Deck 14: Products and Services for Businesses

Question 1

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

Answer 1

True
Explanation: Three interrelated trends spur demand for technologically advanced products: (1) expanding economic and industrial growth in Asia, particularly China and India; (2) the disintegration of the Soviet empire; and (3) the privatization of government-owned industries worldwide.

Question 2

Good quality as interpreted by a highly industrialized market is the same as that interpreted by standards of a less industrialized nation.

Answer 2

False
Explanation: Recent studies have demonstrated that perceptions of industrial product quality can vary across cultural groups even in the most technologically developed countries. Good quality as interpreted by a highly industrialized market is the same as that interpreted by standards of a less industrialized nation.

Question 3

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

Answer 3

True
Explanation: The single most important difference between consumer and industrial marketing is the huge, cyclical swings in demand inherent in the latter.

Question 4

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

Question 5

Industrial demand is unaffected by changes in consumer demand.

Question 6

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

Question 7

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

Question 8

For firms producing products and services for industrial markets, the chief reason for venturing abroad is the prospect of high profits with no risk.

Question 9

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

Question 10

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

Question 11

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

Question 12

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

Question 13

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

Question 14

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 15

Derived demand can be defined as demand dependent on another source.

Question 16

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

Question 17

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

Question 18

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

Question 19

A country can leap several stages of economic development by using technology as economic leverage.

Question 20

The most significant environmental factor affecting the international market for industrial goods and services is the degree of standardization.

Question 21

A company website is the most important vehicle for selling industrial products, reaching prospective B2B customers, and marketing in most countries.

Question 22

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

A) Bypassing import tariffs
B) Avoiding sales tax
C) Reducing the volatility of demand
D) Acquiring ISO certification
E) Acquiring ACSI certification

Question 23

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

A) firms need to incur huge losses to expand their product base.
B) most of the production and sale of goods takes place in the domestic market.
C) product and marketing mix standardization are commonplace.
D) the demand for the goods produced is relatively predictable and stable.
E) the buyer only seeks satisfaction from the product.

Question 24

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

A) The inherent nature of the product
B) The customer motive 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 25

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

Question 26

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

A) availability heuristic
B) bank effect
C) Baskerville effect
D) derived demand
E) catapult demand

Question 27

For international users of heavy construction equipment, the manufacturer's country of origin is of major importance in purchasing construction equipment.

Question 28

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 29

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

Question 30

Industrial markets differ from 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 insignificant in comparison to the market for consumer goods.
C) industrial goods are marketed domestically whereas consumer goods are marketed internationally.
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 whereas consumer goods need to be customized for each market.

Question 31

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

Question 32

Which of the following statements is true of industrial markets?

A) Demand in industrial markets is nonvolatile by nature.
B) Industrial markets are unaffected by derived demand.
C) Industrial sellers tend to have small numbers of customers upon which they are more dependent.
D) Sales of industrial goods are stable and do not fluctuate.
E) Professional buyers in industrial markets tend to undertake dissimilar investment actions to achieve the same goal.

Question 33

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

Question 34

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

Question 35

Trade shows are the most important channel of advertising for consumer goods.

Question 36

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

Question 37

Industrial goods are most likely to be standardized if:

A) they are 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 sold to different income groups.
E) they are sold in different countries.

Question 38

Which of the following statements regarding industrial goods is true?

A) Industrial goods are always marketed through the same channels as consumer goods.
B) Industrial goods are generally standardized.
C) Industrial goods are meant for direct consumption by the general public.
D) The industrial goods are independent of the level of economic and technological development of their market.
E) All industrial goods must adhere to ISO 9000 standards.

Question 39

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

Question 40

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

A) Professional buyers in the industrial 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 make buying decisions independently.
E) The demand for industrial goods is highly inelastic.

Question 41

Country X is most 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 42

A country has reached a level of economic development where the manufacturing of both semidurable and nondurable consumer goods has just begun. 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 does the country fit?

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

Question 43

Russia and Eastern European countries fit 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 44

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) Stage 5 suppliers
D) Stage 1 suppliers
E) Stage 2 suppliers

Question 45

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 the primary requirement in the economy.

Question 46

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) Germany
C) South Korea
D) Czech Republic
E) Vietnam

Question 47

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) Reducing prices during booms
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 48

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 49

The industrialized economies in the _____ stage of Rostow's five-stage model of economic development focus more on low-cost manufacturing of a variety of consumer and some industrial goods. 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 50

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

A) The increase of import tariff by 70 percent
B) The adoption of Marxist-socialist policies
C) The privatization of state-owned enterprises
D) The increased use of labor in place of capital in production
E) The decline of economic growth in Asia

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

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 53

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

A) Farmers in developing countries prioritize ease of maintenance over efficiency of a farm vehicle.
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 54

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 55

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 56

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 57

Derived demand can be defined as demand that is:

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

Question 58

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 59

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 60

Which of the following is 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) Global warming

Question 61

_____ is 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) Warranty

Question 62

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

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

Question 63

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 64

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

A) harmonize 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 65

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 66

The lack of universal standards in the industrial goods market:

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

Question 67

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

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

Question 68

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 69

ISO 9000 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 70

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

A) are almost always more profitable than the actual sale of the goods themselves.
B) require high levels of investment in training and development.
C) ensure that the firm's goods are not liable to lawsuits.
D) cost the firm almost nothing.
E) cannot be outsourced to other companies and must be provided by the firm itself.

Question 71

Buyers in country X prefer to use the older, cheaper version of Firm A's product although it is bulkier and less user-friendly. Buyers in country Y, however, prefer to use the newer, lightweight version for its new user interface. Which of the following statements is the most accurate conclusion from the given 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 72

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

A) The idea of universal standards is being 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 imperial system as a universal standard.
D) All governments mandate universal standards.
E) The lack of universal standards limits the expansion of industries.

Question 73

The ISO 9000 certification allows a company to:

A) hedge its risk from currency fluctuations.
B) bypass all international trade barriers.
C) diversify into other product lines.
D) differentiate its product from its competitors.
E) provide after-sales services.

Question 74

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

A) The ISO 9000 standards apply to specific products.
B) The ISO 9000s guarantee that a manufacturer produces a "quality" product or service.
C) The ISO 9000 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 United States.

Question 75

The American Customer Satisfaction Index (ACSI) focuses on:

A) differentiating a product based on its quality.
B) rating a company's quality based on its 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 creation of a quality control system that can meet published quality standards.

Question 76

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

A) Government regulations
B) Marketplace requirements
C) Environmental regulations
D) Trade tariff requirements
E) Protectionism restrictions

Question 77

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.

Question 78

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

A) ISO 9000 certification
B) ICE certification
C) ACSI certification
D) AERA certification
E) NCME certification

Question 79

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

A) providing all customers with technologically advanced products.
B) signing trade agreements with developed 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 80

Which of the following statements is true of 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.