International Marketing Mid-Term

One difference between domestic marketing and global marketing is the scope of activities.
Marketing discipline varies from one region to another
Marketers can always directly apply experience from one country to another or from one market to another
Global marketing requires marketers to behave in a way that is global and local at the same time by responding to similarities and differences in world markets.
Which of the following is a marketing mix element?
A) Profit
B) Promotion
C) Potential
D) Package
B) Promotion
Cultural similarities provide a good basis for making relatively standardized marketing strategies.
Which of the following statements best describes the phrase “global localization” in a nutshell?
A) A global product must be the same product everywhere without modifications in the marketing mix.
B) A global marketer must push local markets to accept global products.
C) A global marketer must adapt product marketing mix to the similarities and differences in the world market.
D) A global product must be a different product everywhere across the world regions.
C) A global marketer must adapt product marketing mix to the similarities and differences in the world market
The macro dimensions of the environment are economic, social and cultural, political and legal, and technological.
The more developed a country is, the scarcer the availability of economic data.
High-income countries are referred to as emerging markets.
Which of the following is most likely a part of the American culture?
A) Responsibilities for organizational errors are taken by the highest level.
B) Negotiations are lengthy and enable involved parties to get to know each other.
C) A monochronic time system is followed and time is considered precious.
D) A person’s word can be relied upon and no written arguments are needed
C) A monochronic time system is followed and time is considered precious.
Similarities exist among countries that are in the same stage of economic development.
The EU consists of 27 member countries, but it operates as a single market.
The United Kingdom has not adopted the euro as its currency.
The central problem faced by transitioning economies and low-income countries is the shortage of goods and services.
Sarah comes across an online ad promoting a new deodorant that is priced much lower than the one she regularly uses. She goes to a nearby supermarket and uses a free sample pack to evaluate the deodorant. According to Rogers’ diffusion theory, Sarah is in the ________ stage of the adoption process.
A) awareness
B) interest
C) trial
D) adoption
C) trail
How does social behavior vary in different cultures? Explain with a few examples.
Example: while Americans consider it impolite to mound food on a plate or make noises when eating, some Chinese feel it is polite to take a portion of every food served and consider it evidence of satisfaction to belch.
Differentiate between the cultural and marketing values of Westerners and Asians.
Western cultural values are characterized by: (1) nuclear family, self, or immediate family; (2) beliefs in competition, challenge, and self-expression; (3) personal responsibility and independence; (4) doing one’s own thing; (5) resentment of authority; (6) primacy given more to youth and change; and (7) control by “guilt” and conscience.

the Asian cultural values are characterized by: (1) extended family, blood/kinship/work groups; (2) beliefs in harmony, cooperation, avoiding confrontation; (3) shared responsibility, interdependence; (4) public self and “face;” (5) respect for authority; (6) age and seniority important, value tradition; and (7) control by “shame” and “loss of face.”

Western marketing values are characterized by: (1) brand segmentation; personal choice and self-expression through brand; (2) presenters/testimonials important but more to draw attention to brands; (3) seeding and diffusion from leading edge; (4) belief in “understatement” of wealth; and (5) environmentalism.

the Asian marketing values are characterized by: (1) popular famous brands; confidence in brand and corporate names; (2) imitation, emulation, use of presenters as role models in ads; (3) rapid adoption of successful brands; (4) display of wealth and status; and (5) confidence in technology.

Poor operating results can often be traced back to insufficient data and information about events both inside and outside the company.
A focus group is a tool used to collect secondary market data.
Which of the following is the starting point for a global marketing information system?
A) collecting data
B) determining the subject agenda
C) analyzing relevant data
D) making business decisions
B) determining the subject agenda
Which of the following is the first step of a formal marketing research process?
A) developing a research plan
B) identifying the research problem
C) collecting primary data
D) analyzing research data
B) Identifying the research problem
Explain the current issues in global marketing research.
1. instead of analyzing a single national market, the global market researcher must analyze many national markets, each of which has unique characteristics that must be recognized in analysis.
2. the small markets around the world pose a special problem for the researcher. The relatively lower revenue and margins in smaller markets limit marketing expenditure budgets.
Targeting defines the position of a product or a company in the minds of customers.
Demographic segmentation is based on immeasurable or intangible characteristics of populations
Attitudes and lifestyles are examples of demographic variables.
For most consumer and industrial products, the national literacy rate is the single most important segmentation variable and indicator of market potential.
________ is the process of subdividing a market into distinct subsets of customers that behave in the same way or have similar needs.
A) Market penetration
B) Market liquidity
C) Market segmentation
D) Market capitalization
C) Market segmentation
________ refers to the location of a product in the minds of consumers.
A) Positioning
B) Targeting
C) Benchmarking
D) Product displacement
A) Positioning
What are the three basic criteria for assessing opportunity in global target markets?
Current Segment Size and Growth Potential: A company should consider whether a market segment is currently large enough to present the company with the opportunity to make a profit. If it is not large enough or profitable enough today, the company should make sure that it has high growth potential so that it is attractive in terms of its long-term strategy.

Potential Competition: A market or market segment characterized by strong competition may be a segment to avoid or one in which to utilize a different strategy. Often a local brand may present competition to the entering multinational.

Compatibility and Feasibility: If a global target market is judged to be large enough, and if strong competitors are either absent or not deemed to represent insurmountable obstacles, then the final consideration is whether a company can and should target that market. In many cases, reaching global market segments requires considerable resources, such as expenditures for distribution and travel by company personnel. Another factor to be considered is whether the pursuit of a particular segment is compatible with the company’s overall goals and established sources of competitive advantage.

In capital-intensive industries, wage levels are often a large percentage of costs associated with a product.
The use of computer controls and technology has increased the cost of labor.
Exchange-rate fluctuations have little effect on the attractiveness of a potential target market.
Global marketers typically take domestic products as they are and sell it to international customers.
Explain the criteria to be assessed when selecting a potential target market for export?
1. Market Potential
2. Market Access
3. Shipping Costs and Time
4. Potential Competition
5. Service Requirements
6. Product Fit
According to Porter, what are the different barriers that new entrants to an industry face?
Porter describes eight major sources of barriers to entry, the presence or absence of which determines the extent of the threat of new industry entrants.
1) economies of scale
2) product differentiation
3) capital requirements
4) one-time switching costs
5) access to distribution channels
6) government policy
7) cost advantages independent of the scale economies
8) expected competitors response
Low-income countries typically have low birth rates and high literacy rates.
Which of the following statements is true about world economy?
A) Countries in emerging markets have sustained low rates of growth.
B) Global competitors are deprived of new opportunities.
C) The emergence of global markets has displaced local ones.
D) The integration between all world regions has steadily decreased.
C) The emergence of global markets has displaced local ones.
Pricing below cost can be profitable in the long term.
In practice, companies always fix the price of products in country target markets to avoid the impact of currency fluctuations.
Companies typically avoid periodic price adjustments during inflation.
Pricing products at a loss for certain amount of time is characteristic of a ________ strategy.
A) penetration pricing
B) market holding
C) cost-plus pricing
D) market skimming
A) penetration pricing
________ is referred as the exporting of products at a price that is lower than that charged in its home market.
A) Price escalation
B) Transfer pricing
C) Dumping
D) Competitive pricing
C) Dumping
What are the three basic factors that determine the market price of a product?
cost, competition, and demand
product cost
which establishes a long-run price floor, or minimum price
defined by customers: your competitors are those companies whose products compete with your products from the consumer’s point of view
Example of product positioning strategy based on a product’s attribute/benefits EXAMPLE
Volvo automobiles are known for solid construction that offer safety in the event of a crash. In the ongoing credit card wars, VISA’s advertising focuses on the benefit of worldwide merchant acceptance.
New entrants in an industry push prices downward and squeeze margins, resulting in reduced industry profitability.
The effects of global competition have been highly disadvantageous for consumers around the world.
How do organizations identify new-product ideas?
The starting point for an effective worldwide new-product program is an information system that seeks new-product ideas from all potentially useful sources and channels. Those ideas relevant to the company undergo screening at decision centers within the organization. There are many sources of new-product ideas, including customers, suppliers, competitors, company salespeople, distributors and agents, subsidiary executives, headquarters executives, documentary sources (for example, information service reports and publications), and, finally, actual firsthand observation of the market environment.
demand and value
price is a cue for value and, in the case of luxury products, is part of value. A cheap luxury watch is an oxymoron: there is no luxury without a luxury price.
Explain the product positioning strategy based on a product’s attribute/benefits.
A frequently used positioning strategy exploits a particular product attribute, benefit, or feature. In global marketing, the fact that a product is imported can itself represent a benefit positioning. Economy, reliability, and durability are other frequently used attribute/benefit positions.
Intangible product attributes do not play a significant role in global marketing.
Some global products are designed to meet the needs of a national market.
Which of the following is used to indicate the relative wealth of a country’s citizenry?
A) Gross National Product
B) Gross Output
C) Gross Domestic Product
D) Gross Value Added
C) Gross Domestic Product or A) Gross National Product
________ occurs if ownership of a property or assets of a company is transferred to the host government.
A) Internalization
B) Nationalization
C) Deportation
D) Deracination
B) Nationalization
Many companies make efforts to minimize their tax liability by shifting the location of income.
Which of the following statements is true about the political risks in a global marketing environment?
A) The political risk of low-income countries is lesser than high-income countries.
B) The more a country is developed, the greater is the political risk.
C) Political risk is a major deterrent for companies that want to invest abroad.
D) A country with high political risks attracts more investors.
C) Political risk is a major deterrent for companies that want to invest abroad.
U.S. companies are subject to U.S. antitrust laws no matter what country they are doing business in.
Licensing agreements do not come under antitrust scrutiny.
In a fixed exchange-rate system, the currency value is determined by demand and supply.
According to Schwartz, Western Europe cultures emphasize autonomy and egalitarianism.
_____ refers to enduring, centrally held beliefs that pertain to gills in life and guide attention, comprehension, and the selection or evaluation of people, behavior and events of life.
A) Values
B) Emotions
C) Skills
D) Competencies
A) Values
Food is considered to be the most culturally sensitive category of consumer products.
Products can be symbols of individual or collective reality.