International Marketing Final Exam (Ch. 13, 15, & 18)

Which of the following is true regarding the impact of global competition on the business activities in the marketplace?
It has put more power in the hands of the customer
Which of the following is the most important criterion for consumers while purchasing products?
Quality
What are the two dimensions that help in defining the quality of a product of quality?
Market-perceived quality and performance quality
_____ is the term used to describe the changes mandated by local product and service standards.
Product homologation
Vital Health Products found out that they had to reduce the length of the tread in their treadmills sold in China owing to the shorter legs of the average Chinese person. By doing this, Vital has achieved product _____.
homologation
A European chocolate manufacturer received several complaints from customers about the quality of its product when it began selling them in a tropical country. The firm had to re-package its chocolate bars in an extra plastic wrapper to protect it from the heat and dust. Which of the following factors in the local market dictated product adaptation in the current scenario?
Climatic requirements
Booster bar is a popular brand of energy bars in Canada. The company sold these bars singly or in packs of two in the South Asian markets, instead of their regular multiple-item packaging containing 10 or 20 bars to make it more affordable for the consumers. Which of the following requirements of the local market is influencing product adaptation in the above scenario?
Economical requirements
A wine company had to market its products with a different name in a foreign market as it was mandatory to translate the name in the local language. The factor that is influencing product adaptation in the above scenario is _____.
legal requirements
Adore cosmetics had to increase the SPF value of their sunscreen lotions marketed in the Middle East to provide more protection against UV radiation. Which of the following factors is dictating product adaptation in the above scenario?
Climatic requirements
Nuan, a television manufacturer in Korea, had to modify its televisions before introducing it to the Zimbabwean markets, as the country did not have the skills to repair the product in case of a malfunction. The local salesforce too, did not have the sufficient knowledge regarding the installation of the product. The factor that is influencing product adaptation in the above scenario is ________.
technological requirements
A clothing company in Singapore which specialized in women’s clothing, had to modify its clothes before introducing them to Iranian markets, to suit the needs of women in that country. Women in Iran are expected to cover themselves completely. The company mostly used opaque material and provided accessories like scarves. Which of the following factors is dictating product adaptation in the above scenario?
Cultural requirements
_____ is a term used to identify concern with the environmental consequences of a variety of marketing activities.
Green marketing
HT motors is introducing a new technology in its cars to improve the mileage of the cars as well as to reduce carbon emissions. The company is also taking measures to improve its production facilities in order to reduce its carbon footprint. These measures employed by HT motors to meet the guidelines issued by the government shows that the company is engaging in ________.
green marketing
Which of the following has been at the forefront of the “green movement”?
Europe
As part of the “green movement”, the European Commission has passed legislation to control all kinds of packaging waste throughout the European Union. Two critical issues that affect product development are the control of the packaging component of solid waste and _____.
consumer demand for environmentally friendly products
Which of the following is a physical attribute of a product that is essential for its primary function?
Components
An important first step in adapting a product to a foreign market is to determine:
the degree of newness as perceived by the intended market
From a sociological viewpoint, any idea perceived as new by a group of people is considered as a(n) _____.
innovation
_____ is the process by which innovation spreads.
Diffusion
According to Everett Rogers, the goals of the diffusion researcher and the marketer are to shorten the time lag between:
introduction of an idea or product and its widespread adoption
According to Everett Rogers, what is the element that differentiates diffusion from other types of communications research?
Time
Which of the following is considered to be one of the extraneous variables that affects the rate of diffusion of an object?
The method used to communicate the idea
Martin is comparing the characteristics of his company’s water filters with those that are already being marketed in the local market. He realizes that there is lot of scope for his filters as they are functionally more advanced, have longer life, and also can be marketed at a competitive price in these markets. The characteristic of his product that will help in wide acceptance of his product is its _____.
relative advantage
A product is said to be compatible if:
it complies with the accepted norms, values, and culture of the local market.
Carolyn is interested in marketing her company’s diet products in Asia. She is studying the acceptable behavior, norms, and values in Asian markets. Carolyn is studying _____.
compatibility
A company focusing its efforts on making its new innovation more user-friendly is working on the _____ of the product.
complexity
Mark Harmon has found that using his new digital camera is a snap. He did not even have to read the instruction manual to determine how to turn the camera on, snap a digital picture, and export the picture to his computer. The signs (symbols) on the camera body made it very clear what he was to do to achieve digital photography success. Which of the following characteristics of Mark’s “new product” made it easy for him to begin his digital experience?
complexity
Fiona asked her product manager for samples to give to potential consumers in Madrid, her new European market. Fiona is trying to reduce the degree of economic and/or social risk, or _____ associated with product use.
trialability
A product’s _____, refers to the ease with which its benefits can be communicated to the customers.
observability
Ingrid is developing promotional materials and product demonstrations to easily communicate the benefits of her cleaning products. Ingrid is trying to enhance the _____ of her products.
observability
In general, the rate of diffusion can be postulated as negatively related to _____.
complexity
Which of the following factors is mainly responsible for a perceptual bias when interpreting the characteristics of a product?
Market analyst’s self-reference criterion.
The success achieved by firms when they take their inventions to market is referred to as _____.
conversion-ability
The product platform, design features, and functional features are all found in the _____ component of the product, according to the product component model.
core
Simone Francis is a specialist in product design. She is responsible for a product’s aesthetic as well as functional appearance. With respect to the product component model, in which of the following component categories would Simone’s talents most likely be used?
Functional component.
If a company wished to alter a product’s platform so that the product could be manufactured in a variety of forms, to meet local differences in five different foreign markets, the _____ of the product component model would be in consideration.
core component
Omega appliances, a Korean company that manufactures kitchen appliances had to alter the design of its chimneys to suit the needs of the consumers in its Japanese market. The Japanese preferred compact and efficient appliances to fit their small kitchens. The component of the product that had to be altered in the above scenario is the _____.
core component
If a company is altering the price of its product to compete with the local companies in the international market, it is focusing on the _____ component of the product, according to the product component model.
packaging
Apple Computer had difficulties when it first entered the Japanese market with its Macintosh computers. Some of the computers were returned unused after customers found the wrapping on the instruction manual damaged. Though this would probably be no big deal in the U.S., it was certainly a cause for concern in quality-conscious Japan. To fix the problem, Apple needed to concentrate on which of the following components of the product component model?
Packaging component
Bagel’s foods had to change the labeling on their products to meet the specifications regarding vegetarian and non-vegetarian foods, set by the government in the Japanese market. They also had to mention the ingredients in Japanese to make it clear for the local customers. The component of the product that is in focus in the above scenario is the _____.
packaging component
According to the product component model, installation, repair and maintenance, deliveries, and warranties are all part of the _____ component of the product.
support services
In some countries, maintenance of automobiles is not the norm. Cars are not repaired until they break down. Since the consumer is automatically angry with the manufacturer when something goes wrong with the car, repair and maintenance has become a concern of the various automobile manufacturers in this market. In which of the following components of the product component model would the management need to make improvements if problems such as the one above are to be solved?
Support services component.
A Korean electronics company had to add detailed instructions regarding the repair and replacement of its product to make it easy for the local consumers to maintain it. Which of the following components of the product is being altered in the given scenario?
Design component.
The washing machines marketed by Taichi failed in Asian markets as those countries lacked the skills necessary to repair and maintain their products. Also, the washing machines spares available in local markets were not compatible with these machines. This product failure was a result of lack of attention by the company to the _____ component of the product.
support services
Insurance, dry cleaning, and hotel accommodations have intrinsic value resulting from a process, a performance, or an occurrence that only exists while it is being created. Which of the following characteristics of services best matches to the above?
Intangibility
Because a service is individually produced and is virtually unique, the service is said to have _____.
heterogeneity
Dr. Mark Townes is a dentist practicing in Denver. During a four-day stretch in March, it snowed so heavily that not a single patient was able to visit him. Since all the appointments were missed, he did not make any money for those four days, even though his normal expenses remained. Which of the following characteristics of services is affecting Dr. Townes’ business?
Perishability
A characteristic of a service is that it is _____, since it cannot be stored and must be consumed simultaneously with its creation.
perishable
Adam, a hairstylist at a salon in Seattle, styles his customers in various ways. His work looks different on different people even though he has styled all of them. This unique character of a service that is unique for every customer as it is individually produced is referred to as ______.
heterogeneity
Which is the largest services export of the United States, ranking behind only capital goods and industrial supplies when all exports are counted?
International tourism.
How do the vast majority of services enter a foreign market?
Licensing, franchising, or direct investment
Marketers of consumer services face four kinds of barriers in the global marketplace. Which of the following of these barriers is in force when a foreign market requires that services (such as banking or insurance) originate within the country itself and not from outside sources?
Protectionism
The Red Lobster seafood restaurant is considering opening branch operations in China. However, the restaurant chain’s labor union has already pointed out a potential problem with this expansion. In China, it is considered to be in bad taste to allow employees to collect tips for service. Since a great portion of a typical wait-staff person’s compensation comes in the form of tips, the union would like to know how employees would be compensated for this loss. The above example illustrates which of the following barriers a consumer services marketer faces in a foreign market?
Cultural requirements for adaptation.
Maxcare, an insurance firm based in California had difficulties expanding their operations to Asian markets, as most of their target countries had strict regulations on transferring the details of the customers among the different branches of the firm. The company had to obtain an approval from its customers before sharing their personal information with their branches in other countries. Which of the following barriers is affecting the services of the insurance firm in the above scenario?
Controls on transborder data flows
A name, term, sign, symbol, design, or combination used worldwide to identify goods or services of one seller and to differentiate them from those of competitors is called a(n) _____.
global brand
The Norton group, a manufacturer of toiletries and cleaning products uses the name Cleanex, for most its products in all of their international markets. The name has created a universal appeal for their products as customers identify their products with the name. Hence, Cleanex can be regarded as a _____.
global brand
The _____ effect refers to the possibility that the place of manufacture may affect product or brand image.
country-of-origin
A shoe manufacturer in Puerto Ria shipped his entire production to San Francisco and brought it back to his home country to market it as “Made in the U.S.” He knew that people would prefer buying products made in the U.S. rather than those that are domestically produced. The factor that is influencing the perception of the customers in the above scenario is called _____.
country-of-origin effect
Consumers have broad but somewhat vague stereotypes about specific countries and specific product categories that they judge “best.” Which of the following would not fit in the “best” stereotype scheme?
American chocolate
In Russia, products are divided into two categories— “ours” and “imported.” This is an example of:
ethnocentrism
Which of the following is true of the distribution process?
It includes buying and selling negotiations.
In a _____ distribution structure, an importer controls a fixed supply of goods and the marketing system develops around the philosophy of selling a limited supply of goods at high prices to a small number of affluent customers.
traditional
Which of the following statements is true of a traditional distribution structure?
The marketing system develops around the philosophy of selling a limited supply of goods at high prices to a small number of affluent customers.
Which of the following distribution structures is also known as a traditional distribution structure?
Import-oriented
Which of the following statements is true regarding an import-oriented distribution structure?
The importer-wholesaler traditionally performs most of the marketing functions
_____ has long been considered the most effective nontariff barrier to the Japanese market.
The Japanese distribution structure
_____ are considered to be the foundation of the Japanese distribution system.
Small retailers
Which of the following characterizes the business philosophy of the Japanese distribution channels?
Loyalty
Which of the following statements is true of the Japanese market?
The Japanese distribution structure supports long-term dealer-supplier relationships
In Japan, under the Large-Scale Retail Store Law, all proposals for new “large” stores are first judged by the _____.
Ministry of International Trade and Industry
In the international business arena, which of the following is considered to be one of Walmart’s strengths?
Internal Internet-based system.
General Motors, _____, and DaimlerChrysler have created a single online site called Covisint for purchasing automotive parts from suppliers.
Ford Motor Company
Which of the following countries has the largest number of retailers?
China
In the context of distribution patterns, the rate of change in retailing around the world appears to be directly related to the _____.
speed of economic development
_____ is often the approach of choice in markets with insufficient or underdeveloped distribution systems.
Direct marketing
Which of the following has proved to be an important way to break the trade barrier imposed by the Japanese distribution system?
Direct sales through catalogs
Which of the following are frequently criticized for not representing the best interests of a manufacturer?
Merchant middlemen
_____ take title to manufacturers’ goods and assume the trading risks.
Merchant middlemen
The distribution channel process includes all activities, beginning with the manufacturer and ending with the _____.
final consumer
Which of the following statements is true regarding agent middlemen?
They work on commission and arrange for sales in the foreign country
Which of the following statements is true regarding merchant middlemen?
They assume trading risks
A disadvantage when using home-country middlemen as intermediaries in the distribution process is:
the limited control over the distribution process
A major trade-off when using home-country middlemen is:
the large amount of commission charged by the home-country middlemen.
Home-country middlemen are also known as _____ middlemen.
domestic
In the context of the different types of middlemen, which of the following is an example of a manufacturer’s retail store?
Benetton
James Barker is the marketing manager of a firm with small international sales volume. He is looking for a middleman who can take responsibility for promotion of the company’s products, credit arrangements, physical handling, and market research. Also, the middleman must be able to provide information on financial, patent, and licensing matters. In addition, the middleman should agree to work under the name of the firm. Which of the following types of middlemen would be the best choice for Mr. Barker if he wants to meet his objectives?
An export management company
Which of the following statements is true regarding an export management company (EMC)?
It calls for a minimum investment from the parent firm to get into international markets
A major disadvantage of _____ is that they can seldom afford to make the kind of market investment needed to establish deep distribution for products.
export management companies
For companies seeking entrance into the complicated Japanese distribution system, _____ offer one of the easiest routes to success because they virtually control distribution through all levels of channels in Japan.
trading companies
Which of the following was a goal of the Export Trading Company Act?
To remove antitrust disincentives to export activities
Which of the following arrangements are undertaken when a firm wants to keep its seasonal distribution channels functioning throughout the year?
Complementary marketing
Complementary marketing is commonly known as _____.
piggybacking
Companies with marketing facilities in different countries with excess marketing capacity sometimes take on additional product lines for international distribution. The formal name for this type of marketing is:
complementary marketing
A(n) _____ is an individual agent middleman or an agent middleman firm providing a selling service for manufacturers that covers only one or two markets.
manufacturer’s export agent
A _____ provides a selling service for a manufacturer, has a short-term relationship, and operates on a straight commission basis.
manufacturer’s export agent
The Webb-Pomerene Act of 1918 made it possible for American business firms to join forces in export activities without being subject to which of the following acts?
The Sherman Antitrust Act
A(n) _____ is a domestic middleman set up in a foreign country or U.S. possession that can obtain a corporate tax exemption on a portion of the earnings generated by the sale or lease of export property.
foreign sales corporation
Which of the following is a type of domestic middleman?
Export Management Companies
In the context of types of domestic middlemen, the WTO in 2003 ruled _____ to be in violation of international trade rules, thus starting a major trade dispute with the European Union.
foreign sales corporations
Which of the following is true of foreign sales corporations?
They can function as a principal or a commissioned agent
Which of the following factors affects the choice of distribution channels?
Available distribution intermediaries
Which of the following is one of the six Cs of distribution channel strategy?
Continuity
In the context of factors affecting choice of channels, one of the key elements in distribution decisions includes _____.
the functions performed by middlemen
Which of the following is a critical element associated with using a particular type of middleman?
Cash-flow patterns
In which of the following modes of distribution in the foreign market will a company have to make maximum financial investment?
Direct sales force
Which of the following is one of the highest costs of doing business in China?
Capital required to maintain effective distribution
Which of the following modes of distribution affords the most control over the distribution channels but often at a cost that is not practical?
Direct sales force
One of the reasons that channels of distribution often pose longevity problems is that most middlemen _____.
have little loyalty to their vendors
_____ is an area that should be on a checklist of criteria for evaluating middlemen servicing a market.
Productivity
Which of the following actions should be taken to begin with the search for prospective middlemen?
Studying the target market.
Experienced exporters suggest that the only way to select a middleman is:
to personally talk to ultimate consumers to find whom they consider to be the best distributors
Sixty percent of the Japanese population lives in the _____ market area, which essentially functions as one massive city.
Tokyo-Nagoya-Osaka
Most middlemen have little loyalty to their vendors. They handle brands in good times when the line is making money but quickly reject such products within a season or a year if they fail to produce during that period. This is an example of problems associated with which of the following six Cs of channel strategy?
Continuity
Apex Corporation is a wholesaler for Global Electronics in the French market. Global Electronics discovered that Apex Corp. was diverting some of their goods to the English market. Apex Corp. could get a greater profit in the English market because the goods were bought by the firm at a cheaper price in France. In the context of the above scenario, which of the following forms of business is Apex engaged in?
Parallel importing
In the context of controlling middlemen, parallel importing is also known as _____.
secondary wholesaling
E-commerce is more developed in _____ than the rest of the world, partly because of the lower cost of access to the Internet than found elsewhere.
the United States
In the context of the Internet in international marketing channels, technically, e-commerce is a form of _____ selling.
direct
In the context of cultural reactions when engaging in e-commerce, the color red is associated with socialism in _____.
Spain
Which of the following is true of a physical distribution system?
It includes transportation mode, inventory quantities, and packing
Assuming that the international marketer has produced the right product, used the proper channel of distribution, and promoted the good correctly, the effort can fail badly if the international marketer fails to:
set the right price for the goods or services
In general, price decisions are viewed in two ways. Which of the following is one of them?
Pricing is an active instrument of accomplishing marketing objectives
Which of the following is true of a company that views prices as an active instrument of accomplishing marketing objectives?
The company sets prices to achieve specific objectives
A company that views pricing as a static element in a business decision:
exports only excess inventory
The Floral Group, an importing organization in New York, has just bought an excessive amount of perfume from perfume manufacturer in Paris. Unknown to the perfume manufacturer, the Floral Group has sold 25 percent of its order to distributors in France that have been unable to purchase any products from the perfume manufacturer. Which of the following best describes the transaction that has just taken place?
Parallel importing
Since it encourages retailers to stock large assortments of a product, the practice of _____ distribution often creates a favorable condition for parallel importing.
exclusive
Firms that are unfamiliar with overseas marketing and firms that produce industrial goods orient their pricing solely on the basis of:
the costs of production of the good.
In _____ pricing, the firm is concerned only with the marginal or incremental cost of producing goods to be sold in overseas markets.
variable-cost
Which of the following characterizes the variable-cost pricing approach?
In this approach, any contribution to fixed cost after variable costs are covered is profit to the company
_____ pricing is a practical approach to pricing when a company has high fixed costs and unused production capacity.
Marginal-cost
In _____ pricing, the philosophy is that no unit of a similar product is different from any other unit in terms of cost and that each unit must bear its full share of the total fixed and variable cost.
full-cost
Which of the following approaches to pricing is suitable when a company has high variable costs relative to its fixed costs?
Full-cost pricing
Which of the following is true of the full-cost pricing approach?
In this approach, prices are often set on a cost-plus basis, that is, total costs plus a profit margin
A company uses _____ when the objective is to reach a segment of the market that is relatively price insensitive and thus willing to pay a premium price for the value received.
price skimming
If the supply of a good in a market is limited, a company may follow a _____ approach to maximize revenue and to match demand to supply.
price skimming
A _____ policy is used to stimulate market and sales growth by deliberately offering products at low prices.
penetration pricing
Lush Cosmetics, a firm based in the U.S., recently started exporting cosmetics to India. Lush introduced a new range of mineral-based makeup for the first time in the Indian market. It was also priced much higher than the other brands in the market. This is an example of _____.
price skimming
In most cases, the reason that products which cost relatively little in one country cost more in another is:
the costs of exporting
_____ results from the added costs incurred as a result of exporting products from one country to another.
Price escalation
A(n) _____ duty is a flat charge per physical unit imported
specific
_____ duties are levied as a percentage of the value of the goods imported.
Ad valorem
_____ are the primary discriminatory tax that must be taken into account in reckoning with foreign competition.
Tariffs
In a _____ market, it is essential for a company to keep prices low and raise brand value to win the trust of consumers.
deflationary
Which of the following is true of international currencies?
All major currencies are free floating relative to one another
When the value of the dollar is weak relative to the buyer’s currency, sellers generally employ _____ pricing
cost-plus
When the Indian rupee depreciated against the U.S. dollar, PC manufacturers who were dependent on imported parts had to _____ in order to retain their profit margins.
raise the price of PCs
The final price of an imported product is likely to be high if:
middleman markups are not standardized.
One of the possible reasons for manufacturing in a third country could be an attempt to _____.
reduce manufacturing costs
Lower prices to the buyer may also mean lower tariffs, because most tariffs are levied on a(n) _____ basis
ad valorem
The creation of a free trade zone leads to
reduced price escalation
Drew’s company imports materials and parts into a free trade zone (FTZ) within the United States and then exports finished products to other countries. Her company will:
not have to pay tariffs on the imported materials and parts
Which of the following is true of free trade zones (FTZs)?
In an FTZ, payment of import duties is postponed until the product leaves the FTZ area and enters the country
By shipping unassembled goods to a free trade zone (FTZ) in an importing country, a marketer can lower costs because
duties are assessed at lower rates for unassembled goods
A marketer may face lower costs by shipping unassembled goods to a free trade zone (FTZ) in an importing country because
wages may be lower in the importing country
The costs of production may be lowered if a firm ships unassembled goods to a free trade zone (FTZ) in an importing country because:
unassembled goods may qualify for lower freight rates
One approach to defining the pricing policy of dumping is to say that it is a case where a product is sold in the international market:
at a price below the cost of production
What is the function of a countervailing duty?
To restrict the amount a country will import
A _____, which restricts the amount a country will import, may be imposed on foreign goods benefiting from subsidies, whether in production, export, or transportation
minimum access volume
For _____ duties to be levied on a good, it must be shown that prices are lower in the importing country than in the exporting country and that producers in the importing country are being directly harmed by dumping
countervailing
Dumping in the world markets is likely to increase when:
demand in the home country is low
Assembly in the importing country is a way companies attempt to lower prices and avoid dumping charges. These assembly plants are known as _____ plants
screwdriver
An important selling technique to alleviate high prices and capital shortages for capital equipment is the _____ system.
leasing
Which of the following would be considered an advantage of leasing equipment rather than owning it?
Leasing helps guarantee better maintenance on overseas equipment
When Polar Inc., an American fast-food company, wanted to market its burgers and fries in France, it was asked to accept French wine in return. This is an example of:
countertrade
The use of countertrade in international trade:
allows trade with countries short of hard currency
The crucial problem confronting a seller in a countertrade negotiation is determining the _____ for the goods offered as payment.
potential demand
Which of the following is true of counter trading?
Frequently there is inadequate time to conduct a market analysis in a countertrade negotiation
What do barter houses do?
Specialize in trading goods acquired through barter arrangements
_____ are the primary outside source of aid for companies beset by the uncertainty of a countertrade.
Barter houses
Which of the following is essential while making price quotations for international sale?
Price quotations must specify the currency to be used and the credit terms of the transaction
In general, the end goal of all _____ is to reduce the impact of price competition or eliminate it
administered pricing activities
Which of the following is an example of a price-fixing arrangement?
Cartels
A _____ exists when various companies producing similar products or services work together to control markets for the types of goods and services they produce.
cartel
_____ is a typical payment procedure for established customers where the goods are delivered, and the customer is billed on an end-of-the-month basis.
An open account
A(n) _____ means that once the seller has accepted the credit, the buyer cannot alter it in any way without permission of the seller.
irrevocable letter of credit
With _____, the seller assumes all risk until the actual dollars are received.
dollar drafts
Which of the following leave(s) sellers in a position where most of the problems of international commercial finance work to their disadvantage?
Open accounts
In a(n) _____, the seller makes a one-time arrangement with a bank or other financial institution to take over responsibility for collecting the account receivable
forfaiting transaction
Which of the following is true of open accounts?
Sales on open accounts are not generally recommended when there is political unrest in the importer’s country
In _____, a company has an ongoing relationship with a bank that routinely buys its short-term accounts receivable at a discount.
factoring