manufacturing techniques.
E) Infrastructure development is a primary requirement in the economy.

Question 42

Russia and Eastern European countries have been characterized as being in which of the following stages of Rostow's five-stage model of economic growth?

A) The traditional society.
B) Drive to maturity.
C) Preconditions for takeoff.
D) The age of mass consumption.
E) Takeoff.

Question 43

Which of the following factors spurs demand for technologically advanced products in the world?

A) An increase in the size of the global unskilled labor force.
B) Large fiscal deficits in developed nations.
C) Expanding economic and industrial growth in Asia.
D) The increase in the average age in Europe.
E) The opening of the Trans-Arctic route.

Question 44

Which of the following is probably the most significant factor affecting the international market for industrial goods and services?

A) The foreign exchange market.
B) Political conditions.
C) The degree of industrialization.
D) The level of domestic competition.
E) Inflation.

Question 45

In the _____ stage of Rostow's five-stage model of economic development, an industrialized economy's focus is more on low-cost manufacturing of a variety of consumer and some industrial products; they buy from all categories of industrial products and services.

A) traditional society
B) drive to maturity
C) preconditions to takeoff
D) age of mass consumption
E) takeoff

Question 46

A country has reached a level of economic development where there is focus on manufacturing of both semidurable and nondurable consumer goods. Also, the goods demanded relate to equipment and supplies to support manufacturing. Which of the following stages of Rostow's five-stage model of economic growth is the country in?

A) The traditional society.
B) Drive to maturity.
C) Preconditions for takeoff.
D) Takeoff.
E) The age of mass consumption.

Question 47

Country X is likely to be in the age of mass consumption according to Rostow's five-stage model of economic development if:

A) its economy is primarily driven by natural resource extraction.
B) the economy is moving away from agriculture and toward manufacturing.
C) the economy is driven by low-cost manufacturing.
D) it is primarily a service economy.
E) its economy is primarily agrarian.

Question 48

Which of the following stages of Rostow's five-stage model of economic growth do highly-industrialized countries like Japan and Germany fit into?

A) Traditional society.
B) Preconditions to takeoff.
C) Takeoff.
D) Drive to maturity.
E) The age of mass consumption.

Question 49

Which of the following can be used as a measure to manage volatility in industrial demand in the domestic market?

A) Maintaining a narrow product line.
B) Gradually reducing prices.
C) Reducing advertising expenditures during booms.
D) Focusing on market share as a strategic goal.
E) Avoiding investment in foreign high-yield financial instruments.

Question 50

Which of the following will expand demand, particularly for industrial goods and business services, in Latin America?

A) A sharp increase in government spending.
B) The creation of centrally-planned economies.
C) The privatization of state-owned enterprises.
D) The increasing use of labor in place of capital in production.
E) An increase in the number of government regulation.

Question 51

The perception of quality:

A) is specified by the government.
B) depends solely on the customer.
C) is defined by universal quality standards.
D) depends on the manufacturer's specifications.
E) are the same for most industrial goods.

Question 52

Which of the following is the first stage of Rostow's five-stage model of economic development?

A) The traditional society.
B) Drive to maturity.
C) Preconditions for takeoff.
D) Takeoff.
E) The age of mass consumption.

Question 53

Derived demand can be defined as demand that is:

A) independent of price.
B) matched to consumer wants and needs.
C) dependent on another source.
D) highly volatile.
E) highly responsive to factors other than price.

Question 54

Which of the following is true of Stage 1 of Rostow's five-stage model of economic development?

A) The economy is primarily driven by the production of services.
B) The most important industrial demand relates to natural resources extraction.
C) Infrastructure development is a primary requirement in the economy.
D) Manufacturing of both semidurable and nondurable consumer goods has begun.
E) The focus is on low-cost manufacturing of a variety of consumer and some industrial goods.

Question 55

Business-to-business marketers frequently misinterpret the concept of quality. Which of the following examples best illustrates this idea?

A) Farmers in developing countries often prefer less-efficient but easier-to-maintain products.
B) Accountants in the Middle East often use the abacus rather than a calculator.
C) Some Japanese firms do not do business with many U.S. suppliers because their packaging is faulty.
D) Products that are imported into a country are usually customized for the users in the country.
E) ISO 9000 standards are universally accepted as a guarantee of the suitability of products in consumer applications.

Question 56

Which of the following stages of Rostow's five-stage model of economic growth do industrialized economies such as Korea and the Czech Republic fit into?

A) Preconditions to takeoff.
B) Takeoff.
C) Traditional society.
D) Drive to maturity.
E) The age of mass consumption.

Question 57

Why are German and Japanese firms generally better at managing market volatility than American firms?

A) Their emphasis is on beating competitors.
B) They value employees highly and eschew layoffs.
C) They maintain limited product lines.
D) They reduce prices faster and raise advertising expenditures during booms.
E) They consider market share to be a strategic goal.

Question 58

Which of the following countries would be characterized as being in Stage 2 of Rostow's five-stage model of economic growth?

A) Russia
B) Sudan
C) South Korea
D) Czech Republic
E) Vietnam

Question 59

Which of the following is possibly the best indicator of a country's ability to use technology to leap several stages of economic development in a very short time?

A) The quality of the educational system.
B) The size of the population.
C) The general economic environment.
D) The size and growth rate of the market.
E) The level of government regulations.

Question 60

If a country is in Stage 5 (the age of mass consumption) of Rostow's five-stage model of economic development, it purchases most of its highest-technology products and services from _____.

A) Stage 4 suppliers
B) Stage 3 suppliers
C) other Stage 5 suppliers
D) Stage 1 suppliers
E) Stage 2 suppliers

Question 61

The ISO 9000 certification will allow a company to:

A) hedge its risk from currency fluctuations.
B) increase its revenues from associated services.
C) diversify into other product lines.
D) differentiate its product from its competitors.
E) provide after-sales services.

Question 62

The process of total quality management (TQM) starts with:

A) providing all customers with technologically advanced products.
B) signing trade agreements with other countries.
C) involving customers in the product development process.
D) reducing the time taken for the product to reach the market.
E) marketing the products at trade shows and fairs.

Question 63

Many suppliers are adopting ISO 9000 standards because:

A) they can acquire the certification at no extra cost.
B) governments mandate ISO certification for all product categories.
C) they want to be perceived as being environmentally friendly.
D) the WTO expects international suppliers to conform to ISO standards.
E) their buyers require them to be ISO 9000 registered.

Question 64

The U.S. Congress and businesses have been resisting conversion to the metric system because they fear:

A) market competition from international firms already using the metric system.
B) consumer backlash and the substitution of international products.
C) that it will promote standardization.
D) that workers will not understand the system.
E) that it will be too costly to implement.

Question 65

Which of the following is true of the ISO 9000 certification?

A) The ISO 9000 standards apply to specific products.
B) It guarantees that a manufacturer produces a "quality" product or service.
C) The series describes eight quality system models.
D) The ISO 9000 standards are a certification of the quality control system that a company has in place.
E) The ISO 9000s were originally designed by the International Organization for Quality in the U.S.

Question 66

The Global Harmonization Task Force is an international effort that is attempting to:

A) synchronize standards for several international industrial sectors.
B) promote free trade among developing and developed nations.
C) equalize wages among countries.
D) increase double testing of goods and services.
E) equalize the perception of quality across countries.

Question 67

Which of the following are driving a strong level of interest in the ISO 9000 certification?

A) Government regulations
B) Marketplace requirements
C) Market consolidation
D) Free trade
E) Protectionism

Question 68

The _____ measures customers' satisfaction and perceptions of quality of a representative sample of America's goods and services.

A) ISO 9000
B) loyalty business model
C) Net Promoter Score (NPS)
D) American Customer Satisfaction Index (ACSI)
E) American Price Index (API)

Question 69

Which of the following statements is true of universal standards in the sale of international products?

A) The idea of universal standards has been resisted in developing countries.
B) Firms that adhere to universal standards find the costs to be greater than the benefits.
C) The international market for industrial goods uses the metric system as a universal standard.
D) Most governments mandate universal standards.
E) The lack of universal standards limits the expansion of an industry.

Question 70

Firms that sell industrial goods in the international market should focus on after-sales services because these services:

A) are almost always more profitable than the actual sale of the good itself.
B) require high levels of investment in training and development.
C) need to be heavily advertised.
D) cost the firm almost nothing.
E) cannot be outsourced to other companies and must be provided by the firm itself.

Question 71

The ISO 9000 standards concerns the:

A) cost-effectiveness of the production of a good.
B) registration and certification of a manufacturer's quality system.
C) profitability of a production line.
D) ability of a company's computer system to adapt to SAP, a business management software.
E) marketing and promotional strategies of a firm.

Question 72

As compared to the ISO 9000 standards, the American Customer Satisfaction Index (ACSI) focusses on:

A) differentiating a product based on its quality.
B) quality based on leadership, strategic planning, and customer and market focus.
C) the audit of a company's business processes in order to ensure quality.
D) results, that is, quality as perceived by product and service users.
E) the existence of a quality control system that can meet published quality standards.

Question 73

Which of the following is considered to be an important competitive marketing tool in Europe?

A) The adoption of ISO 9000 by a company.
B) The printing of packaging instructions in English.
C) The pricing of all products in dollars.
D) The incorporation of U.S. products in inventories.
E) The indigenous sourcing of all product components.

Question 74

Buyers in Country X preferred to use the older version of Firm A's product although it was bulkier and less user-friendly. Buyers in Country Y, however, preferred to use the newer, lightweight version for its new user interface. What can be inferred from this information?

A) Firm A needs to revamp its after-sales services.
B) The sales of industrial goods are higher in Country X than in Country Y.
C) The perception of quality can differ across countries.
D) Country X is a highly industrialized nation.
E) Country Y has a lower average income level compared to Country X.

Question 75

Which of the following countries is not officially on the metric system?

A) The United States
B) Japan
C) Saudi Arabia
D) Mexico
E) China

Question 76

The lack of universal standards in the industrial goods market:

A) increases market efficiency.
B) gives each firm a competitive edge.
C) increases the level of consumer satisfaction.
D) reduces the prices of the final goods.
E) increases the cost of doing business.

Question 77

In the case of cellular phones, the physical product is practically given away to gain the phone services contract. This could be because:

A) the cellular phone company does not view market share as a strategic goal.
B) the cost of production of the cellular phone is very low.
C) the revenues from associated services exceed the revenues from the cellular phone.
D) the margins on after-sales services for the cellular phones is low.
E) consumers sometimes buy a variety of services that are not associated with products.

Question 78

_____ is/are rapidly becoming a major after-sales service when selling technical products in countries that demand the latest technology.

A) Promotional pricing
B) Product innovation
C) Capacity utilization efficiency
D) Customer training
E) Warranties

Question 79

Which of the following is true of the ISO 9000 certification?

A) To receive the ISO 9000 certification, a company does not require a registration assessment.
B) The ISO 9000 is generally voluntary except for certain regulated products.
C) A complete assessment for recertification of the ISO 9000 is done annually.
D) The ISO 9000 measures customers' satisfaction and perceptions of quality of a representative sample.
E) The ISO 9000 guarantees that a manufacturer produces a "quality" product or service.

Question 80

An important dimension of quality is how well the product:

A) meets the specific needs of the buyer.
B) exceeds competitors' products.
C) conforms to manufacturer's specifications.
D) alters the marketing landscape.
E) saves time and labor.