International Business Chapter 14 Brian Rawson

Governments in developing countries impose fewer consumer protection laws in order to ________.

A) hold down production costs and consumer prices
B) enable companies to focus on profit-making exclusively
C) decrease the flow of foreign direct investment into the country
D) decrease the complexity of the legal procedures for foreign direct investment

A) hold down production costs and consumer prices
All company and product brand names are made up of semantic elements or language building blocks called ________.

A) aesthetics
B) morphemes
C) hybrid words
D) propositions

B) morphemes
________ are imitation products passed off as legitimate trademarks, patents, or copyrighted works.

A) Giffen goods
B) Counterfeit goods
C) Inferior goods
D) Intangible goods

B) Counterfeit goods
Which of the following is true of counterfeit goods?

A) Developed nations normally have the most active counterfeiting markets.
B) Counterfeiting is more common among less visible local brands than global brands.
C) Most counterfeit products are imitations of products that normally enjoy legal protection.
D) Engineered industrial components and medicines are among the few categories of products that cannot be counterfeited.

C) Most counterfeit products are imitations of products that normally enjoy legal protection.
Which of the following is a marketplace of underground transactions that typically appear because a product is either illegal or tightly regulated?

A) black market
B) niche market
C) two-sided market
D) vertical market

A) black market
Which of the following is among the most commonly counterfeited products?

A) aircraft parts
B) watches
C) surgical equipment
D) medicines

B) watches
Which of the following statements is true about international promotions?

A) Most companies standardize all aspects of their international promotions to cut costs.
B) Firms that standardize advertising often control campaigns from the home office.
C) Companies that adapt their advertising to different markets project a consistent brand image.
D) Companies discourage blending product and promotional strategies in a communication process.

B) Firms that standardize advertising often control campaigns from the home office.
________ refers to anything that disrupts the audience’s ability to receive and interpret a promotional message.

A) Noise
B) Interpolation
C) Feedback
D) Resonance

A) Noise
The physical path a product follows on its way to customers is called a(n) ________.

A) distribution channel
B) demand chain
C) critical path
D) external value network

A) distribution channel
Companies along a distribution channel that work together in delivering products to customers are called ________.

A) subsidiaries
B) intermediaries
C) value chains
D) value networks

B) intermediaries
True or False: Product differentiation is more likely when nations share the same level of economic development.
False
True or False: A brand name can function as a legal property.
True
True or False: The value customers obtain from a product is heavily influenced by the image of the country in which the product is manufactured.
True
True or False: All company and product brand names are made up of morphemes
True
True or False: Counterfeiting is common among highly visible brand-name consumer goods.
True
True or False: Developed nations normally have the most active counterfeiting markets.
False
True or False: Product life cycles are becoming shorter because companies are undertaking new product development at an increasingly rapid pace.
True
True or False: The rapid pace of technological innovation today extends the life cycles of products.
False
The term ________ refers to a company’s efforts to reach distribution channels and target customers through communications such as personal selling, advertising, public relations, and direct marketing.

A) social marketing
B) viral marketing
C) promotion mix
D) positioning

C) promotion mix
________ is a major component of a promotion mix.

A) Distribution
B) Market segmentation
C) Pricing
D) Public relations

D) Public relations
Which of the following promotional strategies is being used by a company that hires a fleet of trucks to drive through village squares and hand out free trial packages to potential end users?

A) push strategy
B) pull strategy
C) retrenchment strategy
D) differentiation strategy

B) pull strategy
A promotional strategy designed to create buyer demand that will encourage channel members to stock a company’s product is called a ________.

A) pull strategy
B) push strategy
C) retrenchment strategy
D) stability strategy

A) pull strategy
Which of the following is a push strategy that companies use to promote their products?

A) mass media advertising
B) direct marketing techniques
C) free trial packages
D) retail product stocking

D) retail product stocking
Which of the following is a promotional strategy designed to pressure channel members to carry a product and promote it to final users?

A) differentiation strategy
B) retrenchment strategy
C) push strategy
D) pull strategy

C) push strategy
As a promotional strategy, manufacturers of products that are commonly sold through department and grocery stores often use ________.

A) a push strategy
B) a pull strategy
C) retrenchment strategy
D) stability strategy

A) a push strategy
A ________ is used for a product’s promotion when there are many levels of intermediaries in its distribution channel.

A) push strategy
B) pull strategy
C) retrenchment strategy
D) stability strategy

B) pull strategy
Which of the following circumstances would best require a push strategy to be implemented for product promotion?

A) channel members wield a great deal of power relative to that of producers
B) distribution channels are lengthy
C) buyers display a great deal of brand loyalty to particular product
D) products in question are industrial goods

D) products in question are industrial goods
Which of the following circumstances would best require a pull strategy to be implemented for product promotion?

A) channel members wield relatively lesser power compared to that of producers
B) buyers display a great deal of brand loyalty to a particular product
C) distribution channels are short
D) buyers need to be informed about the features of a product before purchase

B) buyers display a great deal of brand loyalty to a particular product
A ________ strategy is best suited for the promotion of industrial products because potential buyers usually need to be informed about a product’s special features before purchase.

A) push
B) pull
C) stability
D) differentiation

A) push
A company that makes its marketing program elements uniform, targeting an entire region with similar products, is demonstrating ________.

A) customization
B) segmentation
C) standardization
D) differentiation

C) standardization
The process of sending messages about products to target markets is called ________.

A) customer relations
B) customer service
C) market segmentation
D) marketing communication

D) marketing communication
Which of the following occurs when an idea to be communicated is translated into images, words, and symbols?

A) compiling
B) encoding
C) parsing
D) processing

B) encoding
Once an audience receives a message, they interpret the meaning of the message by ________ it.

A) preprocessing
B) decoding
C) parsing
D) compiling

B) decoding
Which of the following reflects the correct sequence of the marketing communication process?

A) promotional message; encoding; decoding; feedback
B) encoding; promotional message; decoding; feedback
C) promotional message; decoding; feedback; encoding
D) encoding; decoding; promotional message; feedback

B) encoding; promotional message; decoding; feedback
Which of the following communication strategies uses the same home-market product and marketing promotion in target markets?

A) product/communications extension
B) product extension/communications adaptation
C) product adaptation/communications extension
D) product/communications adaptation

A) product/communications extension
Which of the following communication strategies expands the same product into new target markets but alters its marketing promotion?

A) product/communications extension
B) product extension/communications adaptation
C) product adaptation/communications extension
D) product/communications adaptation

B) product extension/communications adaptation
Which of the following communication strategies adapts a product to the requirements of the international market while retaining its original marketing communication?

A) product/communications extension
B) product extension/communications adaptation
C) product adaptation/communications extension
D) product/communications adaptation

C) product adaptation/communications extension
Which of the following communication strategies adapts both the product and its marketing communication to suit the target market?

A) product/communications extension
B) product extension/communications adaptation
C) product adaptation/communications extension
D) product/communications adaptation

D) product/communications adaptation
A ________ strategy can be implemented successfully for communicating promotional messages only if a sufficiently large and profitable market segment exists.

A) dual extension method
B) product extension/communications adaptation method
C) product adaptation/communications extension method
D) dual adaptation method

D) dual adaptation method
________ is often necessary as a communication strategy when many important differences exist between the home and target markets.

A) Product invention
B) Product adaptation
C) Dual adaptation
D) Dual extension

A) Product invention
Which of the following refers to planning, implementing, and controlling the physical flow of a product from its point of origin to its point of consumption?

A) customization
B) distribution
C) communication
D) promotion

B) distribution
Silk Industries LLC comprises two major divisions: consumer products and industrial products. The consumer product line of the company is well-recognized and consists of loyal customers worldwide. The management is considering different types of promotional strategies for the two product divisions.

If Silk Industries is interested in creating buyer demand that will encourage channel members to stock its products, it should employ ________.

A) a pull strategy
B) a push strategy
C) horizontal integration
D) vertical integration

A) a pull strategy
Silk Industries LLC comprises two major divisions: consumer products and industrial products. The consumer product line of the company is well-recognized and consists of loyal customers worldwide. The management is considering different types of promotional strategies for the two product divisions.

Which of the following would be most appropriate for its consumer product line?

A) horizontal integration
B) vertical integration
C) push strategy
D) pull strategy

D) pull strategy
Silk Industries LLC comprises two major divisions: consumer products and industrial products. The consumer product line of the company is well-recognized and consists of loyal customers worldwide. The management is considering different types of promotional strategies for the two product divisions.

Which of the following would be most appropriate for its products sold through grocery stores?

A) horizontal integration
B) vertical integration
C) push strategy
D) pull strategy

C) push strategy
Silk Industries LLC comprises two major divisions: consumer products and industrial products. The consumer product line of the company is well-recognized and consists of loyal customers worldwide. The management is considering different types of promotional strategies for the two product divisions.

If Silk Industries pressures channel members to carry a product and promote it to final users, it is using ________.

A) pull strategy
B) push strategy
C) vertical integration
D) horizontal integration

B) push strategy
True or False: A push strategy is a promotional strategy designed to pressure channel members to promote a product to final users.
True
True or False: A common example of a push strategy is the creation of consumer demand through direct marketing techniques.
False
True or False: A push strategy is the most efficient promotional strategy when distribution channels are lengthy.
False
True or False: Emerging markets typically have fewer forms of mass media for use in implementing a pull strategy.
True
True or False: A pull strategy is most appropriate when buyers display a great deal of brand loyalty toward one particular brand name.
True
True or False: Firms that standardize their advertising usually control campaigns from the home office.
True
True or False: In marketing, distribution is the process of sending promotional messages about products to target markets.
False
True or False: The marketing communication process involves encoding and decoding of the promotional message.
True
True or False: Noise refers to anything that disrupts the audience’s ability to receive and interpret a promotional message.
True
True or False: By ignoring important cultural nuances, companies can inadvertently decrease the potential for noise that can cloud the audience’s understanding of their promotional message.
False
True or False: Dual extension method extends the same home-market product and marketing promotion into target markets.
True
True or False: The product adaptation/communications extension method adapts both the product and its marketing communication to suit the target market.
False
True or False: Under the dual adaptation method, a company adapts its product to local requirements while retaining the product’s original marketing communication.
False
A distribution channel in which a manufacturer grants the right to sell its products to only one or a limited number of resellers is called a(n) ________.

A) intensive channel
B) exclusive channel
C) zero-level channel
D) two-level channel

B) exclusive channel
A(n) ________ channel creates a barrier that makes it difficult or impossible for outsiders to penetrate.

A) exclusive
B) intensive
C) selective
D) two-level

A) exclusive
A(n) ________ channel gives producers a good deal of control over the sale of their product by channel members such as wholesalers and retailers.

A) exclusive
B) intensive
C) two-level
D) selective

A) exclusive
A distribution channel in which a producer grants the right to sell its product to many resellers is referred to as a(n) ________.

A) one-level channel
B) zero-level channel
C) exclusive channel
D) intensive channel

D) intensive channel
A(n) ________ channel does not create strong barriers to channel entry for other producers, nor does it provide much control over reseller decisions such as what competing brands to sell.

A) one-level
B) zero-level
C) exclusive
D) intensive

D) intensive
A(n) ________ channel provides buyers with location convenience because of the large number of outlets through which a product is sold.

A) intensive
B) exclusive
C) one-level
D) zero-level

A) intensive
________ refers to the number of intermediaries between producer and buyer.

A) Critical path
B) Channel length
C) Frequency
D) Value density

B) Channel length
Which of the following is also known as direct marketing?

A) an intensive channel
B) an exclusive channel
C) a zero-level channel
D) a two-level channel

C) a zero-level channel
A(n) ________ channel places a single intermediary between the producer and the buyer.

A) intensive
B) exclusive
C) one-level
D) two-level

C) one-level
Old World Ltd., a London-based furniture manufacturer, is establishing its global distribution, pricing, and promotion strategies. Being new to global business, the firm is seeking your help in making its decisions.

If Old World wants to grant the right to sell its furniture to only a limited number of resellers, it should consider a(n) ________ channel.

A) intensive
B) exclusive
C) two-level
D) selective

B) exclusive
Old World Ltd., a London-based furniture manufacturer, is establishing its global distribution, pricing, and promotion strategies. Being new to global business, the firm is seeking your help in making its decisions.

If Old World wants to have its furniture sold through as many distribution outlets as possible, it should consider a(n) ________ channel.

A) exclusive
B) intensive
C) one-level
D) zero-level

B) intensive
Old World Ltd., a London-based furniture manufacturer, is establishing its global distribution, pricing, and promotion strategies. Being new to global business, the firm is seeking your help in making its decisions.

Old World should pursue a(n) ________ channel if it decides to greatly intensify its direct marketing efforts.

A) intensive
B) one-level
C) zero-level
D) selective

C) zero-level
True or False: The physical path of a product follows on its way to customers is called a promotional channel.
False
True or False: Service providers do not need distribution channels because they market intangible goods.
False
The value of a product relative to its weight and volume is called its ________.

A) face value
B) value investing
C) real value
D) value density

D) value density
Which of the following is implied by a product with a low value density?

A) the distribution system is more localized
B) the product is more valuable
C) the cost of shipping the product is negligible
D) the product is processed in areas away from their original locations

A) the distribution system is more localized
Which of the following products has a low value-density ratio?

A) semiconductors
B) emerald
C) crude oil
D) premium perfumes

C) crude oil
Which of the following is true of the value densities of products?

A) The cost of transporting goods with high value-density ratios is high relative to their value.
B) Products with high value-density ratios are integrated into the manufacturing process at points close to their original locations.
C) Most commodities, including cement, iron ore, and crude oil, have high value-density ratios.
D) The lower a product’s value density, the more localized the distribution system.

D) The lower a product’s value density, the more localized the distribution system.
A pricing policy in which one selling price is established for all international markets is called ________.

A) dual pricing
B) value-based pricing
C) worldwide pricing
D) target pricing

C) worldwide pricing
A pricing policy in which a product has a different selling price in export markets than it has in the home market is called ________.

A) dual pricing
B) cost-plus pricing
C) penetration pricing
D) premium pricing

A) dual pricing
When a product has a higher selling price in the target market than it does in the home market or the country where production takes place, it is called ________.

A) price skimming
B) price escalation
C) price dispersion
D) price fixing

B) price escalation
Which of the following refers to the price charged for products sold between a company’s divisions or subsidiaries?

A) dual pricing
B) transfer price
C) price skimming
D) arm’s length price

B) transfer price
The free-market price that unrelated parties charge one another for a specific product is called a(n) ________.

A) worldwide price
B) transfer price
C) dual price
D) arm’s length price

D) arm’s length price
Upper or lower limits placed on the prices of products sold within a country are known as ________.

A) price controls
B) transfer prices
C) price escalators
D) arm’s length prices

A) price controls
Which of the following occurs when the price of a good is lower in export markets than it is in the domestic market?

A) skimming
B) dumping
C) transfer pricing
D) price escalation

B) dumping
Old World Ltd., a London-based furniture manufacturer, is establishing its global distribution, pricing, and promotion strategies. Being new to global business, the firm is seeking your help in making its decisions.

If Old World adopts different selling prices in export markets than it has in the British market, it would be following a ________ pricing strategy.

A) dual
B) transfer
C) target
D) worldwide

B) transfer
Scooters Inc. is a producer of pricey scooters. The company’s profits come mostly from the sales of its luxury line that caters to the esteem needs of the rich population. Ben Driven, vice president of marketing for Scooters Inc., has been asked to review the company’s pricing strategy.

Ben knows that a pricing policy in which one selling price is established for all international markets is called ________.

A) worldwide pricing
B) value-based pricing
C) dual pricing
D) arm’s length pricing

A) worldwide pricing
Scooters Inc. is a producer of pricey scooters. The company’s profits come mostly from the sales of its luxury line that caters to the esteem needs of the rich population. Ben Driven, vice president of marketing for Scooters Inc., has been asked to review the company’s pricing strategy.

Because Scooters Inc. caters to a very narrow niche of wealthy individuals, the CEO is interested in implementing a worldwide pricing scheme. Which of the following is most likely a reason for the establishment of such a scheme?

A) Their production costs differ from market to market.
B) The currency values fluctuate fairly predictably.
C) Their distribution channels are lengthy in each market.
D) Their customers have similar levels of purchasing power.

D) Their customers have similar levels of purchasing power.
Scooters Inc. is a producer of pricey scooters. The company’s profits come mostly from the sales of its luxury line that caters to the esteem needs of the rich population. Ben Driven, vice president of marketing for Scooters Inc., has been asked to review the company’s pricing strategy.

Scooters Inc. has traditionally sold its products at one price in the domestic market and at another price in export markets, which is called a(n) ________ pricing strategy.

A) target
B) value
C) dual
D) arm’s length

C) dual
True or False: The more intermediaries there are in a distribution channel, the less costly the channel becomes.
False
True or False: The lower a product’s value density, the more localized is the distribution system for that product.
True
True or False: An arm’s length price is the price that is charged for products sold among a company’s divisions or subsidiaries.
False
True or False: Antidumping tariffs punish producers in the offending nation by increasing the price of their products to a fairer level.
True