Intmk Final 10 11 12 15 17

Chapter 10 Europe, Africa, and the Middle East Answer Key
True / False Questions
1. (p. 276) Multinational market regions are those groups of countries that seek mutual economic benefit from reducing interregional trade and tariff barriers. TRUE The purpose behind the creation of a multinational market region is a reduction in trade and tariff barriers which facilitate economic benefits for member countries.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 10-01 The reasons for economic union Topic: Might Free Trade Bring Peace to the Middle East?
2. (p. 277) An important objective of the member states of the United Nations is bringing about mutual economic development. TRUE Part of the efforts of the 192 member countries in the United Nations includes mutual economic development.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 10-01 The reasons for economic union Topic: Might Free Trade Bring Peace to the Middle East?
3. (p. 277) The WTO is wholly dedicated toward making trade among nations more efficient. TRUE the World Trade Organization, with its 153 members and 30 observers, is wholly dedicated to making trade among nations more efficient.
4. (p. 277) Nations with complementary economic bases are most likely to encounter frictions in the development and operation of a common market unit. FALSE Nations with complementary economic bases are least likely to encounter frictions in the development and operation of a common market unit.
5. (p. 279) The most basic level of economic integration and cooperation is geographical local federation (GLF). FALSE The most basic level of economic integration and cooperation is the regional cooperation for development (RCD).
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 10-02 Patterns of international cooperation Topic: Patterns of Multinational Cooperation
6. (p. 279) The WTO represents the most important and comprehensive trade agreement in history. TRUE At the most general level, the World Trade Organization represents the most important comprehensive trade agreement in history.
7. (p. 279) Essentially, a free trade area (FTA) provides its members with a mass market without barriers to impede the flow of goods and services. TRUE A free trade area provides its members with a mass market without barriers to impede the flow of goods and services.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 10-02 Patterns of international cooperation Topic: Patterns of Multinational Cooperation
8. (p. 279) The European Union is a good example of a free trade area. FALSE The European Union is a common market that is on the road to a political union.
9. (p. 279) The political union is the most fully integrated form of regional cooperation. TRUE Political union is the most fully integrated form of regional cooperation. It involves complete political and economic integration, either voluntary or enforced.
10. (p. 279) The blueprint for the European Union began with the Treaty of Rome in 1957. TRUE The Treaty of Rome established the European Economic Community. The European Union is an extension of the EEC.
11. (p. 280) A commonwealth of nations is a mandatory organization providing for the strongest possible economic integration relationship. FALSE A commonwealth of nations is a voluntary organization providing for the loosest possible relationship that can be classified as economic integration.
12. (p. 280) The European Union was created when the 12 nations of the European Community ratified the Maastricht Treaty. TRUE The EU was created upon ratification of the Maastricht Treaty by 12 nations of the European Community.
13. (p. 280) The Commonwealth of Independent States (CIS) was formed by Britain because it did not want to join the European Economic Community (EEC). FALSE The Commonwealth of Independent States (CIS) was formed by the republics of the former Soviet Union, and the European Union (EU).
14. (p. 280) One of the chief features of Maastricht Treaty (1992) was that 12 members of the European community agreed to an economic but not political union. FALSE Twelve members of the European Community ratified the Maastricht Treaty and committed themselves to economic and political integration.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 10-02 Patterns of international cooperation Topic: Patterns of Multinational Cooperation
15. (p. 286) Ten new countries joined the EU in 2004 followed by Bulgaria and Romania in 2007. TRUE Ten new countries were added to the EU in 2004. Bulgaria and Romania entered in 2007
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 10-03 The evolution of the European Union Topic: Global Markets and Multinational Market Groups
16. (p. 286) In the Treaty of Amsterdam (1977), the European Union agreed to accommodate the changes brought about by the monetary union and the admission of new members. TRUE The Amsterdam Treaty increases the authority of the institutions of the EU and is designed to accommodate the changes brought about by the monetary union and the admission of new members.
17. (p. 288) Iran, Pakistan, and Turkey, formerly the Regional Cooperation for Development (RCD), have renamed their regional group the Economic Cooperation Organization. TRUE Iran, Pakistan and Turkey were called RCD but were later renamed ECO.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 10-04 Evolving patterns of trade as eastern Europe and the former Soviet states embrace free-market systems Topic: Eastern Europe and the Baltic States
18. (p. 288) The Baltic States had a history of a free trade regime. FALSE The Baltic states shared a legacy of inefficient industry and Soviet-style command economies.
19. (p. 289) Europe and Asia had a trade group that emerged and persisted since the dissolution of the Soviet Union called the Newly Independent States. FALSE Europe and Asia had a trade group that has emerged and persisted since the dissolution of the Soviet Union: the Commonwealth of Independent States (CIS).
20. (p. 289) The CIS is a loose economic and political alliance with open borders but no central government. TRUE The CIS is a loose economic and political alliance with open borders but no central government.
21. (p. 291) The most advanced and viable of Africa's regional organizations is called the Southern African Development Community. TRUE The Southern African Development Community is the most advanced and viable of Africa's regional organizations.
22. (p. 294) The Middle East has been very aggressive in forming multinational market groups. FALSE The Middle East has been less aggressive in the formation of successfully functioning multinational market groups.
23. (p. 294) The Arab Gulf states, Egypt, and Morocco have worked out an agreement on an Arab Free Trade Area, sometimes called the Gulf Arabian Free Trade Area (GAFTA). FALSE GAFTA stands for Greater Arab Free Trade Area.
24. (p. 297) The initial aim of a multinational market is to protect businesses that operate within its borders. TRUE The initial aim of a multinational market is to protect businesses that operate within its borders.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 10-05 Strategic implications for marketing in the region Topic: Implications of Market Integration
25. (p. 297) An expressed goal of a multinational market is to give an advantage to the companies within the market in their dealings with other countries of the market group. TRUE In a multinational market, an expressed goal is to give an advantage to the companies within the market in their dealings with other countries of the market group.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 10-05 Strategic implications for marketing in the region Topic: Implications of Market Integration
Multiple Choice Questions
26. (p. 276) Groups of countries that seek mutual economic benefit from reducing interregional trade and tariff barriers are called: A. multilateral economic associations. B. cartels. C. multinational market regions. D. trade associations. E. political and cultural associations. Multinational market regions are those groups of countries that seek mutual economic benefit from reducing interregional trade and tariff barriers.
27. (p. 277) Regional economic cooperative agreements have been around since: A. the discovery of the New World. B. the American Revolution. C. the American Civil War. D. the end of World War I. E. the end of World War II. Regional economic cooperative agreements have been around since the end of World War II.
28. (p. 277) It was not until this single market was established that the United States, Japan, and other countries gave serious thought to creating other alliances. Which single market is being talked about? A. European Commission B. The European Economic Community C. The European Steel and Coal Community D. The European Union E. The European Community Following the success of the European Steel and Coal Community, a global economic revolution began in 1958 when the European Economic Community was ratified and Europe took the step that would ultimately lead to the present-day European Union (EU).It was not until this single market was established that the United States, Japan, and other countries gave serious thought to creating other alliances.
29. (p. 277) The World Trade Organization is wholly dedicated to ____. A. the expansion of capitalism B. the elimination of language barriers in trade C. free and open national borders D. the enforcement of international anti-bribery laws E. making trade among nations more efficient The World Trade Organization, with its 153 members and 30 observers, is wholly dedicated to making trade among nations more efficient.
30. (p. 277) Every type of economic union shares the development and enlargement of market opportunities as a basic orientation. Which of the following best describes the primary way market opportunities are enlarged by economic unions? A. Preferential tariff treatment for participating members B. A common economic defense force with costs shared by all members C. Formulation of cartels D. Seeking economic dominance through boycotts of rivals E. Movement towards a common language as a means to overcoming economic hurdles Markets are enlarged through preferential tariff treatment for participating members, common tariff barriers against outsiders, or both.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 10-01 The reasons for economic union Topic: La Raison d'Etre
31. (p. 277) Nations with _____ economic bases are least likely to encounter frictions in the development and operation of a common market unit. A. parallel B. divergent C. rigid D. profitable E. complementary Nations with complementary economic bases are least likely to encounter frictions in the development and operation of a common market unit.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 10-01 The reasons for economic union Topic: La Raison d'Etre
32. (p. 277) With respect to political factors, which of the following is one of the most cherished possessions of any nation? A. A two party system B. A three party system C. A high voting rate D. State sovereignty E. A benevolent upper class Before entering into an economic union, a country should be clear about the advantages of the economic union. Moreover, the benefits must greatly outweigh the disadvantages before nations forgo any part of their sovereignty. It is therefore implied that state sovereignty is a cherished possession of any nation.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 10-01 The reasons for economic union Topic: La Raison d'Etre
33. (p. 277) _____ is a comprehensive trade agreement that addresses, and in most cases improves, all aspects of doing business within North America. A. CETA B. NAFTA C. NATO D. MERCOSUR E. LAFTA NAFTA is an acronym for North American Free Trade Agreement.
34. (p. 278) As George Platt examines markets that might match his company's investment requirements; he is particularly struck by the fact that the European Community has an extensive transportation network. This network seems to draw all the member nations closer together. Which of the following critical factors for ensuring an effective economic union is Mr. Platt examining when he reviews transportation networks? A. Cultural factors B. Trade factors C. Political factors D. Geographic proximity E. Economic factors Geographical closeness does facilitate the functioning of a common market. It is seen that transportation networks are likely to be interrelated and well developed when countries are close together.
AACSB: Reflective thinking Bloom's: Application Difficulty Level: Hard Learning Objective: 10-01 The reasons for economic union Topic: La Raison d'Etre
35. (p. 278) Similarity of cultures can make or break an economic union. Although there is great cultural diversity in the European Union, key members share _____ and are commonly aware of being European. A. a common language B. a long-established Christian heritage C. a dislike for foreigners D. a tradition of monarchy and feudalism E. a democratic background and heritage Cultural similarity eases the shock of economic cooperation with other countries. The more similar the culture, the more likely an agreement is to succeed, because members understand the outlook and viewpoints of their colleagues. Although there is great cultural diversity in the European Union, key members share a long-established Christian heritage and are commonly aware of being European.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 10-01 The reasons for economic union Topic: La Raison d'Etre
36. (p. 278) One of the first factors that gave the EU an edge over others in the process of becoming a common market was/were: A. similarity in agriculture and monetary policy. B. political factors. C. similarities in language. D. a well developed transportation network. E. a common currency One of the first major strengths of the European Union was its transportation network; the opening of the tunnel between England and France further bound this common market.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 10-01 The reasons for economic union Topic: La Raison d'Etre
37. (p. 279) At the most general level, the _____ represents the most important and comprehensive trade agreement in history. A. NAFTA B. Amsterdam Treaty C. MERCOSUR D. WTO E. ASEAN The World Trade Organization represents the most important and comprehensive trade agreement in history.
38. (p. 279) The most basic economic integration and cooperation is the: A. political union. B. common market. C. regional cooperation for development (RCD). D. customs union. E. free trade area (FTA). The most basic economic integration and cooperation is the regional cooperation for development (RCD). In the RCD arrangement, governments agree to participate jointly to develop basic industries beneficial to each economy.
39. (p. 279) A _____ is an agreement between two or more countries to reduce or eliminate customs duties and nontariff trade barriers among partner countries while members maintain individual tariff schedules for external countries. A. political union B. common market C. regional cooperation for development (RCD) D. customs union E. free trade area (FTA) In a free trade area, an agreement is made between two or more countries to reduce or eliminate customs duties and nontariff trade barriers among partner countries while members maintain individual tariff schedules for external countries.
40. (p. 279) Essentially, a free trade area (FTA) provides its members with: A. a political union. B. a mass market without barriers. C. a regional cooperation for social development. D. customs unionization. E. border crossing without passports. A free trade area provides its members with a mass market without barriers to impede the flow of goods and services.
41. (p. 279) The _____ has reduced or eliminated internal tariffs and adds a common external tariff on products imported from countries outside the group. A. political union B. common market C. regional cooperation for development (RCD) D. customs union E. free trade area (FTA) A customs union enjoys the free trade area's reduced or eliminated internal tariffs and adds a common external tariff on products imported from countries outside the union.
42. (p. 279) A _____ is the intermediate step between a free trade area and a common market. A. political union B. common market C. regional cooperation for development (RCD) D. customs union E. free trade area (FTA) The customs union is a logical stage of cooperation in the transition from an FTA to a common market.
43. (p. 279) Before becoming a common market, the European Union was a ____. A. free trade area B. customs union C. political union D. regional cooperation group E. economic union The European Union was a customs union before becoming a common market.
44. (p. 279) A _____ agreement eliminates all tariffs and other restrictions on internal trade, adopts a set of common external tariffs, and removes all restrictions on the free flow of capital and labor among member nations. A. political union B. common market C. regional cooperation for development (RCD) D. customs union E. free trade area (FTA) A common market agreement eliminates all tariffs and other restrictions on internal trade, adopts a set of common external tariffs, and removes all restrictions on the free flow of capital and labor among member nations.
45. (p. 279) Which of these levels of economic integration lacks only political unity to become a political union? A. Common market B. Free trade area C. Regional cooperation group D. Customs union E. Trade friendly zone A common market is a unified economy and lacks only political unity to become a political union.
46. (p. 279) The Treaty of _____ established the European Economic Community (EEC) in 1957 and called for common external tariffs and the gradual elimination of intra-market tariffs, quotas, and other trade barriers. A. Kent B. Paris C. Rome D. Cannes E. Hamburg The Treaty of Rome, which established the European Economic Community (EEC) in 1957, called for common external tariffs and the gradual elimination of intra-market tariffs, quotas, and other trade barriers.
47. (p. 279) The most fully integrated form of regional cooperation is called a: A. political union. B. common market. C. regional cooperation for development (RCD). D. customs union. E. free trade area (FTA). A Political union is the most fully integrated form of regional cooperation.
48. (p. 279) A _____ involves complete political and economic integration, either voluntary or enforced. A. political union B. common market C. regional cooperation for development (RCD) D. customs union E. free trade area (FTA) Political union is the most fully integrated form of regional cooperation. It involves complete political and economic integration, either voluntary or enforced.
49. (p. 279) Though now disbanded, which of the following was considered to be the most notable enforced political union of the last forty years? A. NATO B. NAFTA C. MERCOSUR D. COMECON E. LAFTA The most notable enforced political union was the Council for Mutual Economic Assistance (COMECON), a centrally controlled group of countries organized by the Soviet Union.
50. (p. 280) A _____ of nations is a voluntary organization providing for the loosest possible relationship that can be classified as economic integration. A. cartel B. community C. commonwealth D. proprietary colony E. trade association A commonwealth of nations is a voluntary organization providing for the loosest possible relationship that can be classified as economic integration.
51. (p. 280) The European Union was created when the 12 nations of the European Community ratified the _____ Treaty. A. Kent B. Paris C. Rome D. Cannes E. Maastricht The European Union was created when the 12 nations of the European Community ratified the Maastricht Treaty.
52. (p. 280) Of all the multinational market groups, none has been more secure in its cooperation or more important economically than the: A. NAFTA accords. B. NATO accords. C. United Nations. D. European Union. E. Trans-Pacific Union. Of all the multinational market groups, the European Union is the most secure in its cooperation and the most important economically.
53. (p. 282) Many international trade experts have marveled at how members of the European Union have overcome ____, ____, and _____ differences. A. marketing; management; promotional B. energy; political; geographical C. cultural; legal; social D. time zone; coastal; religious E. language; educational; technological Skeptics were apprehensive about how cultural, legal, and social differences in Europe could ever be overcome and how a unified Europe could ever emerge. However, their skepticism proved wrong and today they marvel at how far the European Union has come.
54. (p. 282) Warren wants to market his products in the three largest European Union countries. He would market his products in: A. Germany, France, and the United Kingdom B. France, Spain, and Italy C. United Kingdom, Ireland, and Italy D. Sweden, Norway, and Finland E. Spain, Austria, and Germany Refer Exhibit 10.2 - The European Economic Area: EU, EFTA, and Associates
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Hard Learning Objective: 10-03 The evolution of the European Union Topic: Global Markets and Multinational Market Groups
55. (p. 284) The institutions of the European Union form a _____ pattern. A. bilateral B. unitary C. federal D. provincial E. autonomous The European Union's institutions form a federal pattern with executive, parliamentary, and judicial branches.
56. (p. 284) The European Commission, the Council of Ministers, the European Parliament, and the Court of Justice are institutions of the ____. A. COMECON B. European Free Trade Area C. European Economic Area D. European Union The European Union's institutions form a federal pattern with executive, parliamentary, and judicial branches: the European Commission, the Council of Ministers, the European Parliament, and the Court of Justice respectively.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 10-03 The evolution of the European Union Topic: Global Markets and Multinational Market Groups
57. (p. 284) The _____ initiates policy and supervises its observance by member states, and it proposes and supervises execution of laws and policies. A. United Nations B. World Trade Organization C. European Commission D. Commonwealth Delineation E. Council of Ministers The European Commission initiates policy and supervises its observance by member states, and it proposes and supervises execution of laws and policies.
58. (p. 284) The _____ is the decision-making body of the EU and can enact into law all proposals by majority vote except for changes in tax rates on products and services, which require unanimous vote. A. United Nations B. World Trade Organization C. European Commission D. Commonwealth Delineation E. Council of Ministers The Council of Ministers is the decision-making body of the EU; it is the Council's responsibility to debate and decide which proposals of the Single European Act to accept as binding on EU members. The Council can enact into law all proposals by majority vote except for changes in tax rates on products and services, which require unanimous vote.
59. (p. 284) The European Community uses several forms of legal instruments. Which of the following has the effect of binding member states but allowing them to choose the means of execution? A. Regulations B. Decisions C. Codes D. Directives E. Specifications Directives are a kind of legal instrument that is used by the EU. They are binding on the member states but allow them to choose the means of execution.
60. (p. 285) The introduction of euro banknotes and coins facilitated: A. international corruption. B. political dialogue. C. market exchanges. D. industrial production. E. international promotion. Creation of a common currency among member states made trade between them easier.
61. (p. 285) The _____ is the European Union's Supreme Court. A. International Court of Justice B. European Court of Justice C. International Criminal Court D. Brussels Judicial Council E. Security Council The European Court of Justice (ECJ) is the European Union's Supreme Court. It is responsible for challenging any measures incompatible with the Treaty of Rome and for passing judgment, at the request of a national court, on the interpretation or validity of points of EU law.
62. (p. 285) The European Court of Justice is the European Union's ____. A. criminal court B. regional civil court C. war crimes court D. Supreme Court E. judicial court The European Court of Justice (ECJ) is called the European Union's Supreme Court because its decisions are final and cannot be appealed in national courts. It is responsible for challenging any measures incompatible with the Treaty of Rome and for passing judgment, at the request of a national court, on the interpretation or validity of points of EU law.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 10-03 The evolution of the European Union Topic: Global Markets and Multinational Market Groups
63. (p. 286) The official European Union abbreviation for the euro is ____. A. E B. EUR C. Euro D. E$ E. EU The official abbreviation for the euro is EUR.
64. (p. 280) The final step in the European Community's march to union was ratification of the _____ Treaty (1992). A. Rome B. Berlin C. Maastricht D. Barcelona E. Athens The Maastricht treaty allows for the free movement of goods, persons, services, and capital throughout the member states of the European community; a common currency; common foreign and security policies, including defense; a common justice system; and cooperation between police and other authorities on crime, terrorism, and immigration issues.
65. (p. 284) The _____ originally had only a consultative role that passed on most European Union legislation but now has the power to amend and adopt legislation. A. Court of Justice B. European Parliament C. Council of Ministers D. European Commission E. Legislative Commission The European Parliament originally had only a consultative role that passed on most European Union legislation. However, it can now amend and adopt legislation.
66. (p. 285) Which agency established the parameters for the creation of the common currency for the EU? A. Economic policy agency B. Optimal currency area eurozone C. Economy of Europe D. Monetary Union E. Economic and Monetary Union The EMU, a provision of the Maastricht Treaty, established the parameters of the creation of a common currency for the EU, the euro.
67. (p. 286) The _____ increases the authority of the institutions of the EU and is designed to accommodate the changes brought about by the monetary union and the admission of new members. A. Treaty of Rome B. Single European Act C. Maastricht Treaty D. NAFTA E. Amsterdam Treaty The Amsterdam Treaty increases the authority of the institutions of the EU and is designed to accommodate the changes brought about by the monetary union and the admission of new members.
68. (p. 286) Which of the following treaties followed the Maastricht Treaty (1992) and established procedures for expansion to Central and Eastern Europe? A. Versailles Treaty B. London Treaty C. Amsterdam Treaty D. Monaco Treaty E. Paris Treaty The Amsterdam Treaty increases the authority of the institutions of the EU and is designed to accommodate the changes brought about by the monetary union and the admission of new members.
69. (p. 287) The European Union is anxious to admit new members; however, there have been problems. Which of the following problems has been deemed to be the most significant regarding new member admission? A. The threat of nuclear war B. The problem of multiple currencies C. The rise of Asia in the world arena D. The prospect of illegal immigrants from the former Soviet Union E. The economic instability of prospective members A broader preoccupation for the EU is the prospect of illegal immigrants from former Soviet states surging across poorly guarded borders of the newer and/or candidate states and making their way farther west within the EU. The EU is demanding that borders be sealed, but the new and candidate states are reluctant to jeopardize relations with neighboring communities.
70. (p. 286-287) Most of the problems faced by EU relates to: A. currency B. language C. human rights D. agriculture and monetary policy E. border issues. It is significant that most of the problems encountered by the EU have arisen over agriculture and monetary policy.
71. (p. 287) With the expansion of the European Union, existing members fear: A. retaliation against members by the Soviet Union. B. a flood of cheap labor into their countries. C. OPEC will cut off supplies to countries supporting expansion of the EU. D. new political leaders will overwhelm the existing leadership. E. dilution of the Euro. The EU is apprehensive about the infiltration of illegal immigrants from former Soviet states surging across poorly guarded borders of the newer and/or candidate states and making their way farther west within the EU. Moreover, EU fears a flood of cheap labor even if the borders are closed.
72. (p. 287) One of the challenges facing the European Union in the next 50 years is ____. A. deciding how to limit the political aspects of union B. managing and preserving the value of the euro C. avoiding isolation from the United Nations D. the aging European population E. transitioning to a common language The long-term challenges facing the European Union in the next 50 years appear to fall into three categories: (1) improving the Union's economic performance, (2) deciding how to limit the political aspects of union, and (3) deciding about further enlargement.
73. (p. 287) Improving economic performance, deciding how to limit political aspects and deciding about further enlargement are all the long term challenges faced by the ____. A. APEC B. NAFTA C. European Union D. ASEAN E. LAIA The long-term challenges facing the Union in the next 50 years appear to fall into three categories: (1) improving the Union's economic performance, (2) deciding how to limit the political aspects of union, and (3) deciding about further enlargement.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 10-03 The evolution of the European Union Topic: The evolution of the EU
74. (p. 288) Eastern Europe and the Baltic states, satellite nations of the former Soviet Union, have moved steadily toward adopting aspects of ____. A. capitalism B. socialism C. federalism D. democracy E. a customs union Eastern Europe and the Baltic states are moving from the restrictions of a Marxist-socialist system to some version of free markets and capitalism.
75. (p. 288) The Czech Republic, Hungary, the Slovak Republic, and Poland have become members of the ____. A. UNDP B. OECD C. WTO D. EU E. APEC The Czech Republic, Hungary, the Slovak Republic, and Poland have become members of the OECD.
76. (p. 288) Government bureaucracy, corruption and organized crime are common problems found in ____. A. Latin America B. United States C. China D. former soviet union E. Japan Government bureaucracy, corruption, and organized crime are common problems found in the countries of the former Soviet Union.
77. (p. 288) Most eastern European countries are privatizing state-owned enterprises, establishing free market pricing systems and: A. permitting greater government control/intervention. B. increasing trade barriers. C. relaxing import controls. D. making import controls stringent. E. switching over to a socialist economy. Most eastern European countries are privatizing state-owned enterprises, establishing free market pricing systems, relaxing import controls.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 10-04 Evolving patterns of trade as eastern Europe and the former Soviet states embrace free-market systems Topic: Eastern Europe and the Baltic States
78. (p. 288) Yugoslavia has been facing internal strife due to: A. land issues B. class war C. high inflation D. economic recession E. ethnic strife Yugoslavia has been plagued with internal strife over ethnic divisions.
79. (p. 289) Europe and some of the Baltic states have switched over to a(n) _____ economy. A. protected B. open market C. command D. traditional E. mixed To overcome issues such as inefficient industry and a soviet style command economy, Estonia switched over to a liberalized economy.
80. (p. 289) Which is the trade group that is part of Europe and Asia that has emerged and persisted since the dissolution of the Soviet Union? A. The European Union East B. The Commonwealth of Independent States C. The Eastern Bloc Economic Area D. The European Free Trade Association E. The Euro-Soviet Union Europe (and Asia) has one other trade group that has emerged and persisted since the dissolution of the Soviet Union: the Commonwealth of Independent States (CIS).
81. (p. 289) The Commonwealth of Independent States is: A. a political alliance with a central government. B. an economic and political alliance with open borders and no central government. C. an economic and political alliance with closed borders and a federal government. D. a federation of many states. E. a supranational organization similar to the old European community. The CIS is a loose economic and political alliance with open borders but no central government.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Hard Learning Objective: 10-04 Evolving patterns of trade as eastern Europe and the former Soviet states embrace free-market systems Topic: Eastern Europe and the Baltic States
82. (p. 289) When the Soviet Union dissolved, it was replaced by the _____ that had 12 members that agreed to a loose economic and political alliance with open borders but no central government. A. European Trade Pact B. Commonwealth of Independent States C. The Eurasian Alliance D. The Russian Confederation E. The Post-Soviet Bloc A trade group that emerged and persisted since the dissolution of the Soviet Union is the Commonwealth of Independent States (CIS).
83. (p. 289) The ties that bind members of the _____ stem mainly from their former Soviet membership. A. European Trade Pact B. Commonwealth of Independent States C. Central European Free Trade Area D. The Eurasian Alliance E. The Post-Soviet Bloc After the dissolution of the Soviet Union, the first Soviet republics to declare independence were the Baltic states, which quickly gained recognition by several Western nations. The remaining 12 republics of the former USSR, collectively known as the Newly Independent States (NIS), regrouped into the Commonwealth of Independent States.
AACSB: Reflective thinking Bloom's: Application Difficulty Level: Medium Learning Objective: 10-04 Evolving patterns of trade as eastern Europe and the former Soviet states embrace free-market systems Topic: Eastern Europe and the Baltic States
84. (p. 291) ECOWAS, SADC, and EAC are active regional cooperative groups in ____. A. North America B. Australia C. Africa D. Europe E. Asia The Economic Community of West African States (ECOWAS), the Southern African Development Community (SADC), and the East African Community (EAC) are the three most active regional cooperative groups in Africa.
85. (p. 291) Now that Apartheid is over, South Africa's economic growth has ____. A. been overshadowed by it B. increased significantly C. decreased D. remained unchanged E. increased a little but still looks shaky South Africa's economic growth has increased significantly now that apartheid is officially over.
86. (p. 291) Which of these is the most advanced and viable of Africa's regional organizations? A. Economic Community of West African States B. African Development Bank C. Southern African Development Community D. Organization of African Unity E. Economic Community of Central African States The Southern African Development Community is the most advanced and viable of Africa's regional organizations.
87. (p. 293) In spite of possessing land that is rich, the majority of the population of this country is desperately poor. A. Japan B. Austria C. Australia D. Africa E. Asia One of the paradoxes of Africa is that its people are for the most part desperately poor, while its land is extraordinarily rich.
88. (p. 293) _____ has the potential to become the newest big emerging market (BEM), but its development will depend on government action and external investment by other governments and multinational firms. A. South Africa B. South America C. East Asia D. West Asia E. South Asia South Africa has the potential to become the newest big emerging market (BEM), but its development will depend on government action and external investment by other governments and multinational firms.
89. (p. 296) The formation of multinational market groups has resulted in: A. trade becoming more difficult. B. an increased regulation of business activities. C. business activities losing management control. D. an increase in tariffs. E. an increase in border controls. Regulation of business activities has been intensified throughout multinational market groups; each group now has management and administrative bodies specifically concerned with business.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 10-05 Strategic implications for marketing in the region Topic: Implications of Market Integration
90. (p. 297) Which of the following is true regarding multinational markets? A. Large markets do not lead to marketing efficiencies. B. Large markets cannot achieve economies of scale. C. Large markets are particularly important to businesses not accustomed to mass production. D. Economic integration creates smaller markets. E. Despite the problems that are sure to occur because of integration, the economic benefits from free trade can be enormous. Despite the problems that are sure to occur because of integration, the economic benefits from free trade can be enormous.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 10-05 Strategic implications for marketing in the region Topic: Implications of Market Integration
Essay Questions
91. (p. 276) Briefly, explain the concept of a multinational market region. Multinational market regions are those groups of countries that seek mutual economic benefit from reducing interregional trade and tariff barriers. They are an important global trend today. Although organizational form varies widely among market regions, the universal goals of multinational cooperation are economic benefits for the participants and the associated peace between and within countries.
92. (p. 277-278) Successful economic union requires that four factors be in the positive range for success to occur. Briefly describe the four factors. The factors that facilitate the formation of a successful economic union are: Economic factors: Nations with complementary economic bases are least likely to encounter frictions in the development and operation of a common market unit. However, for an economic union to survive, it must have agreements and mechanisms in place to settle economic disputes. Political factors: Political amenability among countries is another basic requisite for the development of a supranational market arrangement. Participating countries must have comparable aspirations and general compatibility before entering into an agreement. Geographic and Temporal proximity: Although geographic and temporal proximity are not absolutely imperative for cooperating members of a customs union, such closeness does facilitate the functioning of a common market. Transportation networks (basic to any marketing system) are likely to be interrelated and well developed when countries are close together. Cultural factors: The more similar the culture, the more likely an agreement is to succeed, because members understand the outlook and viewpoints of their colleagues.
Chapter 11 The Asia Pacific Region Answer Key
1. (p. 304) The term "The Greater China" refers to the People's Republic of China (PRC). FALSE The term "The Greater China" refers to both the People's Republic of China (PRC) and the Republic of China (ROC) or Taiwan.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 11-01 The dynamic growth in the region Topic: The Greater China
2. (p. 305) The two major events that had a profound impact on China's economy were: the global recession that started in 2008 and the 2008 Olympics Games that were held there. FALSE Two major events that occurred in 2000 are having a profound effect on China's economy: admission to the World Trade Organization and the United States' granting normal trade relations (NTR) to China on a permanent basis (PNTR).
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 11-01 The dynamic growth in the region Topic: The Greater China
3. (p. 305) It is more convenient to think of China as a group of regions rather than a single country. TRUE Because of China's size, diversity, and political organization, it can be more conveniently thought of as a group of regions rather than a single country.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 11-01 The dynamic growth in the region Topic: The Greater China
4. (p. 305) A major issue that China has to address in its path to economic growth is human rights. TRUE China has two important steps to take if the road to economic growth is to be smooth: improving human rights and reforming the legal system.
5. (p. 305) China is now the biggest market for personal computers. FALSE China is now the second biggest market for personal computers, following only the United States.
6. (p. 306) Hong Kong's colonial past guarantees that it has a high degree of autonomy. FALSE The Basic Law of the Hong Kong special administrative region (SAR) forms the legal basis for China's "one country, two systems" agreement that guarantees Hong Kong a high degree of autonomy.
7. (p. 307) The Hong Kong dollar is fully convertible. TRUE The Hong Kong dollar continues to be freely convertible, and foreign exchange, gold, and securities markets continue to operate as before.
8. (p. 308) The peculiar feature of the recession that affected Japan in the 90s was the extraordinarily high inflation it gave rise to. FALSE The peculiar feature of Japan's 1990's version was its decade-long persistence.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 11-02 The importance and slow growth of Japan Topic: Japan
9. (p. 308) The sector that was hit the hardest during the Japanese recession was the real estate sector. FALSE During the Japanese recession, no sector was hit harder than Japan's lending institutions, especially its huge, world-class banks.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 11-02 The importance and slow growth of Japan Topic: Japan
10. (p. 309) According to analysts, Japan's long entrenched Liberal Democratic Political party was one of the reasons for the Japanese crisis. #1: The country's long entrenched Liberal Democratic Political Party. #2: The hidebound Japanese bureaucracy. TRUE Analysts found two major political villains that led to Japan's crisis:
11. (p. 309) According to Frank Gibney, Japan has become victim to the political vice of "neighborhood sickness." FALSE In a new appraisal of Japan, Frank Gibney has written that Japan became the victim of "oneparty sickness," an ailment brought on by a 40-year hardening of political arteries.
12. (p. 310) One of Japan's advantages over other countries is its language; the syntax of the Japanese language is similar to that of certain programming languages. FALSE Japan has serious disadvantage in the information age: its complex language. Not only did its three alphabet systems hinder software innovations appropriate for world markets, but the fundamental indirectness of the Japanese linguistic system hinders electronic information flows in general.
13. (p. 310) In Japan, lack of a common goal can be a problem. TRUE Perhaps more than any other society, the Japanese have an affinity for united effort. They seem inspired by common striving toward a common goal. Lack of one can present a problem.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 11-02 The importance and slow growth of Japan Topic: Japan
14. (p. 312) Owing to the deeply corrupt system, most of the foreign investors in India are leaving for other countries or pulling the money back to their home country. FALSE Widespread corruption and a deeply ingrained system of bribery in India make every transaction complicated and expensive. Nevertheless, a survey of U.S. manufacturers shows that 95 percent of respondents with Indian operations plan on expanding, and none say they are leaving. They are hooked on the country's cheap, qualified labor and the potential of a massive market.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 11-02 The importance and slow growth of Japan Topic: India
15. (p. 313) The Four Asian Tigers are: China, Thailand, India, and Vietnam. FALSE The most rapidly growing economies in Asia during the 1980s and 1990s were the group sometimes referred to as the Four Asian Tigers (or Four Dragons): Hong Kong, South Korea, Singapore, and Taiwan.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 11-02 The importance and slow growth of Japan Topic: The Four "Asian Tigers"
16. (p. 313) The U.S. has granted NTR (normal trade relations) to Vietnam. TRUE A bilateral trade agreement between the United States and Vietnam led to NTR status for Vietnam and will lower tariffs on Vietnamese exports to the United States from an average of 40 percent to less than 3 percent.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 11-02 The importance and slow growth of Japan Topic: Vietnam
17. (p. 314) According to C. K. Prahalad, the global market consisting of the 4 billion people across the globe with annual incomes of less than $1,200 is termed subsistence market. FALSE C. K. Prahalad and his associates introduced a new concept into the discussion of developing countries and markets bottom-of-the-pyramid markets (BOPMs)consisting of the 4 billion people across the globe with annual incomes of less than $1,200.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 11-03 The importance of the Bottom-of-the-Pyramid Markets Topic: Bottom-of-the-Pyramid Markets (BOPMs)
18. (p. 318) The primary multinational trade group in Asia is APEC. FALSE The primary multinational trade group in Asia is ASEAN.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 11-05 The interrelationships among countries in the region Topic: Association of Southeast Asian Nations (ASEAN) and ASEAN+3
19. (p. 320) The Asian financial crisis led to the creation of the ASEAN+3. TRUE One result of the Asian financial crisis of 1997 to 1998 was the creation of ASEAN+3 (ASEAN plus China, Japan, and South Korea) to deal with trade and monetary issues facing Asia.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 11-05 The interrelationships among countries in the region Topic: Association of Southeast Asian Nations (ASEAN) and ASEAN+3
20. (p. 325) The region of Shenzhen was designated as China's first Special Economic Zone. TRUE In 1980, Shenzhen, a boomtown bordering Hong Kong and a fishing village just 20 years ago, was designated as China's first Special Economic Zone.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 11-06 The diversity within China Topic: Pearl River Delta
21. (p. 326) The central government spends almost 50 percent of its budget for the rural poor who amount to almost three-fourths of the Chinese population. FALSE The Chinese rural people usually receive about 10 percent of the central government budget. That amounts to less than $100 a head for rural roads, water, power supplies, schools, and hospitals.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 11-06 The diversity within China Topic: The Other Billion
22. (p. 327) Negotiators from the Beijing area are known for their unusual bureaucratic sloth and imperialist perspective. TRUE Negotiators from the Beijing area are known for their unusual (within China) bureaucratic sloth and imperialist perspective, both yielding a relatively uncommon lack of creativity, that is, thinking outside the box.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 11-06 The diversity within China Topic: Differences in Business Negotiation Styles Within The Greater China
23. (p. 327) According to their southern neighbors, businesspeople in the Northeast of China are forthright. TRUE Forthrightness is the stereotype of businesspeople in the Northeast, mostly held by their southern neighbors.
24. (p. 328) Negotiators in Taiwan are known for their efforts to impress you in ways and to extents you won't see anywhere else in China. FALSE Negotiators from the Shanghai area are renowned in China for their shrewdness. They are outgoing, big talkers and big spenders. They try to impress you in ways and to extents you won't see anywhere else in China.
25. (p. 328) As they were the closest to foreign influences, negotiators in Taiwan are considered to be the most liberal. FALSE Both the behavior and the language of the people of Taiwan are considered, by other Chinese, to be the most conservative.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 11-06 The diversity within China Topic: Differences in Business Negotiation Styles Within The Greater China
26. (p. 304) Which of the following is the term used to refer to both the People's Republic of China (PRC) and the Republic of China (ROC) or Taiwan? A. Integrated China B. The Yellow Route C. Neo China D. Mainland China E. Greater China The term "The Greater China" refers to both the People's Republic of China (PRC) and the Republic of China (ROC) or Taiwan.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 11-01 The dynamic growth in the region Topic: The Greater China
27. (p. 304) Which of the following was instrumental in decreasing the historical tension between People's Republic of China (PRC) and the Republic of China (ROC)? A. U.N. negotiations B. Inclusion of both countries in the Security Council C. Increase in direct trade D. American military involvement in peacekeeping E. ASEAN dictates overruling former hostilities between member nations Over the years the relationship between People's Republic of China (PRC) and the Republic of China (ROC) has been both politically difficult and militarily dangerous. But in the 21st century, direct trade between the formerly hostile neighbors has increased dramatically, easing much of the historical tension in all of East Asia.
28. (p. 305) Two major events that occurred in 2000 are having a profound effect on China's economy. One of these is the United States' granting normal trade relations (NTR) to China on a permanent basis (PNTR). Which of the following is the other one? A. Inclusion in the board of the World Bank B. Admission to the World Trade Organization C. Signing of the new ASEAN pact D. The handover of Honk Kong from the British to China E. Inclusion of Hong Kong as a special administrative region (SAR) of China Two major events that occurred in 2000 are having a profound effect on China's economy: admission to the World Trade Organization and the United States' granting normal trade relations (NTR) to China on a permanent basis (PNTR).
29. (p. 305) According to the text, which of the following are the two important steps China has to take if the road to economic growth is to be smooth? A. Increasing export barriers and promoting indigenous technology B. Evolving into a democracy and inviting more foreign capital C. Investing in more developing countries and changing the education system D. Membership in more regional trade blocs and lowering of entry barriers E. Improving human rights and reforming the legal system China has two important steps to take if the road to economic growth is to be smooth: improving human rights and reforming the legal system.
30. (p. 306) IBM entered into a venture with the Railways Ministry that allowed IBM to set up a national network of IBM service centers in railway stations that has enabled IBM to ship computer parts via the railroad around the country within 24 hours. This venture was dubbed the ____. A. Blue Connect B. China Express C. China Blue D. Blue Express E. China Connect After nearly a decade of frustration in trying to effectively market and service its products in China, IBM took a bold step and entered a venture with the Railways Ministry that allowed IBM to set up IBM service centers dubbed the "Blue Express."
31. (p. 306) What are the particular cultural hurdles, the overcoming of which can transform China into a vast market in the long run? A. Rigid hierarchy and male chauvinism B. Thrift and xenophobia C. Language barrier and stereotyping D. Ritualism and ethnocentrism E. Gender divide and narcissism In the long run, the economic strength of China will not be as an exporting machine but as a vast market, particularly if consumers there can overcome the cultural hurdles of thrift and xenophobia.
32. (p. 306) Which of the following is the biggest threat for the fast pace of growth China is experiencing? A. Increased opening of the market to foreign investments B. Trade isolation by other ASEAN countries C. Losing the permanent normal trade relations (PNTR) status conferred by the U.S. D. India and other Asian countries doubling their development efforts E. Economic volatility that accompanies fast growth China is a relatively poor nation going through a painfully awkward transformation from a socialist market system to a hybrid socialist-free market system, not yet complete and with the rules of the game still being written. The biggest threat for China is the economic volatility that seems to accompany fast growth.
33. (p. 306) All of the following are true regarding Hong Kong EXCEPT that: A. Hong Kong became a special administrative region (SAR) of the People's Republic of China in 1944. B. the Basic Law of the Hong Kong SAR forms the legal basis for China's "one country, two systems" agreement. C. the Basic Law of the Hong Kong SAR guarantees Hong Kong a high degree of autonomy. D. the Hong Kong government negotiates bilateral agreements and makes major economic decisions on its own. E. the central government in Beijing is responsible only for foreign affairs and defense of the SAR. After 155 years of British rule, Hong Kong reverted to China in 1997 when it became a special administrative region (SAR) of the People's Republic of China.
34. (p. 307) What is the tenet that China follows to ensure that Hong Kong's exuberant capitalism is retained despite the communist leanings of mainland China? A. Free Trade Area of the country B. Sovereignty of the provinces C. Federalism D. Unity in diversity E. One country, two systems Many thought the territory's laissez-faire ways, exuberant capitalism, and gung-ho spirit would prove unbearable for Beijing's heavy-handed communist leaders. But except for changes in tone and emphasis, even opponents of communist rule concede that Beijing is honoring the "one country, two systems" arrangement.
35. (p. 307) Which of the following represent the "three direct links" leading to the establishment of One China? A. Transportation, trade, and communications B. Culture, language, and religion C. History, language, and transportation D. Federal bodies, education, and trade E. Technology, natural resources, and people It is best to wrap future talks on the One China debate inside a bundle of more concrete issues, such as establishing the "three direct links"transportation, trade, and communications. The three direct links issue must be faced because each country has joined the WTO, and the rules insist that members communicate about trade disputes and other issues.
36. (p. 308) Which of the following is NOT one of the theories explaining the persistence of stagnation in Japan in the 1990s? A. Faulty economic policies B. Inept political apparatus C. Aggressive competition, especially from East Asian economies D. Disadvantages due to global circumstances E. Cultural inhibitions Four explanatory themes have emerged for the persistence stagnation in Japan in the 1990s, each with a basis in observable fact, namely, Japan's (1) faulty economic policies, (2) inept political apparatus, (3) disadvantages due to global circumstances, and (4) cultural inhibitions.
37. (p. 309) Political explanations of Japan's crisis during the 1990s identified two villains. One of them was the powerful Japanese bureaucracy. Which of the following is the other one? A. Japan's trade policies with the U.S. B. Japan's refusal to join Asian trade blocs C. The powerful influence of the royalty in political issues D. The long entrenched Liberal Democratic Political Party E. The splintering of most of Japan's right-wing political parties Views of economists on Japan's crisis have not been the only ones heard. Political pundits also rose to the challenge. They found two major villains: Villain #1: The Country's Long Entrenched Liberal Democratic Political Party. Villain #2: The Hidebound Japanese Bureaucracy.
38. (p. 309) In the 1970s, Frank Gibney had called Japan The Fragile Superpower, which was confirmed with the crisis of the 1990s. In his new appraisal, Gibney writes that Japan has become the victim of: A. neighborhood sickness. B. political correctness. C. being penny-wise and pound-foolish. D. herd behavior. E. one-party sickness. Back in the 1970s, Frank Gibney had written a seminal book on Japan. He called it The Fragile Superpower. His insight into the possible future of Japan's then surging economy was confirmed when the 1990s brought on crisis conditions. In a new appraisal, Gibney has written that Japan became the victim of "one-party sickness," an ailment brought on by a 40-year hardening of political arteries.
39. (p. 310) Which of the following out-of-control factor explains Japan's end-of-the-century economic problems? A. The deeply-rooted bureaucratic structure B. The rise in global oil prices C. The complex Japanese language D. The growing fiscal deficit E. The burgeoning population Japan has serious disadvantage in the information age: its complex language. Not only did its three alphabet systems hinder software innovations appropriate for world markets, but the fundamental indirectness of the Japanese linguistic system hinders electronic information flows in general.
40. (p. 310) Immediately after World War II, a shattered Japanese nation arrived at a consensus goal for national recovery. That consensual goal provided the incentive for its spectacular progress, decade after decade. Then during the late 1980s, the Japanese people stepped back and looked around at their manifest achievement. It was easy to conclude they had reached their coveted goal. So the question for them became, "all right, what's next?" This theory tries to explain the Japanese crisis of the 90's. Which of the following theory are we talking about? A. The Cultural Causation theory B. The Power Shift theory C. The Third Way theory D. The Hybridity theory E. The Cultural Capital theory The Cultural Causation theory went something as follows: Immediately after World War II, a shattered Japanese nation arrived at a consensus goal for national recovery. That consensual goal provided the incentive for its spectacular progress, decade after decade. Then during the late 1980s, the Japanese people stepped back and looked around at their manifest achievement. It was easy to conclude they had reached their coveted goal. So the question for them became, "all right, what's next?"
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Hard Learning Objective: 11-02 The importance and slow growth of Japan Topic: Japan
41. (p. 312) Which of the following explains why most of the companies with Indian operations are saying that they are not leaving, but planning on expanding their Indian operations? A. Government machinery is one of the most efficient in the world. B. Living standards for expatriates are comparable to the world's best. C. Qualified labor is cheap, and the market potential is massive. D. Proximity to China makes sourcing of parts easier. E. Paying bribes simplifies otherwise complex procedural hurdles. One noted authority on India declared that corrupt practices are not the quaint custom of baksheesh but pervasive, systematic, structured, and degraded corruption running from the bottom to the top of the political order. Nevertheless, a survey of U.S. manufacturers shows that 95 percent of respondents with Indian operations plan on expanding, and none say they are leaving. They are hooked on the country's cheap, qualified labor and the potential of a massive market.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 11-02 The importance and slow growth of Japan Topic: India
42. (p. 313) Which of the following is NOT one of the Four Asian Tigers? A. Hong Kong B. Thailand C. South Korea D. Singapore E. Taiwan The most rapidly growing economies in this region during the 1980s and 1990s were the group sometimes referred to as the Four Asian Tigers (or Four Dragons): Hong Kong, South Korea, Singapore, and Taiwan.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 11-02 The importance and slow growth of Japan Topic: The Four "Asian Tigers"
43. (p. 313) The most rapidly growing economies in the Asian region during the 1980s and 1990s were sometimes referred to as the Four Asian Tigers or the Four ____. A. Lions B. Elephants C. Dragons D. Horses E. Swans The most rapidly growing economies in the Asian region during the 1980s and 1990s were sometimes referred to as the Four Asian Tigers or Four Dragons. These countries are Hong Kong, South Korea, Singapore, and Taiwan.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 11-02 The importance and slow growth of Japan Topic: The Four "Asian Tigers"
44. (p. 313) The Four Asian Tigers were the first countries in Asia, after ____, to move from a status of developing countries to newly industrialized countries. A. Bhutan B. Japan C. India D. Indonesia E. Kuwait The Four Asian Tigers were the first countries in Asia, after Japan, to move from a status of developing countries to newly industrialized countries.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 11-02 The importance and slow growth of Japan Topic: The Four "Asian Tigers"
45. (p. 314) C. K. Prahalad and associates introduced the concept of a global market, not necessarily defined by national borders but rather by the pockets of poverty across countries, and consisting of 4 billion people across the globe with annual incomes of less than $1,200. These consumers, concentrated in the LDCs and LLDCs, are referred to as _____ markets. A. subsistence B. third-world C. underdeveloped D. bottom-of-the-pyramid E. peripheral C. K. Prahalad and his associates introduced a new concept into the discussion of developing countries and markets bottom-of-the-pyramid markets (BOPMs) consisting of the 4 billion people across the globe with annual incomes of less than $1,200. These markets are not necessarily defined by national borders but rather by the pockets of poverty across countries. These 4 billion consumers are, of course, concentrated in the LDCs and LLDCs, as defined in the aforementioned U.N. classification scheme, particularly in South Asia and sub-Sahara Africa.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 11-03 The importance of the Bottom-of-the-Pyramid Markets Topic: Bottom-of-the-Pyramid Markets (BOPMs)
46. (p. 314) According to C. K. Prahalad, which of the following represents the misconception that leads international markets to ignore the bottom-of-the-pyramid markets? A. Most products will not be appropriate for BOPMs. B. Most BOPMs are geographically isolated and thus difficult to access. C. Protective policies make BOPMs difficult to penetrate. D. Exchange-rate fluctuations make BOPMs very volatile. E. Language and cultural barriers make BOPMs unattractive and sometimes hostile. Prahalad's basic point is that these consumers have been relatively ignored by international marketers because of misconceptions about their lack of resources (both money and technology) and the lack of appropriateness of products and services usually developed for more affluent consumers.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 11-03 The importance of the Bottom-of-the-Pyramid Markets Topic: Bottom-of-the-Pyramid Markets (BOPMs)
47. (p. 314) C. K. Prahalad and his associates introduced a new concept into the discussion of developing countries and markets bottom-of-the-pyramid markets (BOPMs) 23 consisting of the 4 billion people across the globe with annual incomes of less than ____. A. $400 B. $1,200 C. $2500 D. $3700 E. $4200 C. K. Prahalad and his associates introduced a new concept into the discussion of developing countries and markets bottom-of-the-pyramid markets (BOPMs) 23 consisting of the 4 billion people across the globe with annual incomes of less than $1,200.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 11-03 The importance of the Bottom-of-the-Pyramid Markets Topic: Bottom-of-the-Pyramid Markets (BOPMs)
48. (p. 314) According to C. K. Prahalad, consumers in the bottom-of-the-pyramid markets have been relatively ignored by international marketers because of misconceptions about their: A. willingness to buy international products. B. buying habits. C. expectations from the product. D. lack of resources. E. traditions and culture. Prahalad's basic point is that these consumers have been relatively ignored by international marketers because of misconceptions about their lack of resources (both money and technology) and the lack of appropriateness of products and services usually developed for more affluent consumers.
49. (p. 315) According to the text, which of the following is perhaps the best way to stimulate economic development and growth from within developing countries? A. Improving literacy rates B. Stabilizing the currency exchange rates C. Providing free medical services to poor people D. Reducing inflation levels E. Encouraging entrepreneurial activities Entrepreneurial activities that are networked appear to be perhaps the best way to stimulate economic development and growth from within developing countries.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Hard Learning Objective: 11-03 The importance of the Bottom-of-the-Pyramid Markets Topic: Bottom-of-the-Pyramid Markets (BOPMs)
50. (p. 315) Grameen Bank is a private commercial enterprise in ____. A. Bangladesh B. China C. Japan D. Sri Lanka E. South Korea Grameen Bank is a private commercial enterprise in Bangladesh.
51. (p. 318) ASEAN+3 is a forum for ASEAN ministers plus ministers from China, Japan, and ____. A. the United States B. South Korea C. Russia D. Australia E. New Zealand ASEAN+3 is a forum for ASEAN ministers plus ministers from China, Japan, and South Korea.
52. (p. 318) The primary multinational trade group in Asia is _____. A. NAFTA B. COMESA C. CEFTA D. SADC E. ASEAN The primary multinational trade group in Asia is ASEAN.
53. (p. 320) One result of the Asian financial crisis of 1997 to 1998 was the creation of ____. A. SADC B. NAFTA C. ASEAN+3 D. CEFTA E. COMESA One result of the Asian financial crisis of 1997 to 1998 was the creation of ASEAN+3 (ASEAN plus China, Japan, and South Korea) to deal with trade and monetary issues facing Asia.
54. (p. 320) The first meeting of the members of the ASEAN+3 was devoted to devising a system whereby the member countries could ____. A. defend their currencies against future attack B. improve the multilateral trade C. keep the inflation under check D. acquire the nuclear technology E. improve agricultural production The first meeting of ASEAN+3 was devoted to devising a system whereby the member countries shared foreign exchange reserves to defend their currencies against future attack.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 11-05 The interrelationships among countries in the region Topic: Association of Southeast Asian Nations (ASEAN) and ASEAN+3
55. (p. 320) Which of the following regions is most likely to be considered as the information technology (IT) corridor in north China? A. The coastal Dalian city B. Beijing-Tianjin C. The Yangtze River Delta D. The Pearl River Delta E. Fujian The Beijing-Tianjin region is considered as the information technology (IT) corridor in north China.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 11-06 The diversity within China Topic: A Focus on Diversity Within China
56. (p. 321) _____ contains Hong Kong, Macau, Guangzhou, and Shenzhen and it is considered as the world's manufacturing base for the IT industry. A. Northeast China B. The Yellow River Delta C. The Yangtze River Delta D. The Pearl River Delta E. Southwest China The Pearl River Delta contains Hong Kong, Macau, Guangzhou, and Shenzhen and it is considered as the world's manufacturing base for the IT industry.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 11-06 The diversity within China Topic: A Focus on Diversity Within China
57. (p. 322) The national language of China is standard _____ but more than 56 dialects and other languages are spoken across the country. A. Wu B. Min C. Hakka D. Xiang E. Mandarin The national language of China is standard Mandarin but more than 56 dialects and other languages are spoken across the country.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 11-06 The diversity within China Topic: A Focus on Diversity Within China
58. (p. 322) According to the text, in China, which of the following can cause some problems for television and radio advertisers in the country that print media can usually avoid? A. Low levels of television and radio penetration B. Cultural diversity C. Lack of common language D. Stringent laws governing the television and radio advertisements E. High cost of advertising on television and radio In China, lack of common language causes some problems for television and radio advertisers in the country that print media can usually avoid.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 11-06 The diversity within China Topic: A Focus on Diversity Within China
59. (p. 323) ____, Jilin, and Heilongjiang have long represented a cohesive unit in terms of culture and the political economy. The three are referred to as dongbei, meaning Northeast, or dong sansheng, meaning Northeastern Three Provinces, instead of identifying each province individually. A. Gansu B. Shanxi C. Henan D. Liaoning E. Sichuan The three contiguous provinces in Northeast ChinaLiaoning (43.2 million persons), Jilin (27.4 million), and Heilongjiang (38.3 million)have long represented a cohesive unit in terms of culture and the political economy. These three provinces are referred to as dongbei.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 11-06 The diversity within China Topic: Northeast China: Longtime Industrial Heartland
60. (p. 323) _____ is now Japan's most important trading partner. A. Malaysia B. The United States C. Bangladesh D. Bahrain E. China China is now Japan's most important trading partner, even ahead of the United States.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 11-06 The diversity within China Topic: Northeast China: Longtime Industrial Heartland
61. (p. 324) _____ is the capital of China. A. Chongqing B. Beijing C. Taipei D. Changchun E. Kunming Beijing is the capital of China.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 11-06 The diversity within China Topic: Beijing-Tianjin
62. (p. 324) This region in China is the political and R&D center of China. The 75-mile corridor in this region hosts some 5,000 Chinese high-tech companies, and more than 1,000 international IT companies. Perhaps the key to this region is the quality of its higher education. Identify the region in discussion. A. The coastal Dalian city B. The Pearl River Delta C. The Yangtze River Delta D. Beijing-Tianjin E. Fujian The Beijing-Tianjin region is the political and R&D center of China. The 75-mile corridor between Beijing and its coastal cousin Tianjin hosts some 5,000 Chinese high-tech companies, among them Lenovo, and more than 1,000 international IT companies.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 11-06 The diversity within China Topic: Beijing-Tianjin
63. (p. 324) _____ is known as China's Silicon Valley. A. Liaoning B. Zhongguancun C. Jilin D. Guangzhou E. Heilongjiang Zhongguancun is known as China's Silicon Valley.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 11-06 The diversity within China Topic: Beijing-Tianjin
64. (p. 324) _____ is China's third largest industrial city after Shanghai and Beijing, but it is also the fastest growing one. A. Wuhan B. Chengdu C. Qingdao D. Tianjin E. Kaohsiung Tianjin is China's third largest industrial city after Shanghai and Beijing, but it is also the fastest growing one.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 11-06 The diversity within China Topic: Beijing-Tianjin
65. (p. 325) Half of Shanghai's GDP is derived from which of the following industries? A. Financial services B. Steel C. Electronic products D. Shipping E. Software Half the Shanghai's GDP derives from financial services industries, such as banking, retailing, finance, trade, insurance, and real estate development.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 11-06 The diversity within China Topic: Shanghai and the Yangtze River Delta
66. (p. 325) This region in China includes three cities of over 5 million inhabitants (Hong Kong, Guangzhou, and Shenzhen); five cities with more than 1 million inhabitants (Zhuhai, Huizhou, Foshan, Zhongshan, and Dongguan); and a number of cities that each contain approximately half a million inhabitants, such as Macau. Identify the region. A. Shanghai B. Northeast China C. Yangtze River Delta D. The Greater Pearl River area E. Mainland China The Greater Pearl River area includes three cities of over 5 million inhabitants (Hong Kong, Guangzhou, and Shenzhen); five cities with more than 1 million inhabitants (Zhuhai, Huizhou, Foshan, Zhongshan, and Dongguan); and a number of cities that each contain approximately half a million inhabitants, such as Macau.
67. (p. 325) Which of the following was designated China's first Special Economic Zone? A. Shanghai B. Honk Kong C. Taiwan D. Beijing E. Shenzen In 1980, Shenzhen was designated as China's first Special Economic Zone.
68. (p. 326) The rural population, which accounts for almost three-fourths of the Chinese population, usually receives about _____ percent of the central government budget. A. 10 B. 25 C. 30 D. 45 E. 55 These one billion people usually receive about 10 percent of the central government budget. That amounts to less than $100 a head for rural roads, water, power supplies, schools, and hospitals.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 11-06 The diversity within China Topic: The Other Billion
69. (p. 327) Which of the following is the reason why most of the 1.3 billion potential consumers are not accessible? A. Most of them are in Mainland China where entry is prohibited. B. The distribution network is poor or is absent. C. These are mostly Communist party members who are prohibited from dealing with MNC brands. D. They are restricted to settlement zones where marketing is prohibited. E. They are unfamiliar with the English language. In China, most of the 1.3 billion potential consumers are not accessible because of a poor or nonexistent distribution network.
70. (p. 327) The true consumer market in China is probably limited to no more than _____ percent of those who live in the more affluent cities. A. 9 B. 15 C. 25 D. 33 E. 48 The true consumer market in China is probably limited to no more than 25 percent of those who live in the more affluent cities.
71. (p. 327) Which of the following is the stereotype of businesspeople in the Northeast? A. Loud and argumentative B. Cold and businesslike C. Aggression D. Simplicity E. Forthrightness Forthrightness is the stereotype of businesspeople in the Northeast, mostly held by their southern neighbors.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 11-06 The diversity within China Topic: Differences in Business Negotiation Styles Within The Greater China
72. (p. 327) Which of the following characterizes negotiators from the Beijing area? A. Traditional thought pattern B. Bureaucratic sloth C. Forthrightness D. Shrewdness E. Entrepreneurship Negotiators from the Beijing area are known for their unusual (within China) bureaucratic sloth and imperialist perspective, both yielding a relatively uncommon lack of creativity, that is, thinking outside the box.
73. (p. 328) What are negotiators from the Shanghai area famous for? A. Shrewdness B. Forthrightness C. Entrepreneurship D. Out-of-the-box thinking E. Bureaucratic sloth Negotiators from the Shanghai area are renowned in China for their shrewdness. They are outgoing, big talkers and big spenders. They try to impress you in ways and to extents you won't see anywhere else in China.
74. (p. 328) As they have been the closest to foreign influences, negotiators from this part of China are famous for their special forms of entrepreneurship and spontaneity. Identify the region. A. Taiwan B. Mainland China C. Beijing D. Shanghai E. The Pearl River Delta Chinese in the south (The Pearl River Delta) have always been the closest to foreign influences, which has yielded their special forms of entrepreneurship and spontaneity.
75. (p. 328) The Chinese in this area are less calculating than folks in Shanghai. But they are excellent traders and particularly interested in making short-term gains. These negotiators belong to: A. Taiwan B. The Pearl River Delta C. Beijing D. Shanghai E. Mainland China Negotiators from the Pearl River Delta are reputed to be relatively honest and forthright. They are less calculating than folks in Shanghai. But they are excellent traders and particularly interested in making short-term gains.
76. (p. 328) Almost all the Chinese you deal with in _____ will be bilingual and speak at least English fluently. A. Hong Kong B. Mainland China C. Beijing D. Shanghai E. Taiwan Almost all the Chinese you deal with in Hong Kong will be bilingual and speak at least English fluently.
77. (p. 328) Which part of China is considered conservative in both behavior and language? A. Hong Kong B. Mainland China C. Beijing D. Shanghai E. Taiwan Both the behavior and the language of the people of Taiwan are considered, by other Chinese, to be the most conservative.
78. (p. 328) Managers in this part of China are known to be simultaneously down-to-earth and practical but on occasion daring. A. Hong Kong B. Mainland China C. Taiwan D. Shanghai E. Beijing Companies in Taiwan tend to be managed directly from the top, and the decision-making style is autocratic. Managers are simultaneously down-to-earth and practical but on occasion daring.
79. (p. 328) Which of the following is NOT true of the marketing opportunities in Greater China? A. Rich municipalities like Beijing and Shanghai are quite comparable to Paris, New York, or Tokyo. B. Some municipalities are large and rich enough to be thought of as "more-developed countries." C. As in the United States, luxury cars sell better on the coast, and trucks sell better in rural areas of the west. D. Some of the rural areas might be labeled "least-developed countries." E. Just like in the U.S., the same lines of cosmetics or shampoos are sold nationwide. Unlike in the U.S., in China you cannot sell the same lines of cosmetics or shampoos nationwide.
Chapter 13 Products and Services for Consumers Answer Key
1. (p. 361) Quality can be defined on two dimensions: market-perceived quality and performance quality. TRUE Quality can be defined on two dimensions: market-perceived quality and performance quality.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 13-02 The importance of quality and how quality is defi ned Topic: Quality Defined
2. (p. 361) Though quality is always important in the consumer's mind, they, in general, do not expect it to be a given. FALSE Since the consumer expects performance quality to be a given, quality to the consumer is more than compliance.
3. (p. 362) Even though most companies claim high performance quality when a product leaves the factory, the factory is still the place where most products are damaged in global marketing. FALSE Maintaining performance quality is critical, but frequently a product that leaves the factory with performance quality is damaged as it passes through the distribution chain.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 13-02 The importance of quality and how quality is defi ned Topic: Maintaining Quality
4. (p. 363) In many countries the term product homologation is used to describe the changes mandated by local product and service standards. TRUE In many countries, the term product homologation is used to describe the changes mandated by local product and service standards.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Physical or Mandatory Requirements and Adaptation
5. (p. 363) 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. TRUE 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.
AACSB: Medium Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Physical, mandatory, and cultural requirements to product adaptation
6. (p. 364) Green marketing is the term frequently used to identify a marketer's efforts to reduce its dependency on U.S. dollars as the standard for international exchange. FALSE Green marketing is a term used to identify concern with the environmental consequences of a variety of marketing activities.
7. (p. 364) The European Commission (EC) mandate requires a product to be evaluated from manufacturing to disposal. TRUE Under the guidelines of the European Union, a product is evaluated on all significant environmental effects throughout its life cycle, from manufacturing to disposal.
8. (p. 366) Strictly speaking from a marketing point of view as well as from a definitional view, a product is a physical item. FALSE A product is more than a physical item: it is a bundle of satisfactions (or utilities) that the buyer receives.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Products and Culture
9. (p. 368) From a sociological viewpoint, any idea perceived as new by a group of people is an innovation. TRUE From a sociological viewpoint, any idea perceived as new by a group of people is an innovation.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Physical, mandatory, and cultural requirements to product adaptation
10. (p. 369) The element of time is what differentiates diffusion (i.e., diffusion of innovations) from other types of communication research. TRUE It is the element of time that differentiates diffusion from other types of communications research.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Diffusion of Innovations
11. (p. 370) One of the three variables, which affect the rate of diffusion of a product, is the product's degree of perceived newness. TRUE At least three extraneous variables affect the rate of diffusion of an object: the degree of perceived newness, the perceived attributes of the innovation, and the method used to communicate the idea.
12. (p. 370) The method used to communicate the idea is one of the three variables which affect the rate of diffusion of a product. TRUE At least three extraneous variables affect the rate of diffusion of an object: the degree of perceived newness, the perceived attributes of the innovation, and the method used to communicate the idea.
13. (p. 370) The perceived attributes of the innovation is a variable which affect the rate of diffusion of a product. TRUE At least three extraneous variables affect the rate of diffusion of an object: the degree of perceived newness, the perceived attributes of the innovation, and the method used to communicate the idea.
14. (p. 371) If a new product has the trait of relative advantage, it has guaranteed success in the marketplace. FALSE Analyzing the five characteristics of an innovation can assist in determining the rate of acceptance or resistance of the market to a product. A product's (1) relative advantage (the perceived marginal value of the new product relative to the old), (2) compatibility (its compatibility with acceptable behavior, norms, values, and so forth), (3) complexity (the degree of complexity associated with product use), (4) trialability (the degree of economic and/or social risk associated with product use), and (5) observability (the ease with which the product benefits can be communicated) affect the degree of its acceptance or resistance.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Diffusion of Innovations-The topic is present in the question
15. (p. 372) The newness of a product or brand introduced can be an important competitive advantage. TRUE The newness of the product or brand introduced can be an important competitive advantage.
16. (p. 372) Most of the new ideas associated with the Internet are being produced in Europe because of the number of Internet users on the continent. FALSE Most of the new ideas associated with the Internet are being produced in the United States.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Production of Innovation
17. (p. 373) The packaging component of the product component model contains the physical product and all its design and functional features. FALSE The core component consists of the physical productthe platform that contains the essential technologyand all its design and functional features.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 13-04 The need to view all attributes of a product to overcome resistance to acceptance Topic: Analyzing Product Components for Adaptation
18. (p. 373) One of the core components in the product component model is the product platform. TRUE The core component of the product component model comprises the product platform.
19. (p. 374) If you were looking for information and strategies on a product's brand name, you would find it under the packaging component of the product component model. TRUE The packaging component includes style features, packaging, labeling, trademarks, brand name, quality, price, and all other aspects of a product's package.
20. (p. 374) A well-known baby-food producer that introduced small jars of baby food in Africa complete with labels featuring a picture of a baby experienced the classic example of misinterpreted symbols--consumers thought it was ground-up babies in a jar. This would be an example of a problem with the packaging component in the product component model. TRUE Care must be taken to ensure that corporate trademarks and other parts of the packaging component do not have unacceptable symbolic meanings. Particular attention should be given to translations of brand names and colors used in packaging.
21. (p. 375) Literacy rates and educational levels in our increasingly technological world have reached a point where manufacturers of international products can generally put out standardized product instructions. FALSE In low-literacy countries, pictures and symbols are taken literally as instructions and information. Hence, manufacturers of international products cannot put out standardized product instructions.
22. (p. 376) One of the consistencies that marketers can look forward to when marketing products abroad is that (in general) almost all labeling laws worldwide are essentially the same. FALSE Labeling laws vary from country to country and do not seem to follow any predictable pattern.
23. (p. 376) The support services component of the product component model contains such items as repair and maintenance and warranties. TRUE The support services component includes repair and maintenance, instructions, installation, warranties, deliveries, and the availability of spare parts.
24. (p. 377) Increasingly complementary products must be considered in the marketing of a variety of high-tech products. TRUE Complementary products must be considered increasingly in the marketing of a variety of hightech products.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 13-04 The need to view all attributes of a product to overcome resistance to acceptance Topic: Support Services Component
25. (p. 377) Consumer services are distinguished by four unique characteristics--intangibility, inseparability, homogeneity, and longevity. FALSE Consumer services are distinguished by four unique characteristicsintangibility, inseparability, heterogeneity, and perishability.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 13-04 The need to view all attributes of a product to overcome resistance to acceptance Topic: Marketing Consumer Services Globally
26. (p. 380) The vast majority of services enter foreign markets by licensing, franchising, or direct investment. TRUE The vast majority of services (some 85 percent) enter foreign markets by licensing, franchising, or direct investment.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 13-04 The need to view all attributes of a product to overcome resistance to acceptance Topic: Barriers to Entering Global Markets for Consumer Services
27. (p. 384) Brand image is at the very core of business identity and strategy. TRUE Brand image is at the very core of business identity and strategy.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 13-04 The need to view all attributes of a product to overcome resistance to acceptance Topic: Brands in International Markets
28. (p. 386) According to the text it has been reported that consumers in "Eastern" cultures are more likely to understand and appreciate brand extensions because of their more holistic thinking than consumers in "Western" cultures with their more analytical thinking patterns. TRUE Consumers in "Eastern" cultures may be more likely to understand and appreciate brand extensions because of their more holistic thinking than consumers in "Western" cultures, with their more analytical thinking patterns.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 13-04 The need to view all attributes of a product to overcome resistance to acceptance Topic: Global Brands
29. (p. 360) Which of the following represents the shift of power in the marketplace? A. From a producers' to a sellers' market B. From a sellers' to a customers' market C. From a buyers' to a users' market D. From a producers' to a outsourcers' market E. From a producers' market to a third-party vendors' market The power in the marketplace is shifting from a sellers' to a customers' market, and the latter have more choices because more companies are competing for their attention.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 13-01 The importance of offering a product suitable for the intended market Topic: Quality
30. (p. 360) More and more companies are offering a mix of products and services to their customers. This leads to a blurring of the distinction between products and services leading to new terms like: A. market applications. B. market solutions. C. product portfolio. D. market offerings. E. product basket. The lack of distinction between products and services has led to the invention of new terms encompassing both products and services, such as market offerings and business-to-consumer (B2C) marketing.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 13-01 The importance of offering a product suitable for the intended market Topic: Quality
31. (p. 360) Global competition is placing new emphasis on some basic tenets of business. All of the following represent the major trends EXCEPT: A. longer product life cycles. B. importance of quality. C. competitive prices. D. innovative products. E. shift of power from sellers' to customers' market. Global competition is placing new emphasis on some basic tenets of business. It is shortening product life cycles and focusing on the importance of quality, competitive prices, and innovative products. The power in the marketplace is shifting from a sellers' to a customers' market, and the latter have more choices because more companies are competing for their attention.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 13-01 The importance of offering a product suitable for the intended market Topic: Quality
32. (p. 361) Which are the two dimensions of quality? A. Product quality and process quality B. Market-perceived quality and performance quality C. Product quality and service quality D. Actual quality and assumed quality E. Absolute quality and relative quality Quality can be defined on two dimensions: market-perceived quality and performance quality.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 13-02 The importance of quality and how quality is defi ned Topic: Quality Defined
33. (p. 362) Apart from market-perceived quality and performance quality, which is other form of quality testing is popular? A. Quality perceived by internal panels B. Quality measured by objective third parties C. Quality assurance from internal vendors D. Quality measured by NGO activist groups E. Quality certified by quality circles Quality is also measured in many industries by objective third parties. In the United States, J.D. Power and Associates has expanded its auto quality ratings, which are based on consumer surveys, to other areas, such as computers.
34. (p. 363) In many countries, the term used to describe the changes mandated by local product and service standards is product ____. A. localization B. blending C. standardization D. dilution E. homologation A product may have to change in a number of ways to meet the physical or mandatory requirements of a new market, ranging from simple package changes to total redesign of the physical core product. The term used to describe the changes mandated by local product and service standards is product homologation.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Physical or Mandatory Requirements and Adaptation
35. (p. 363) 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 ____. A. homologation B. standardization C. dilution D. flexibility E. repositioning A product may have to change in a number of ways to meet the physical or mandatory requirements of a new market, ranging from simple package changes to total redesign of the physical core product. The term used to describe the changes mandated by local product and service standards is product homologation.
AACSB: Reflective thinking Bloom's: Application Difficulty Level: Medium Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Physical or Mandatory Requirements and Adaptation
36. (p. 364) _____ is a term used to identify concern with the environmental consequences of a variety of marketing activities. A. Green marketing B. Hybrid business C. Greenfield business D. Greenhouse business E. Alternative marketing Green marketing is a term used to identify concern with the environmental consequences of a variety of marketing activities.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Green Marketing and Product Development
37. (p. 364) Which of the following has been at the forefront of the "green movement?" A. The United States B. Japan C. Europe D. OPEC countries E. NAFTA countries Europe has/have been at the forefront of the "green movement," with strong public opinion and specific legislation favoring environmentally friendly marketing and products.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Green Marketing and Product Development
38. (p. 364) McDonald's has just required that all of its paper packages that are used to contain its food products be biodegradable, contain no harmful inks, and be recyclable whenever possible. This would be an example of which of the following marketing strategies? A. Envo-marketing B. Planet marketing C. Socialist marketing D. Green marketing E. Political marketing Green marketing is a term used to identify concern with the environmental consequences of a variety of marketing activities.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Green Marketing and Product Development
39. (p. 364) As part of the "green marketing" 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 ____. A. variations in standards across different member countries B. consumer demand for environmentally friendly products C. government subsidies for greener technologies D. availability of alternative energy resources for production E. management of existing inventory of conventional energy products 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.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Green Marketing and Product Development
40. (p. 364) Which of the following countries or organizations requires that packaging material through all levels of distribution, from manufacturer to consumer, be recycled or reused? A. The United States B. The European Commission (EC) C. NAFTA D. Australia/New Zealand E. WTO The European Commission has passed legislation to control all kinds of packaging waste throughout the European Union.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Green Marketing and Product Development
41. (p. 366) All of the following illustrate how products (product concepts) have been rejected by cultures because they did not meet the norms, values, or behavior patterns of the culture EXCEPT: A. many financial services in Muslim countries. B. body jewelry in Japan. C. pork and pork products in Scotland. D. filter cigarettes in Asia. E. whiskey and beer in Ireland. The adoption of some products by consumers can be affected as much by how the product concept conforms with their norms, values, and behavior patterns as by its physical or mechanical attributes.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Products and Culture
42. (p. 368) From a sociological viewpoint, any idea perceived as new by a group of people is a(n) ____. A. creation B. adaptation C. ideation D. homologation E. innovation From a sociological viewpoint, any idea perceived as new by a group of people is an innovation.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Innovative Products and Adaptation
43. (p. 368) _____ is the process by which innovation spreads. A. Diffusion B. Filtering C. Dissolution D. Trickle-down E. Cascading Diffusion is the process by which innovation spreads and knowledge of this is helpful in developing a successful product strategy.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Innovative Products and Adaptation
44. (p. 369) Everett Rogers notes that crucial elements in the diffusion of new ideas are all of the following EXCEPT: A. innovation. B. communication channels. C. time. D. members of a social system. E. government support. Everett Rogers noted that "crucial elements in the diffusion of new ideas are (1) an innovation, (2) which is communicated through certain channels, (3) over time, (4) among the members of a social system."
45. (p. 369) According to Everett Rogers, the goal of the diffusion researcher and the marketer are to shorten the time lag between: A. the time that a product is made and the time that retailers place the product in inventory. B. the time that a budget is constructed and the time needed funds reach communication channels. C. the time that an investment is made and the time that a profit is turned. D. introduction of an idea or product and its widespread adoption. E. introduction of an idea or product and when revisions can be made. 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.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Diffusion of Innovations
46. (p. 369) Innovative product ideas reach markets with varying rates of diffusion based on the time variable. All of the following are actual examples of this phenomenon EXCEPT: A. microwave ovens took 20 years to catch on in the United States. B. the contraceptive pill took only a few years to be accepted in the United States. C. modern math took only about five years to be diffused through the U.S. school systems. D. the idea of kindergartens took nearly 50 years to gain total acceptance in the United States. E. color televisions were available in 1949 but not widely accepted in the market until 1985. Everett Rogers and others give ample evidence of the fact that product innovations have varying rates of acceptance. Some diffuse from introduction to widespread use in a few years; others take decades. Color televisions, introduced in the early 50s started selling in large numbers by the 1960s. All the others are examples provided in the text.
47. (p. 369) According to Everett Rogers, which is the element that differentiates diffusion from other types of communications research? A. Breakthrough innovation B. Communications channels C. Time D. Social system E. Government support Everett Rogers states that it is the element of time that differentiates diffusion from other types of communications research. 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.
48. (p. 370) Which of the following is considered to be one of the extraneous variables that affects the rate of diffusion of an object? A. The use of the Internet in the diffusion process B. The age appearance of the innovation C. The number of marketing personnel dedicated to diffusion D. The method used to communicate the idea E. The shelf live of the diffusion object At least three extraneous variables affect the rate of diffusion of an object: the degree of perceived newness, the perceived attributes of the innovation, and the method used to communicate the idea.
49. (p. 370) An important first step in adapting a product to a foreign market is to determine: A. the degree of newness as perceived by the intended market. B. the cost of the adapted product in the foreign market. C. the advertising parallels with the domestic market. D. the ability of a sales force to sell the product. E. the match to religious doctrine(s) in the foreign country. At least three extraneous variables affect the rate of diffusion of an object: the degree of perceived newness, the perceived attributes of the innovation, and the method used to communicate the idea.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Diffusion of Innovations
50. (p. 369) Which of the following is not one of the Everett Rogers crucial elements in the diffusion of new ideas? A. An innovation B. Communication through certain channels C. New ideas are communicated over time D. New ideas are sent to members of a social system E. New ideas are automatically placed in an incubation zone Everett Rogers noted that "crucial elements in the diffusion of new ideas are (1) an innovation, (2) which is communicated through certain channels, (3) over time, (4) among the members of a social system."
51. (p. 371) Carolyn is interested in marketing her company's diet products in Asia. She is studying what acceptable behavior, norms, and values in Asian markets. Carolyn is studying ____. A. relative advantage B. compatibility C. complexity D. trialability E. observability Analyzing the five characteristics of an innovation can assist in determining the rate of acceptance or resistance of the market to a product. A product's (1) relative advantage (the perceived marginal value of the new product relative to the old), (2) compatibility (its compatibility with acceptable behavior, norms, values, and so forth), (3) complexity (the degree of complexity associated with product use), (4) trialability (the degree of economic and/or social risk associated with product use), and (5) observability (the ease with which the product benefits can be communicated) affect the degree of its acceptance or resistance.
AACSB: Reflective thinking Bloom's: Application Difficulty Level: Hard Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Diffusion of Innovations
52. (p. 371) 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. A. relative advantage B. compatibility C. complexity D. trialability E. observability Analyzing the five characteristics of an innovation can assist in determining the rate of acceptance or resistance of the market to a product. A product's (1) relative advantage (the perceived marginal value of the new product relative to the old), (2) compatibility (its compatibility with acceptable behavior, norms, values, and so forth), (3) complexity (the degree of complexity associated with product use), (4) trialability (the degree of economic and/or social risk associated with product use), and (5) observability (the ease with which the product benefits can be communicated) affect the degree of its acceptance or resistance.
53. (p. 371) 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. A. relative advantage B. compatibility C. complexity D. trialability E. observability Analyzing the five characteristics of an innovation can assist in determining the rate of acceptance or resistance of the market to a product. A product's (1) relative advantage (the perceived marginal value of the new product relative to the old), (2) compatibility (its compatibility with acceptable behavior, norms, values, and so forth), (3) complexity (the degree of complexity associated with product use), (4) trialability (the degree of economic and/or social risk associated with product use), and (5) observability (the ease with which the product benefits can be communicated) affect the degree of its acceptance or resistance.
54. (p. 371) 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? A. Relative advantage B. Compatibility C. Complexity D. Trialability E. Observability Analyzing the five characteristics of an innovation can assist in determining the rate of acceptance or resistance of the market to a product. A product's (1) relative advantage (the perceived marginal value of the new product relative to the old), (2) compatibility (its compatibility with acceptable behavior, norms, values, and so forth), (3) complexity (the degree of complexity associated with product use), (4) trialability (the degree of economic and/or social risk associated with product use), and (5) observability (the ease with which the product benefits can be communicated) affect the degree of its acceptance or resistance.
55. (p. 371) In general, the rate of diffusion can be postulated as negatively related to ____. A. relative advantage B. compatibility C. trialability D. complexity E. observability In general, the rate of diffusion can be postulated as positively related to relative advantage, compatibility, trialability, and observability but negatively related to complexity.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Hard Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Diffusion of Innovations
56. (p. 372) Which of the following factors is mainly responsible for a perceptual bias when interpreting the characteristics of a product? A. Poor product knowledge B. Noise in the communication channel C. Market analyst's self-reference criteria D. Multitude of competing products E. Market analyst's intelligence quotient A market analyst's self-reference criterion (SRC) may cause a perceptual bias when interpreting the characteristics of a product. Thus, instead of evaluating product characteristics from the foreign user's frame of reference, the marketer might analyze them from his or her frame of reference, leading to a misinterpretation of the product's cultural importance.
57. (p. 372) The success of a firm taking inventions to market is referred to as ____. A. conversion ability B. product penetration C. diffusion D. marketization E. mass customization Conversion-ability is the success firms have when they take inventions to market. Three main factors seem to favor conversion: patience, focus on a few important innovations, and experience.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Production of Innovations
58. (p. 373) Installation, repair and maintenance, deliveries, and warranties are all found in which of the following components of the product component model used in the text? A. Core component B. Support services component C. Packaging component D. Functional component E. Global component Refer Exhibit 13.1- Product Component Model
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Core Component
59. (p. 373) The product platform, design features, and functional features are all found in which of the following components of the product component model used in the text? A. Core component B. Support services component C. Packaging component D. Functional component E. Global component The core component consists of the physical productthe platform that contains the essential technologyand all its design and functional features. It is on the product platform that product variations can be added or deleted to satisfy local differences. Also refer Exhibit 13.1- Product Component Model
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Core Component
60. (p. 373) 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 shown in the text, in which of the following component categories would Simone's talents most likely be used? A. Core component B. Support services component C. Packaging component D. Functional component E. Global component The core component consists of the physical productthe platform that contains the essential technologyand all its design and functional features. It is on the product platform that product variations can be added or deleted to satisfy local differences. Also refer Exhibit 13.1- Product Component Model
AACSB: Reflective thinking Bloom's: Application Difficulty Level: Hard Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Core Component
61. (p. 373) 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 component that would be in consideration. A. core component B. support services component C. packaging component D. functional component E. global component The core component consists of the physical productthe platform that contains the essential technologyand all its design and functional features. It is on the product platform that product variations can be added or deleted to satisfy local differences. Also refer Exhibit 13.1- Product Component Model
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Core Component
62. (p. 373-374) 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? A. Core component B. Support services component C. Packaging component D. Functional component E. Global component The packaging component includes style features, packaging, labeling, trademarks, brand name, quality, price, and all other aspects of a product's package. Also refer Exhibit 13.1- Product Component Model
AACSB: Reflective thinking Bloom's: Application Difficulty Level: Medium Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Core Component
63. (p. 376) 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 management need to make improvement if problems such as the one above are going to be solved? A. Core component B. Support services component C. Packaging component D. Functional component E. Global component The support services component includes repair and maintenance, instructions, installation, warranties, deliveries, and the availability of spare parts. Also refer Exhibit 13.1- Product Component Model
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Support Services Component
64. (p. 378) Services are distinguished by all of the following unique characteristics EXCEPT: A. intangibility. B. inseparability. C. heterogeneity. D. perishability. E. repeatability. Services are distinguished by four unique characteristicsintangibility, inseparability, heterogeneity, and perishabilityand thus require special consideration.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Marketing Consumer Services Globally
65. (p. 378) 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? A. Intangibility B. Inseparability C. Profitability D. Heterogeneity E. Perishability Services are intangible. Insurance, dry cleaning, hotel accommodations, and airline passenger or freight service, in contrast, are intangible and have intrinsic value resulting from a process, a performance, or an occurrence that exists only while it is being created.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Hard Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Marketing Consumer Services Globally
66. (p. 378) Because a service is individually produced and is virtually unique, the service is said to have: A. intangibility B. inseparability C. profitability D. heterogeneity E. perishability A service is heterogeneous in that it is individually produced and is thus unique.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Marketing Consumer Services Globally
67. (p. 378) Mark Townes is a dentist in Denver. During a four-day stretch in March, the snows in Denver were so bad that not one single patient was able to come for appointments with Dr. Townes. Since all of the appointments were missed, he made absolutely no money for the four days even though all of his normal expenses were still there. Which of the following best explains the particular difficulty Mark is facing? A. Intangibility B. Inseparability C. Profitability D. Heterogeneity E. Perishability A service is perishable in that once created it cannot be stored but must be consumed simultaneously with its creation.
AACSB: Reflective thinking Bloom's: Application Difficulty Level: Medium Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Marketing Consumer Services Globally
68. (p. 378) Which of the following is the largest services export of the United States? A. Media and entertainment B. International tourism C. Healthcare D. Research and development E. Education services International tourism is by far the largest services export of the United States, ranking behind only capital goods and industrial supplies when all exports are counted.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Services Opportunities in Global Markets
69. (p. 380) How do the vast majority of services enter a foreign market? A. Exporting B. Importing C. Licensing, franchising, or direct investment D. Through brokers E. Through agent intermediaries The vast majority of services (some 85 percent) enter foreign markets by licensing, franchising, or direct investment.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Barriers to Entering Global Markets for Consumer Services
70. (p. 381) Four kinds of barriers face consumer services marketers 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 foreign market itself and not from outside sources? A. Protectionism B. Controls on transborder data flows C. Protection of intellectual property D. Cultural requirements for adaptation E. Language translation barriers Four kinds of barriers face consumer services marketers in this growing sector of the global marketplace: protectionism, controls on transborder data flows, protection of intellectual property, and cultural requirements for adaptation.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Barriers to Entering Global Markets for Consumer Services
71. (p. 381) 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, service providers would find it 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? A. Protectionism B. Controls on transborder data flows C. Protection of intellectual property D. Cultural requirements for adaptation E. Language translation barriers Because trade in services frequently involves people-to-people contact, culture plays a much bigger role in services than in merchandise trade.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Barriers to Entering Global Markets for Consumer Services
72. (p. 382) The worldwide use of a name, term, sign, symbol, design, or combination thereof intended to identify goods or services of one seller and to differentiate them from those of competitors is called a/an: A. trademark. B. copymark. C. global brand. D. brand's equity position. E. owner's mark. A global brand is defined as the worldwide use of a name, term, sign, symbol (visual and/or auditory), design, or combination thereof intended to identify goods or services of one seller and to differentiate them from those of competitors.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Brands in International Markets
73. (p. 387) Any influence that the company of manufacture, assembly, or design has on a consumer's positive or negative perception of a product is called the: A. plus or minus effect. B. polar effect. C. transfer effect. D. alteration effect. E. country-of-origin effect. Country-of-origin effect (COE) can be defined as any influence that the country of manufacture, assembly, or design has on a consumer's positive or negative perception of a product.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 13-05 Country-of-origin effects on product image Topic: Country-of-Origin Effect and Global Brands
74. (p. 388) 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? A. English tea B. American chocolate C. French perfume D. Chinese silk E. Jamaican rum Consumers have broad but somewhat vague stereotypes about specific countries and specific product categories that they judge "best": English tea, French perfume, Chinese silk, Italian leather, Japanese electronics, Jamaican rum, and so on. American chocolate is not one of them.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 13-05 Country-of-origin effects on product image Topic: Country-of-Origin Effect and Global Brands
75. (p. 388) In Russia products are placed into two categoriesours and "imported." This is an example of: A. cultural revisionism B. ethnocentrism C. conversion to capitalism D. communist mentality E. structural marketing orientation Ethnocentrism can also have country-of-origin effects; feelings of national pridethe "buy local" effect, for examplecan influence attitudes toward foreign products. Russians prefer fresh, homegrown food products but imported clothing and manufactured items.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 13-05 Country-of-origin effects on product image Topic: Country-of-Origin Effect and Global Brands
Essay Questions
76. (p. 361) Discuss the two dimensions of quality. The two dimensions of quality are market-perceived quality and performance quality. Simply, one dimension deals with how consumers believe the company, product, or service matches to expectations of quality. The other dimension, which can be measured, deals with how the product, company, or service actually performs.
77. (p. 363) Describe the process called product homologation. Product homologation is used to describe the changes mandated by local product and service standards. A product may have to change in a number of ways to meet the physical or mandatory requirements of a new market.
78. (p. 369) Everett Rogers notes that four crucial elements impact the diffusion of new ideas. What are those elements? Everett Rogers noted that "crucial elements in the diffusion of new ideas are (1) an innovation, (2) which is communicated through certain channels, (3) over time, (4) among the members of a social system." Rogers continued with the statement that it is the element of time that differentiates diffusion from other types of communications research.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 13-03 Physical; mandatory; and cultural requirements for product adaptation Topic: Marketing Consumer Services Globally
79. (p. 373) Draw and correctly label the product component model shown in the text. The model is shown on page 350 (see Exhibit 12.1). Students should include the core, packaging, and support services components and the sub-parts of each for full credit.
80. (p. 378) Consumer services are distinguished by four unique characteristics. List and characterize each of these four unique characteristics. The characteristics are (a) intangibility--services cannot be touched, (b) inseparability--the service cannot be separated from its consumption, (c) heterogeneous--it is individually produced and is thus virtually unique, and (d) perishability--once created it cannot be stored but must be consumed simultaneously with its creation.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 13-04 The need to view all attributes of a product to overcome resistance to acceptance Topic: Marketing Consumer Services Globally
81. (p. 380) Consumer services face four kinds of barriers as these services are presented to the global market. What are these barriers? The barriers to consumer services are (a) protectionism, (b) controls on transborder data flows, (c) protection of intellectual property, and (d) cultural requirements for adaptation.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 13-04 The need to view all attributes of a product to overcome resistance to acceptance Topic: Barriers to Entering Global Markets for Consumer Services
82. (p. 382) Define a global brand. How important are global brands? A global brand is defined as the worldwide use of a name, term, sign, symbol (visual and/or auditory), design, or combination thereof intended to identify goods or services of one seller and to differentiate them from those of competitors. Much like the experience with global products, the question of whether or not to establish global brands has no single answer. However, the importance of a brand name, even in the nonprofit sector, is unquestionable.
83. (p. 384) A successful brand is the most valuable resource a company has. Comment on why this is true and create an example to illustrate. A successful brand is the most valuable resource a company has. The brand name encompasses the years of advertising, goodwill, quality evaluations, product experience, and other beneficial attributes the market associates with the product. Brand image is at the very core of business identity and strategy. Western researchers have personified brands, imbuing them with personalities and images. In a sense, the consumer-brand interaction becomes much like an interpersonal interaction, wherein cultural differences hold heavy sway. To cite an example, Coca Cola is one of the oldest brands in the refreshment industry. It cannot be treated only as a refreshment drink because over the years it has built a reputation for itself among consumers. Today, the Coca Cola brand stands for refreshment of the mind, body and spirit.
84. (p. 387) Assuming that you were a new marketing manager for Nike and that your first task was to launch a renewed effort to gain market share in Europe, an Adidas stronghold. Describe the impact that the country-of-origin effect might have on your chances of success. The country-of-origin effect can be defined as any influence that the country of manufacture, assembly, or design has on a consumer's positive or negative perception of a product. Students could discuss stereotypes in the example, mention the difficulties that the U.S. has had with France, the general opinion of American-made products, Nike's publicity as a sweatshop broker, or how a home-based rival such as Adidas might react to Nike. If you, as an instructor, would like to set additional parameters for this question, please do so before the exam.
AACSB: Reflective thinking Bloom's: Application Difficulty Level: Medium Learning Objective: 13-05 Country-of-origin effects on product image Topic: Country-of-Origin Effect and Global Brands
85. (p. 389) Discuss how can company stereotyping be overcome? Once the market gains experience with a product, negative stereotypes can be overcome. Moreover, country stereotyping or "nation equity" can be overcome with good marketing. The image of Korean electronics and autos improved substantially in the United States once the market gained positive experience with Korean brands.
Chapter 14 Products and Services for Businesses Answer Key
1. (p. 396-397) For firms producing products and services for industrial markets, a chief reason for venturing abroad is the prospect of high profits with little risk. FALSE Firms producing products and services for industrial markets have a crucial reason for venturing abroad: dampening the natural volatility of industrial markets.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 14-01 The importance of derived demand in industrial markets Topic: The Volatility of Industrial Demand
2. (p. 398) For managers selling capital equipment and big-ticket industrial services, understanding the concept of derived demand is absolutely fundamental to their success. TRUE For managers selling capital equipment and big-ticket industrial services, understanding the concept of derived demand is absolutely fundamental to their success.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Easy Learning Objective: 14-01 The importance of derived demand in industrial markets Topic: The Volatility of Industrial Demand
3. (p. 398) Derived demand can be defined as demand that comes from the psychological aspects of market forces. FALSE Derived demand can be defined as demand dependent on another source.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 14-01 The importance of derived demand in industrial markets Topic: The Volatility of Industrial Demand
4. (p. 398) One of the ways that an industrial firm can manage against the inherent volatility of the industrial sector is to maintain broad product lines. TRUE Industrial firms can take several measures to manage inherent volatility, such as maintaining broad product lines and broad market coverage, raising prices faster and reducing advertising expenditures during booms, ignoring market share as a strategic goal, eschewing layoffs, and focusing on stability.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Easy Learning Objective: 14-01 The importance of derived demand in industrial markets Topic: The Volatility of Industrial Demand
5. (p. 399) Perhaps the most significant environmental factor affecting the international market for industrial goods and services is the degree of industrialization. TRUE Perhaps the most significant environmental factor affecting the international market for industrial goods and services is the degree of industrialization.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Easy Learning Objective: 14-01 The importance of derived demand in industrial markets Topic: Stages of Economic Development
6. (p. 399) With respect to Rostow's five-stage model of economic development, in Stage 1 (the traditional society), the most important industrial demand is associated with labor. FALSE With respect to Rostow's five-stage model of economic development, in Stage 1 (the traditional society), the most important industrial demand will be associated with natural resources extraction.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 14-01 The importance of derived demand in industrial markets Topic: Stages of Economic Development
7. (p. 399) With respect to Rostow's five-stage model of economic development, countries in Stage 5 (the age of mass consumption) are mostly service economies. TRUE With respect to Rostow's five-stage model of economic development, countries in Stage 5 (the age of mass consumption) are countries where design activities are going on and manufacturing techniques are being developed, and they are mostly service economies.
8. (p. 399) A country is able to leap several stages of economic development by using technology as economic leverage. TRUE An important approach to grouping countries is on the basis of their ability to benefit from and use technology, particularly now that countries are using technology as economic leverage to leap several stages of economic development in a very short time.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Easy Learning Objective: 14-02 How demand is affected by technology levels Topic: Technology and Market Demand
9. (p. 400) One of the trends that have spurred the demand for technologically advanced products is the disintegration of the Soviet empire. TRUE 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.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 14-02 How demand is affected by technology levels Topic: Technology and Market Demand
10. (p. 400) An important trend that has spurred the demand for technologically advanced products is worldwide popularity of the Xbox video game system. FALSE 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.
11. (p. 401) The perception of quality rests solely with the quality inspector. FALSE The perception of quality rests solely with the customer.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 14-02 How demand is affected by technology levels Topic: Quality and Global Standards
12. (p. 401) Recent studies have demonstrated that perceptions of industrial product quality can vary across per capital income levels. FALSE Recent studies have demonstrated that perceptions of industrial product quality can vary across cultural groups even in the most technologically developed countries.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Easy Learning Objective: 14-02 How demand is affected by technology levels Topic: Quality and Global Standards
13. (p. 401) Good quality, as perceived by highly industrialized and less-industrialized countries, is basically the same. FALSE Good quality as interpreted by a highly industrialized market is not the same as that interpreted by standards of a less industrialized nation.
14. (p. 402) George Howard's company has just invented a product that will reduce the time it takes to construct a new home by one-third. However, his company's product is not doing well in third world countries. The reason is probably that labor-saving features are of little importance when time has limited value and labor is plentiful. TRUE Standard quality requirements of industrial products sold in the U.S. market that command commensurately higher prices may be completely out of line for the needs of the less developed markets of the world. Labor-saving features are of little importance when time has limited value and labor is plentiful.
AACSB: Analytic Bloom's: Application Difficulty Level: Medium Learning Objective: 14-03 Characteristics of an industrial product Topic: Quality Is Defined by the Buyer
15. (p. 402) Extreme variations in climate create problems in designing equipment that is universally operable. TRUE Extreme variations in climate create problems in designing equipment that is universally operable.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 14-03 Characteristics of an industrial product Topic: Quality Is Defined by the Buyer
16. (p. 402) At present, there are generally accepted universal standards for industrial products around the world. FALSE A lack of universal standards is a problem in international sales of industrial products.
17. (p. 403) There is agreement between the U.S. and the European Union to mutually accept one another's standards in sectors such as telecommunications, medical devices, electromagnetic compatibility, electrical safety, recreation craft, and pharmaceuticals. TRUE Recently a key agreement was signed by the U.S. with the European Union to mutually recognize each other's standards in six sectors. The agreements will eliminate the need for double testing and address inspection or certification in telecommunications, medical devices, electromagnetic compatibility, electrical safety, recreation craft, and pharmaceuticals.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 14-03 Characteristics of an industrial product Topic: Quality Is Defined by the Buyer
18. (p. 404) The U.S. Department of Commerce does not mandate the use of the metric system unless your company wants to sell something to the U.S. government; all sellers to this market must use metric. TRUE To spur U.S. industry into action, the Department of Commerce indicated that accepting the metric system will not be mandatory unless you want to sell something to the U.S. government; all U.S. government purchases are to be conducted exclusively in metric.
19. (p. 405) ISO 9000 standards apply to specific products. FALSE ISO 9000 standards do not apply to specific products.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 14-04 The importance of ISO 9000 certifi cation Topic: ISO 9000 Certification: An International Standard of Quality
20. (p. 406) For many industrial products, the revenue from associated services exceeds the revenue from the products themselves. TRUE For many industrial products, the revenues from associated services exceed the revenues from the products.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Easy Learning Objective: 14-04 The importance of ISO 9000 certifi cation Topic: Business Services
21. (p. 407) According to a recent study of international users of heavy construction equipment, next to the manufacturer's country of origin, quick delivery of replacement parts was of major importance in purchasing construction equipment. FALSE A recent study of international users of heavy construction equipment revealed that, next to the manufacturer's reputation, quick delivery of replacement parts was of major importance in purchasing construction equipment.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 14-04 The importance of ISO 9000 certifi cation Topic: After-Sale Services
22. (p. 408) Blue Cross is now selling HMO services to American companies operating in Mexico. In this case, Blue Cross is referred to as a client follower. TRUE Most recently, healthcare services providers have been following firms abroadBlue Cross is now selling HMO services to American companies operating in Mexico. Once established, many of these client followers expand their client base to include local companies as well.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Easy Learning Objective: 14-05 The growth of business services and nuances of their marketing Topic: Other Business Services
23. (p. 409) A company Web site is the most important vehicle for selling products, reaching prospective customers, and marketing in most countries. FALSE In addition to advertising in print media and reaching industrial customers through catalogs, Web sites, and direct mail, the trade show or trade fair has become the primary vehicle for doing business in many foreign countries.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 14-06 The importance of trade shows in promoting industrial goods Topic: Trade Shows: A Crucial Part of Business-to-Business Marketing
24. (p. 410) Although important in most countries, trade shows serve a much more important role in the United States. FALSE Although important in the United States, trade shows serve a much more important role in other countries.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 14-06 The importance of trade shows in promoting industrial goods Topic: Trade Shows: A Crucial Part of Business-to-Business Marketing
25. (p. 412) The first and foremost characteristic of industrial goods markets is the motive of the buyer: to make a profit. TRUE The first and foremost characteristic of industrial goods markets is the motive of the buyer: to make a profit.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 14-07 The importance of relationship marketing for industrial products and services Topic: Relationship Marketing in Business-to-Business Contexts
26. (p. 394) Mary is a new international sales rep for an industrial supply company. She will learn that the inherent nature of industrial goods and the sameness in motive and behavior among business customers create a market where product and marketing mix _____ are commonplace. A. customization B. localization C. standardization D. simplification E. regulations The inherent nature of industrial goods and the sameness in motives and behavior among businesses as customers create a market where product and marketing mix standardization are commonplace.
AACSB: Analytic Bloom's: Application Difficulty Level: Medium Learning Objective: 14-01 The importance of derived demand in industrial markets Topic: Global Perspective
27. (p. 394) Which of the following statements regarding standardization versus adaptation in the industrial market is most correct? A. The exact same situation occurs in marketing industrial goods as in marketing consumer goods. B. There is more standardization in industrial goods. C. There is more adaptation in industrial goods than in consumer goods. D. The industrial goods market demands adaptation. E. The industrial goods market varies across cultural groups. The issues of standardization versus adaptation have less relevance to marketing industrial goods than consumer goods because there are more similarities in marketing products and services to businesses across country markets than there are differences.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 14-01 The importance of derived demand in industrial markets Topic: Global Perspective
28. (p. 395) Two basic factors account for the market similarities among industrial goods customers. One factor is the motive or intent of industrial customers is the same. The other factor accounting for the similarity among industrial goods customers is: A. the inherent nature of the product. B. the customer is seeking satisfaction. C. the government influence over design specifications. D. the tie to services. E. the perishability of the product. Two basic factors account for greater market similarities among industrial goods customers than among consumer goods customers. First is the inherent nature of the product. Second, the motive or intent of the users differs.
29. (p. 395) Along with industrial goods, the most rapidly growing sector of U.S. international trade today consists of: A. industrial products. B. consumer products. C. computer products. D. business services. E. governmental services. Along with industrial goods, the most rapidly growing sector of U.S. international trade today consists of business servicesaccounting, advertising, banking, consulting, construction, hotels, insurance, law, transportation, and travel sold by U.S. firms in global markets.
30. (p. 396) Demand in industrial markets is different from that in consumer markets. All of the following are factors that differentiate the industrial market from the consumer market EXCEPT: A. demand is more volatile in the industrial market. B. stages in industrial development affect demand for industrial products. C. stages in economic development affect demand for industrial products. D. industrial products are always more expensive than consumer products. E. the level of technology of products and services makes their sale more appropriate in some countries than others. Three factors seem to affect the demand in international industrial markets differently than in consumer markets. First, demand in industrial markets is by nature more volatile. Second, stages of industrial and economic development affect demand for industrial products. Third, the level of technology of products and services makes their sale more appropriate for some countries than others.
31. (p. 396-397) Many reasons for marketing consumer products and services abroad match with those for marketing industrial goods abroad. However, there is one important additional reason for marketing industrial goods abroad that does not apply to the consumer market. What is that reason? A. Avoiding inflationary pressures domestically B. Making as much profit as possible C. Dampening the natural volatility of industrial markets D. Meeting foreign competitors in their home markets E. Setting up situations where strategic alliance opportunities might be realized Firms producing products and services for industrial markets have an additional crucial reason for venturing abroad: dampening the natural volatility of industrial markets.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Hard Learning Objective: 14-01 The importance of derived demand in industrial markets Topic: The Volatility of Industrial Demand
32. (p. 397) Which of the following is a factor that exacerbates the volatility in demand in industrial markets? A. Professional buyers tend to act in concert. B. Derived demand decelerates changes in markets. C. There are small, noncyclical swings in demand inherent in industrial markets. D. Experienced purchasers tend to act independently. E. Inelastic demand accelerates changes in markets. In industrial markets, two factors come into play that exacerbate both the ups and downs in demand: Professional buyers tend to act in concert, and derived demand accelerates changes in markets.
33. (p. 398) For managers selling capital equipment and big-ticket industrial services, understanding the concept of _____ demand is absolutely fundamental to their success. A. kinked B. sliding C. multiple D. derived E. postponed For managers selling capital equipment and big-ticket industrial services, understanding the concept of derived demand is absolutely fundamental to their success.
34. (p. 398) Derived demand can be defined as demand: A. that is derived from supply. B. that is matched to consumer wants and needs. C. dependent on another source. D. that is volatile. E. for a basic good wanted for its own sake. Derived demand can be defined as demand dependent on another source.
35. (p. 398) Ryan Teed knows that domestic industrial demand is very volatile. He decided to hire a consultant to give him advice on what to do about this unacceptable situation. Which of the following would NOT be a measure put forward as a solution to combat volatile demand in the industrial goods sector? A. Maintain a broad product line B. Raise prices faster C. Reduce advertising expenditures during booms D. Ignore market share as a strategic goal, avoid layoffs, and focus on stability E. Invest in foreign high-yield financial instruments Industrial firms can take several measures to manage the inherent volatility in domestic industrial demand, such as maintaining broad product lines and broad market coverage, raising prices faster and reducing advertising expenditures during booms, ignoring market share as a strategic goal, eschewing layoffs, and focusing on stability.
AACSB: Analytic Bloom's: Application Difficulty Level: Medium Learning Objective: 14-01 The importance of derived demand in industrial markets Topic: The Volatility of Industrial Demand
36. (p. 398) 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 and stability very highly. C. They maintain limited product lines. D. They reduce prices faster and raise advertising expenditures during booms. E. They consider market share as a strategic goal. For most American firms, where corporate cultures emphasize beating competitors, such stabilizing measures as maintaining broad product lines and broad market coverage, raising prices faster and reducing advertising expenditures during booms, ignoring market share as a strategic goal, eschewing layoffs, and focusing on stability are usually given only lip service. Conversely, German and Japanese firms value employees and stability more highly and are generally better at managing volatility in markets.
37. (p. 399) Which of the following is, perhaps, the most significant environmental factor affecting the international market for industrial goods and services? A. Foreign exchange B. Political conditions C. The degree of industrialization D. The level of competition E. Inflation Perhaps the most significant environmental factor affecting the international market for industrial goods and services is the degree of industrialization.
38. (p. 399) With respect to industrial demand, which of the following best characterizes the "traditional society" described in Stage 1 of Rostow's five-stage model of economic development? A. A service economy is on the horizon. B. The important industrial demand is associated with natural resources extraction. C. Primary needs are related to infrastructure development. D. Manufacturing of both semidurable and nondurable consumer goods begins. E. The focus in on low-cost manufacturing of a variety of consumer and some industrial goods. In Stage 1 (the traditional society), the most important industrial demand will be associated with natural resources extraction.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 14-01 The importance of derived demand in industrial markets Topic: Stages of Economic Development
39. (p. 399) In Stage 2 of Rostow's five-stage model of economic growth, manufacturing is beginning and primary needs are related to infrastructure development. Which of the following countries would be characterized as being in this stage of economic development? A. Russia B. Eastern European countries C. South Korea D. Czech Republic E. Vietnam In Stage 2 (preconditions for takeoff), manufacturing is beginning. Primary needs will be related to infrastructure developmentfor example, telecommunications, construction, and power generation equipment and expertise. Vietnam would fit this category.
AACSB: Reflective Thinking Bloom's: Application Difficulty Level: Hard Learning Objective: 14-01 The importance of derived demand in industrial markets Topic: Stages of Economic Development
40. (p. 399) If a country has reached an economic development level where there is a focus on manufacturing of both semidurable and nondurable consumer goods and goods demanded relate to equipment and supplies to support manufacturing, which of the following stages of Rostow's five-stage model of economic growth is the country in? A. The traditional society B. Drive to maturity C. Preconditions for takeoff D. Takeoff E. The age of mass consumption In Stage 3 (takeoff), manufacturing of both semidurable and nondurable consumer goods has begun. Goods demanded relate to equipment and supplies to support manufacturing. Russian and Eastern European countries fit this category.
AACSB: Analytic Bloom's: Application Difficulty Level: Medium Learning Objective: 14-01 The importance of derived demand in industrial markets Topic: Stages of Economic Development
41. (p. 399) Russia and Eastern European countries have been characterized as being 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 In Stage 3 (takeoff), manufacturing of both semidurable and nondurable consumer goods has begun. Goods demanded relate to equipment and supplies to support manufacturing. Russian and Eastern European countries fit this category.
AACSB: Reflective Thinking Bloom's: Application Difficulty Level: Hard Learning Objective: 14-01 The importance of derived demand in industrial markets Topic: Stages of Economic Development
42. (p. 399) In the _____ stage of Rostow's five-stage model of economic development, an industrialized economy's focus is more on low-cost manufacturing of a variety of consumer and some industrial products; 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 Stage 4 (drive to maturity): These are industrialized economies such as Korea and the Czech Republic. Their focus is more on low-cost manufacturing of a variety of consumer and some industrial goods. They buy from all categories of industrial products and services.
43. (p. 399) Industrialized economies such as Korea and the Czech Republic have been characterized as being in which stage of Rostow's five-stage model of economic growth? A. Preconditions to takeoff B. Takeoff C. Traditional society D. Drive to maturity E. Age of mass consumption Stage 4 (drive to maturity): These are industrialized economies such as Korea and the Czech Republic. Their focus is more on low-cost manufacturing of a variety of consumer and some industrial goods. They buy from all categories of industrial products and services.
44. (p. 399) Countries such as Japan and Germany are characterized as being in which stage of Rostow's five-stage model of economic growth? A. Traditional society B. Preconditions to takeoff C. Takeoff D. Drive to maturity E. Age of mass consumption Stage 5 (the age of mass consumption): These are countries where design activities are going on and manufacturing techniques are being developed, and they are mostly service economies. Japan and Germany are obvious examples of countries that purchase the highest-technology products and services, mostly from other Stage 5 suppliers and consumer products from Stage 3 and 4 countries.
45. (p. 399) If a country is in Stage 5 (the age of mass consumption) of Rostow's five-stage model of economic development, where does the country purchase most of its highest-technology products and services? A. From Stage 4 suppliers B. From Stage 3 suppliers C. From other Stage 5 suppliers D. From itself-it never needs anyone else E. From Stage 3 and 4 suppliers together Stage 5 (the age of mass consumption): These are countries where design activities are going on and manufacturing techniques are being developed, and they are mostly service economies. Japan and Germany are obvious examples of countries that purchase the highest-technology products and services, mostly from other Stage 5 suppliers and consumer products from Stage 3 and 4 countries.
46. (p. 399) Which of the following is, perhaps, the best indicator of the "countries' abilities to benefit from and use technology as economic leverage" dimension of development? A. The educational system B. The degree of industrialization C. The general economic environment D. Market size and growth E. Government regulations An important approach to grouping countries is on the basis of their ability to benefit from and use technology, particularly now that countries are using technology as economic leverage to leap several stages of economic development in a very short time. Perhaps the best indicator of this dimension of development is the quality of the educational system.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 14-02 How demand is affected by technology levels Topic: Technology and Market Demand
47. (p. 400) Which of the following is NOT an interrelated trend that spurs demand for technologically advanced products? A. Expanding industrial growth in Asia B. Expanding economic growth in Asia C. The disintegration of the Soviet empire D. The privatization of government-owned industries worldwide E. The opening of the Trans-Arctic route 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.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Easy Learning Objective: 14-02 How demand is affected by technology levels Topic: Technology and Market Demand
48. (p. 400) Which of the following has become the most advanced industrialized country in the Asian region? A. South Korea B. Japan C. Hong Kong D. Singapore E. Taiwan Beginning with Japan, many Asian countries have been in a state of rapid economic growth over the last 30 years. Although this growth has recently slowed, the long-term outlook for these countries remains excellent. Japan has become the most advanced industrialized country in the region, while South Korea, Hong Kong, Singapore, and Taiwan have successfully moved from being cheap labor sources to becoming industrialized nations.
49. (p. 401) The perception of quality rests solely with the: A. retailer. B. customer. C. marketer. D. manufacturer. E. quality inspector. The concept of quality encompasses many factors, and the perception of quality rests solely with the customer.
50. (p. 401) Which of the following will create expanding demand, particularly for industrial goods and business services, in Latin America? A. The fast economic growth B. The creation of market economies C. The privatization of state-owned enterprises D. Employment creation E. Government regulations The fast economic growth in Asia, the creation of market economies in eastern Europe and the republics of the former Soviet Union, and the privatization of state-owned enterprises in Latin America and elsewhere will create expanding demand, particularly for industrial goods and business services, well into the 21st century.
51. (p. 401) Business-to-business marketers frequently misinterpret the concept of quality. Which of the following examples best illustrates this idea? A. Farmers in third world countries often prefer less-efficient and lower quality but easier-tomaintain products to do work tasks. B. Arabic accountants often use the abacus rather than a calculator. C. The Japanese will no longer do business with many U.S. suppliers because their packaging is faulty. D. The French absolutely abhor the term "French fry." E. The universal acceptance of ISO 9000 standards as a guarantee of the suitability of products in consumer applications. Business-to-business marketers frequently misinterpret the concept of quality. Good quality as interpreted by a highly industrialized market is not the same as that interpreted by standards of a less industrialized nation.
AACSB: Reflective Thinking Bloom's: Application Difficulty Level: Medium Learning Objective: 14-02 How demand is affected by technology levels Topic: Quality and Global Standards
52. (p. 402) One 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. matches up to applicable conditions. One important dimension of quality is how well a product meets the specific needs of the buyer. When a product falls short of performance expectations, its poor quality is readily apparent. However, it is less apparent but nonetheless true that a product that exceeds performance expectations can also be of poor quality.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 14-03 Characteristics of an industrial product Topic: Quality Is Defined by the Buyer
53. (p. 402) Quality is defined by the: A. seller. B. manufacturer. C. buyer. D. government. E. trade publications. One important dimension of quality is how well a product meets the specific needs of the buyer. Quality is defined by the buyer.
54. (p. 402) To Chinese import managers, which of the following aspects of the purchasing process was ranked as the number one important aspect when buying a product or service from a foreign supplier? A. Quality B. Price C. Product style D. Product features E. Timely delivery Features that a buyer does not want or cannot effectively use do not enhance a product's quality rating. This distinction means that developing markets require products designed to meet their specific needs, not products designed for different uses and expectations, especially if the additional features result in higher prices. This attitude was reflected in a study of purchasing behavior of Chinese import managers, who ranked product quality first, followed in importance by price.
55. (p. 402) To be competitive in today's global markets, the concept of total quality management (TQM) must be part of all MNCs' management strategy, and TQM starts with: A. the initial designer. B. the comptroller's office. C. talking with the customers. D. ISO 9000. E. the corporate mission statement. To be competitive in today's global markets, the concept of total quality management (TQM) must be a part of all MNCs' management strategy, and TQM starts with talking to customers.
56. (p. 402) With respect to universal standards in the sales of international products, which of the following statements is most applicable? A. There are generally accepted universal standards for industrial products around the world. B. There is a lack of universal standards. C. The movement toward universal standards is nearing completion. D. Most governments now mandate universal standards. E. Universal standards have been present for a number of years. A lack of universal standards is a problem in international sales of industrial products.
57. (p. 403) Which international organization is concerned with standard specifications for electrical equipment for machine tools? A. The U.S. Department of Labor B. The International Telecommunication Union C. The International Organization for Standardization D. The International Electrotechnical Commission E. The U.S. Chamber of Commerce Efforts are being made through international organizations to create international standards. For example, the International Electrotechnical Commission is concerned with standard specifications for electrical equipment for machine tools. The search has also been engaged for ways in which an international roaming umbrella can be established for wireless communications.
58. (p. 403) Which of the following is the international organization that is attempting to synchronize standards for several international industrial sectors? A. The U.S. Department of Labor B. The Global Harmonization Task Force C. The United Nations D. The Better Business Bureau E. The U.S. Chamber of Commerce The U.S. Department of Commerce participates in programs to promote U.S. standards and is active in the development of the Global Harmonization Task Force, an international effort to harmonize standards for several industry sectors.
59. (p. 404) "Making deals in pounds isn't easy when you're negotiating with someone who speaks in grams" is why many American firms are: A. championing an international weight-loss program. B. only doing business in Great Britain. C. converting measures to the metric system. D. simulating rather than estimating production standards. E. offering to change customers' calculations into standards acceptable to American manufacturers. To spur U.S. industry into action, the Department of Commerce indicated that accepting the metric system will not be mandatory unless you want to sell something to the U.S. government; all U.S. government purchases are to be conducted exclusively in metric. All federal buildings are now being designed with metric specifications, and highway construction funded by Washington uses metric units. Because the U.S. government is the nation's largest customer, this directive may be successful in converting U.S. business to the metric system.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 14-03 Characteristics of an industrial product Topic: Quality Is Defined by the Buyer
60. (p. 404) The U.S. Congress and businesses have been resisting conversion to the metric system fearing: A. market competition from international firms already using the metric system. B. consumer backlash and substitution of international products. C. Department of Commerce rules requiring wine to be sold in liters. D. workers would not understand the system. E. it would be too costly. In the United States, conversion to the metric system and acceptance of international standards have been slow. Congress and industry have dragged their feet for fear conversion would be too costly.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Easy Learning Objective: 14-03 Characteristics of an industrial product Topic: Quality Is Defined by the Buyer
61. (p. 404) To spur U.S. industry into action, the _____ indicated that accepting the metric system will not be mandatory unless you want to sell something to the U.S. government; all U.S. government purchases are to be conducted exclusively in metric. A. Office of the United States Trade Representative B. International Electrotechnical Commission C. Department of Labor D. International Organization for Standardization E. Department of Commerce To spur U.S. industry into action, the Department of Commerce indicated that accepting the metric system will not be mandatory unless you want to sell something to the U.S. government; all U.S. government purchases are to be conducted exclusively in metric.
62. (p. 404) 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 The only two countries not officially on the metric system are Myanmar and the United States. It is becoming increasingly evident that the United States must change or be left behind.
63. (p. 405) Many suppliers are adopting ISO 9000 standards because: A. customer satisfaction surveys indicate retail customers prefer ISO certified suppliers. B. it is the latest fad that adds value according to customer perception. C. they want to be perceived as eco-friendly. D. the WTO expects international suppliers to conform to ISO standards. E. manufacturers are requiring them to do so. As the market demands quality and more and more companies adopt some form of TQM, manufacturers are increasingly requiring ISO 9000 registration of their suppliers.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Hard Learning Objective: 14-04 The importance of ISO 9000 certifi cation Topic: ISO 9000 Certification: An International Standard of Quality
64. (p. 405) ISO 9000 concerns the: A. ability of a company to meet quality expectations of consumers. 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. E. assurance of product application. ISO 9000 concerns the registration and certification of a manufacturer's quality system.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 14-04 The importance of ISO 9000 certifi cation Topic: ISO 9000 Certification: An International Standard of Quality
65. (p. 405) Which of the following about ISO 9000 is true? A. ISO 9000 standards apply to specific products. B. It guarantees that a manufacturer produces a "quality" product or service. C. The series describes five quality system models. D. ISO 9000 standards relate to generic system standards that enable a company to provide assurance that it has a quality control system. E. ISO 9000s were originally designed by the International Organization for Standardization in Zurich. ISO 9000s were originally designed by the International Organization for Standardization in Geneva. ISO 9000 standards do not apply to specific products. It is a certification of the production process only and does not guarantee that a manufacturer produces a "quality" product or service. The series describes three quality system models.
66. (p. 405) A strong level of interest in ISO 9000 is being driven more by: A. government regulations. B. marketplace requirements. C. coercive action. D. collective action. E. internal perspectives. A strong level of interest in ISO 9000 is being driven more by marketplace requirements than by government regulations, and ISO 9000 is now an important competitive marketing tool in Europe and around the world.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 14-04 The importance of ISO 9000 certifi cation Topic: ISO 9000 Certification: An International Standard of Quality
67. (p. 405) Identify the correct statement about ISO 9000. A. To receive ISO 9000 certification, a company requests a certifying body to conduct an audit of the governance framework of a company. B. The object of the assessor asking questions about everything is to develop a transitory plan to ensure that minute details are not overlooked. C. A complete assessment for recertification is done every four years. D. Although ISO 9000 is generally involuntary, the EU Product Liability Directive puts pressure on all companies to become certified. E. The assessor helps employees create a quality manual, which will be made available to customers wishing to verify the organization's reliability. To receive ISO 9000 certification, a company requests a certifying body to conduct an audit of the key business processes of a company. The object is to develop a comprehensive plan to ensure that minute details are not overlooked. The assessor helps management create a quality manual, which will be made available to customers wishing to verify the organization's reliability. Although ISO 9000 is generally voluntary, except for certain regulated products, the EU Product Liability Directive puts pressure on all companies to become certified.
68. (p. 405) Which of the following is considered to be an important competitive tool in Europe? A. Adoption of ISO 9000 by a company. B. All packaging instructions are printed in English. C. All pricing is pegged to the dollar as the international standard. D. The ability to incorporate U.S. products into inventories. E. All product components are indigenously sourced. A strong level of interest in ISO 9000 is being driven more by marketplace requirements than by government regulations, and ISO 9000 is now an important competitive marketing tool in Europe and around the world.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 14-04 The importance of ISO 9000 certifi cation Topic: ISO 9000 Certification: An International Standard of Quality
69. (p. 406) The _____ measures customers' satisfaction and perceptions of quality of a representative sample of America's goods and services. A. ISO 9000 B. Loyalty business model C. Net Promoter Score (NPS) D. American Customer Satisfaction Index (ACSI) E. American Price Index (API) The American Customer Satisfaction Index (ACSI) measures customers' satisfaction and perceptions of quality of a representative sample of America's goods and services.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 14-04 The importance of ISO 9000 certifi cation Topic: ISO 9000 Certification: An International Standard of Quality
70. (p. 406) For many industrial products, the revenues from associated services exceed the revenues from the products. Which of the following examples best illustrates this statement? A. Paper produced in a paper mill B. A dental laboratory that prepares false teeth C. Cell phones D. A fax machine E. A heavy duty lathe machine For many industrial products, the revenues from associated services exceed the revenues from the products. Perhaps the most obvious case is cellular phones, in which the physical product is practically given away to gain the phone services contract.
AACSB: Analytic Bloom's: Application Difficulty Level: Medium Learning Objective: 14-04 The importance of ISO 9000 certifi cation Topic: Business Services
71. (p. 406) For many technical products, the willingness of the seller to provide _____ may be the deciding factor for the buyers accepting one company's product over another's. A. trade in kind B. barter arrangements C. installation and training D. a 90-day no pay period E. a no fault policy For many technical products, the willingness of the seller to provide installation and training may be the deciding factor for the buyers in accepting one company's product over another's.
72. (p. 407) McDonald's Hamburger University is known for having one of the finest (and most famous) international customer training facilities in the world. This is part of McDonald's _____ when dealing with international customers. A. pricing promotion B. product innovation C. capacity utilization efficiency D. after-sales service E. warranty Customer training is rapidly becoming a major after-sales service when selling technical products in countries that demand the latest technology but do not always have trained personnel. While perhaps McDonald's Hamburger University is the most famous international customer training center, industrial sellers may soon catch up.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Easy Learning Objective: 14-04 The importance of ISO 9000 certifi cation Topic: After-Sale Services
73. (p. 407) The ready availability of parts and services provided by U.S. marketers can give them _____ in international markets. A. easy market entry B. increased liability C. performance problems D. reduced costs E. a competitive advantage The ready availability of parts and services provided by U.S. marketers can give them a competitive edge.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 14-04 The importance of ISO 9000 certifi cation Topic: After-Sale Services
74. (p. 408) Research has shown that after-sales services are crucial in building customer loyalty and maintaining company reputation. What is another key reason that after-sales services should receive particular attention of top management? A. These services are almost always more profitable than the actual sale of the primary good itself. B. These services are very difficult to duplicate. C. These services can be very heavily advertised. D. These services cost almost nothing. E. Degree of outsourcing service support. After-sales services are not only crucial in building strong customer loyalty and the all-important reputation that leads to sales at other companies, but they are also almost always more profitable than the actual sale of the machinery or product.
75. (p. 408) The mode of entry for most consumer services firms is licensing, franchising, strategic alliances, or direct. This tendency is so because of the: A. natural or planned differentiation of commodities. B. perishability or inability to inventory. C. inseparability of creation and consumption. D. variability of inputs and outputs. E. physical intangibility of services. The mode of entry for most consumer services firms is licensing, franchising, strategic alliances, or direct. This tendency is so because of the inseparability of the creation and consumption of the services.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 14-05 The growth of business services and nuances of their marketing Topic: Other Business Services
76. (p. 408) Because some business services have intrinsic value that can be embodied in some tangible form, they can be produced in one country and exported to another. Which of the following is an example of this? A. Language schools B. In-flight services related to air transportation C. Operating an automatic teller machine D. Data processing E. Consultations of physicians Because some business services have intrinsic value that can be embodied in some tangible form, they can be produced in one country and exported to another. Data processing and data analysis services are good examples.
77. (p. 408) What is the chief reason that most U.S. business services companies enter the international market? A. To service their U.S. clients abroad B. To make high profits C. To avoid government restrictions D. To find and service new international customers E. To avoid governmental controls in the domestic market Most business services companies enter international markets to service their local clients abroad.
78. (p. 408) B&F Advertising Agency has just acquired a significant piece of Oracle's multimilliondollar advertising business. Oracle would particularly like B&F to come up with creative ideas for Oracle's recent expansion into the lower Asian markets of India and Indonesia. In order to accommodate Oracle, B&F has now opened offices in two Indian cities and one Indonesian city. What would be the proper term to use to describe what B&F is doing with its own expansion into the above Asian markets? A. Client baiting B. Client following C. Bargain hunting D. Padding their bet E. Risk avoidance Most business services companies enter international markets to service their local clients abroad. Most recently, healthcare services providers have been following firms abroad. Once established, many of these client followers, as one researcher refers to them, expand their client base to include local companies as well.
AACSB: Analytic Bloom's: Application Difficulty Level: Easy Learning Objective: 14-05 The growth of business services and nuances of their marketing Topic: Other Business Services
79. (p. 408) Until the _____ and _____ agreements, there were few international rules of fair play governing trade in services. A. WTO; MERCOSUR B. GATT; NAFTA C. FCPA; ISO D. GDP; RRP E. HMO; EU Until the GATT and NAFTA agreements, few international rules of fair play governed trade in services.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 14-05 The growth of business services and nuances of their marketing Topic: Other Business Services
80. (p. 408) What is the most serious threat to the continued expansion of international services trade? A. Free trade B. Capitalism C. Trade bloc D. Countervailing duties E. Protectionism Protectionism is the most serious threat to the continued expansion of international services trade.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 14-05 The growth of business services and nuances of their marketing Topic: Other Business Services
81. (p. 408) Cathy wants to provide accounting and financial services to her clients as they expand into international markets. Cathy can expect to face most of the same _____ merchandise traders. A. barriers confronting B. receptiveness experienced by C. support from local governments promised to D. alternative distribution channels utilized by E. outsourcing objections by Business services firms face most of the same constraints and problems confronting merchandise traders. Protectionism is the most serious threat to the continued expansion of international services trade. The growth of international services has been so rapid during the last decade it has drawn the attention of local companies, governments, and researchers. As a result, direct and indirect trade barriers have been imposed to restrict foreign companies from domestic markets.
AACSB: Analytic Bloom's: Application Difficulty Level: Hard Learning Objective: 14-05 The growth of business services and nuances of their marketing Topic: Other Business Services
82. (p. 409) Which of the following industries is most heavily damaged when restrictions are placed on cross-border data flows? A. Construction industry B. Plastics industry C. Pharmaceutical industry D. Communications industry E. Retailing industry Restrictions on cross-border data flows are potentially the most damaging to both the communications industry and other MNCs that rely on data transfers across borders to conduct business.
83. (p. 409) Which of the following has become the primary vehicle for business-to-business promotion and selling in many foreign countries? A. Trade shows B. In-office visits by sales teams C. TV advertising D. Local radio advertising E. Transit media In addition to advertising in print media and reaching industrial customers through catalogs, Web sites, and direct mail, the trade show or trade fair has become the primary vehicle for doing business in many foreign countries.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 14-06 The importance of trade shows in promoting industrial goods Topic: Trade Shows: A Crucial Part of Business-to-Business Marketing
84. (p. 410) All of the following are specific uses for trade shows in aiding the marketing effort in most countries EXCEPT: A. selling products. B. reaching prospective customers. C. contacting and evaluating potential agents and distributors. D. dispute settlement. E. marketing. Trade shows serve as the most important vehicles for selling products, reaching prospective customers, contacting and evaluating potential agents and distributors, and marketing in most countries.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Easy Learning Objective: 14-06 The importance of trade shows in promoting industrial goods Topic: Trade Shows: A Crucial Part of Business-to-Business Marketing
85. (p. 410) _____ provide(s) the facilities for a manufacturer to exhibit and demonstrate products to potential users and to view competitors' products. A. Catalogs B. Direct mail C. Web sites D. Trade shows E. Specialty advertising venues Trade shows provide the facilities for a manufacturer to exhibit and demonstrate products to potential users and to view competitors' products.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 14-06 The importance of trade shows in promoting industrial goods Topic: Trade Shows: A Crucial Part of Business-to-Business Marketing
86. (p. 412) Relationship marketing is particularly important in international markets where _____ dictates strong ties between people and companies. A. demand B. price C. culture D. government E. manufacturing Focusing on long-term relationship building will be especially important in most international markets where culture dictates stronger ties between people and companies.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 14-07 The importance of relationship marketing for industrial products and services Topic: Relationship Marketing in Business-to-Business Contexts
87. (p. 412) Robert always lets his customers know when changes are being made and calls on his customers regularly. As part of relationship marketing, Robert is building a(n) _____ with customers. A. long-term relationship B. distance relationship C. Internet link D. service-only link E. standard call-contact frequency Constant and close communication with customers will be the single most important source of information about the development of new industrial products and services. Longer-term and more communication-rich relationships are keys to success in international industrial markets.
AACSB: Reflective Thinking Bloom's: Application Difficulty Level: Easy Learning Objective: 14-07 The importance of relationship marketing for industrial products and services Topic: Relationship Marketing in Business-to-Business Contexts
88. (p. 412) One of the key functions of global account managers revolves around the notion of: A. intelligence gathering. B. mass advertising. C. relationship building. D. corporate air travel. E. possibility thinking. The key functions of global account managers revolve around the notions of intelligence gathering, coordination with the customer's staff, and reconfiguration.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 14-07 The importance of relationship marketing for industrial products and services Topic: Relationship Marketing in Business-to-Business Contexts
89. (p. 412) One of the key functions of global account managers revolves around the notion of: A. mass promotion and advertising. B. customer relationship building. C. mergers and acquisitions. D. coordination with customer's staff. E. data gathering and analysis. The key functions of global account managers revolve around the notions of intelligence gathering, coordination with the customer's staff, and reconfiguration.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 14-07 The importance of relationship marketing for industrial products and services Topic: Relationship Marketing in Business-to-Business Contexts
90. (p. 412) One of the key functions of global account managers revolve around the notion of: A. mass advertising. B. reconfiguration. C. relationship building. D. corporate air travel. E. possibility thinking. The key functions of global account managers revolve around the notions of intelligence gathering, coordination with the customer's staff, and reconfiguration.
Chapter 15 International Marketing Channels Answer Key
1. (p. 421) The distribution process includes promotion of goods and services by sellers and resellers. FALSE The distribution process includes the physical handling and distribution of goods, the passage of ownership (title), andmost important from the standpoint of marketing strategythe buying and selling negotiations between producers and middlemen and between middlemen and customers.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 15-01 The variety of distribution channels and how they affect cost and effi ciency in marketing Topic: Channel-of-Distribution Structures
2. (p. 421) Channels in a distribution network have fixed structures in the short run. TRUE Each market contains a distribution network with many channel choices whose structures are unique and, in the short run, fixed.
3. (p. 421) In an import-oriented distribution structure, in most cases, supply exceeds demand. FALSE In an import-oriented distribution structure, market penetration and mass distribution are not necessary because demand exceeds supply, and in most cases, the customer seeks the supply from a limited number of middlemen.
AACSB: Analytic Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 15-01 The variety of distribution channels and how they affect cost and effi ciency in marketing Topic: Channel-of-Distribution Structures
4. (p. 421) An import-oriented distribution structure prevails in the United States and other industrialized nations. FALSE The distribution philosophy of mass consumption prevails in the United States and other industrialized nations.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 15-01 The variety of distribution channels and how they affect cost and effi ciency in marketing Topic: Channel-of-Distribution Structures
5. (p. 422) One of the distinguishing characteristics of the Japanese channel system is that the channel system is controlled by a few small retailers found in the country. FALSE The Japanese system has four distinguishing features: (1) a structure dominated by many small middlemen dealing with many small retailers, (2) channel control by manufacturers, (3) a business philosophy and (4) laws that protect the foundation of the systemthe small retailer.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 15-02 The Japanese distribution structure and what it means to Japanese customers and to competing importers of goods Topic: Japanese Distribution Structure
6. (p. 423) The number of small retail stores is increasing in Japan. FALSE The number of small stores is declining as they are being replaced by larger discount and specialty stores.
7. (p. 423) The Japanese consumers favor price over personal service. FALSE The Japanese consumer contributes to the continuation of the traditional nature of the distribution system through frequent buying trips, small purchases, favoring personal service over price, and a proclivity for loyalty to brands perceived to be of high quality.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 15-02 The Japanese distribution structure and what it means to Japanese customers and to competing importers of goods Topic: Japanese Distribution Structure
8. (p. 425) As modern channel structures continue to evolve importers and retailers are even becoming involved in new product development. TRUE As modern channel structures continue to evolve importers and retailers are even becoming involved in new product development. For example, the Mexican appliance and electronics giant Grupo Elektra has formed an alliance with Beijing Automobile Works Group to develop and build low-cost cars for Mexico and export markets.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 15-02 The Japanese distribution structure and what it means to Japanese customers and to competing importers of goods Topic: Trends: From Traditional to Modern Channel Structures
9. (p. 426) One of Wal-Mart's strengths in distribution is its internal Internet-based system. TRUE One of Wal-Mart's strengths in distribution is its internal Internet-based system which makes its transactions with suppliers more efficient and lowers its cost of production.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 15-02 The Japanese distribution structure and what it means to Japanese customers and to competing importers of goods Topic: Trends: From Traditional to Modern Channel Structures
10. (p. 428) Retailing shows even greater diversity in its structure than does wholesaling. TRUE Retailing shows even greater diversity in its structure than does wholesaling. For example, in Italy and Morocco, retailing is composed largely of specialty houses that carry narrow lines, whereas in Finland, most retailers carry a more general line of merchandise.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 15-02 The Japanese distribution structure and what it means to Japanese customers and to competing importers of goods Topic: Retail Patterns
11. (p. 430) Agent middlemen take title to the goods and buy and sell on their own account. FALSE Agent middlemen work on commission and arrange for sales in the foreign country but do not take title to the merchandise.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Alternative Middleman Choices
12. (p. 430) Merchant middlemen take title to manufacturers' goods and assume the trading risks, so they tend to be less controllable than agent middlemen. TRUE Merchant middlemen take title to manufacturers' goods and assume the trading risks, so they tend to be less controllable than agent middlemen.
13. (p. 430) The channel process includes all activities, beginning with the manufacturer and ending with the retailer. FALSE The channel process includes all activities, beginning with the manufacturer and ending with the final consumer.
14. (p. 431) Domestic middlemen offer many advantages for companies with large international sales volume. FALSE Domestic middlemen offer many advantages for companies with small international sales volume.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Moderate Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Home-Country Middlemen
15. (p. 432) An export management company functions as a low-cost, independent marketing department with direct responsibility to the parent firm. TRUE Typically, the EMC becomes an integral part of the marketing operations of its client companies. Working under the names of the manufacturers, the EMC functions as a low-cost, independent marketing department with direct responsibility to the parent firm. The working relationship is so close that customers are often unaware they are not dealing directly with the export department of the company.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Home-Country Middlemen
16. (p. 432) The WTO in 2003 ruled export management companies (EMC)s to be in violation of international trade rules. FALSE The WTO in 2003 ruled foreign sales corporations to be in violation of international trade rules.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Home-Country Middlemen
17. (p. 432) Export management companies work under their own names. FALSE The export management companies work under the names of the manufacturers. An export management company functions as a low-cost, independent marketing department with direct responsibility to the parent firm.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Home-Country Middlemen
18. (p. 433) The Export Trading Company (ETC) Act allows producers of similar products to form export trading companies in the U.S. TRUE The Export Trading Company (ETC) Act allows producers of similar products to form export trading companies. A major goal of the ETC Act was to increase U.S. exports by encouraging more efficient export trade services to producers and suppliers to improve the availability of trade finance and to remove antitrust disincentives to export activities.
19. (p. 433) Another term for complementary marketing is piggybacking. TRUE Complementary marketing is commonly known as piggybacking.
20. (p. 434) The Webb-Pomerene Act of 1918 allowed American business firms to join forces in export activities without being subject to the export trading companies Act. FALSE The Webb-Pomerene Act of 1918 allowed American business firms to join forces in export activities without being subject to the Sherman Antitrust Act.
21. (p. 434) Using foreign-country middlemen moves the manufacturer away from the market and the company becomes less involved with problems of language, physical distribution, communications, and financing. FALSE Using foreign-country middlemen moves the manufacturer closer to the market and involves the company more closely with problems of language, physical distribution, communications, and financing.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Foreign-Country Middlemen
22. (p. 436) As channels grow longer, the ability of a manufacturer to control price, volume, promotion, and type of outlets increases. FALSE As channels grow longer, the ability of a manufacturer to control price, volume, promotion, and type of outlets diminishes.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Control
23. (p. 440) In the U.S., if you terminate an agent, you are required to pay 10 percent of the agent's average annual compensation, multiplied by the number of years the agent served, as a final settlement. FALSE In the United States, this termination is usually a simple action regardless of the type of middlemen; they are simply dismissed. However, in other parts of the world, the middleman often has some legal protection that makes termination difficult. In Colombia, for example, if you terminate an agent, you are required to pay 10 percent of the agent's average annual compensation, multiplied by the number of years the agent served, as a final settlement.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 15-4 The functions Learning Objective: advantages Learning Objective: and disadvantages of various kinds of middlemen Topic: Terminating Middlemen
24. (p. 441) An e-vendor in a foreign market can generally ignore culture as an important variable because the commerce is being done via the Internet that is culturally insensitive. FALSE The Web site and the product must be culturally neutral or adapted to fit the uniqueness of a market, because culture does matter.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Hard Learning Objective: 15-05 The importance of selecting and maintaining middlemen Topic: The Internet
25. (p. 448) With respect to international marketing, ideally, a Web site should be translated into the languages of the target market. TRUE Ideally, a Web site should be translated into the languages of the target markets. This translation may not be financially feasible for some companies, but at least the most important pages of the site should be translated.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 15-05 The importance of selecting and maintaining middlemen Topic: The Internet
26. (p. 421) The distribution process includes all of the following EXCEPT: A. physical handling of goods. B. promotion of goods and services. C. passage of ownership (title). D. buying and selling negotiations. E. physical distribution of goods. The distribution process includes the physical handling and distribution of goods, the passage of ownership (title), andmost important from the standpoint of marketing strategythe buying and selling negotiations between producers and middlemen and between middlemen and customers.
27. (p. 421) In a(n) _____ 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. A. export-oriented B. import-oriented C. manufacturer-oriented D. service-oriented E. customer-oriented In an import-oriented or traditional 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.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 15-01 The variety of distribution channels and how they affect cost and effi ciency in marketing Topic: Import-Oriented Distribution Structure
28. (p. 421) Which of the following distribution structures is considered as a traditional distribution structure? A. Export-oriented B. Import-oriented C. Manufacturer-oriented D. Service-oriented E. Customer-oriented An import-oriented distribution structures is considered as a traditional distribution structure.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 15-01 The variety of distribution channels and how they affect cost and effi ciency in marketing Topic: Import-Oriented Distribution Structure
29. (p. 421) Which of the following statements is true regarding an import-oriented distribution structure? A. Distribution systems are national in scope. B. The relationship between the importer and any middleman in the marketplace is similar to that found in a mass-marketing system. C. The idea of a channel as a chain of intermediaries performing specific activities and each selling to a smaller unit beneath it until the chain reaches the ultimate consumer is common in an import-oriented system. D. Several independent agencies providing functions such as advertising, marketing research, financing are a part of this distribution structure. E. An import-oriented distribution structure is considered as a traditional distribution structure. An import-oriented distribution structure is considered as a traditional distribution structure. The import-oriented distribution systems are local rather than national in scope, and the relationship between the importer and any middleman in the marketplace is considerably different from that found in a mass-marketing system. Since the importer-wholesaler traditionally performs most marketing functions, independent agencies that provide advertising, marketing research, warehousing and storage etc. are nonexistent or underdeveloped.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 15-01 The variety of distribution channels and how they affect cost and effi ciency in marketing Topic: Import-Oriented Distribution Structure
30. (p. 422) The foundation of the Japanese distribution system is the: A. middleman. B. intermediary. C. manufacturer. D. small retailer. E. wholesaler. Small retailers are considered to be the foundation of the Japanese distribution system.
31. (p. 422) _____ has long been considered the most effective nontariff barrier to the Japanese market. A. Population in Japan B. Distribution in Japan C. Japanese culture D. Cumbersome import and export procedures in Japan E. Intense competition in Japan Distribution in Japan has long been considered the most effective nontariff barrier to the Japanese market.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 15-02 The Japanese distribution structure and what it means to Japanese customers and to competing importers of goods Topic: Japanese Distribution Structure
32. (p. 423) Which of the following does NOT contribute to explaining why Japan has a high number of small stores? A. Population density B. A tradition of frequent trips to the store C. Emphasis on service D. Freshness and quality expectations E. Limited commercial real estate plots High population density; the tradition of frequent trips to the store; an emphasis on service, freshness, and quality; and wholesalers who provide financial assistance, frequent deliveries of small lots, and other benefits combine to support the high number of small stores.
AACSB: Analytic Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 15-02 The Japanese distribution structure and what it means to Japanese customers and to competing importers of goods Topic: Japanese Distribution Structure
33. (p. 423) Which of the following is an area of emphasis that characterizes Japanese distribution channels? A. Loyalty B. Direct sales C. Fast delivery D. Variety E. Intense focus on price Japanese distribution channel follows a relationship-oriented business philosophy that emphasizes loyalty, harmony, and friendship.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 15-02 The Japanese distribution structure and what it means to Japanese customers and to competing importers of goods Topic: Japanese Distribution Structure
34. (p. 423) All the following statements are true regarding a Japanese market EXCEPT: A. the costs of Japanese consumer goods are among the highest in the world. B. manufacturers depend on wholesalers for a multitude of services to other members of the distribution network like financing, physical distribution etc. C. the Japanese distribution structure supports long-term dealer-supplier relationships. D. the Japanese market is characterized by the tradition of frequent trips to the store. E. the Japanese consumers favor price over personal service. The Japanese consumer contributes to the continuation of the traditional nature of the distribution system through frequent buying trips, small purchases, favoring personal service over price, and a proclivity for loyalty to brands perceived to be of high quality.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Hard Learning Objective: 15-02 The Japanese distribution structure and what it means to Japanese customers and to competing importers of goods Topic: Japanese Distribution Structure
35. (p. 423) In Japan, under the Large-Scale Retail Store Law, all proposals for new "large" stores were first judged by the Ministry of ____. A. Land, Infrastructure, Transport and Tourism B. Internal Affairs and Communications C. International Trade and Industry D. Health and Welfare E. Labor In Japan, under the Large-Scale Retail Store Law, all proposals for new "large" stores were first judged by the Ministry of International Trade and Industry.
36. (p. 426) In the international business arena, which of the following is considered to be one of Wal-Mart's strengths? A. Squeaky-clean reputation in the international arena B. Internal Internet-based system C. Ability to drive all other competitors out of a market D. Ability to influence foreign governments E. Outreach programs designed to placate small retailers One of Walmart's strengths is its internal Internet-based system, which makes its transactions with suppliers highly efficient and lowers its cost of operations.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 15-02 The Japanese distribution structure and what it means to Japanese customers and to competing importers of goods Topic: Trends: From Traditional to Modern Channel Structures
37. (p. 426) General Motors, ____, and DaimlerChrysler have created a single online site called Covisint (www.covisint.com) for purchasing automotive parts from suppliers, which is expected to save the companies millions of dollars. A. Toyota Motor Corporation B. Honda Motor Company C. Ford Motor Company D. Nissan Motor Company E. TATA motors General Motors, Ford Motor Company, and DaimlerChrysler have created a single online site called Covisint (www.covisint.com) for purchasing automotive parts from suppliers, which is expected to save the companies millions of dollars.
38. (p. 426) Sears, Roebuck and _____ of France have created GlobalNetXchange (www.gnx.com), a retail exchange that allows retailers and their suppliers to conduct transactions online. A. Carrefour B. 7-Eleven C. Ito-Yokado D. Plus E. Tesco Sears, Roebuck and Carrefour of France have created GlobalNetXchange (www.gnx.com), a retail exchange that allows retailers and their suppliers to conduct transactions online.
39. (p. 428) _____ is/are often the approach of choice in markets with insufficient or underdeveloped distribution systems. A. Direct selling B. Big wholesale stores C. Internet selling D. Discount houses E. Television advertising Selling directly to the consumer through mail, by telephone, or door-to-door is often the approach of choice in markets with insufficient or underdeveloped distribution systems.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 15-02 The Japanese distribution structure and what it means to Japanese customers and to competing importers of goods Topic: Direct Marketing
40. (p. 429) Which of the following have proved to be a successful way to break the trade barrier imposed by the Japanese distribution system? A. Direct catalog sales B. Large wholesale stores C. Street corner kiosks D. Internet shopping E. Television advertising Direct sales through catalogs have proved to be a successful way to enter foreign markets. In Japan, it has been an important way to break the trade barrier imposed by the Japanese distribution system.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 15-02 The Japanese distribution structure and what it means to Japanese customers and to competing importers of goods Topic: Direct Marketing
41. (p. 430) Which of the following are frequently criticized for not representing the best interests of a manufacturer? A. Global wholesalers B. Trading companies C. Manufacturer's representatives D. Merchant middlemen E. Agent middlemen Merchant middlemen actually take title to manufacturers' goods and assume the trading risks, so they tend to be less controllable than agent middlemen. Because merchant middlemen primarily are concerned with sales and profit margins on their merchandise, they are frequently criticized for not representing the best interests of a manufacturer.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Easy Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Alternative Middleman Choices
42. (p. 428) According to the text, which of the following countries has the largest number of retailers? A. United States B. Argentina C. China D. South Africa E. Japan Refer exhibit 15.2. Among the countries mentioned in question, China has the largest number of retailers.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 15-02 The Japanese distribution structure and what it means to Japanese customers and to competing importers of goods Topic: Retail Patterns
43. (p. 428) Retailing around the world has been in a state of active ferment for several years and the rate of change appears to be directly related to the ____. A. literacy rate in the country B. rate of inflation in the country C. rate of population growth D. stage and speed of economic development E. dollar exchange rate for the currency of the country Retailing around the world has been in a state of active ferment for several years and the rate of change appears to be directly related to the stage and speed of economic development.
AACSB: Analytic Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 15-02 The Japanese distribution structure and what it means to Japanese customers and to competing importers of goods Topic: Retail Patterns
44. (p. 430) _____ take title to the goods and buy and sell on their own account. A. Merchant middlemen B. Brokers C. Buying offices D. Export agent E. Agent middlemen Merchant middlemen actually take title to manufacturers' goods and assume the trading risks, so they tend to be less controllable than agent middlemen.
45. (p. 430) With reference to a distribution channel, the channel process includes all activities, beginning with the manufacturer and ending with the ____. A. wholesaler B. agent middlemen C. merchant middlemen D. retailer E. final consumer The channel process includes all activities, beginning with the manufacturer and ending with the final consumer.
46. (p. 430) Which of the following statements is true regarding agent middlemen? A. They take title to the merchandise. B. They assume trading risk. C. They are less controllable by manufacturers than merchant middlemen. D. They are frequently criticized for not representing the best interests of a manufacturer. E. They work on commission and arrange for sales in the foreign country. Agent middlemen work on commission and arrange for sales in the foreign country but do not take title to the merchandise.
AACSB: Analytic Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Alternative Middleman Choices
47. (p. 430) All of the following statements are true regarding merchant middlemen EXCEPT: A. they take title to manufacturers' goods. B. they are more controllable by manufacturers than agent middlemen. C. they assume trading risk. D. they are primarily concerned with sales and profit margins on their merchandise. E. they are frequently criticized for not representing the best interests of a manufacturer. Merchant middlemen actually take title to manufacturers' goods and assume the trading risks, so they tend to be less controllable than agent middlemen.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Hard Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Alternative Middleman Choices
48. (p. 431) A major trade-off when using home-country middlemen is: A. the large financial investment required. B. the limited control over the entire distribution process. C. the large managerial investments required. D. the limited number of retailers in the foreign country who can be reached through the homecountry middlemen. E. the large amount of commission charged by the home-country middlemen. A major trade-off when using home-country middlemen is limited control over the entire process.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Home-Country Middlemen
49. (p. 431) Which of the following types of companies will most likely use the services provided by a home-country middleman? A. Companies with large international sales volume B. Companies which are experienced with the foreign markets C. Companies which want to become involved with the complexities of international marketing D. Companies which are willing make managerial investment in the distribution process E. Companies which want to sell abroad with minimum financial commitment Domestic middlemen offer many advantages for companies with small international sales volume, those inexperienced with foreign markets, those not wanting to become immediately involved with the complexities of international marketing, and those wanting to sell abroad with minimal financial and management commitment.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Hard Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Home-Country Middlemen
50. (p. 431) Another term for home-country middlemen is _____ middlemen. A. uniform B. agent C. merchant D. domestic E. regional Home-country middlemen are also known as domestic middlemen. They are located in the producing firm's country and provide marketing services from a domestic base.
51. (p. 431) IKEA, Costco, and Sears Roebuck are examples of ____. A. export management companies B. trading companies C. export associations D. global retailers E. complimentary marketers IKEA, Costco, and Sears Roebuck are examples of global retailers.
52. (p. 432) James Barker is the marketing manager of a firm which has small international sales volume. He is looking for a middleman who can take responsibility for promotion of the goods, credit arrangements, physical handling, market research, and provide information on financial, patent, and licensing matters while working under the name of his company. Which of the following would be the best choice for Mr. Barker if he wants to meet his objectives? A. A manufacturer's export agent B. An export merchant C. A trade representative D. An export management company E. A complimentary marketer The EMC functions as a low-cost, independent marketing department with direct responsibility to the parent firm. The export management company may take full or partial responsibility for promotion of the goods, credit arrangements, physical handling, market research, and information on financial, patent, and licensing matters.
AACSB: Reflective thinking Bloom's: Application Difficulty Level: Hard Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Home-Country Middlemen
53. (p. 432) Which of the following statements is true regarding an export management company (EMC)? A. It acts as a middleman for firms with relatively large international volume. B. EMCs work under their own names. C. EMCs have direct responsibility to the parent company. D. It acts as a middleman for companies willing to involve their own personnel in the international function. E. EMCs seldom can afford to make the kind of market investment needed to establish deep distribution for products. The major disadvantage is that EMCs seldom can afford to make the kind of market investment needed to establish deep distribution for products because they must have immediate sales payout to survive.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Hard Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Home-Country Middlemen
54. (p. 432) A major disadvantage of _____ is that they seldom can afford to make the kind of market investment needed to establish deep distribution for products because they must have immediate sales payout to survive. A. export management companies B. trading companies C. export associations D. global retailers E. complimentary marketers A major disadvantage of export management companies is that they seldom can afford to make the kind of market investment needed to establish deep distribution for products because they must have immediate sales payout to survive.
55. (p. 432) Specialization of this type of middleman in a given field often enables it to offer a level of service that could not be attained by the manufacturer without years of groundwork. This middleman acts under the name of the manufacturer as an independent marketing department. Identify the middleman in the discussion. A. Webb-Pomerene export association B. trading company C. export management company D. export agency E. foreign sales corporation Typically, the export management company becomes an integral part of the marketing operations of its client companies. Working under the names of the manufacturers, the EMC functions as a low-cost, independent marketing department with direct responsibility to the parent firm.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Easy Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Home-Country Middlemen
56. (p. 433) Which of the following represents a joint export ventures through which U.S. firms can take advantage of economies of scale, spread risk, and pool their expertise? A. Manufacturers' export agents B. U.S. trading companies C. Manufacturers' Retail Stores D. Export management companies E. Complimentary marketers The ETC Act created a more favorable environment for the formation of joint export ventures. Through such joint ventures, U.S. firms can take advantage of economies of scale, spread risk, and pool their expertise.
57. (p. 433) Typically, which of the following arrangements are undertaken when a firm wants to fill out its product line or keep its seasonal distribution channels functioning throughout the year? A. Price skimming B. Using services of a trading company C. Establishing a retail store D. Using services of an export management company E. Complimentary marketing Most complementary marketing arrangements are undertaken when a firm wants to fill out its product line or keep its seasonal distribution channels functioning throughout the year.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Easy Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Home-Country Middlemen
58. (p. 433) 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. A. trade representatives B. trading companies C. brokers D. export management companies E. complimentary marketers For companies seeking entrance into the complicated Japanese distribution system, the Japanese trading company offers one of the easiest routes to success. The omnipresent trading companies virtually control distribution through all levels of channels in Japan. Because trading companies may control many of the distributors and maintain broad distribution channels, they provide the best means for intensive coverage of the market.
59. (p. 433) What is the basic function of the Export Trading Company Act? A. It allows U.S. companies to bypass tax laws with respect to international trading. B. It allows producers of similar products to form export trading companies. C. It allows companies to bypass trade barriers in foreign countries. D. It allows companies to earn the highest possible profits in foreign countries. E. It allows companies to combine export shipments within single containers. The Export Trading Company (ETC) Act allows producers of similar products to form export trading companies.
60. (p. 433) Another term that is commonly used to describe the activities of complementary marketing is: A. backhauling. B. demand shifting. C. piggybacking. D. shape shifting. E. skimming. Complementary marketing is commonly called as piggybacking.
61. (p. 433) Companies with marketing facilities or contacts in different countries with excess marketing capacity or a desire for a broader product line sometimes take on additional product lines for international distribution. The formal name for this type of marketing is: A. skimming. B. backhauling. C. complementary marketing. D. export marketing. E. demand shifting. Companies with marketing facilities or contacts in different countries with excess marketing capacity or a desire for a broader product line sometimes take on additional product lines for international distribution. The formal name for this type of marketing is complementary marketing.
62. (p. 433) A(n) _____ is an individual agent middleman or an agent middleman firm providing a selling service for manufacturers that normally covers only one or two markets and operates on straight commission basis. A. complementary marketer B. export management company C. Webb-Pomerene export association D. global retailer E. manufacturer's export agent The manufacturer's export agent (MEA) is an individual agent middleman or an agent middleman firm providing a selling service for manufacturers. Unlike the EMC, the MEA does not serve as the producer's export department but has a short-term relationship, covers only one or two markets, and operates on a straight commission basis.
63. (p. 434) A(n) _____ does not serve as the producer's export department but has a short-term relationship, covers only one or two markets, and operates on a straight commission basis and they do business in their own names rather than in the name of the client. A. manufacturers' retail store B. trading company C. global retailer D. manufacturer's export agent E. complementary marketer A manufacturer's export agent (MEA) does not serve as the producer's export department but has a short-term relationship, covers only one or two markets, and operates on a straight commission basis. Another principal difference is that MEAs do business in their own names rather than in the name of the client.
64. (p. 434) 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? A. The Sherman Antitrust Act B. The Federal Communications Act C. The Federal Trade Commission Act D. The Federal Food, Drug, and Cosmetic Act E. The Robinson-Patman act The Webb-Pomerene Act of 1918 allowed American business firms to join forces in export activities without being subject to the Sherman Antitrust Act.
65. (p. 434) A(n) _____ is a sales corporation 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. A. Webb-Pomerene export association B. trading company C. export management company D. export agency E. foreign sales corporation A foreign sales corporation (FSC) is a sales corporation 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.
66. (p. 434) Which of the following is NOT a type of domestic middlemen? A. Manufacturers' Retail Stores B. Trading Companies C. Foreign distributors D. Complementary Marketers E. Export Management Companies Using foreign-country middlemen moves the manufacturer closer to the market and involves the company more closely with problems of language, physical distribution, communications, and financing. Some of the more important foreign-country middlemen are manufacturer's representatives and foreign distributors.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Foreign-Country Middlemen
67. (p. 434) The WTO in 2003 ruled _____ to be in violation of international trade rules, thus starting a major trade dispute with the European Union that still simmers and occasionally sizzles. A. foreign sales corporation B. direct marketing partnerships C. trading companies D. export promotion company E. Webb-Pomerene export associations The WTO in 2003 ruled foreign sales corporations to be in violation of international trade rules, thus starting a major trade dispute with the European Union that still simmers and occasionally sizzles.
68. (p. 434) The _____ allowed American business firms to join forces in export activities without being subject to the Sherman Antitrust Act. A. Export Trading Company Act B. Roebuck-Guillaume Act of 1936 C. Webb-Pomerene Act of 1918 D. North American Free Trade Agreement E. Sarbanes-Oxley Act The Webb-Pomerene Act of 1918 allowed American business firms to join forces in export activities without being subject to the Sherman Antitrust Act.
69. (p. 435) A variety of factors affect choice of channels in a foreign market. All of the following points should be addressed prior to the selection process EXCEPT: A. identify specific target markets within and across countries. B. specify marketing goals in terms of volume, market share, and profit margin requirements. C. specify financial and personnel commitments to the development of international distribution. D. identify control, length of channels, terms of sale, and channel relationships. E. identify decision-making processes and languages of prospective middlemen. The following points should be addressed prior to the selection process: 1. Identify specific target markets within and across countries. 2. Specify marketing goals in terms of volume, market share, and profit margin requirements. 3. Specify financial and personnel commitments to the development of international distribution. 4. Identify control, length of channels, terms of sale, and channel ownership.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Factors Affecting Choice of Channels
70. (p. 435) According to the text, distribution channels vary depending on which of the following? A. Distance from manufacturer B. Language and dialect spoken in the target market C. Available distribution intermediaries D. The literacy levels in the target market E. Per capita income in the target market Distribution channels vary depending on target market size, competition, and available distribution intermediaries.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Factors Affecting Choice of Channels
71. (p. 435) Channel strategy is considered to have six specific strategic goals. These goals can be characterized as the six Cs of channel strategy. Which of the following is NOT one of these six Cs? A. Cost B. Coverage C. Capacity D. Character E. Continuity The six Cs of channel strategy are cost, capital, control, coverage, character, and continuity.
72. (p. 435) One of the key elements in distribution decisions includes ____. A. the selection of optimum container sizes B. volume discounts and rebates C. the functions performed by middlemen D. the foreign language local advertising modes E. the target market culture Key elements in distribution decisions include the functions performed by middlemen (and the effectiveness with which each is performed), the cost of their services, their availability, and the extent of control that the manufacturer can exert over middlemen activities.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Factors Affecting Choice of Channels
73. (p. 436) According to the text, one of the critical elements associated with using a particular type of middleman is ____. A. knowledge of the culture of the target market B. number of employees C. mode of transportation available for moving goods D. influence over the target market E. capital requirements Capital requirement and cash-flow patterns are considered critical elements associated with using a particular type of middleman.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Capital Requirements
74. (p. 436) In which of the following modes of distribution in the foreign market will a company have to make maximum financial investment? A. Export management companies B. Trading companies C. Export associations D. Direct sales force E. Complimentary marketers Maximum investment is usually required when a company establishes its own internal channels, that is, its own sales force.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Capital Requirements
75. (p. 436) One of the highest costs of doing business in China is the: A. money required for the transportation of the goods. B. amount of money and time required for obtaining the appropriate permits. C. cost of local advertising. D. capital required to maintain effective distribution. E. cost of customizing the products for the Chinese market. One of the highest costs of doing business in China is the capital required to maintain effective distribution.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Capital Requirements
76. (p. 436) In China, it is often necessary to use varied distribution forms to reach customers. If a company is using manufacturer's agents, a direct sales force, merchant wholesalers, and small retailers to sell goods to this massive market, which of the following Cs of channel strategy is receiving the attention of the company in its strategy process? A. Cost B. Control C. Coverage D. Capital E. Continuity Full-market coverage is required to gain the optimum volume of sales obtainable in each market, secure a reasonable market share, and attain satisfactory market penetration.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Easy Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Coverage
77. (p. 436) Which of the following modes of distribution affords the most control over the distribution channels but often at a cost that is not practical? A. Complementary marketers B. Direct sales force C. Export associations D. Trading companies E. Export management companies A company's own sales force affords the most control but often at a cost that is not practical.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Control
78. (p. 436) Sixty percent of the Japanese population lives in the _____ market area, which essentially functions as one massive city. A. Tokyo-Nagoya-Osaka B. Komaki-Tokoname-Kariya C. Nagoya-Handa-Seto D. Nishio-Okazaki-Inazawa E. Inuyama-Nisshin-Takahama Sixty percent of the Japanese population lives in the Tokyo-Nagoya-Osaka market area, which essentially functions as one massive city.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Coverage
79. (p. 437) 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? A. Character B. Continuity C. Control D. Cost E. Capital requirement Channels of distribution often pose longevity problems. 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.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Continuity
80. (p. 438) One of the reasons that channels of distribution often pose longevity problems is that ____. A. most middlemen do not maintain sufficient inventory to serve customers B. some middlemen lack product knowledge resulting in low sales volume C. most middlemen have little loyalty to their vendors D. most middlemen tend to slow down distribution to extract higher commissions E. most middlemen do not have sufficient knowledge of the target market Channels of distribution often pose longevity problems. Most agent middlemen firms tend to be small institutions. When one individual retires or moves out of a line of business, the company may find it has lost its distribution in that area.
AACSB: Analytic Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Continuity
81. (p. 438) _____ is one of the basic subject areas that should be on a checklist of criteria for evaluating middlemen serving a market. A. Knowledge of the product B. Knowledge of geography or terrain C. Knowledge of local culture and traditions D. Productivity or volume E. Reputation in the target market The checklist of criteria differs according to the type of middlemen being used and the nature of their relationship with the company. Basically, such lists are built around four subject areas: productivity or volume, financial strength, managerial stability and capability, and the nature and reputation of the business.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Locating Middlemen
82. (p. 438) According to the text, the search for prospective middlemen should begin with: A. shortlisting the middlemen. B. studying the target market. C. evaluating the financial resources available with the manufacturing company. D. exploring the financial investment required for using own sales force in the target market. E. understanding the mission and vision of the manufacturing firm. The search for prospective middlemen should begin with study of the market and determination of criteria for evaluating middlemen servicing that market.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 15-03 How distributive patterns affect the various aspects of international marketing Topic: Locating Middlemen
83. (p. 438) Experienced exporters suggest that the only way to select a middleman is: A. to conduct a background check on all the distributors available in the target market. B. to issue a request-for-proposal (RFP) to all distributors in the target market and evaluate their responses. C. consult other manufacturers of the similar products and select the distributor recommended by them. D. consult trade organizations and select the distributor recommended by them. E. to personally talk to ultimate users of your product to find whom they consider to be the best distributors. Experienced exporters suggest that the only way to select a middleman is to go personally to the country and talk to ultimate users of your product to find whom they consider to be the best distributors.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Hard Learning Objective: 15-4 The functions Learning Objective: advantages Learning Objective: and disadvantages of various kinds of middlemen Topic: Selecting Middlemen
84. (p. 439) Particularly, when cultural distances are great, the company should use which of the following techniques for motivating middlemen? A. Communication B. Financial rewards C. Psychological rewards D. Company support E. Corporate rapport Motivational techniques that can be employed to maintain middleman interest and support for the product may be grouped into five categories: financial rewards, psychological rewards, communications, company support, and corporate rapport. In all instances, but particularly when cultural distances are great, the company should maintain a continuing flow of communication in the form of letters, newsletters, and periodicals to all its middlemen.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 15-4 The functions Learning Objective: advantages Learning Objective: and disadvantages of various kinds of middlemen Topic: Motivating Middlemen
85. (p. 439) On all levels of distribution, there is a clear correlation between the middleman's _____ and sales volume produced. A. reputation in the target market B. motivation C. control over the target market D. closeness to the manufacturer E. degree of freedom On all levels, the middleman's motivation is clearly correlated with sales volume. Motivational techniques that can be employed to maintain middleman interest and support for the product may be grouped into five categories: financial rewards, psychological rewards, communications, company support, and corporate rapport.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 15-4 The functions Learning Objective: advantages Learning Objective: and disadvantages of various kinds of middlemen Topic: Motivating Middlemen
86. (p. 441) Apex Corporation is a wholesaler for Global Electric Company in the French market. Global Electric discovered that Apex was diverting some of the goods of the Global Electric that Apex purchased to the English market where Apex could make higher profits. Apex was able to sell at cheaper prices in the English market than authorized dealers because Global Electric sold its goods at cheaper prices in France. Which of the forms of business is Apex engaged in with respect to what it is doing with GE products? A. Black marketing B. Parallel importing C. Backwashing D. Industrial piracy E. Smuggling A company's goods intended for one country are sometimes diverted through distributors to another country, where they compete with existing retail or wholesale organizations. This is known as parallel importing or secondary wholesaling.
AACSB: Reflective thinking Bloom's: Application Difficulty Level: Easy Learning Objective: 15-4 The functions Learning Objective: advantages Learning Objective: and disadvantages of various kinds of middlemen Topic: Controlling Middlemen
87. (p. 441) Parallel importing is also known as ____. A. secondary wholesaling B. black marketing C. backwashing D. industrial piracy E. smuggling A company's goods intended for one country are sometimes diverted through distributors to another country, where they compete with existing retail or wholesale organizations. This is known as parallel importing or secondary wholesaling.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 15-4 The functions Learning Objective: advantages Learning Objective: and disadvantages of various kinds of middlemen Topic: Controlling Middlemen
88. (p. 441) E-commerce is more developed in _____ than the rest of the world, partly because of the vast number of people who own personal computers and partly because of the much lower cost of access to the Internet than found elsewhere. A. China B. Brazil C. Switzerland D. South Africa E. the United States E-commerce is more developed in the United States than the rest of the world, partly because of the vast number of people who own personal computers and partly because of the much lower cost of access to the Internet than found elsewhere.
89. (p. 441) Technically, e-commerce is a form of ____. A. direct selling B. parallel selling C. dual selling D. mass selling E. targeted selling Technically, e-commerce is a form of direct selling; however, because of its newness and the unique issues associated with this form of distribution, it is important to differentiate it from other types of direct marketing.
90. (p. 448) In ____, red color is associated with socialism. A. the United States B. China C. Brazil D. Uruguay E. Spain In Spain, red color is associated with socialism.
Chapter 16 Integrated Marketing Communications and International Advertising Answer Key
1. (p. 454) For most companies, trade shows and direct selling are the major components in the marketing communications mix. FALSE For most companies, advertising and personal selling are the major components in the marketing communications mix.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 16-01 Local market characteristics that affect the advertising and promotion of products Topic: Sales Promotions in International Markets
2. (p. 454) Sales promotions are marketing activities that stimulate consumer purchases and improve retailer or middlemen effectiveness and cooperation. TRUE Sales promotions are marketing activities that stimulate consumer purchases and improve retailer or middlemen effectiveness and cooperation.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 16-02 The strengths and weaknesses of sales promotions and public relations in global marketing Topic: Sales Promotions in International Markets
3. (p. 454) Contests, sweepstakes, sponsorship of special events such as concerts are techniques used for maintaining and improving public relations. FALSE Cents-off, in-store demonstrations, samples, coupons, gifts, product tie-ins, contests, sweepstakes, sponsorship of special events such as concerts, the Olympics, fairs, and point-ofpurchase displays are types of sales promotion devices.
4. (p. 455) Sales promotions are long-term efforts directed to the consumer or retailer. FALSE Sales promotions are short-term efforts directed to the consumer or retailer.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 16-02 The strengths and weaknesses of sales promotions and public relations in global marketing Topic: Sales Promotions in International Markets
5. (p. 461) Of all the elements of the marketing mix, decisions involving advertising are those most often affected by cultural differences among country markets. TRUE Of all the elements of the marketing mix, decisions involving advertising are those most often affected by cultural differences among country markets.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 16-02 The strengths and weaknesses of sales promotions and public relations in global marketing Topic: International Advertising
6. (p. 461) While developing an international advertisement campaign, the first step of the process is selecting effective media. FALSE The steps to be performed for developing an international advertisement campaign are: Perform marketing research, Specify the goals of the communication, Develop the most effective message(s) for the market segments selected, Select effective media, Compose and secure a budget based on what is required to meet goals, Execute the campaign, Evaluate the campaign relative to the goals specified.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 16-02 The strengths and weaknesses of sales promotions and public relations in global marketing Topic: International Advertising
7. (p. 462) A market offering is a bundle of satisfactions that the buyer receives. TRUE A market offering really is a bundle of satisfactions the buyer receives.
AACSB: Reflective thinking Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 16-03 When global advertising is most effective; when modified advertising is necessary Topic: Product Attribute and Benefit Segmentation
8. (p. 463) Different cultures often seek the same value or benefits from the primary function of a product. TRUE Different cultures often seek the same value or benefits from the primary function of a product for example, the ability of an automobile to get from point A to point B, a camera to take a picture, or a wristwatch to tell time.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Easy Learning Objective: 16-03 When global advertising is most effective; when modified advertising is necessary Topic: Product Attribute and Benefit Segmentation
9. (p. 467) One of the reasons that a marketing communication may fail is that the message received by the intended audience is not understood because of cultural interpretations. TRUE International communications may fail for a variety of reasons: A message may not get through because of media inadequacy, the message may be received by the intended audience but not be understood because of different cultural interpretations, or the message may reach the intended audience and be understood but have no effect because the marketer did not correctly assess the needs and wants or even the thinking processes of the target market.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 16-04 The communication process and advertising misfi res Topic: Global Advertising and the Communications Process
10. (p. 467) If the message from the source is converted into effective symbolism for transmission to a receiver, the message is decoded. FALSE If the message from the source is converted into effective symbolism for transmission to a receiver, the message is encoded.
11. (p. 467) Europe is considered a single homogeneous market for all products. promotional strategy would mean identifying a market segment across all European countries and designing a promotional concept appealing to market segment similarities. FALSE Europe will never be a single homogeneous market. A pan- European
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 16-03 When global advertising is most effective; when modified advertising is necessary Topic: Regional Segmentation
12. (p. 467) A marketer sends his message to his target audience through newspapers. Here newspaper acts as a feedback channel. FALSE In this case, since the marketer is sending his message to his target audience through newspapers, newspaper acts as a message channel.
13. (p. 468) Problems of literacy, media availability, and types of media create problems in the communications process at the decoding step. FALSE Problems of literacy, media availability, and types of media create challenges in the communications process at the encoding step.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 16-04 The communication process and advertising misfi res Topic: Global Advertising and the Communications Process
14. (p. 471) Errors at the receiving end do not occur if the message is encoded properly. FALSE Errors at the receiver end of the process generally result from a combination of factors: an improper message resulting from incorrect knowledge of use patterns, poor encoding producing a meaningless message, poor media selection that does not get the message to the receiver, or inaccurate decoding by the receiver so that the message is garbled or incorrect.
15. (p. 471) The encoding step of the communications process is important as a check on the effectiveness of the other steps. FALSE The feedback step of the communications process is important as a check on the effectiveness of the other steps.
16. (p. 471) An example of noise in the communications process is competitive advertising. TRUE Noise comprises external influences, such as competitive advertising, other sales personnel, and confusion at the receiving end, that can detract from the ultimate effectiveness of the communication.
17. (p. 471) Comparative advertising is considered legal in Germany. FALSE Comparative advertising is illegal in Germany.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 16-05 The effects of a single European market on advertising Topic: Legal Constraints
18. (p. 473) Physical gestures are one of the major barriers to effective communication through advertising. FALSE Language is one of the major barriers to effective communication through advertising.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 16-05 The effects of a single European market on advertising Topic: Linguistic Limitations
19. (p. 473) No advertising is allowed on the BBC in the United Kingdom. TRUE No advertising is allowed on the BBC in the United Kingdom.
20. (p. 477) Nearly every sizable nation essentially has the same kinds of media. TRUE Although nearly every sizable nation essentially has the same kinds of media, a number of specific considerations, problems, and differences are encountered from one nation to another.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 16-06 The effect of limited media; excessive media; and government regulations on advertising and promotion budgets Topic: Tactical Considerations
21. (p. 479) A majority of the population of less developed countries can be reached readily through the traditional mass medium of advertising. FALSE A majority of the population of less developed countries cannot be reached readily through the traditional mass medium of advertising.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 16-06 The effect of limited media; excessive media; and government regulations on advertising and promotion budgets Topic: Tactical Considerations
22. (p. 481) Satellite TV and the Internet have become major communications media in almost all nations. FALSE Radio and television have become major communications media in almost all nations.
23. (p. 482) One of the drawbacks of satellites is also their strength, that is, their ability to span a wide geographical region covering many different cultures. TRUE One of the drawbacks of satellites is also their strength, that is, their ability to span a wide geographical region covering many different country markets. That means a single message is broadcast throughout a wide area. This span may not be desirable for some products
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 16-06 The effect of limited media; excessive media; and government regulations on advertising and promotion budgets Topic: Tactical Considerations
24. (p. 483) Industrial advertisers rarely use direct mail for advertising. FALSE Industrial advertisers are heavy mail users and rely on catalogs and sales sheets to generate large volumes of international business.
25. (p. 455) The role of public relations is to create good relationships with the popular press and other media to help companies communicate messages to their publicscustomers, the general public, and governmental regulators. TRUE Creating good relationships with the popular press and other media to help companies communicate messages to their publicscustomers, the general public, and governmental regulatorsis the role of public relations (PR).
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 16-02 The strengths and weaknesses of sales promotions and public relations in global marketing Topic: International Public Relations
26. (p. 454) _____ communications are composed of advertising, sales promotions, trade shows, personal selling, direct selling, and public relations. A. International B. Integrated marketing C. Public D. Management E. Grapevine Integrated marketing communications (IMC) are composed of advertising, sales promotions, trade shows, personal selling, direct selling, and public relations.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 16-01 Local market characteristics that affect the advertising and promotion of products Topic: Sales Promotions in International Markets
27. (p. 454) Integrated marketing communications are composed of all of the following EXCEPT: A. advertising. B. sales promotions. C. trade shows. D. public relations. E. mass customization. Integrated marketing communications (IMC) are composed of advertising, sales promotions, trade shows, personal selling, direct selling, and public relations.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 16-01 Local market characteristics that affect the advertising and promotion of products Topic: Sales Promotions in International Markets
28. (p. 454) For most companies, which of the following are the major components in the marketing communications mix? A. Public relations and advertising B. Direct selling and trade shows C. Advertising and personal selling D. Public relations and sales promotions E. Direct selling and sales promotions For most companies, advertising and personal selling are the major components in the marketing communications mix.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 16-01 Local market characteristics that affect the advertising and promotion of products Topic: Sales Promotions in International Markets
29. (p. 454) Which of the following has the general marketing goals of stimulating consumer purchases and improving retailer or middlemen effectiveness and cooperation? A. Sales promotion B. Advertising C. Trade shows D. Direct selling E. Public relations Sales promotions are marketing activities that stimulate consumer purchases and improve retailer or middlemen effectiveness and cooperation.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 16-02 The strengths and weaknesses of sales promotions and public relations in global marketing Topic: Sales Promotions in International Markets
30. (p. 454) Sales promotions are _____ efforts directed to the consumer or retailer to achieve such specific objectives as consumer product trial or immediate purchase. A. long-term B. mid-term C. annual D. short-term E. bi-annual Sales promotions are short-term efforts directed to the consumer or retailer to achieve such specific objectives as consumer product trial or immediate purchase, consumer introduction to the store or brand, gaining retail point-of-purchase displays, encouraging stores to stock the product, and supporting and augmenting advertising and personal sales efforts.
31. (p. 454) In-store demonstrations, samples, coupons, contests, and sweepstakes are most likely used for ____. A. personal selling B. sales promotions C. trade shows D. direct selling E. public relations Cents-off, in-store demonstrations, samples, coupons, gifts, product tie-ins, contests, sweepstakes, sponsorship of special events such as concerts, the Olympics, fairs, and point-ofpurchase displays are types of sales promotion devices.
32. (p. 454) All of the following are specific objectives of sales promotion EXCEPT: A. immediate purchase. B. consumer introduction to the store. C. gaining retail point-of-purchase displays. D. building brand loyalty. E. encouraging stores to stock the product. Sales promotions are short-term efforts directed to the consumer or retailer to achieve such specific objectives as consumer product trial or immediate purchase, consumer introduction to the store or brand, gaining retail point-of-purchase displays, encouraging stores to stock the product, and supporting and augmenting advertising and personal sales efforts.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 16-02 The strengths and weaknesses of sales promotions and public relations in global marketing Topic: Sales Promotions in International Markets
33. (p. 455) An especially effective promotional tool when the product concept is new or has a very small market share is ____. A. sponsorship of special events such as concerts B. sweepstakes C. product sampling D. contests E. product tie-ins An especially effective promotional tool when the product concept is new or has a very small market share is product sampling.
34. (p. 455) Creating good relationships with the popular press and other media to help companies communicate messages to their publicscustomers, the general public, and governmental regulatorsis the role of ____. A. trade shows B. direct selling C. public relations D. personal selling E. sales promotion Creating good relationships with the popular press and other media to help companies communicate messages to their publicscustomers, the general public, and governmental regulatorsis the role of public relations.
35. (p. 455) Which of the following elements of integrated marketing communications is related to encouraging the press to cover positive stories about companies and managing unfavorable rumors, stories, and events? A. Public relations B. Direct selling C. Trade shows D. Personal selling E. Sales promotion The role of public relations is to encourage the press to cover positive stories about companies and manage unfavorable rumors, stories, and events.
36. (p. 457) International public relations, sales promotion, and other IMC efforts work best when coordinated and reinforced with: A. trade shows and direct selling. B. personal selling and trade shows. C. a consistent advertising campaign. D. personal selling and direct selling. E. management directive outlining costs, profit-projections, and outside accounting supervision. International public relations, sales promotion, and other IMC efforts work best when coordinated and reinforced with a consistent advertising campaign.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Easy Learning Objective: 16-02 The strengths and weaknesses of sales promotions and public relations in global marketing Topic: Sales Promotions in International Markets
37. (p. 460) Which industry is the global leader in advertising expenditures? A. Food B. Pharmaceuticals C. Automotive D. Electronics, computers E. Personal care Refer exhibit 16.2. Automotive industry is the global leader in advertising expenditures.
38. (p. 461) Of all the elements of the marketing mix, decisions involving _____ are those most often affected by cultural differences among country markets. A. direct selling B. public relations C. the Internet D. advertising E. sales promotion Of all the elements of the marketing mix, decisions involving advertising are those most often affected by cultural differences among country markets.
39. (p. 461) Which of the following organizations has spent the highest amount on advertising during the years 2007 and 2008? A. Coca-Cola Co. B. McDonald's Corp. C. Kraft Foods D. Procter & Gamble Co. E. General Motors Refer exhibit 16.1. Procter & Gamble Co. has spent the highest amount on advertising during the years 2007 and 2008.
40. (p. 461) While developing an international advertisement campaign, which of the following is the first step of the process? A. Compose and secure a budget based on what is required to meet goals. B. Specify the goals of the communication. C. Select effective media. D. Execute the campaign. E. Perform marketing research. The steps to be performed for developing an international advertisement campaign are: Perform marketing research, Specify the goals of the communication, Develop the most effective message(s) for the market segments selected, Select effective media, Compose and secure a budget based on what is required to meet goals, Execute the campaign, Evaluate the campaign relative to the goals specified.
41. (p. 461) Of all the elements of the marketing mix, decisions involving which of the following are those most often affected by cultural differences among country markets? A. Price of the product B. Benefits offered by the product C. Services offered along with the product D. The place of offering the product E. The method of advertising the product Of all the elements of the marketing mix, decisions involving advertising are those most often affected by cultural differences among country markets.
42. (p. 462) Of the seven steps in developing international advertising, _____ almost always represents the most daunting task for international marketing managers. A. developing messages B. selecting effective media C. executing the campaign D. composing and securing a budget E. specifying the goals of the communication Of the seven steps in developing international advertising, developing messages almost always represents the most daunting task for international marketing managers.
43. (p. 462) Which of the following is LEAST likely to be an international advertising goal? A. Chinese manufacturers establishing new brands as their economy expands. B. Gillette Company attempting to gain distributor cooperation in Japan. C. Unilever introducing a new product-line extension. D. Aeroflot seeking to upgrade its image. E. Coca-Cola maintaining its global brand stature. The goals of advertising around the world vary substantially. All the goals mentioned in the question are valid international advertising goals except Gillette Company attempting to gain distributor cooperation in Japan.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Hard Learning Objective: 16-03 When global advertising is most effective; when modified advertising is necessary Topic: Advertising Strategy and Goals
44. (p. 462) In many markets standardized products may be marketed globally. But, because of differences in culture, the products will require: A. a different advertising appeal. B. a different distribution pattern. C. a consistent promotional message. D. an alternative benefit-cost calculation. E. a different packaging. In many cases, standardized products may be marketed globally. But because of differences in cultures, they still require a different advertising appeal in different markets.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 16-03 When global advertising is most effective; when modified advertising is necessary Topic: Advertising Strategy and Goals
45. (p. 463) A market offering most likely refers to the: A. tangible product. B. service. C. price of the product. D. image of the product. E. bundle of satisfactions the buyer receives. A market offering really is a bundle of satisfactions the buyer receives.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 16-03 When global advertising is most effective; when modified advertising is necessary Topic: Product Attribute and Benefit Segmentation
46. (p. 467) During which step of the international communications process, the receiver of the message interprets symbolism transmitted from the information source? A. Selecting a message B. Encoding C. Selecting a message channel D. Decoding E. Identifying the sources of noise The interpretation by the receiver of the symbolism transmitted from the information source is known as decoding.
47. (p. 467) In the international communications process, once a message to communicate has been decided, it goes to the ____ stage. A. feedback B. receiver C. message channel selection D. decoding E. encoding Once a message to be communicated is finalized, it must be encoded. During encoding the message from the source converted into effective symbolism for transmission to a receiver.
48. (p. 467) In an international communication process carried out by a company, the sales force of the company acts as a ____. A. decoder B. message source C. receiver D. message channel E. noise The sales force and/or advertising media convey the encoded message to the intended receiver and thus it acts as a message channel.
49. (p. 467) In an international communications process, an international marketing executive with a product message to communicate acts as a ____. A. decoder B. message source C. receiver D. message channel E. noise In an international communications process, an international marketing executive with a product message to communicate acts as a message source.
50. (p. 467) Which of the following elements of a communication process can be best defined as the interpretation by the receiver of the symbolism transmitted from the information source? A. Encoding B. Selecting a message C. Decoding D. Selecting a message channel E. Evaluating the feedback Decoding is defined as the interpretation by the receiver of the symbolism transmitted from the information source.
51. (p. 468) In an advertisement of a perfume, the perfume was presented against a backdrop of rain that, for Europeans, symbolized a clean, cool, refreshing image but to Africans was a symbol of fertility. The ad prompted many viewers to ask if the perfume was effective against infertility. This miscommunication indicates a problem associated with which of the following steps of an international communication process? A. Encoding the message B. Decoding the message C. Receiving the message D. Selecting an appropriate channel of communication E. Providing feedback The encoding step causes problems even with a "proper" message. At this step, such factors as color, timing, values, beliefs, humor, tastes, and appropriateness of spokespersons can cause the international marketer to symbolize the message incorrectly.
AACSB: Reflective thinking Bloom's: Application Difficulty Level: Hard Learning Objective: 16-04 The communication process and advertising misfi res Topic: Global Advertising and the Communications Process
52. (p. 468) Which of the following elements of a communication process refers to external influences, such as competitive advertising, other sales personnel, and confusion at the receiving end that can detract from the ultimate effectiveness of the communication? A. Selecting a message source B. Encoding C. Selecting a message channel D. Decoding E. Noise Noise comprises various external influences, such as competitive advertising, other sales personnel, and confusion at the receiving end, that can detract from the ultimate effectiveness of the communication.
53. (p. 468) Janet is assisting the IMC manager with the design and language to be used in an upcoming promotional campaign. The manager knows what she wants to say but is having trouble coming up with the right language. Janet is trying to help her in: A. identifying the various possible feedbacks to the message. B. encoding the message. C. choosing the appropriate channel for the message. D. decoding the message. E. minimizing noise in the communication channel. The encoding step can cause problems even with a "proper" message. At this step, such factors as color, timing, values, beliefs, humor, tastes, and appropriateness of spokespersons can cause the international marketer to symbolize the message incorrectly.
AACSB: Reflective thinking Bloom's: Application Difficulty Level: Easy Learning Objective: 16-04 The communication process and advertising misfi res Topic: Global Advertising and the Communications Process
54. (p. 468) After running a series of ads promoting the benefits of her company's skin care products, Kathy learns some consumers drank her product rather than applying it to their skin. Kathy has received ____. A. a feedback B. an encoded message C. a source of information D. a decoded message E. a noise Information about the effectiveness of the message that flows from the receiver (the intended target) back to the information source for evaluation of the effectiveness of the process is known as feedback.
AACSB: Reflective thinking Bloom's: Application Difficulty Level: Easy Learning Objective: 16-04 The communication process and advertising misfi res Topic: Global Advertising and the Communications Process
55. (p. 468) Once a message, in the international communications process, has been decoded, it goes to the _____ stage. A. feedback B. receiver C. message channel selection D. encoding E. identifying the message source In a communication process, during the receiver stage, a consumer takes certain actions to respond to a decoded message.
56. (p. 468) According to the text, which of the following creates a problem in the communications process at the encoding step? A. Problems of literacy B. Amount of budget C. Seasonality of the product D. Government regulations E. Market segmentation Problems of literacy, media availability, and types of media create challenges in the communications process at the encoding step.
57. (p. 468) According to the text, problems of literacy, media availability, and types of media create challenges in the communications process at the _____ step. A. feedback B. decoding C. message channel selection D. encoding E. message selection Problems of literacy, media availability, and types of media create challenges in the communications process at the encoding step.
58. (p. 468) With reference to a communication process, using the Internet as a medium when only a small percentage of an intended market has access to the Internet, is an example of error related to: A. feedback. B. decoding. C. message channel selection. D. encoding. E. message selection. Errors such as using the Internet as a medium when only a small percentage of an intended market has access to the Internet, or using print media for a channel of communications when the majority of the intended users cannot read or do not read the language in the medium, are examples of ineffective media channel selection in the communications process.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Easy Learning Objective: 16-04 The communication process and advertising misfi res Topic: Global Advertising and the Communications Process
59. (p. 470) Decoding problems are generally caused by: A. improper encoding. B. poor media choice. C. inadequate media budget. D. poor copywriting team. E. cultural bias. Decoding problems are generally created by improper encoding.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 16-04 The communication process and advertising misfi res Topic: Global Advertising and the Communications Process
60. (p. 471) Which of the following statements about comparative advertising laws is most correct? A. There really are no laws governing comparative advertising in the international arena. B. Almost all laws governing this behavior are essentially the same. C. There are laws in the Western nations governing this behavior and not in most other countries. D. Laws vary from country to country with respect to the subject. E. There are no laws governing comparative advertising in any country. Laws that control comparative advertising vary from country to country. For example in Germany comparative advertising is illegal whereas it is clearly authorized in the United Kingdom, Ireland, Spain, and Portugal.
61. (p. 471) Which of the following steps of a communications process is important as a check on the effectiveness of the other steps? A. Selecting a proper message B. Encoding the message C. Selecting an appropriate channel of communication D. Decoding the message E. Feedback The feedback step of the communications process is important as a check on the effectiveness of the other steps. Companies that do not measure their communications efforts are likely to allow errors of source, encoding, media selection, decoding, or receiver to continue longer than necessary.
62. (p. 472) All of the following statements are true regarding legal constraints on advertising EXCEPT: A. in Germany, it is illegal to use any comparative terminology. B. Chinese government has banned pigs in advertising. C. in Kuwait, advertising is not allowed on the government-controlled TV network. D. the European Union limits product placement in foreign programming but not EU-produced material. E. Russian law forbids subliminal advertising. In Kuwait, the government-controlled TV network allows only 32 minutes of advertising per day, in the evening.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 16-05 The effects of a single European market on advertising Topic: Legal Constraints
63. (p. 473) Which of the following are especially vulnerable as EU member states decide which area of regulation should apply to these services? A. Newspaper advertising B. Radio advertising C. Outdoor services D. Personal selling E. Internet services Internet services are especially vulnerable as EU member states decide which area of regulation should apply to these services.
64. (p. 473) _____ is one of the major barriers to effective communication through advertising. A. Language B. Ideology C. Technology D. Distance E. Power structure Language is one of the major barriers to effective communication through advertising.
65. (p. 473) According to the text, Austria is a best illustration of how media choice can be distorted due to ____. A. literacy levels B. government laws C. cultural differences D. advertising taxation E. standard of living Some countries have special taxes that apply to advertising, which might restrict creative freedom in media selection. The tax structure in Austria best illustrates how advertising taxation can distort media choice by changing the cost ratios of various media.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 16-05 The effects of a single European market on advertising Topic: Legal Constraints
66. (p. 475) According to one advertising executive, "International advertising is almost uniformly dreadful mostly because people: A. don't know how to read." B. don't like advertising in general." C. don't understand language and culture." D. don't have time to watch advertisement." E. become conditioned to ignore advertising." The problems associated with communicating to people in diverse cultures present one of the great creative challenges in advertising. One advertising executive puts it bluntly: "International advertising is almost uniformly dreadful mostly because people don't understand language and culture."
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 16-05 The effects of a single European market on advertising Topic: Cultural Diversity
67. (p. 475) According to the text, the only way to avoid linguistic problems in advertising communication is: A. creating an entirely new advertisement for the new market. B. using the best language experts for translating the advertisement. C. developing a new version of the product for the new market. D. in-country testing with the target consumer group. E. avoiding verbal communication and used only facial expressions and physical gestures in the advertisement. In-country testing with the target consumer group is the only way to avoid linguistic problems in advertising communications.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 16-05 The effects of a single European market on advertising Topic: Linguistic Limitations
68. (p. 477) With respect to advertising, _____ is especially important when a budget is small or where there are severe production limitations. A. color B. language C. technology D. creativity E. slogans Creativity is especially important when a budget is small or where there are severe production limitations, such as poor-quality printing and a lack of high-grade paper.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 16-06 The effect of limited media; excessive media; and government regulations on advertising and promotion budgets Topic: Production and Cost Limitations
69. (p. 478) Which of the following statements is true regarding the cost of the media? A. Media prices remain fixed in all the countries. B. Agency space discounts are rarely split with the client. C. The cost of reaching a prospect through advertising is independent of the agent's bargaining ability. D. The per contract cost for advertisements varies widely from country to country. E. Britain has a fixed rate card for advertising slots. Media prices are susceptible to negotiation in most countries. Agency space discounts are often split with the client to bring down the cost of media. The advertiser may find that the cost of reaching a prospect through advertising depends on the agent's bargaining ability. The per contract cost varies widely from country to country.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 16-06 The effect of limited media; excessive media; and government regulations on advertising and promotion budgets Topic: Tactical Considerations
70. (p. 479) One head of an Italian advertising agency commented about his country: "One fundamental rule. ____." A. All consumers are alike B. You cannot buy what you want C. Television is always the best communication vehicle D. Literacy is not a problem anymore E. Only Americans like sex and humor in advertising One head of an Italian advertising agency commented about his country: "One fundamental rule. You cannot buy what you want."
71. (p. 479) Asahi' is the largest newspaper of ____. A. Germany B. Spain C. Japan D. Mexico E. China Asahi' is the largest newspaper of Japan.
72. (p. 481) The president of the Mexican National Advertisers Association charged that newspaper circulation figures are grossly exaggerated. He suggested that as a rule, agencies should: A. divide the circulation data in two and take the result with a grain of salt. B. avoid using newspaper as a medium of advertisement in Mexico. C. use newspaper circulation figures from other countries and project them for Mexico. D. consider television as the best medium of advertisement in Mexico. E. use magazines for print advertisements rather than newspaper. The president of the Mexican National Advertisers Association charged that newspaper circulation figures are grossly exaggerated. He suggested that as a rule, agencies should divide these figures in two and take the result with a grain of salt.
73. (p. 481) According to the text, one of the reasons for the notably low use of foreign national consumer magazines by international advertisers is that: A. consumers in most of the countries rarely read magazines. B. few magazines have a large circulation and provide reliable circulation data. C. in most international markets, consumers read American magazines. D. international magazines are generally incompatible with company values. E. advertising in magazines is costly as compared to any other medium of advertisement. The use of foreign national consumer magazines by international advertisers has been notably low for many reasons. Few magazines have a large circulation or provide dependable circulation figures.
74. (p. 481) Which of the following are considered to be major communications media in most countries? A. Newspapers and magazines B. Radio and television C. Newspapers and the Internet D. Billboards and television E. Radio and newspapers Possibly because of their inherent entertainment value, radio and television have become major communications media in almost all nations.
75. (p. 482) _____ was the first to broadcast across Asia. A. Star TV B. CNN C. ESPN D. MTV E. Al-Jazeera Star TV was the first to broadcast across Asia.
76. (p. 482) According to the text, one of the drawbacks of satellites is: A. the cost of creating an advertisement with high picture quality for the satellite television. B. the limited reach of the satellite television. C. the monopoly of small number of satellite service providers. D. the government regulations placed on advertisements broadcasted using satellite channels. E. their ability to span a wide geographical region covering many different country markets. One of the drawbacks of satellites is also their strength, that is, their ability to span a wide geographical region covering many different country markets. That means a single message is broadcast throughout a wide area. This span may not be desirable for some products.
77. (p. 483) _____ is an innovation that will make regional advertising in diverse cultures easier than it presently is when using cable or satellite television. It allows ESPN, which offers this service, to fill visual real estateblank walls, streets, stadium sidingswith computer-generated visuals that look like they belong in the scene. A. Princeton Video Imaging B. Texas Digital Imaging C. Massachusetts Video Imaging D. Texas Visual Imaging E. Princeton Digital Imaging PVI (Princeton Video Imaging) is an innovation that will make regional advertising in diverse cultures easier than it presently is when using cable or satellite television. PVI allows ESPN, which offers this service, to fill visual real estateblank walls, streets, stadium sidingswith computer-generated visuals that look like they belong in the scene.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 16-06 The effect of limited media; excessive media; and government regulations on advertising and promotion budgets Topic: Tactical Considerations
78. (p. 483) Direct mail is an unpopular medium in Chile because: A. the literacy level in Chile is extremely low. B. the receiver must pay for part of the cost of the direct mail piece. C. the direct mail uses paper and hence it is considered as a threat to the environment. D. the reach of the direct mail is extremely limited in Chile. E. the direct mail communication in Chile is governed by complicated government regulations. In Chile, direct mail is virtually eliminated as an effective medium because the sender pays only part of the mailing fee; the letter carrier must collect additional postage for every item delivered. Obviously, advertisers cannot afford to alienate customers by forcing them to pay for unsolicited advertisements.
79. (p. 483) It has emerged as a viable medium for advertising and should be included in a company's possible media mix. It is limited in its penetration of households globally and for consumer products, its major limitation is coverage. This media suffers from issues such as difficulty in assessing taxes, unfair competition, import duties, and privacy. Also it is difficult to control this media. Identify the media in the discussion. A. Radio B. Direct mail C. Magazines D. Newspapers E. The Internet The media being discussed in the question is the Internet. Although still evolving, the Internet has emerged as a viable medium for advertising and should be included in a company's possible media mix.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 16-06 The effect of limited media; excessive media; and government regulations on advertising and promotion budgets Topic: Tactical Considerations
80. (p. 484) According to a survey, the most visited Web sites in France are ____. A. Yahoo! sites B. Microsoft sites C. Wikipedia sites D. T-Online sites E. Google sites Refer exhibit 16.6. According to a survey, the most visited Web sites in France are Google sites.
81. (p. 484) According to the text, for consumer products, which of the following is the major limitation of the Internet? A. Knowledge of how to use the Internet B. Coverage of the Internet C. Government regulations on the use of the Internet D. Difficulty in tracking the effectiveness of advertisements on the Internet E. Cost of using the Internet For consumer products, the major limitation of the Internet is coverage.
82. (p. 485) According to the text, the new social media permits consumers to ____. A. obtain discounts on the brands they endorse on their blogs B. obtain free internet access that is supported by brand ads C. create content about brands whether the marketers of those brands like it or not D. contact the manufacturer directly about warranty issues E. become authorized virtual brand agents for the product manufacturers Word-of-mouth (WOM) advertising and peer recommendations have always been key influencers of brand choice, but the power of the Internet has changed the pace and reach of WOM. Now with the help of the Internet, consumers can create content about brands whether the marketers of those brands like it or not.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Easy Learning Objective: 16-06 The effect of limited media; excessive media; and government regulations on advertising and promotion budgets Topic: Tactical Considerations
83. (p. 485) Blogs, social networking, and video sharing are examples of media commonly known as ____. A. global media B. local media C. popular media D. social media E. widespread media Blogs, social networking, and video sharing are examples of social media.
84. (p. 488) In which of the following countries, the average time spent on social networking sites (measured in terms of hours per user) is the highest? A. Britain B. United States C. Australia D. Spain E. Italy In Australia, the average time spent on social networking sites (measured in terms of hours per user) is the highest.
85. (p. 488) According to the text, billboards are especially useful in countries: A. with high income levels. B. where the laws governing the Internet are very complicated. C. with high illiteracy rates. D. where maximum households are below the poverty line. E. where people prefer buying in small quantities. Billboards are especially useful in countries with high illiteracy rates.
86. (p. 489) _____ is clearly the neon capital of the world. A. Paris B. Hong Kong C. London D. Sydney E. Bras'lia Hong Kong is clearly the neon capital of the world, with Tokyo's Ginza and New York's Times Square running close seconds.
87. (p. 489) A new medium of advertising includes private cars that are painted with advertisements for products and serve as moving billboards as they travel around. This medium of advertising known as Publicoche' is generally found in ____. A. the United States B. India C. Thailand D. Spain E. Uganda In Spain, a new medium includes private cars that are painted with advertisements for products and serve as moving billboards as they travel around. This system, called Publicoche (derived from the words publicidad, meaning advertising, and coche, meaning car), has 75 cars in Madrid.
88. (p. 489) Compensation arrangements for advertising agencies throughout the world are based on the U.S. system of _____ percent commissions. A. 5 B. 10 C. 15 D. 20 E. 25 Compensation arrangements for advertising agencies throughout the world are based on the U.S. system of 15 percent commissions.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 16-06 The effect of limited media; excessive media; and government regulations on advertising and promotion budgets Topic: Campaign Execution and Advertising Agencies
89. (p. 491) Which of the following statements regarding how Brazilians perceive advertisements is true? A. Most Brazilians consider ads entertaining and enjoyable. B. Most Brazilians believe that advertising often makes them buy things they do not really need. C. Most Brazilians believe that advertising means higher prices. D. Most Brazilians believe that advertisements do not provide any useful information. E. Most Brazilians believe that advertisements are often deceptive. Most Brazilians consider ads entertaining and enjoyable.
AACSB: Reflective thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 16-06 The effect of limited media; excessive media; and government regulations on advertising and promotion budgets Topic: International Control of Advertising: Broader Issues
90. (p. 491) Demands for regulation of advertising _____ is a trend appearing in both industrialized and developing countries. A. of medicines B. aimed at children C. of alcohol D. aimed at teenagers E. of tobacco Demands for regulation of advertising aimed at children is a trend appearing in both industrialized and developing countries.
Chapter 17 Personal Selling and Sales Management Answer Key
1. (p. 496) The first step in managing a sales force is its design. TRUE The first step in managing a sales force is its design.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 17-02 The considerations in designing an international sales force Topic: Designing the Sales Force
2. (p. 496) Selling in relationship-oriented countries will require the most complete local knowledge possessed only by natives. TRUE Selling in relationship-oriented countries such as Japan will require the most complete local knowledge possessed only by natives.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 17-02 The considerations in designing an international sales force Topic: Designing the Sales Force
3. (p. 498) The number of companies relying on expatriate personnel is increasing. FALSE The number of companies relying on expatriate personnel is declining as the volume of world trade increases and as more companies use locals to fill marketing positions.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 17-03 The steps to recruiting three types of international salespeople Topic: Expatriates
4. (p. 498) Only limited number of high-caliber personnel are willing to live abroad for extended periods as expatriates. TRUE The chief disadvantages of an expatriate sales force are the high cost, cultural and legal barriers, and the limited number of high-caliber personnel willing to live abroad for extended periods.
5. (p. 499) Virtual expatriates find managing contacts with subordinates and customers easier than before. FALSE Close contact with subordinates and customers is tougher for virtual expatriates.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 17-03 The steps to recruiting three types of international salespeople Topic: Virtual Expatriates
6. (p. 500) Expatriate managers are still the preferred workforce for foreign assignments. FALSE The historical preference for expatriate managers and salespeople from the home country is giving way to a preference for local nationals.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Hard Learning Objective: 17-03 The steps to recruiting three types of international salespeople Topic: Local Nationals
7. (p. 500) The main disadvantage of hiring local nationals is the tendency of headquarters personnel to ignore their advice. TRUE The main disadvantage of hiring local nationals is the tendency of headquarters personnel to ignore their advice.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 17-03 The steps to recruiting three types of international salespeople Topic: Local Nationals
8. (p. 501) Salespersons in relationship-oriented cultures are considered to belong down in the social ladder. TRUE In the more relationship-oriented cultures such as France, Mexico, and Japan, sales representatives tend to be on the bottom rung of the social ladder.
9. (p. 501) Third-country nationals are foreign nationals working as managers in the company's home country. FALSE Third-country nationals (TCNs) are expatriates from their own countries working for a foreign company in a third country.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 17-03 The steps to recruiting three types of international salespeople Topic: Third-Country Nationals
10. (p. 501) Double taxation is one of the disadvantages of recruiting an American expatriate. TRUE American companies often seek TCNs from other English-speaking countries to avoid the double taxation costs of their American managers.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 17-03 The steps to recruiting three types of international salespeople Topic: Third-Country Nationals
11. (p. 503) Though maturity and emotional stability is essential, the transnational manager is not expected to have a breadth of knowledge. FALSE Managers or salespeople operating in foreign countries need considerable breadth of knowledge of many subjects both on and off the job. The ability to speak one or more other languages is always preferable.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 17-04 Selection criteria for international sales and marketing positions Topic: Third-Country Nationals
12. (p. 503) Paper-and-pencil ability tests, biographical information, and reference checks are the most effective tools in assessing the personality tools required for an expatriate manager's position. FALSE Most of the personality traits can be assessed during interviews and perhaps during role-playing exercises. Paper-and-pencil ability tests, biographical information, and reference checks are of secondary importance.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 17-04 Selection criteria for international sales and marketing positions Topic: Selecting Sales and Marketing Personnel
13. (p. 504) Generally, successful sales representatives share common traits across cultures. FALSE There is evidence that some traits that make for successful sales representatives in the United States may not be important in other countries.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 17-04 Selection criteria for international sales and marketing positions Topic: Selecting Sales and Marketing Personnel
14. (p. 505) Continual training may be more important in foreign markets than in domestic ones. TRUE Continual training may be more important in foreign markets than in domestic ones because of the lack of routine contact with the parent company and its marketing personnel.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Hard Learning Objective: 17-05 The special training needs of international personnel Topic: Training for International Marketing
15. (p. 506-507) Compared to Japanese salesperson, social recognition is more important for the American. FALSE Refer Exhibit 17.3 - Salespeople's Distribution of 100 Points among Rewards in Terms of Their Importance (The only difference between the two groups was in social recognition, which the Japanese rated as more important).
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 17-06 Motivation techniques for international sales representatives Topic: Motivating Sales Personnel
16. (p. 507) Japanese sales representatives are motivated more by the social pressure of their peers than by the prospect of making more money based on individual effort. TRUE Japan's emphasis on paternalism and collectivism and its system of lifetime employment and seniority, motivation through individual incentives does not work well because Japanese employees seem to derive the greatest satisfaction from being comfortable members of a group.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 17-06 Motivation techniques for international sales representatives Topic: Motivating Sales Personnel
17. (p. 508) Expatriate managers fear that they will be forgotten by the home office. TRUE One of the greatest fears of expatriate managers, which can be easily allayed, is that they will be forgotten by the home office.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 17-06 Motivation techniques for international sales representatives Topic: Motivating Sales Personnel
18. (p. 508) Separation allowances are benefits paid when an expatriate manager leaves a company to join another. FALSE Separation allowances are overseas premiums paid if the family does not go along.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 17-07 How to design compensation systems for an international sales force Topic: For Expatriates
19. (p. 509) In Europe, internal labor committees are influential in setting compensation rules for sales people. TRUE In Europe, work councils (that is, internal labor union committees) are very much involved in setting rules about compensation companywide, even for sales people.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 17-07 How to design compensation systems for an international sales force Topic: For a Global Sales Force
20. (p. 509) Experts believe that compensation systems are becoming more diversified across the world. FALSE Experts believe that generally compensation schemes around the world are becoming more similar to the U.S. system with its emphasis on commissions based on individual performance.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 17-07 How to design compensation systems for an international sales force Topic: For a Global Sales Force
21. (p. 512) American salespersons are mostly distributed as a few high performers and mostly middle-level performers, but almost no low performers. TRUE In a study of salesperson's performances, it was found that compared to the Japanese, American distribution was differenta few high, most in the middle, but almost no low performers. In the United States, poor performers either quit (because they are not making any money), or they are fired.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 17-07 How to design compensation systems for an international sales force Topic: Evaluating and Controlling Sales Representatives
22. (p. 512) The primary control tool used by American managers is the reporting system. FALSE The primary control tool used by American sales managers is the incentive system.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 17-07 How to design compensation systems for an international sales force Topic: Evaluating and Controlling Sales Representatives
23. (p. 513) Studies find that the expatriate manager's lack of cultural awareness was the primary reason for his/her failure to function effectively in a foreign assignment. FALSE A study of personnel directors of over 300 international firms found that the inability of the manager's spouse to adjust to a different physical or cultural environment was the primary reason for an expatriate's failure to function effectively in a foreign assignment.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 17-08 How to prepare Americans for foreign assignments Topic: Reducing the Rate of Early Returns
24. (p. 514) Personal career planning for the expatriate is the significant strategy that leads to higher retention of returnee expatriates. TRUE Companies with the least amount of returnee attrition differ from those with the highest attrition in one significant way: personal career planning for the expatriate.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 17-08 How to prepare Americans for foreign assignments Topic: Successful Expatriate Repatriation
25. (p. 516) According to studies, most chief executives had an HR background. FALSE Surveys of chief executives consistently reported that more than three-quarters had finance, manufacturing, or marketing backgrounds.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 17-09 The changing profi le of the global sales and marketing manager Topic: The Changing Profile of the Global Manager
26. (p. 496) The most direct tie to the customer is the: A. product. B. manager of the company. C. salesperson. D. advertising specialist. E. public relations specialist. The salesperson is a company's most direct tie to the customer; in the eyes of most customers, the salesperson is the company.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy -Learning Objective: 17-01 The role of interpersonal selling in international marketing Topic: The role of interpersonal selling in international marketing
27. (p. 496) According to some experts, which of the following may be a reason that substantial reductions in field sales may occur in the future? A. Cost of maintaining a sales team B. Lack of security for confidential information C. Skill-set deficiencies in the sales force D. Advances in information technology E. Increasing competition Advances in information technology are changing the nature of personal selling and sales management, leading some to forecast substantial reductions in field sales efforts.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium -Learning Objective: 17-01 The role of interpersonal selling in international marketing Topic: The role of interpersonal selling in international marketing
28. (p. 496) Which of the following reasons would best explain why a country such as Germany allows for greater use of expatriates in international sales forces? A. It is cheap to live there B. The language is easy to master C. It wants to spread its arms to the international community D. It is an information-oriented culture E. It is a multi-cultural society Selling in information-oriented cultures such as Germany may also allow for greater use of expatriates.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 17-02 The considerations in designing an international sales force Topic: Designing the Sales Force
29. (p. 496-497) According to experts, what form of selling has the best results in Japan? A. Expatriate selling B. Localized selling C. Virtual selling D. Asian selling (i.e., personnel from China) E. Visionary selling Writing about Japan, two international marketing experts agree: "Personal selling as a rule has to be localized for even the most global of corporations and industries."
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 17-02 The considerations in designing an international sales force Topic: Designing the Sales Force
30. (p. 496) Distribution strategies will often vary from country to country. Some markets may require a direct sales force, whereas others may not. Countries such as Japan will require the most complete local knowledge possessed only by natives. Which aspect of Japanese culture requires this feature in the sales strategy? A. Strong traditions and taboos B. Unfamiliarity with the English language C. Relationship orientation D. General suspicion of foreigners E. Ethnocentrism Distribution strategies will often vary from country to country. Relationship-oriented countries such as Japan will require the most complete local knowledge possessed only by natives.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 17-02 The considerations in designing an international sales force Topic: Designing the Sales Force
31. (p. 498) The largest personnel requirement abroad for most companies is: A. the management team. B. the service department. C. the purchasing professionals. D. the advertising specialists. E. the sales force. The largest personnel requirement abroad for most companies is the sales force, recruited from three sources: expatriates, local nationals, and third-country nationals.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 17-03 The steps to recruiting three types of international salespeople Topic: Recruiting Marketing and Sales Personnel
32. (p. 498) In which of the following scenarios is an expatriate sales force the best choice for a company? A. When the product is customized B. When the product is mass-marketed C. When the product caters to a niche market D. When the product is highly technical E. When the product is global in nature The number of companies relying on expatriate personnel is declining as the volume of world trade increases and as more companies use locals to fill marketing positions. However, when products are highly technical, or when selling requires an extensive background of information and applications, an expatriate sales force remains the best choice.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Hard Learning Objective: 17-03 The steps to recruiting three types of international salespeople Topic: Expatriates
33. (p. 498) Which of the following is one of the advantages of using an expatriate salesperson? A. Greater technical training B. Increases the diversity mix of the organizational profile C. Usually more experienced than local nationals D. Other-country teams are more accepting of an expatriate manager E. Lesser risk of employee-poaching in a foreign market The expatriate salesperson may have the advantages of greater technical training, better knowledge of the company and its product line, and proven dependability.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 17-03 The steps to recruiting three types of international salespeople Topic: Expatriates
34. (p. 498) A(n) _____ is a person who leaves their home country to work for their domestic employer in a foreign country. A. home-country manager B. foreign manager C. outsourcer D. other-country manager E. expatriate The number of companies relying on expatriate personnel is declining as the volume of world trade increases and as more companies use locals to fill marketing positions.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 17-03 The steps to recruiting three types of international salespeople Topic: Expatriates
35. (p. 498) All of the following are advantages that an expatriate salesperson has in representing his or her company in a foreign market; however, one of these advantages stands out above the others. Which one is it? A. Greater technical training B. Better knowledge of the company and its product line C. Proven dependability D. Adds prestige to the product line, in the eye of the buyer E. The ability to communicate with and influence headquarter's personnel Perhaps most important advantage is that expatriates usually are able to effectively communicate with and influence headquarters personnel.
36. (p. 498) All of the following are disadvantages to having an expatriate salesperson in a foreign market EXCEPT: A. high cost. B. cultural barriers. C. willingness to live abroad for extended periods. D. unverified dependability. E. legal barriers. The expatriate salesperson may have the advantages of greater technical training, better knowledge of the company and its product line, and proven dependability.
37. (p. 498) Which of the following is the major deterrent for executives offered an expatriate position? A. The threat of international terrorist attacks in foreign markets B. The loss of visibility at corporate headquarters C. The steep increase in living costs in a foreign location D. The lack of proper communication technology E. The loss of deep-rooted friendships at the home-country office The loss of visibility at corporate headquarters plus the belief that "out of sight is out of mind" are major reasons for the reluctance to accept a foreign assignment.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 17-03 The steps to recruiting three types of international salespeople Topic: Expatriates
38. (p. 498) What strategy do companies take to ensure that executives accept expatriate positions? A. Promote overseas stint as a ticket to top management B. Mandate expatriate positions for all executives C. Shift a part of the head-office to the new location D. Transfer a support team along with the expatriate manager E. Find a mentor in the new country to guide the executive The best international companies make it crystal clear that a ticket to top management is an overseas stint.
39. (p. 498) Mike Assaini has found that his ability to speak several Middle-Eastern languages is a real asset in his chosen career as a salesperson for Shell Oil. Since Mike works one foreign assignment after another and rarely returns to home base in Holland, he is called a(n): A. rover. B. castaway. C. wanderer. D. professional expatriate. E. troubleshooter. Some expatriates have one-time assignments (which may last for years), after which they return to the parent company; others are essentially professional expatriates, working abroad in country after country.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 17-03 The steps to recruiting three types of international salespeople Topic: Expatriates
40. (p. 499) Because of new advances in communications technology, a new form of expatriate has emerged. What is the name of this new form of expatriate? A. The geek expatriate B. The virtual expatriate C. The e-com expatriate D. The dotcom expatriate E. The visionary expatriate The Internet and other advances in communications technologies, along with the growing reluctance of executives to move abroad, are creating a new breed of expatriate, the virtual one.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 17-03 The steps to recruiting three types of international salespeople Topic: Virtual Expatriates
41. (p. 499) All of the following is true of virtual expatriates EXCEPT that they: A. do not move to other countries. B. don't stay in hotels. C. make long visits. D. are glued to their laptops and cell phones. E. maintain their families at home. Virtual expatriates manage operations in other countries but do not move there. They stay in hotels, make long visits, and maintain their families at home.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 17-03 The steps to recruiting three types of international salespeople Topic: Virtual Expatriates
42. (p. 500) The historical preference for expatriate managers and salespeople from the home country is giving way to a preference for: A. outsourcers from the home country. B. virtual managers and salespeople. C. virtual expatriates. D. local nationals. E. visionary expatriates. The historical preference for expatriate managers and salespeople from the home country is giving way to a preference for local nationals.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 17-03 The steps to recruiting three types of international salespeople Topic: Local Nationals
43. (p. 500) Which of the following makes an expatriate manager often three times costlier than their national counterparts? A. Exchange rate variations B. Higher taxes for earnings C. Special cost-of-living benefits D. Added costs for the goodwill generated E. Thrice the average pay is the normal expatriate compensation expected Although expatriates' salaries may be no more than those of their national counterparts, the total cost of keeping comparable groups of expatriates in a country can be considerably higher (often three times the expense) because of special cost-of-living benefits, moving expenses, taxes, and other costs associated with keeping an expatriate abroad.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 17-03 The steps to recruiting three types of international salespeople Topic: Local Nationals
44. (p. 500) Which of the following is the main disadvantage of hiring local nationals? A. Headquarters personnel ignore their advice. B. Most local nationals turn out to be costlier in the long run. C. Poaching by competition turns out to be a huge challenge. D. Cultural differences lead to communication issues. E. National interests conflict with the corporate strategy. The main disadvantage of hiring local nationals is the tendency of headquarters personnel to ignore their advice.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 17-03 The steps to recruiting three types of international salespeople Topic: Local Nationals
45. Particularly in relationship-oriented cultures such as France, Mexico, and Japan, sales representatives tend to be: A. available only on a part-time basis. B. on the bottom rung of the social ladder. C. too close to customers to develop a professional selling relationship. D. unwilling to commit to an organization for any length of time. E. respected and held in high esteem.
46. (p. 501) Which of the following is the most common job in the United States? A. Construction worker B. Truck driver C. Office manager D. Personal selling E. Teacher Personal selling is the most common job in the United States. Indeed, the United States has been described as "a nation of salesmen."
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 17-03 The steps to recruiting three types of international salespeople Topic: Local Nationals
47. (p. 501) The _____ are a group whose nationality has little to do with where they work or for whom. A. virtual expatriates B. expatriate managers C. third-country nationals D. transnational expatriates E. local nationals The internationalization of business has created a pool of third-country nationals (TCNs), expatriates from their own countries working for a foreign company in a third country. The TCNs are a group whose nationality has little to do with where they work or for whom.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 17-03 The steps to recruiting three types of international salespeople Topic: Third-Country Nationals
48. (p. 501) The growing use of third-country nationals is, in part, a(n): A. response to the increased availability of third-country nationals. B. symbol of the death of nationalism. C. acknowledgment that personal skills and motivation are international values. D. alternative to using domestic product controls. E. an attempt to stimulate world peace through international marketing. Overall, the development of TCN executives reflects not only a growing internationalization of business but also an acknowledgment that personal skills and motivations are not the exclusive property of one nation.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 17-03 The steps to recruiting three types of international salespeople Topic: Third-Country Nationals
49. (p. 501) Fritz Weaver is a German national working for a U.S. company in Argentina. This would be an example of which of the following types of foreign worker classifications? A. Outsourcers B. Global specialists C. Global expatriates D. Third-country nationals E. Multi-country nationals Third-country nationals (TCNs) are expatriates from their own countries working for a foreign company in a third country. An example would be a German working in Argentina for a U.S. company.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 17-03 The steps to recruiting three types of international salespeople Topic: Third-Country Nationals
50. (p. 502) Which of the following external uncontrollable factor influences selection of expatriates over local nationals? A. The host government's attitude toward foreign workers B. Market acceptance of foreign products C. Technical complexity of the product(s) D. Size and spread of the customer base E. Demographic profile of the target customer The host government's attitudes toward foreign workers often complicate selecting expatriate U.S. nationals over locals.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 17-03 The steps to recruiting three types of international salespeople Topic: Host-Country Restrictions
51. (p. 502) Compared to the diplomatic skills required in a transnational management position, what are the major skills people operating in the home country require? A. Proficiency in at least two languages B. Attributes of effective salespersons C. People management and reporting skills D. Quantitative skills to read market trends E. Effective strategic planning skills People operating in the home country need only the attributes of effective salespersons, whereas a transnational management position can require skills and attitudes that would challenge a diplomat.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 17-04 Selection criteria for international sales and marketing positions Topic: Selecting Sales and Marketing Personnel
52. (p. 503) Which of the following traits of the expatriate would ensure the company to have confidence in his/her ability to make ethical decisions and commitments without constant recourse to the home office? A. Positive outlook B. Cultural empathy C. Breadth of knowledge D. Flexibility E. Maturity Maturity is a prime requisite for expatriate and third-country personnel. Managers and sales personnel working abroad typically must work more independently than their domestic counterparts. The company must have confidence in their ability to make ethical decisions and commitments without constant recourse to the home office, or they cannot be individually effective.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Hard Learning Objective: 17-04 Selection criteria for international sales and marketing positions Topic: Selecting Sales and Marketing Personnel
53. (p. 503) Why do international sales representatives require lots of stamina? A. Interacting with other-country colleagues is a stressful procedure. B. Presentations to foreign customers are generally lengthy procedures. C. Most of them are required to work late nights. D. It requires lots of stressful travel and immigration procedures. E. The new market may be physically difficult to access. International sales and marketing personnel must be energetic and enjoy travel. Many international sales representatives spend about two-thirds of their nights in hotel rooms around the world. Going through the long lines of customs and immigration after a 15-hour flight requires a certain kind of stamina not commonly encountered.
54. (p. 503) Cultural empathy means that a person is: A. subservient to a superior culture. B. sympathetic and understanding of a culture other than their own. C. tolerant of inferior cultures. D. knowledgeable in the major cultural trends, globally. E. hostile to all cultures except his own. Successful adaptation in international affairs is based on a combination of attitude and effort. Cultural empathy is clearly a part of the basic orientation, because anyone who is antagonistic or confused about the environment is unlikely to be effective.
55. (p. 503) When hiring new personnel, most of the traits necessary for success in international marketing can be assessed by: A. tests. B. interviews and role-playing exercises. C. biographical information. D. checking references. E. body language. Most of the necessary traits for international marketing can be assessed during interviews and perhaps during role-playing exercises. Paper-and-pencil ability tests, biographical information, and reference checks are of secondary importance.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 17-04 Selection criteria for international sales and marketing positions Topic: Selecting Sales and Marketing Personnel
56. (p. 504) According to a recent study, Japanese sales representatives tended to be more satisfied with their jobs when: A. their values were consistent with those of their company. B. they received high salaries. C. they were better educated. D. they had high salaries and were better educated. E. they did not have to work abroad. One study compared sales representatives in the electronics industries in Japan and the United States. Americans who cared more about money and were more educated tended to perform better and be more satisfied with their sales jobs. Conversely, the Japanese sales representatives tended to be more satisfied with their jobs when their values were consistent with those of their company.
57. (p. 504-505) There is evidence that a manager's _____ affects personnel decisions when hiring in the international arena. A. age B. sex C. culture D. income level E. emotional stability Evidence indicates that a manager's culture affects personnel decisions. One study reports "that managers given an identical [personnel selection] problem do not make the same decisions nor do they value the criteria often used in recruitment and promotion decisions equally."
58. (p. 505) Training for local personnel should require greater emphasis on all of the following EXCEPT: A. the company. B. selling methods. C. technical information. D. special foreign problems. E. the company's products. Training for expatriates focuses on the customs and the special foreign sales problems that will be encountered, whereas local personnel require greater emphasis on the company, its products, technical information, and selling methods.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 17-04 Selection criteria for international sales and marketing positions Topic: Selecting Sales and Marketing Personnel
59. (p. 505) What explains the fact that continual training may be more important in foreign markets than in domestic ones? A. Foreign markets are slower to adapt to innovative products B. Cultural distance could result in dilution of core aspects of the strategy C. Updating of newer technological innovations in the product D. Lack of technical knowledge among the foreign salespersons E. Lack of routine contact with the parent company Continual training may be more important in foreign markets than in domestic ones because of the lack of routine contact with the parent company and its marketing personnel.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Hard Learning Objective: 17-05 The special training needs of international personnel Topic: Training for International Marketing
60. (p. 505) Which of the following is suggested to make home-office personnel more aware of problems of foreign operations? A. Cross-cultural training B. Global selling techniques C. Newer technical skills D. Telecommuting and teleconferencing skills E. Email and presentation skills The best companies provide home-office personnel with cross-cultural training and send them abroad periodically to increase their awareness of the problems of the foreign operations.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 17-05 The special training needs of international personnel Topic: Training for International Marketing
61. (p. 506-507) In a study, when asked to rate the rewards from work, Japanese and American salespersons showed surprising similarity barring one aspect which the Japanese rated as more important than what their American counterparts did. Identify the one from the following. A. Job security B. Promotion C. Feeling of worthwhile accomplishment D. Social recognition (sales club awards) E. Personal growth and development The only real difference between the two groups was in social recognition, which, predictably, the Japanese rated as more important. However, the authors of the study concluded that though individual values for rewards may be similar, the social and competitive contexts still require different motivational systems.
62. (p. 507) Which of the following reward areas scores the highest among American salespeople? A. Job security B. Promotion C. Merit increase with pay D. Feeling of worthwhile accomplishment E. Social recognition (sales club awards) Refer Exhibit 17.3 - Salespeople's Distribution of 100 Points among Rewards in Terms of Their Importance
63. (p. 507) Considering the specific characteristics of Japan's culture, which of the following strategies might be used as a motivator in Japanese organizations? A. Individual rewards B. Group bonus schemes C. Early promotion opportunities D. Individual commission system E. Merit increase in pay With Japan's emphasis on paternalism and collectivism and its system of lifetime employment and seniority, motivation through individual incentives does not work well because Japanese employees seem to derive the greatest satisfaction from being comfortable members of a group. Japanese bonus systems are therefore based on group effort, and individual commission systems are rare.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 17-06 Motivation techniques for international sales representatives Topic: Motivating Sales Personnel
64. (p. 508) Which of the following represents one of the greatest fears of expatriate managers? A. They will forget their own culture and traditions. B. They might be stressed out in the new market. C. Their product(s) might be unsuitable in the new market. D. They will be forgotten by the home office. E. Colleagues in the foreign country will be hostile. One of the greatest fears of expatriate managers, which can be easily allayed, is that they will be forgotten by the home office.
65. (p. 508) Overseas premiums, paid if the family does not go along, are called: A. resettlement claims. B. family compensation. C. displacement allowances. D. fringe benefits. E. separation allowances. Short-term assignments involve payments of overseas premiums (sometimes called separation allowances if the family does not go along), all excess expenses, and allowances for tax differentials.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 17-07 How to design compensation systems for an international sales force Topic: For Expatriates
66. (p. 509) Which of the following agencies/bodies is actively involved in setting rules about compensation (even for sales people) in Europe? A. Pension committees B. Work councils C. International Labour Organization D. The European Union E. The WTO In Europe, work councils (that is, internal labor union committees) are very much involved in setting rules about compensation companywide, even for sales people.
67. (p. 510) Which of the following is true of sales compensation practices across the globe? A. Most Asian MNCs have adopted the U.S. system with its emphasis on commissions based on individual performance. B. Government intervention in pay determination aimed at leveling pay scales, is gaining popularity in European countries. C. A majority (nearly 75 percent) of multinational companies describe their sales compensation plans as global in nature. D. The International Labour Organization is playing a key role in determining compensation practices worldwide. E. Most companies establish sales compensation practices locally. As can be seen in Exhibit 17.5, most companies establish sales compensation practices locally (either at the country or regional levels).
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 17-07 How to design compensation systems for an international sales force Topic: For a Global Sales Force
68. (p. 512) The primary control tool used by American sales managers is: A. the threat of termination. B. the quota system. C. the incentive system. D. the attraction of a foreign assignment. E. tolerance and patience. The primary control tool used by American sales managers is the incentive system.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Easy Learning Objective: 17-07 How to design compensation systems for an international sales force Topic: Evaluating and Controlling Sales Representatives
69. (p. 511) IBM's revamping of its sales compensation scheme led to some valuable information. Which of the following is NOT one of them? A. Do involve representatives from key countries. B. Do allow local managers to decide the mix between base and incentive pay. C. Do use consistent performance measures. D. Do allow local countries flexibility in implementations. E. Do assume that cultural differences can be managed through the incentive plan. The list of do's and don'ts is provided on page 511. Also refer Exhibit 17.6 - A Compensation Blueprint: How IBM Pays 140,000 Sales Executives Worldwide
70. (p. 512) Unlike the Japanese, Americans sales managers do not have to worry about the problem of how to motivate poor performers. Why? A. The group incentive system balances pay differences and thus is motivating enough. B. Companies are more focused on long-term loyalty and are willing to compromise on performance initially. C. They are automatically shifted to areas where their performance levels could meet expectations. D. The system of peer-mentoring takes care of progress of low performers. E. The team usually does not have any low performers as they quit or are fired. According to a study, the distribution of performance American salespersons was as followsa few high, most in the middle, but almost no low performers. In the United States, poor performers either quit (because they are not making any money), or they are fired. Thus sales managers in Japan have a problem their American counterparts do not: how to motivate poor performers.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Hard Learning Objective: 17-07 How to design compensation systems for an international sales force Topic: Evaluating and Controlling Sales Representatives
71. (p. 512) What are the most frequently mentioned reasons for a manager to refuse a foreign assignment? A. Compensation B. Destination of the assignment C. Fear of travel and its hardships D. Concerns for career and family E. Dislike of foreigners Concerns for career and family are the most frequently mentioned reasons for a manager to refuse a foreign assignment.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 17-08 How to prepare Americans for foreign assignments Topic: Overcoming Reluctance to Accept a Foreign Assignment
72. (p. 513) Better qualified and ambitious personnel decline to go abroad because sometimes expatriate positions do not have clear evidence of advance planning to protect career development. This "out of sight, out of mind" fear is closely linked to the problems of: A. conflict of interests. B. acculturation. C. skill redundancy. D. variable compensation. E. repatriation. This "out of sight, out of mind" fear is closely linked to the problems of repatriation. Without evidence of advance planning to protect career development, better qualified and ambitious personnel may decline offers to go abroad.
AACSB: Reflective Thinking Bloom's: Comprehension Difficulty Level: Medium Learning Objective: 17-08 How to prepare Americans for foreign assignments Topic: Overcoming Reluctance to Accept a Foreign Assignment
73. (p. 513) Which of the following is the single most important reason for expatriate dissatisfaction? A. Unsuccessful family adjustment B. Cultural conflict in the foreign country C. Non-cooperation of foreign colleagues D. Communication issues with home-country head quarters E. Redundant/mismatching skills in a foreign country The most important reasons a growing number of companies are including an evaluation of an employee's family among selection criteria are the high cost of sending an expatriate abroad and increasing evidence that unsuccessful family adjustment is the single most important reason for expatriate dissatisfaction and the resultant request for return home.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 17-08 How to prepare Americans for foreign assignments Topic: Reducing the Rate of Early Returns
74. (p. 513) Which of the following is the primary reason for an expatriate's failure to function effectively in a foreign assignment? A. Differing customer expectations on product features B. Lack of synergy owing to ineffective team communication C. Ineffectiveness of home-country skills in the foreign country D. Inability of the manager's spouse to adjust to a different environment E. Cultural differences leading to conflicts of interest A study of personnel directors of over 300 international firms found that the inability of the manager's spouse to adjust to a different physical or cultural environment was the primary reason for an expatriate's failure to function effectively in a foreign assignment.
AACSB: Analytic Bloom's: Knowledge Difficulty Level: Medium Learning Objective: 17-08 How to prepare Americans for foreign assignments Topic: Reducing the Rate of Early Returns
75. (p. 515) Which of the following differentiates companies with least amount of returnee attrition from those with the highest attrition? A. Specialized expatriate department B. Personal career planning C. Continued cultural training D. Increased compensation E. Family migration planning Companies with the least amount of returnee attrition differ from those with the highest attrition in one significant way: personal career planning for the expatriate.

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Chapter 10 Europe, Africa, and the Middle East Answer Key

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Chapter 11 The Asia Pacific Region Answer Key

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Chapter 13 Products and Services for Consumers Answer Key

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Chapter 14 Products and Services for Businesses Answer Key

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Chapter 15 International Marketing Channels Answer Key

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Chapter 16 Integrated Marketing Communications and International Advertising Answer Key

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Chapter 17 Personal Selling and Sales Management Answer Key

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