Deck 18: Marketing Strategies for Emerging Markets

Question 1

Which country has the greatest number of mobile phone subscribers per 100 inhabitants?

A) Italy
B) Russia
C) Germany
D) United Kingdom
E) Nigeria

Answer 1

A

Question 2

The Next Eleven:

A) is a George Clooney movie sequel.
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

Answer 2

B

Question 3

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

Answer 3

C

Question 4

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 5

Acer, the world leader in laptop manufacturing and design, is based in which country?

A) South Korea
B) Taiwan
C) China
D) Japan
E) Singapore

Question 6

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 7

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

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

Question 8

Which of the following is NOT a category of emerging markets?

A) developed countries
B) advanced emerging
C) secondary emerging
D) frontier countries
E) both a and d

Question 9

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

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

Question 10

Jollibee competes in which industry around the world?

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

Question 11

Emerging markets refer to:

A) countries that used to be called "less developed countries."
B) countries that were previously called "Third World."
C) countries that lacked convertible currency.
D) countries that were communist.
E) both a and b

Question 12

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.

Question 13

Emigrant workers from emerging markets:

A) are a nuisance to the countries they work in.
B) deplete the economy of their home country.
C) are almost always unskilled workers.
D) form local communities abroad that can be leveraged.
E) travel only within their own continent.

Question 14

What event caused severe setbacks to many emerging markets?

A) global warming
B) China's rise as a global superpower
C) losses in the World Cup soccer matches
D) the Asian financial crisis
E) EU focus on North Africa as a trading partner

Question 15

Emerging markets:

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

Question 16

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

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

Question 17

Global competitors:

A) are not headquartered in emerging markets.
B) duel for market share in emerging markets but only consist of MNCs from developed countries.
C) come only from the BRIC nations.
D) may emerge from any nation to challenge established MNCs.
E) none of the above

Question 18

Because emerging markets have underdeveloped infrastructure:

A) they cannot afford the best products from MNCs.
B) they can leapfrog old technology.
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 19

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

A) Miller beer
B) Jaguar
C) IBM PC
D) Ferrari
E) Budweiser

Question 20

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 21

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 22

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) buy out local rivals and use them to challenge the new champion in the home market.
E) none of the above

Question 23

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 24

What approach should smaller firms take in emerging markets?

A) Be a follower so you don't make costly mistakes.
B) Be a first-mover-to the victor go the spoils.
C) Be a first-mover to outmaneuver larger firms eyeing the same market.
D) Avoid the markets altogether-they take too much time and effort to develop compared to the pay-off for a small firm.
E) Merge with a local company.

Question 25

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 26

Social marketing-in the form of new product development and/or aiding development:

A) is not practiced by emerging market companies.
B) is a waste of time-the population won't be exposed to the messages and is unlikely to follow directions.
C) can expand market opportunities for the firm.
D) builds goodwill that can be leveraged into greater profits.
E) both c and d

Question 27

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 28

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 29

The BOP:

A) constitutes a majority of the world's population.
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 30

Despite its dismal financial condition, the BOP has support as a viable market segment. This is because:

A) Wal-Mart concentrated in a similar area in the U.S. and became a world player.
B) incomes are expected to rise over time and this segment could become brand loyal.
C) challenges faced here could be the basis for new and innovative products.
D) the BOP is a source of cheap labor.
E) both b and c

Question 31

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) All of the above are not suggested.

Question 32

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

Question 33

Rapid scale-up of new champions:

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

Question 34

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) emphasized local R&D efforts
D) concentrated on the urban population for sales
E) offered a wide variety of brands to tightly segment the market

Question 35

Bottom of the pyramid means:

A) lower class Egyptians.
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 per day.
E) the first step toward $1 million on a game show.

Question 36

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 37

What best describes the outcome of early entry into emerging markets?

A) It can be lucrative, especially for huge markets like China and India.
B) It is likely to fail because the markets don't or can't appreciate the product.
C) It will probably face few direct competitors.
D) Products will be too expensive for local consumers.
E) None of the above

Question 38

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 39

Some people are optimistic about the BOP as a market segment. This is because:

A) they are hopeless romantics and can't face reality.
B) there is a great deal of untapped money in the BOP.
C) BOP is critical for long term growth of the company.
D) the BOP needs help and would welcome input from outsiders.
E) only b and c

Question 40

Compared to developed countries, segments in emerging markets are:

A) enormous.
B) much more coarse and difficult to define.
C) harder to reach because media options are not as well developed.
D) less wealthy.
E) all of the above

Question 41

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 42

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 43

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 44

When designing a product for emerging markets, companies should consider which of the following?

A) low price, ruggedness, and low quality
B) low price, inconsistent quality, and ability to run without electricity
C) high price, consistent quality, and a warranty
D) low incomes, unreliable power supplies, and scarce resources
E) low price, back-up power supplies, and a warranty

Question 45

Package design in emerging markets can largely ignore the feature of ________.

A) sturdiness
B) heat resistance
C) freshness
D) sustainability
E) none of the above

Question 46

Common features that products must have to be successful in emerging markets include:

A) the very latest designs.
B) the widest variety of options.
C) ruggedness.
D) high quality.
E) warranties.

Question 47

Entry strategies for emerging markets include _______.

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

Question 48

Why is distribution considered to be the biggest challenge when entering an emerging market?

A) It isn't-pricing is.
B) It isn't-product adaptation is.
C) Distribution infrastructure is too complex to navigate.
D) The country's land mass is a deterrent.
E) All of the above

Question 49

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 50

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 enter spectrum of marketing and financial risks.

Question 51

Backward innovation and selling obsolete goods:

A) run a risk of consumer backlash in emerging markets.
B) could save the company money on product development.
C) should not be used because cutting edge products are most highly favored in emerging markets.
D) are entirely different approaches to entering a market.
E) a, b and c are all reasonable answers

Question 52

Brand strategies proven to succeed in emerging markets include:

A) pursuing only the wealthy-they don't require product or price changes.
B) aiming brands at various market segments with different formulae and prices.
C) focusing on the emerging middle class for its growing buying power and eventual loyalty.
D) purchasing a local brand as part of the product offering.
E) both b and d

Question 53

Because of the climate and sales conditions of many emerging markets, packages should:

A) come frozen so freshness and safety are ensured.
B) be made of the cheapest materials to save money.
C) be sold with reusable containers.
D) allow people to see and smell the product before buying.
E) all of the above

Question 54

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

A) Local and rural areas can both be easily reached.
B) Shopping malls and supermarkets are on the rise in emerging markets.
C) Traditional retailers can be hard to work with.
D) Operating capital of retailers may be lacking.
E) Local brands are difficult to displace on the shelves.

Question 55

When MNCs enter an emerging market, they are likely to:

A) share product secrets with the new country.
B) insist on tight corporate control.
C) take a high risk approach to increase the chance for greater rewards.
D) emphasize sales as a measure of success.
E) both b and d

Question 56

Companies have used which of the following methods to enhance product acceptance in emerging markets?

A) washing machines that can restart after a power outage
B) changing detergent formulae to use more water
C) selling a top-end water purifier in India for greater assurance of pure water
D) lowering quality to keep prices low
E) all of the above

Question 57

The preferred entry mode(s) for emerging markets:

A) include(s) both licensing and minority joint venture.
B) seek(s) to adapt products to ensure the capture of the market.
C) involve(s) direct investment to close the market to local challengers and later MNCs.
D) focus (focuses) on marketing instead of sales.
E) both a and b

Question 58

Which of the following is MOST likely to be used when packaging for emerging markets?

A) large packages to cater to the bigger families common in these countries
B) large packages because an entire village will share the product
C) smaller packages at lower price points
D) large packages with individual wrappers so merchants can resell in smaller quantities
E) both c and d

Question 59

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 60

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 61

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

Question 62

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

Question 63

Remittances from foreign workers are important to emerging market economies.

Question 64

Most of the largest banks in the world are from the United States.

Question 65

Communication challenges include:

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 66

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

Question 67

Direct selling in emerging markets:

A) is attractive because of the rapid growth of internet sales.
B) often works best in a B2B setting.
C) is valuable in countries where face-to-face sales are common.
D) both b and c
E) none of the above-direct selling should be avoided as too difficult to supervise.

Question 68

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 69

Which of the following is a reason why a push strategy would 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 70

Products from emerging markets only compete as low-end challengers to established brands.

Question 71

The most busy McDonald's in the world is in Peking.

Question 72

Product piracy is not a problem in China.

Question 73

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 74

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

A) They don't understand the message about the product.
B) Coupons may be stolen and never reach the consumer for redemption.
C) Mass media are less effective in the emerging nations.
D) All of the above apply.
E) None of the above apply-emerging market consumers love coupons.

Question 75

P&G succeeded in Russia by:

A) using door to door sales reps.
B) direct export to a single large distributor in Moscow.
C) partnering with EU firms that already had a presence in Russia.
D) developing its own distributor network in exchange for exclusivity.
E) none of the above-Unilever is the dominant player in Russia.

Question 76

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

Question 77

Iran is one of the BRIC nations.

Question 78

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

Question 79

Emerging market distributors seeking exclusive territories should:

A) be told yes, on a temporary basis.
B) be denied, because this policy retards 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 80

Emerging markets are not a tempting target for MNCs.