Global Marketing, 8e (Keegan/Green)
Chapter 1 Introduction to Global Marketing
1) The market development strategy involves seeking new customers by introducing existing
products or services to a new market segment.
Answer: TRUE
Difficulty: Easy
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
2) Starbucks is building on its loyalty card and rewards program in the United States with a
smartphone app that enables customers to pay for purchases electronically. This is an example of
Market Penetration.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
3) The perceived value equation can be represented as Value = Price/Benefits.
Answer: FALSE
Difficulty: Easy
Chapter LO: 2
AACSB: Analytical thinking
Course LO: Discuss the fundamental concepts of marketing
4) Companies can increase prices if costs are low because of process efficiencies in
manufacturing.
Answer: FALSE
Difficulty: Easy
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Identify and describe the processes and tools of strategic marketing
5) If Nestlé decides not to market biscuits (cookies) in the United States due to competitive
reasons, it is considered as a lack of strategic focus and missed opportunity.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Identify and describe the processes and tools of strategic marketing
6) The Yugo automobile achieved a modest level of U.S. sales in the 1980s despite a "don't buy"
rating from a consumer magazine.
Answer: TRUE
Difficulty: Easy
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Identify and describe the processes and tools of strategic marketing
7) Walmart's recent exit from the German market was due, in part, to the fact that German
shoppers could find lower prices at stores known as "hard discounters."
Answer: TRUE
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Identify and describe the processes and tools of strategic marketing
8) Nike dropped their well-known tag line "Just do it" in advertising women's clothing in Europe
and replaced it by the slogan "Here I am" since college-age women in Europe are not as
competitive about sports as men are.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 2
AACSB: Analytical thinking
Course LO: Identify and describe the processes and tools of strategic marketing
9) From a global marketing perspective, the history of the Beatles' records is an interesting case
study in both product adaptation and product extension.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Identify and describe the processes and tools of strategic marketing
10) In an effort to "Americanize" the sound of the Beatles' recordings, a studio effect known as
reverb was added to some tracks.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Identify and describe the processes and tools of strategic marketing
11) McDonald's global marketing strategy is based primarily on local marketing mix elements.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Identify and describe the processes and tools of strategic marketing
12) Starbucks opened an experimental store in Amsterdam that serves as a testing ground for
new design concepts such as locally sourced and recycled building materials.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Identify and describe the processes and tools of strategic marketing
13) Tang drink powder became a $1 billion brand as regional managers in the Middle East added
mango and pineapple flavors.
Answer: TRUE
Difficulty: Easy
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
14) About 75 percent of the Coca-Cola Company's operating income and two-thirds of its
operating revenue are generated outside North America.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Identify and describe the processes and tools of strategic marketing
15) Ethnocentric companies that conduct business outside the home country adhere to the notion
that the products that succeed in the home country will succeed anywhere.
Answer: TRUE
Difficulty: Difficult
Chapter LO: 5
AACSB: Application of knowledge
Course LO: Identify and describe the processes and tools of strategic marketing
16) The term "polycentric" describes management's belief or assumption that each country in
which a company does business is the same as the home country business.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 5
AACSB: Analytical thinking
Course LO: Identify and describe the processes and tools of strategic marketing
17) Unilever's Rexona deodorant brand had 30 different package designs and 48 different
formulations. This is an example of ethnocentrism.
Answer: FALSE
Difficulty: Easy
Chapter LO: 5
AACSB: Application of knowledge
Course LO: Identify and describe the processes and tools of strategic marketing
18) A U.S. company that focuses on the countries included in the North American Free Trade
Agreement (NAFTA) has a regiocentric orientation.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 5
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
19) A European company that focuses its attention on Europe can be considered to have
geocentric orientation.
Answer: FALSE
Difficulty: Difficult
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
20) A company with a geocentric orientation views the world as a potential market and strives to
develop integrated global strategies.
Answer: TRUE
Difficulty: Difficult
Chapter LO: 5
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
21) A true transnational company would be characterized as "stateless."
Answer: TRUE
Difficulty: Difficult
Chapter LO: 6
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
22) One way to assess a company's "degree of transnationality" is to compute the ratio between
the sales outside the home country to total sales.
Answer: TRUE
Difficulty: Difficult
Chapter LO: 6
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
23) Economic growth has reduced resistance that might otherwise have developed in response to
the entry of foreign firms into domestic economies.
Answer: TRUE
Difficulty: Difficult
Chapter LO: 6
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
24) In the context of global marketing, leverage means some type of advantage that a company
enjoys by virtue of the fact that it has experience in its home country.
Answer: FALSE
Difficulty: Difficult
Chapter LO: 6
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
25) Evidence of the company's ongoing commitment to innovation can be seen in continuous
new product introduction.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 6
AACSB: Analytical thinking
Course LO: Discuss the fundamental concepts of marketing
26) Most global markets do not exist in nature.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 6
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
27) A global company can leverage its experience in any market in the world.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
28) Nontariff barriers (NTBs) are monetary restrictions on cross-border trade.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 6
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
29) Anheuser-Busch, the brewer of Budweiser beer, lost its independence after years of focusing
primarily on the U.S. market.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 6
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
30) The term globaphobia is used to describe an attitude of hostility towards trade agreements
and global brands.
Answer: TRUE
Difficulty: Easy
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
31) When you call United Airlines for a reservation on a toll-free number and get a response
from an operator in Mumbai, this is an example of:
A) anti-globalization.
B) global marketplace.
C) multilingual expression.
D) discrimination.
E) E-ticketing.
Answer: B
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
32) In global markets, Starbucks is a good example of simultaneously executing all of the growth
strategies except:
A) Market penetration.
B) Market development.
C) Product development.
D) Market orientation.
E) Diversification.
Answer: D
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
33) Slumdog Millionaire, a movie which received several awards and an Oscar in 2009, was
filmed on a location in and around:
A) London.
B) San Francisco.
C) Cancun.
D) Mumbai.
E) Moscow.
Answer: D
Difficulty: Easy
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
34) Starbucks has launched several new ventures in global markets, including music CDs and
movie production. This is an example of:
A) Market Penetration.
B) Market Development.
C) Market Diversification.
D) Product Development.
E) Global Marketing.
Answer: C
Difficulty: Moderate
Chapter LO: 1
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
35) A fundamental difference between regular marketing and global marketing is:
A) the lack of marketing mix.
B) the scope of activities.
C) the lack of strategic planning.
D) the focus on resources.
E) the lack of communication.
Answer: B
Difficulty: Moderate
Chapter LO: 1
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
36) Starbucks is building on its loyalty card and rewards program in the United States with a
smartphone app that enables customers to pay for purchases electronically. The app displays a
bar code that the barista can scan. This is an example of:
A) Market Penetration.
B) Market Development.
C) Market Diversification.
D) Product Development.
E) Global Marketing.
Answer: A
Difficulty: Moderate
Chapter LO: 1
AACSB: Information technology
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
37) Starbucks is entering India via an alliance with the Tata Group. Phase 1 calls for sourcing
coffee beans in India and marketing them at Starbucks stores throughout the world. This is an
example of:
A) Market Penetration.
B) Market Development.
C) Market Diversification.
D) Product Development.
E) Regular Marketing.
Answer: B
Difficulty: Moderate
Chapter LO: 1
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
38) The essence of marketing worldwide is to surpass the competition in creating perceived
value, which can be represented as:
A) Value = Price/Benefits.
B) Value = Benefits/Price.
C) Value = Benefits × Price.
D) Value = Benefits - Price.
E) Value = Benefits + Price.
Answer: B
Difficulty: Difficult
Chapter LO: 1
AACSB: Analytical thinking
Course LO: Discuss the fundamental concepts of marketing
39) The marketing mix is integral to the value equation which is represented by:
A) Value = Price/Benefits.
B) Value = Benefits/Price.
C) Value = Benefits × Price.
D) Value = Benefits - Price.
E) Value = Benefits + Price.
Answer: B
Difficulty: Difficult
Chapter LO: 1
AACSB: Analytical thinking
Course LO: Discuss the fundamental concepts of marketing
40) Renault and its rivals are racing to offer middle-class consumers a new value proposition by
selling cars for the equivalent of $10,000 or less. On the heels of Renault's success with Dacia
Logan came the $2,500 Nano from India's Tata Motors. This illustrates that:
A) consumers are looking for low price irrespective of quality.
B) Renault is overcharging for their cars compared to their competitors.
C) higher product development costs are a driving force behind globalization.
D) market success depends on reaching a threshold of acceptable quality for consumers.
E) cars are not very popular in emerging markets like India.
Answer: D
Difficulty: Difficult
Chapter LO: 1
AACSB: Analytical thinking
Course LO: Discuss the fundamental concepts of marketing
41) Walmart's exit from the German market was due, in part, to the fact that German shoppers
could find lower prices at stores known as:
A) All-in-one stores.
B) Dollar stores.
C) Discount sores.
D) Hard discounters.
E) Fresh & Easy stores.
Answer: D
Difficulty: Moderate
Chapter LO: 1
AACSB: Analytical thinking
Course LO: Discuss the fundamental concepts of marketing
42) According to Michael Porter, a global industry is one in which ________ can be achieved by
integrating and leveraging operations on a worldwide scale.
A) marketing mix
B) competitive advantage
C) cross border infiltration
D) ration analysis
E) production capability
Answer: B
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
43) The former chairman of Nestlé recently told an interviewer: "We are food and beverages. We
are not running bicycle shops. Even in food we are not in all fields. There are certain areas we do
not touch. Also, we have no soft drinks because I have said we either buy Coca-Cola or we leave
it alone." What strategic marketing principle does the chairman's comment emphasize most
specifically?
A) customer value
B) competitive advantage
C) focus
D) myopia
E) policy of dealing only with Swiss businesses
Answer: C
Difficulty: Difficult
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
44) Nike recently adopted the slogan "Here I am" for its pan-European clothing advertising
targeting women. The decision to drop the famous "Just do it" tag line was based on the research
indicating that:
A) the famous slogan did not have accurate translation in European languages.
B) Europeans do not like tag lines that portray American thinking.
C) college-age women in Europe are not as competitive about sports as men are.
D) the old slogan conveys superiority of men over women.
E) European women want to differentiate themselves from men.
Answer: C
Difficulty: Moderate
Chapter LO: 2
AACSB: Diverse and multicultural work environment
Course LO: Identify and describe the processes and tools of strategic marketing
45) The decision to enter one or more particular markets outside the home country depends on all
of the mentioned factors except:
A) company's resources.
B) company's age.
C) company's managerial mind-set.
D) nature of opportunities.
E) threats.
Answer: B
Difficulty: Easy
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Identify and describe the processes and tools of strategic marketing
46) From the global marketing perspective, the customization of the Beatles' records is a good
example of:
A) product adaptation.
B) market penetration.
C) diversification.
D) product development.
E) marketing mix.
Answer: A
Difficulty: Easy
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Identify and describe the processes and tools of strategic marketing
47) In an effort to "Americanize" the sound of the Beatles' recordings, a studio effect known as
reverb was added to some tracks. This is an example of:
A) product adaptation.
B) market penetration.
C) diversification.
D) product development.
E) marketing mix.
Answer: A
Difficulty: Easy
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Identify and describe the processes and tools of strategic marketing
48) Two decades ago, professor Ted Levitt wrote a classic Harvard Business Review article titled
"The Globalization of Markets." Which of the following statements about the author and the
article is accurate?
A) Levitt urged companies to adopt products on a country-by-country basis.
B) There was universal agreement about his thesis that the world is becoming homogeneous.
C) Levitt urged companies to develop standardized products that could be marketed worldwide
with little adaptation.
D) Levitt warned of the coming backlash against globalization.
E) Levitt did not recommend developing standardized products.
Answer: C
Difficulty: Difficult
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Identify and describe the processes and tools of strategic marketing
49) Coca-Cola achieved success in the Japanese market primarily by:
A) standardization of marketing mix elements.
B) global localization.
C) vending machine operations.
D) selecting market mix options.
E) homogenization.
Answer: B
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Identify and describe the processes and tools of strategic marketing
50) A company that succeeds in global marketing:
A) pursues a "one size fits all" strategy by creating identical products for homogeneous markets.
B) customizes special products for each world country or region.
C) creates both standardized and localized products.
D) nurtures an ethnocentric management orientation.
E) uses localized products only.
Answer: C
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Identify and describe the processes and tools of strategic marketing
51) An important managerial task in global marketing is learning to recognize the extent to
which it is possible to extend marketing plans as well as the extent to which adaptation is
desired. The way a company addresses this task is a reflection of the company's:
A) market penetration.
B) market diversification.
C) global marketing strategy.
D) product development.
E) product standardization.
Answer: C
Difficulty: Difficult
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Identify and describe the processes and tools of strategic marketing
52) One of the dimensions of global marketing strategy which pertains to marketing management
is:
A) concentration of market penetration.
B) coordination of market diversification.
C) integration of competitive moves.
D) coordination of product development.
E) product standardization.
Answer: C
Difficulty: Difficult
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Identify and describe the processes and tools of strategic marketing
53) Statements that illustrate the success of global marketing include all of the following except:
A) the Coca-Cola Company supports its Coke brand by utilizing global and local marketing mix.
B) Apple is synonymous with cutting-edge innovation and high-tech design.
C) Italy's Benetton utilizes marketing as a knee-jerk reaction to world marketing needs.
D) the backbone of Caterpillar's global success is its network of dealers.
E) Germany's reputation for engineering and manufacturing provides a competitive advantage.
Answer: C
Difficulty: Moderate
Chapter LO: 3
AACSB: Diverse and multicultural work environment
Course LO: Identify and describe the processes and tools of strategic marketing
54) McDonald's serves McAloo Tikki Burger in India, McRice Burger in Malaysia, McOZ
Burger in Australia, Kiwi Burger in New Zealand, and McHuevo Burger in Uruguay and
McSamurai Burger in Thailand. These menu variations are examples of:
A) a combination of global and local marketing mix elements.
B) a reflection of failure of U.S. menu items in those countries.
C) a deviation from successful marketing practices.
D) a replacement of standard menu names with fancy names.
E) a selection of menu items that can be sold eventually in U.S. markets.
Answer: A
Difficulty: Easy
Chapter LO: 3
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
55) All of the following correctly states McDonald's approach to standardization and adaptation
of the marketing mix except:
A) McDonald's standardizes some product elements and adapts others.
B) McDonald's standardizes some place elements and adapts others.
C) McDonald's standardizes some promotion elements and adapts others.
D) McDonald's standardizes some price elements and adapts others.
E) McDonald's standardizes all product elements.
Answer: E
Difficulty: Moderate
Chapter LO: 3
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
56) Examples of effective global marketing by McDonald's include both standardized and
localized marketing mix elements. Which of the following does not represent a localized
element?
A) It serves McAloo tikki potato burger in India.
B) It uses the advertising slogan "I'm lovin' it."
C) It operates themed dining cars on the Swiss national rail system.
D) It has home delivery service in India.
E) It has slang nicknames such as MakDo in Philippines and McDo in France.
Answer: B
Difficulty: Moderate
Chapter LO: 3
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
57) Uniqlo, a division of Japan's Fast Retail, operates about 850 stores in Japan and currently has
six stores in the United States. Their plans call for a total of 200 U.S. stores by 2020. The
fulfillment of their plan will depend on:
A) industry conditions.
B) sources of competitive advantage.
C) the condition of the apparel market worldwide.
D) the demand in Japan for U.S. style garments.
E) all of the above
Answer: E
Difficulty: Moderate
Chapter LO: 4
AACSB: Analytical thinking
Course LO: Identify and describe the processes and tools of strategic marketing
58) Measured by national income, the United States represents the world's largest single market
for goods and services. Roughly what percentage of world income is found outside the United
States?
A) 25%
B) 50%
C) 75%
D) 95%
E) 35%
Answer: C
Difficulty: Moderate
Chapter LO: 4
AACSB: Analytical thinking
Course LO: Identify and describe the processes and tools of strategic marketing
59) Even though Germany is the largest single-country market in Europe, what percent of the
world market potential for German companies is outside Germany?
A) 40%
B) 55%
C) 74%
D) 94%
E) 85%
Answer: D
Difficulty: Easy
Chapter LO: 4
AACSB: Analytical thinking
Course LO: Identify and describe the processes and tools of strategic marketing
60) According to the Fortune global 500 companies for 2012, the largest corporation based on
revenue is:
A) Exxon Corporation.
B) Toyota Motors.
C) Royal Dutch Shell.
D) General Electric.
E) Walmart stores.
Answer: C
Difficulty: Easy
Chapter LO: 4
AACSB: Analytical thinking
Course LO: Identify and describe the processes and tools of strategic marketing
61) Based on 2012 rankings of Fortune Global 500 companies, the world's most valuable car
company is:
A) GM.
B) Daimler AG.
C) Toyota.
D) Ford.
E) Chrysler.
Answer: C
Difficulty: Easy
Chapter LO: 4
AACSB: Analytical thinking
Course LO: Identify and describe the processes and tools of strategic marketing
62) Based on the size of the market in U.S. dollars, the leading consumer products are:
A) cell phones.
B) bottled water.
C) cigarettes.
D) video games.
E) recorded music.
Answer: C
Difficulty: Easy
Chapter LO: 4
AACSB: Analytical thinking
Course LO: Identify and describe the processes and tools of strategic marketing
63) Based on the size of the market in U.S. dollars, the second highest consumer products are:
A) luxury goods.
B) cell phones.
C) cigarettes.
D) bottled water.
E) recorded music.
Answer: A
Difficulty: Easy
Chapter LO: 4
AACSB: Analytical thinking
Course LO: Identify and describe the processes and tools of strategic marketing
64) Based on the total annual units sold in the worldwide market, the leading product category is:
A) flat-panel TV sets.
B) cigarettes.
C) cell phone handsets.
D) cars and light trucks.
E) HDTV sets.
Answer: B
Difficulty: Easy
Chapter LO: 4
AACSB: Analytical thinking
Course LO: Identify and describe the processes and tools of strategic marketing
65) A person who assumes that his or her home country is superior to the rest of the world is said
to have:
A) ethnocentric orientation.
B) polycentric orientation.
C) regiocentric orientation.
D) geocentric orientation.
E) None of the above
Answer: A
Difficulty: Moderate
Chapter LO: 5
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
66) Nissan's earlier vehicles were difficult to start in many parts of the United States during the
cold
winter months. In northern Japan, it was customary for many car owners to put blankets over the
hoods of their cars during winter months. Nissan's assumption was that Americans would do the
same thing. This is an example of:
A) ethnocentric orientation.
B) polycentric orientation.
C) regiocentric orientation.
D) geocentric orientation.
E) geopolitic orientation.
Answer: A
Difficulty: Moderate
Chapter LO: 5
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
67) The cell phone divisions of Toshiba, Sharp, and other Japanese companies prospered by
focusing on the domestic market. When handset sales in Japan slowed a few years ago, the
Japanese companies realized that Nokia, Motorola, and Samsung already dominated key world
markets. Atsutoshi Nishida, president of Toshiba, noted, "We were thinking only about Japan.
We really missed our chance." This example illustrates:
A) geocentric orientation.
B) regiocentric orientation.
C) polycentric orientation.
D) ethnocentric orientation.
E) poor globalization orientation.
Answer: D
Difficulty: Moderate
Chapter LO: 6
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
68) Unilever, the Anglo-Dutch consumer products company, at one time had 30 different
package designs and 48 different formulations for its Rexona deodorant brand. This is an
example of:
A) ethnocentric orientation.
B) polycentric orientation.
C) regiocentric orientation.
D) geocentric orientation.
E) transnational orientation.
Answer: B
Difficulty: Moderate
Chapter LO: 6
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
69) Transnational companies, such as Toyota and Honda, have characteristic features that
include:
A) being in both global markets and utilizing global supply chains.
B) characterized by a mind-set of being "stateless."
C) using both localized and standardized elements in marketing programs.
D) decisions made on the basis of ongoing research.
E) all of the above
Answer: E
Difficulty: Moderate
Chapter LO: 5
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
70) Nestlé, Unilever, GlaxoSmithKline, and Royal Philips Electronics can be considered
transnational companies on the basis of:
A) sales outside the home country to total sales.
B) assets outside the home country to total assets.
C) employees outside the home country to total employees.
D) headquartered in a relatively small home-country market.
E) all of the above
Answer: E
Difficulty: Moderate
Chapter LO: 6
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
71) A type of advantage that a global company possesses by virtue of the fact that it has
experience in more than one country is referred to as:
A) Leverage.
B) Transferability.
C) Flexibility.
D) Capability.
E) Enability.
Answer: A
Difficulty: Moderate
Chapter LO: 6
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
72) A number of multilateral trade agreements have accelerated the pace of global integration
which include:
A) NAFTA.
B) GATT.
C) WTO.
D) EU.
E) all of the above
Answer: E
Difficulty: Easy
Chapter LO: 6
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
73) Pfizer, Merck, Novartis, and other pharmaceutical companies have little choice but to engage
in global marketing since:
A) there is little demand for their products in home countries.
B) their research centers are located overseas.
C) no single market is large enough to recover costs incurred in research.
D) there is more demand overseas for their products.
E) technology is not available in home countries.
Answer: C
Difficulty: Moderate
Chapter LO: 6
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
74) In their book, Daniel Yergin and Joseph Stanislaw wrote "It is the greatest sale in the history
of the world. Governments are getting out of businesses by disposing of what amounts to trillions
of dollars of assets. Everything is going—from steel plants and phone companies . . . to hotels,
restaurants, and nightclubs." This is an indication of:
A) the fact that governments can make more money by selling assets.
B) privatization is becoming a driving force for global marketing.
C) these businesses are considered as closed markets.
D) foreign companies are competing with governments.
E) there is less demand for these type of companies.
Answer: B
Difficulty: Difficult
Chapter LO: 6
AACSB: Analytical thinking
Course LO: Identify factors that influence a company's micro environment and macro
environment
75) When a country like China is experiencing rapid economic growth, policymakers are likely
to:
A) look more favorably on outsiders.
B) look less favorably on outsiders.
C) experience more resistance toward outsiders.
D) feel threatened by outsiders.
E) None of the above
Answer: A
Difficulty: Moderate
Chapter LO: 6
AACSB: Analytical thinking
Course LO: Identify factors that influence a company's micro environment and macro
environment
76) H.F. Iskander, general manager of Chevron's Kuwait office, stated "Chevron is pumping oil
in different locations all over the world . . . there isn't a rock we haven't drilled through. We
centralize all that knowledge at our headquarters, analyze it, sort it out, and that enables us to
solve any oil-drilling problem anywhere." From the global marketing point of view this is an
example of a global company:
A) that is hungry to exploit natural resources.
B) that is trying to be first to explore oil.
C) that it is trying to solve world problems.
D) that gains leverage through experience transfers.
E) that does not have easy access to information.
Answer: D
Difficulty: Moderate
Chapter LO: 6
AACSB: Analytical thinking
Course LO: Identify factors that influence a company's micro environment and macro
environment
77) Japan's giant Matsushita Electric Company achieved scale economies by exporting VCRs,
televisions, and other consumer electronics products throughout the world from world-scale
factories in Japan. This is an example of the fact that:
A) scale economies were a cornerstone of Japanese success in the 1970s and 1980s.
B) leverage from scale economies is not limited to manufacturing.
C) a global company can achieve the same economies on a global scale.
D) the larger scale of the global company also creates opportunities to improve corporate staff
competence and quality.
E) all of the above
Answer: E
Difficulty: Moderate
Chapter LO: 6
AACSB: Analytical thinking
Course LO: Identify factors that influence a company's micro environment and macro
environment
78) Anheuser-Busch, the brewer of Budweiser beer, lost its independence after years of focusing
primarily on the domestic U.S. market. This is most likely a result of:
A) management myopia.
B) national controls.
C) opposition to globalization.
D) newcomers from emerging markets.
E) organizational culture.
Answer: A
Difficulty: Moderate
Chapter LO: 6
AACSB: Analytical thinking
Course LO: Identify factors that influence a company's micro environment and macro
environment
79) In the United States, some people believe that globalization has depressed the wages of
American workers and resulted in the loss of both blue-collar and white-collar jobs. This is an
example of:
A) discrimination.
B) domination.
C) globaphobia.
D) management myopia.
E) economic crisis.
Answer: C
Difficulty: Moderate
Chapter LO: 6
AACSB: Analytical thinking
Course LO: Identify factors that influence a company's micro environment and macro
environment
80) McDonald's restaurants are found in more than 118 countries. To ensure high levels of
consistency and quality, the company's far-flung restaurant system incorporates many
standardized elements (e.g. restaurant design, burgers/fries/soft drinks as basic menu offerings).
However, McDonald's also prides itself on sourcing many of its food inputs (e.g. potatoes and
dairy products) in individual host countries. McDonald's strives to be locally responsive—it
creates new menu items specifically designed with local eating customs and preferences in mind.
Typically, McDonald's forms joint ventures with local partners, a tactic that ensures that a local
"face" is associated with the company. Finally, McDonald's has been in many country markets
long enough that a new generation of consumers has grown up with McDonald's and are not
aware of the company's U.S. origins. On the basis of this summary, what is the highest stage of
corporate development that McDonald's arguably has achieved?
A) international
B) multinational
C) global
D) transnational
E) myopic
Answer: D
Difficulty: Difficult
Chapter LO: 6
AACSB: Analytical thinking
Course LO: Identify factors that influence a company's micro environment and macro
environment
81) What is "global marketing" and how does it differ from "regular marketing"? Giving
examples of at least one major corporation, explain these differences.
Answer: Marketing is an organizational function and a set of processes for creating,
communicating, and delivering value to customers. An organization that engages in global
marketing focuses its resources and competencies on global market opportunities and threats. A
fundamental difference between "regular marketing" and "global marketing" is the scope of
activities. A company that engages in global marketing conducts important business activities
outside the home-country market. For example, as Walmart expands into Guatemala and other
Central America countries, it is implementing a market development strategy.
Difficulty: Easy
Chapter LO: 1
AACSB: Application of knowledge
Course LO: Discuss the fundamental concepts of marketing
82) What is meant by competitive advantage? Explain, giving examples as to how globalization
presents companies with unprecedented opportunities to reconfigure themselves.
Answer: When a company succeeds in creating more value for customers than its competitors,
that company is said to enjoy "competitive advantage." It is measured relative to rivals in a given
industry. For example, Coca-Cola and Pepsi are trying to maintain a competitive advantage in
global markets. Globalization presents companies with unprecedented opportunities as well as
challenges. Achieving competitive advantage in a global industry requires executives and
managers to maintain a well-defined strategic focus. Globalization provides companies to
develop new products, get new ideas, develop markets, expand brand recognition, and eventually
profits.
Difficulty: Moderate
Chapter LO: 2
AACSB: Application of knowledge
Course LO: Discuss the fundamental concepts of marketing
83) What are the dimensions of global marketing strategy (GMS) that pertain to marketing
management? Explain in detail giving examples.
Answer: GMS has three dimensions that pertain to marketing management. First, "concentration
of marketing activities" such as promotional campaigns or pricing decisions is performed in one
or a few country locations. The second, "coordination of marketing activities," refers to the
extent to which marketing activities related to the marketing mix are planned and executed
interdependently around the globe. Finally, "integration of competitive moves" is the extent to
which a firm's competitive marketing tactics in different parts of the world are interdependent. In
essence, GMS should enhance the firm's performance on a worldwide basis.
Difficulty: Moderate
Chapter LO: 3
AACSB: Application of knowledge
Course LO: Discuss the fundamental concepts of marketing
84) Describe how the global marketing strategy is different when compared to that of single
country marketing.
Answer: In single country marketing, choosing a target market and developing a marketing mix
are two important considerations. The same two aspects are also important in global marketing;
however, they are viewed from a different perspective. There is standardization or adaptation in
each of the marketing mix components in each country where business is conducted. Global
marketing strategy has three additional dimensions that pertain to marketing management:
concentration of marketing activities, coordination of marketing activities, and integration of
competitive moves.
Difficulty: Moderate
Chapter LO: 3
AACSB: Application of knowledge
Course LO: Discuss the fundamental concepts of marketing
85) The Coca-Cola Company has convincingly demonstrated that the ability to think globally
and act locally can be a source of competitive advantage. Justify this statement using examples.
Answer: Coke achieved success in Japan by spending a great deal of time and money to become
an insider. The company built a complete local infrastructure with its sales force and vending
machine operations. Coke's success in Japan is a function of its ability to achieve "global
localization," being as much of an insider as a local company but still reaping the benefits of
world-wide operations. The company is adept at adapting sales promotion, distribution, and
customer service efforts to local needs. Coke has become one of the brands that have spent time
and money getting this experience in unknown territories.
Difficulty: Difficult
Chapter LO: 2
AACSB: Application of knowledge
Course LO: Discuss the fundamental concepts of marketing
86) Using McDonald's as an example, show how effective global marketing can be successfully
achieved.
Answer: The particular approach to global marketing that a company adopts will depend on
industry conditions and its source or sources of competitive advantage. McDonald's standardized
product is Big Mac which is localized in various countries, such as McAloo Tikka Burger in
India. Similar products with local slang names were used adapting to tastes in different countries.
For promotion the standardized slogan "I'm lovin' it" is used whereas individual promotion is
used in different countries. Freestanding restaurants are a standardized version, which is
localized in several countries by having kiosks or home delivery. Similarly, the average price of
Big Mac is used as a standard which is localized on the basis of currency fluctuation and
affordability.
Difficulty: Moderate
Chapter LO: 3
AACSB: Application of knowledge
Course LO: Discuss the fundamental concepts of marketing
87) In an effort to "Americanize" the sound of the Beatles' recordings, a studio effect known as
reverb was added to some tracks. From the global marketing perspective, what does this change
represent?
Answer: The early albums released in the United Kingdom differed from releases in the United
States as well as in other countries. EMI sent master tapes to various countries, often
customizing them at the request of the local company. Reverb makes a dry (unprocessed) sound
compared to the wetter echo-like sound preferred by Americans. In addition, some of the original
mono and stereo tracks were remixed for the American market. Converting it to suit the local
market is referred to as both product adaptation and product extension.
Difficulty: Moderate
Chapter LO: 3
AACSB: Application of knowledge
Course LO: Discuss the fundamental concepts of marketing
88) How do ethnocentric orientations of a company differ from polycentric orientations? Give
examples of how companies react under both orientations.
Answer: A manager who assumes that his or her home country is superior to the rest of the
world is said to have an ethnocentric orientation. Polycentric orientation is the opposite of
ethnocentric orientation, where a manager assumes that each country in which a company does
business is unique. In ethnocentric orientation, foreign operations or markets are typically
viewed as being secondary or subordinate to domestic ones. For example Nissan's ethnocentric
orientation caused the managers to believe that consumers all over the world should be able to
behave as Japanese. In Northern Japan, people would put blankets over the hoods of their cars
during cold winters and managers assumed that people in the United States should be able to do
the same. Citicorp's financial company executives have polycentric orientation, where the
assumption was that each country is different, and there is a need for a localized or adaptation
approach.
Difficulty: Moderate
Chapter LO: 5
AACSB: Application of knowledge
Course LO: Discuss the fundamental concepts of marketing
89) Global marketing does not necessarily mean operating everywhere since there are forces
affecting global integration and global marketing. Justify this statement using examples based on
the world economic trends.
Answer: Economic growth in key developing countries creates market opportunities that provide
a major incentive for companies to expand globally. Due to the rising per capita incomes in
India, China, and elsewhere, the growing ranks of middle-class consumers have more money to
spend than in the past. At the same time, slow growth in industrialized countries has compelled
management to look ahead for opportunities in nations or regions with high rates of growth.
Also, the economic growth has reduced resistance that might otherwise have developed in
response to the entry of foreign firms into domestic economies. The worldwide movement
toward free markets, deregulation, and privatization is also a driving force. The trend toward
privatization is opening up formerly closed markets creating tremendous opportunities.
Difficulty: Easy
Chapter LO: 6
AACSB: Application of knowledge
Course LO: Discuss the fundamental concepts of marketing
90) List and briefly describe the forces affecting local integration and global marketing.
Answer: The forces affecting local integration and global marketing are (a) Multilateral Trade
Agreements such as NAFTA which has expanded trade among the United States, Canada, and
Mexico; (b) converging market needs and wants and the information revolution: the development
of technology has a considerable impact on the market needs and wants; (c) transportation and
communication improvements: the technology for transportation and communication is changing
rapidly; (d) product development costs: new products require major investments and
considerable time; (e) world economic trends: growing economies worldwide have an impact on
global marketing; and (f) leverage: it is an advantage that a company enjoys by virtue of having
experience in more than one country.
Difficulty: Moderate
Chapter LO: 6
AACSB: Application of knowledge
Course LO: Discuss the fundamental concepts of marketing
Chapter 4 Social and Cultural Environments
1) Venice is unique among the cities of the world and consists of more than 100 islands linked by
a system of canals.
Answer: TRUE
Difficulty: Easy
Chapter LO: 1
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
2) Venice is threatened by modern invaders since it is one of the top cruise destinations.
Answer: TRUE
Difficulty: Easy
Chapter LO: 1
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
3) Culture includes conscious and unconscious values, ideas, attitudes, and symbols that shape
human behavior and that are confined to one generation.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 1
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
4) When marketers refer to "fast-food culture", or "credit-card culture" they are referring to a
cosmopolitan culture which is comprised of various segments of the population which are
interconnected.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 1
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
5) A "value" is an organized pattern of knowledge that an individual holds to be true about the
world.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
6) In Indonesia, home of the world's largest Muslim population, KFC uses Ramadan-themed
outdoor advertising to encourage Indonesians to come to the restaurants at buka puasa, the end of
each day's fast.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
7) Aesthetic elements that are attractive, appealing, and in good taste are perceived as decent and
accepted universally.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
8) In surveys about color preferences, 50 percent of respondents indicate green is their favorite—
and it is favored by a wide margin over the next-preferred color.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
9) Cadbury has trademarked the color purple for its chocolate confectionary packaging.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
10) Music represents a "transculture" that cannot be identified with any particular nation since
rhythm is a universal aspect of music.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
11) In order to convey the sense of the country of origin it is advisable to use the same
background music in broadcast commercials in all parts of the world.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
12) In China, authorities have the power to dictate which songs can be marketed and performed.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 1
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
13) Domino's Pizza had to pull out of Italy because Italians perceived its products to be "too
American."
Answer: TRUE
Difficulty: Moderate
Chapter LO: 1
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
14) Although some food preferences remain deeply embedded in culture, plenty of evidence
suggests that global dietary preferences are converging.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 1
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
15) A number of authors, journalists, and food critics have chronicled a disturbing trend in the
land of haute cuisine-the decline in France's status as a culinary superpower.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 1
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
16) In China, Dell had to find a meaningful interpretation of "direct sales," the phrase that
describes the company's powerful business model.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 1
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
17) In Korea 4 5683 968 can be interpreted as "I love you."
Answer: TRUE
Difficulty: Moderate
Chapter LO: 1
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
18) Colgate discovered that in Spanish colgate is a verb form that means "go hang yourself."
Answer: TRUE
Difficulty: Moderate
Chapter LO: 1
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
19) Westerners doing business in the Middle East must be careful not to reveal the soles of their
shoes to hosts or pass documents with the left hand.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 1
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
20) "McDonaldization of culture," a term coined by Geert Hofstede, refers to the wide spread of
McDonald's restaurants in the world and its adverse impact on global culture.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 1
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
21) Americans typically want to "go it alone." As a result, they may be outnumbered in a
negotiation situation.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 1
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
22) The president of an American company was interested in dealing with a company in Saudi
Arabia. The Saudi CEO made it clear at the outset that the credentials in the documents have less
credibility than personal trust and confidence. This shows that the Saudi Arabian culture is a
high-context culture.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 2
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
23) If a potential Latin American customer insists on giving you a tour of the architectural
highlights of his city prior to discussing business, it's a clue that you are doing business in a highcontext culture.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 2
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
24) Competitive bidding is most likely to be infrequent in a low-context culture.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 2
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
25) According to Hofstede's research on cultural values, masculinity dimension describes a
society in which social roles of men and women overlap.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 3
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
26) Long-term values include persistence (perseverance), defined as a general tenacity in the
pursuit of a goal.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
27) The power distance dimension reflects the degree of trust among members of society. Thus,
the higher the power distance (PDI), the higher the level of trust.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 3
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
28) A sense of shame leads to sensitivity in social contacts within high-performing Asian
countries such as Hong Kong, Taiwan, and Japan.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 3
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
29) Former Disney chairman Michael Eisner and other company executives were blinded by
ethnocentrism. Avoiding the Self-Reference Criterion (SRC) requires a person to suspend
assumptions based on prior experience and success and be prepared to acquire new knowledge
about human behavior and motivation.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 3
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
30) According to Roger's diffusion theory, most customers will not purchase expensive products
without the "hands-on" experience marketers call "trial."
Answer: TRUE
Difficulty: Moderate
Chapter LO: 4
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
31) The cultural environment of a country is best defined by which characteristics?
A) standard of living and stage of economic development
B) production process and standards of measurement
C) attitudes, beliefs, and values
D) degree of nationalism and economic community membership
E) fast food culture and slow food culture
Answer: C
Difficulty: Moderate
Chapter LO: 1
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
32) Suppose you have a friend from India who is a lifelong vegetarian and who does not like
McDonald's because the company sells hamburgers in many countries. Which of the following
describes your friend?
A) "vegetarianism" represents a value, "dislike McDonald's" represents an attitude
B) "vegetarianism" represents an attitude, "dislike McDonald's" represents a value
C) "vegetarianism" and "dislike McDonald's" both represent an attitude
D) "vegetarianism" represents a value, "dislike McDonald's" represents a belief
E) "vegetarianism" and "dislike McDonald's" both represent values
Answer: A
Difficulty: Moderate
Chapter LO: 1
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
33) There is nothing inherently "good" or "bad" about any color of the spectrum and all
associations and perceptions regarding color arise from culture. Which of the following
statements is not true?
A) Red is a popular color in most parts of the world.
B) Red color is associated with "active," "vibrant," and "emotional."
C) Red color is preferred in many countries since it is the color of blood.
D) Red color is highly preferred in some African countries.
E) Red color is tied to the traditions of viticulture and winemaking.
Answer: D
Difficulty: Moderate
Chapter LO: 1
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
34) The use of this color dates back millennia as seen by artisans in ancient Egypt, China, and
Mayan civilizations all worked with the color, which is now associated with royalty and divinity.
A) Red
B) Green
C) Blue
D) Orange
E) Brown
Answer: C
Difficulty: Easy
Chapter LO: 1
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
35) Cultural influences are also quite apparent in food preparation and consumption patterns and
habits. Domino's Pizza, the world's largest pizza-delivery company, pulled out of Italy because:
A) tomato sauce was too bold and competed with Italian products.
B) people did not like to eat at home.
C) Italians perceived its products to be "too American."
D) Italians wanted more toppings on thick crust.
E) Italians did not like anyone else to use the name pizza.
Answer: C
Difficulty: Moderate
Chapter LO: 1
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
36) While some food preferences remain deeply embedded in culture, there is plenty of evidence
that global dietary preferences are converging. Examples of such a change can be predicted
from:
A) the popularity of Domino's Pizza in Italy.
B) the preference for local hamburgers from a local chain, Jollibee's, in the Philippines.
C) the growing number of McDonald's restaurants globally.
D) the increased sales of soups and noodles in Thailand.
E) popularity of Chinese foods in Taiwan.
Answer: C
Difficulty: Moderate
Chapter LO: 1
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
37) As cultural differences become less relevant and disposable incomes become high, a trend
towards greater consumption of the following type of foods is predicted.
A) French artistic foods
B) American fast foods
C) Chinese retail foods
D) Indian spicy foods
E) Mexican spicy foods
Answer: B
Difficulty: Moderate
Chapter LO: 1
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
38) American Nancy McKinstry recently became the new CEO at Dutch publisher Wolters
Kluwer. As Ms. McKinstry noted, she had to drop the word "aggressive" in describing her
strategic plan to company managers. She said, "I learned that the word has a negative
connotation to a lot of Europeans. I was coming across too hard, too much of a results-driven
American to the people. I needed to get on board so I started describing our strategy as 'decisive'
and that made all the difference." Which of the following grammar topics is the critical element
in this passage?
A) syntax
B) semantics
C) morphology
D) phonology
E) semiotics
Answer: B
Difficulty: Moderate
Chapter LO: 1
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
39) An intern from the United Kingdom was working in an American software company during
summers. One day her boss gave her a memo asking her to post it, with the intention of having it
put on the bulletin board. To her boss's surprise the letter was mailed by the intern since the word
"post" means "mail" in British English. In communication terms this error can be attributed due
to:
A) syntax.
B) phonology.
C) morphology.
D) semantics.
E) semiotics.
Answer: D
Difficulty: Moderate
Chapter LO: 1
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
40) Linguists have divided the study of languages into four main areas. The system of word
formation is referred to as:
A) syntax.
B) phonology.
C) morphology.
D) semantics.
E) semiotics.
Answer: C
Difficulty: Moderate
Chapter LO: 1
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
41) Anheuser-Busch and Miller Brewing both experienced market failures in the United
Kingdom when they used the phrase "light beer" which was misinterpreted as:
A) being low in calories.
B) having reduced alcohol levels.
C) having light color.
D) having less quality.
E) having less quantity.
Answer: B
Difficulty: Moderate
Chapter LO: 1
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
42) When the Coca-Cola Company was developing its new Dasani bottled water brand, linguists
helped guide the naming process. For example, the recurring "a" was chosen because it has a
soothing sound. In linguistics, issues pertaining to letters and sounds are a matter of:
A) syntax.
B) synonym.
C) phonology.
D) semiotics.
E) semantics.
Answer: C
Difficulty: Difficult
Chapter LO: 1
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
43) In China, Dell had to find a meaningful interpretation of "direct sales." A literal translation
results in zhi xiao which is the Chinese term for "illegal pyramid marketing schemes." To
counteract the negative connotation, Dell's sales representatives began using the phrase zhi xiao
ding gou, which translates as:
A) direct orders.
B) direct marketing.
C) pyramid orders.
D) pyramid scheme.
E) direct shipping.
Answer: A
Difficulty: Difficult
Chapter LO: 1
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
44) Colgate discovered that in Spanish colgate is a verb form that means "go hang yourself."
Whirlpool found that consumers in Italy, France, and Germany had trouble pronouncing the
name. These are examples which show the importance of ________ in global marketing.
A) syntax and morphology
B) phonology and morphology
C) syntax and semantics
D) semantics and phonology
E) semantics and morphology
Answer: B
Difficulty: Difficult
Chapter LO: 1
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
45) Giving business cards with the left hand in Malaysia, showing soles of shoes to a host in
Saudi Arabia, and winking one eye in India are all considered impolite interpersonal
communication due to the fact that:
A) in Middle Eastern countries it is customary to take off shoes at the door.
B) it is difficult to notice when one winks eyes since there are many people in India.
C) people pick up nonverbal cues and understand intuitively without being told.
D) these actions distract people from hearing at meetings.
E) people are not aware of Western ways of doing business.
Answer: C
Difficulty: Moderate
Chapter LO: 1
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
46) A vice-president of an American software company introduced himself to a group of Korean
partners and added "you may just call me John." Although this verbal cue shows the underlying
reality that Americans have a high value on informality and equality, it needs adaptation due to
the reason that:
A) John is not a very popular name in Korea.
B) it is difficult to translate John in Korean language.
C) customs, hierarchies, and class structure of Korean culture have to be respected.
D) Korean culture requires that first and last name be used in addressing guests.
E) it is not appropriate to disclose nicknames in business meetings.
Answer: C
Difficulty: Moderate
Chapter LO: 1
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
47) A characteristic of a low-context culture which is prevalent in the United States, Switzerland,
and Germany is that:
A) less information is contained in verbal communication.
B) major emphasis on a person's values and position in society.
C) the messages are explicit and specific.
D) a person's word is his or her bond.
E) the negotiations are long and protracted.
Answer: C
Difficulty: Moderate
Chapter LO: 2
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
48) In high-context cultures, time is:
A) monochronic.
B) polychronic.
C) linear.
D) short.
E) common.
Answer: B
Difficulty: Moderate
Chapter LO: 2
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
49) Insisting on competitive bidding can cause complications in:
A) low-context cultures
B) high-context cultures.
C) low and high context cultures.
D) Korean cultures.
E) Japanese cultures.
Answer: A
Difficulty: Moderate
Chapter LO: 2
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
50) Lawyers are more important in:
A) low-context cultures.
B) high-context cultures.
C) Indian cultures.
D) Korean cultures.
E) Japanese cultures.
Answer: A
Difficulty: Moderate
Chapter LO: 2
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
51) According to Geert Hofstede, which of the following is a key cultural dimension that helps
account for rapid economic growth in Asia?
A) power distance
B) individualist/collectivist
C) feminine/masculine
D) uncertainty avoidance
E) long-term orientation
Answer: E
Difficulty: Moderate
Chapter LO: 3
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
52) Two countries that score high in uncertainty avoidance are:
A) Austria and Belgium.
B) Japan and Hong Kong.
C) Greece and Portugal.
D) Denmark and Finland.
E) Ireland and Italy.
Answer: C
Difficulty: Moderate
Chapter LO: 3
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
53) Long-term values include all of the following except:
A) dynamism.
B) persistence.
C) sense of shame.
D) thrift.
E) ordering relationships.
Answer: A
Difficulty: Difficult
Chapter LO: 3
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
54) Which is not considered as a long-term value?
A) persistence
B) sense of shame
C) thrift
D) ordering relationships
E) search for truth
Answer: E
Difficulty: Difficult
Chapter LO: 3
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
55) The power distance dimension reflects the degree of trust among members of society. Thus,
the higher the power distance (PDI) the:
A) greater is uncertainty avoidance.
B) lower is the level of trust.
C) higher is tolerance for ambiguity.
D) greater is male dominance.
E) lower is the harmony.
Answer: B
Difficulty: Moderate
Chapter LO: 3
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
56) Danes generally are not afraid of taking chances; they are comfortable doing things that are
not carefully thought out or planned. Denmark's "flexicurity" policy combines free labor markets
with adjustable welfare benefits. This is an example of the application of Hofstede's typology
under the values which highlight:
A) Future Orientation.
B) Uncertainty Avoidance.
C) Gender Differentiation.
D) Power Distance.
E) Individualism/Collectivism.
Answer: B
Difficulty: Moderate
Chapter LO: 3
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
57) European consumers have faced a number of food-related issues, including an outbreak of
hoof-and-mouth disease and continuing concerns over mad cow disease. As a result, many are
skeptical about GMOs (genetically-modified organisms) and the benefits of eating food products
that incorporate genetically-engineered ingredients. As one French citizen noted recently, "We
have a very risk-averse society that has been completely traumatized by food scares." Thinking
about this situation in terms of Hofstede's cultural values framework, one might reasonably
interpret this remark to indicate that France ranks relatively high in:
A) Power Distance.
B) Short-term Orientation.
C) Masculinity.
D) Uncertainty Avoidance.
E) Individualism.
Answer: D
Difficulty: Difficult
Chapter LO: 3
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
58) Procter & Gamble's introduction of All-Temperature Cheer laundry detergent in Japan was a
flop at first. The problem was that Japanese women wash clothes in cold water—either tap water
or leftover bath water—so they don't care about all-temperature washing (which is a big selling
point in the United States). Also, Cheer was first introduced in Japan at a time when the market
for fabric softeners in Japan was rapidly expanding. However, when Japanese housewives added
lots of fabric softener to the water, Cheer didn't produce many suds (Americans don't use as
much fabric softener). P&G reformulated the product so it wouldn't be affected by fabric
softeners, and ads for Cheer in Japan pledged superior cleaning in cold water, not all
temperatures. Which of the following might have helped P&G avoid the initial problems with
Cheer?
A) Maslow's hierarchy
B) high vs. low context culture
C) diffusion of innovation
D) self-reference criterion
E) polycentric orientation
Answer: D
Difficulty: Difficult
Chapter LO: 3
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
59) The Walt Disney Company's decision to build a theme park in France provides an excellent
vehicle to understanding SRC (Self-Reference Criterion). All of the statements listed below
portray this meaning except:
A) Disney executives believed there is virtually unlimited demand for American cultural exports.
B) French are sensitive about American cultural imperialism.
C) Consuming wine with the midday meal is a long-established custom which was not realized
by Disney executives.
D) Disney executives were blinded by their prior success and ethnocentrism.
E) The SRC can be a powerful negative force in global business.
Answer: D
Difficulty: Difficult
Chapter LO: 3
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
60) Which of the following best sums up the experience of Walt Disney Company executives
when creating Disney's theme park in Paris?
A) They were guided by the "think global, act local" principle.
B) They fell victim to the self-reference criterion.
C) They exhibited a geocentric management orientation.
D) They miscalculated the rate of diffusion of innovations in Europe.
E) They had an unbiased perception of existing culture in Europe.
Answer: B
Difficulty: Moderate
Chapter LO: 3
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
61) The lesson that SRC (Self-Reference Criterion) teaches can be summarized as:
A) a person's perception of market needs is framed by others cultural experience.
B) perceptual blockage and distortion about cultures are hard to reduce.
C) unbiased perception is a vital and critical skill in global marketing.
D) unconscious reference to one's cultural values is critical in global marketing.
E) prior success and ethnocentrism can override the SRC.
Answer: C
Difficulty: Easy
Chapter LO: 3
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
62) When Walt Disney Company's executives were planning to build a theme park in France,
they firmly believed that the success of McDonald's and Coke as well as their success in Tokyo
Disneyland ensures the runaway success of their plans. Disney policies prohibit sale or
consumption of alcohol inside the theme parks which they also implemented in France. This
proved to be a failure since consuming wine with the midday meal is a long-established custom
in France. This is most likely a classical example of:
A) the "think global, act local" principle.
B) being victim to the self-reference criterion.
C) a geocentric management orientation.
D) miscalculation of the rate of diffusion of innovations in Europe.
E) an unbiased perception of existing culture in Europe.
Answer: C
Difficulty: Moderate
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
63) One of the basic elements of sociologist Everett Roger's Diffusion theory is the concept of an
"adoption process." The first step in this adoption process is:
A) interest.
B) evaluation.
C) trial.
D) adoption.
E) awareness.
Answer: E
Difficulty: Difficult
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
64) Which of the following shows the correct order of the product adoption process?
A) evaluation→trial→awareness→interest→adoption
B) trial→interest→evaluation→awareness→adoption
C) interest→awareness→adoption→trial→evaluation
D) awareness→interest→evaluation→trial→adoption
E) adoption→evaluation→trial→interest→awareness
Answer: D
Difficulty: Easy
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
65) Which of the following can negatively influence the rate of diffusion of an innovation?
A) substantial relative advantage
B) high compatibility
C) high complexity
D) divisibility
E) high level of communicability
Answer: C
Difficulty: Moderate
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
66) That floppy disks are being dumped in favor of USB mass storage devices can be attributed
to which characteristics of innovation?
A) compatibility
B) relative advantage
C) divisibility
D) communicability
E) complexity
Answer: B
Difficulty: Moderate
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
67) To speed adoption of a new product, the marketing team should:
A) ensure that features and benefits can be communicated or demonstrated.
B) design the maximum amount of complexity into the product.
C) discourage limited use on a "trial" basis.
D) attempt to make a clean break with existing customer values.
E) rely heavily on word-of-mouth marketing.
Answer: A
Difficulty: Moderate
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
68) In the 1990s, Philips Electronics developed a new consumer electronics product called the
Digital Compact Cassette player. DCC allowed users to record and playback in a new digital
format; DCC was also designed to play the older, analog cassette tapes that many people own.
This latter feature reflects which of the following characteristics of innovations?
A) relative advantage
B) communicability
C) compatibility
D) complexity
E) divisibility
Answer: C
Difficulty: Moderate
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
69) Together, innovators and early adopters make up about ________ of the potential market for
a new product.
A) 16.0%
B) 26.0%
C) 34.0%
D) 46.0%
E) 13.5%
Answer: A
Difficulty: Moderate
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
70) If a marketing manager plans to enter the newly industrializing countries (NICs) or other
Asia markets with a product that has proved to be successful in the home market, the product's
diffusion processes are likely to be:
A) negligible since consumers will take time to assess the relative advantage.
B) much slower than in the home market.
C) much faster than in the home market.
D) similar to that in the home market.
E) less compatible in the Asian market.
Answer: C
Difficulty: Moderate
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
71) A few years ago, Philips Electronics developed a new consumer electronics product called
the Digital Compact Cassette player. DCC did more than allow users to record and playback in a
new digital format; DCC was also designed to play the older, analog cassette tapes that many
people own. However, die-hard audio buffs were the only ones to buy DCC and Philips
ultimately discontinued the product. Which of the following statements based on adopter
categories describes this?
A) early adopters bought, but innovators didn't
B) innovators bought, but early adopters didn't
C) innovators bought, and everyone else was a laggard
D) early majority bought, but late majority didn't
E) DCC was a laggard
Answer: B
Difficulty: Moderate
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
72) Adopter categories are classifications of individuals within a market on the basis of their
innovativeness. Recently Apple introduced the iPhone for which people waited in long lines
before the doors opened. According to experts these 2.5% of people who bought the iPhone are
categorized as:
A) early adopters.
B) innovators.
C) early majority.
D) late majority.
E) laggards.
Answer: B
Difficulty: Moderate
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
73) Which of the following is true about the innovation diffusion process in Asia?
A) Japan has a high-context culture with a relatively homogeneous population.
B) Because risk avoidance is a cultural value, there are fewer innovators in Asia than in the
United States.
C) Once innovators in Asia have tried a product, early adopters and the early majority quickly
follow suit.
D) After a new product has achieved success in one Asian market, it is likely to be adopted in
other Asian markets at an even faster rate.
E) All of the above are true.
Answer: E
Difficulty: Moderate
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
74) Comparing and contrasting the diffusion of innovations in Western countries and in Asia,
one can say that:
A) the process occurs in an identical manner in both regions.
B) in Asia, the adoption process begins more slowly but ramps up more rapidly than it does in
Western countries.
C) in Western countries, the adoption process begins more slowly but ramps up more rapidly
than it does in Asia.
D) the diffusion of innovation framework is applicable in the West but not in Asia.
E) the diffusion of innovation framework is applicable in Asia but not in the West.
Answer: B
Difficulty: Moderate
Chapter LO: 4
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
75) Which of the following is arranged starting with the highest level of environmental
sensitivity and ending with the lowest level?
A) food→computers→integrated circuits
B) integrated circuits→food→computers
C) integrated circuits→computers→food
D) computers→food→integrated circuits
E) none of the above
Answer: A
Difficulty: Easy
Chapter LO: 5
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
76) The ________ the level of environmental sensitivity for a given product, the ________ the
need for managers to address country-specific economic, regulatory, technological, social and
cultural environmental conditions.
A) greater; greater
B) lower; greater
C) greater; lower
D) lower; lower
E) stronger; greater
Answer: A
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
77) Which of the following is true about "coffee culture" in England?
A) Starbucks has been unsuccessful in its attempt to change the Brits' preference for tea.
B) American entrepreneurs found success in England with the Seattle Coffee Company which
Starbucks later acquired.
C) Starbucks succeeded in England only after changing the company's name to Seattle Coffee
Company.
D) Starbucks-style coffee shops have been a flop because tea culture is too deeply engrained.
E) Starbucks has been successful in England since it started selling beer.
Answer: B
Difficulty: Moderate
Chapter LO: 5
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
78) Despite the fact that the American team advanced to the semi-finals in South Africa, the
game is much more popular in other parts of the world. There is an effort to make soccer popular
in the United States, and many fashion brands are interesting in marketing their products which
pertain to soccer and other sports. Considering this aspect which of the following statements is
incorrect?
A) In the United States, 2010 World Cup merchandise such as T-shirts was available at Walmart.
B) FIFA is the only global marketer seeking revenue growth by boosting soccer's popularity in
America.
C) Yves Saint Laurent designer was selling merchandise with soccer related embossed emblems.
D) The fall 2010 collection of designer clothes included "FIFA Heritage Tees" with logos on
shirts.
E) FIFA has chosen Total Apparel Group (TAG) to boost soccer's visibility and popularity
among Americans.
Answer: E
Difficulty: Moderate
Chapter LO: 5
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
79) Coca-Cola billboards were recently put up near the Piazza San Marco in Venice, which has
numerous historical landmarks. The major reason for allowing the billboards at a prominent
historical site is:
A) Coke is a very popular drink in Italy.
B) to introduce an American product in an emerging market.
C) severe lack of funds for historic renovation.
D) aesthetic.
E) global marketing.
Answer: C
Difficulty: Moderate
Chapter LO: 5
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
80) A massive effort dubbed as "Moses Project" is underway in Venice in order to:
A) promote passive tourism.
B) reduce the number of billboards on historic sites.
C) provide biblical information to tourists.
D) prevent flooding.
E) modernize accommodations.
Answer: D
Difficulty: Moderate
Chapter LO: 5
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
81) There are considerable differences and similarities among world cultures. This makes the
task of the global marketer much more difficult. Giving examples, show what factors have to be
taken into account when planning marketing strategy for different parts of the world.
Answer: The task of the global marketer is twofold based on the differences and similarities
prevalent worldwide. First of all, marketers must study and understand the country cultures in
which conduction of business is planned. Secondly, marketers must incorporate this
understanding into the marketing planning process. Several adaptations will be needed in
developing strategies. Deep cultural understanding can actually be a source of competitive
advantage for global companies. It is not only the language but deep understanding of culture
and developing a relationship that is of paramount importance. In a new geographic market it
requires a combination of tough-mindedness and generosity. While marketers should be secure
in their own convictions and traditions, generosity is required to appreciate the integrity and
value of other ways of life as well as points of view. People should overcome the prejudices that
are a natural result of the human tendency toward ethnocentricity.
Difficulty: Moderate
Chapter LO: 1
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
82) London's Sunday Times reported that Mecca-Cola has become the drink which has come to
be seen as "politically preferable" to Pepsi or Coke in many Muslim countries. Also, Danish
products were boycotted in many Islamic countries in protest of an offensive cartoon that was
printed in Danish newspapers. Considering these two examples, show how religion can have an
impact on marketing.
Answer: Religion is one of the most important sources of a culture's beliefs, attitudes, and
values. Hindus do not eat beef, which means that McDonald's does not serve hamburgers in
India. There was a big uproar when it was found that McDonald's french fries had beef as one of
the ingredients. Similarly, Jews do not combine fish and dairy products, which make McDonald's
fish fillet a problem for them. Jews and Muslims do not eat pork, which rules out the use of
bacon in many products sold by fast food operations. Restaurants in Malaysia have to declare
that all meats are Halal or sacrificed in a specified religious way. In addition to religious
requirements, religious sentiments also play an important role. After the incidents of September
2001, there was a distinct feeling of anti-Americanism in many parts of the world, particularly
the Middle Eastern region. Mecca-Cola was an attempt to make indigenous products to compete
with American ones. One of the concerns in allowing Turkey to join the European Union is that
it is predominantly Islamic, whereas other members are comprised of Christians. All these cases
show that religion plays a very important role in how people live as well as buy products and
services.
Difficulty: Moderate
Chapter LO: 1
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
83) Giving examples show how technology is providing interesting new opportunities for
exploiting linguistics in the name of marketing.
Answer: With the increased use of information technology and computers, there has been a
noticeable positive and negative impact on linguistics. Text messaging and chat rooms have
made it much easier to abbreviate common words, primarily due to limited space on keyboards
of cell phones such as BlackBerry and to reduce time involved. Thus, a combination of
numerical and alphabetical abbreviations is being used. For example, GR8 (great); CU (see you);
AFK (away from keyboard); b4 (before); BBL (be back later); BRB (be right back); GMTA
(great minds think alike); l8r (later) and ^5 (high five). In Korean, the phonetic pronunciation of
the numerical sequence 8282 (Pal Yi PalYi) means hurry up and 7179 (Chil Han Chil Gu)
sounds like "close friend." In some languages numerology has different meanings which when
decoded can convey messages. In addition to being exciting, such use of terminology can make
slogans stick in the minds of consumers and therefore can be used effectively in marketing.
Some of these are getting universally accepted terms due to common use of computers and
technological gadgets.
Difficulty: Moderate
Chapter LO: 1
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
84) The diversity of cultures around the world is also reflected in languages and communication.
When KFC translated its slogan "Finger Licking Good" it became "Eat your fingers" in Chinese;
similarly "Pepsi is for Generations" became "your grandparents will come out of the grave to
drink Pepsi." Studies showing how linguists have divided the study of spoken or verbal language
demonstrate how verbal and non-verbal communication can have an impact on marketing around
the world.
Answer: Linguists have divided the study of spoken language into four main areas: syntax (rules
of sentence formation); semantics (system of meaning); phonology (system of sound patterns);
and morphology (word formation). Unspoken or nonverbal communication includes gestures,
touching, and other forms of body language. Both the spoken and unspoken aspects of language
are included in the broader field of semiotics, which is the study of signs and their meanings.
Language is a crucial tool for communicating with customers and channel intermediaries. Words
have different meanings in different cultures. For example post in America may refer to putting
something on a bulletin board, whereas in British English it may mean mailing. Similarly, Miller
Lite was considered to have less alcohol in Europe, whereas Diet Coke was considered as a
dietary supplement in the Middle East. Changes were made to market Miller Lite as Miller
Pilsner in Europe and Diet Coke as light coke in the Middle East. In addition to syntax and
semantics, phonology can have an impact. For example there is no letter that sounds like P in
Arabic so Pepsi sounds like Bebsi and Popeye's sounds like Bobeye's. Similarly, sounds of r and
l are intermixed in Chinese. In the United States recently, Sioux Gateway City airport decided to
keep the symbol "SUX" although there were a lot of comments about its phonology. On the other
hand, the airport decided to use it in marketing by using the slogan "Fly SUX" thereby making it
easy for people to remember it. Semantics can also have an impact, such as the word Esso has
negative connotation in some languages; Nova (as in Chevy Nova) meant it does not move and
Colgate means "go hang yourself" in Spanish. Also, nonverbal cues can have different meanings.
In some cultures shaking the head from right to left is considered as yes whereas it means no in
some other cultures. Shaking hands is considered as finalizing the deal in some cultures and in
others it is just an introduction. There are different ways of bowing in Far Eastern cultures to
indicate different aspects. Thus, verbal and nonverbal communications have a distinct impact on
marketing practices.
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
85) What are some of the salient characteristics and differences between high- and low-context
cultures?
Answer: In a low-context culture, messages are explicit and specific; words carry most of the
communication power whereas in high-context culture, less information is contained in the
verbal part of a message. Much more resides in the context of communication, including the
background, associations, and basic values of the communicators. Japan and Saudi Arabia are
examples of high-context culture, where a great deal of emphasis is placed on a person's values
and position or place in society. In a low-context culture, such as the United States, Switzerland,
or Germany, deals are made with much less information about the character, background, and
values of the participants. In a high-context culture, a person's word is his or her bond. As a
result, lawyers are much less important in high-context cultures. This also makes negotiations
lengthy in high-context culture since several meetings or prodding is needed.
Difficulty: Moderate
Chapter LO: 2
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
86) Hofstede considers culture as "the collective programming of the mind," which makes it
necessary to look at the attitudes, beliefs, and values. Giving an example of a country, explain
how these attributes are so important.
Answer: An attitude is a learned tendency to respond in a consistent way to a given object or
entity. Actually, they are clusters of interrelated beliefs. Many Japanese believe that the West is
the source of important fashion trends, and therefore they share a favorable attitude toward
American brands. A belief is an organized pattern of knowledge that an individual holds to be
true about the world. Japan's monocultural society reflects the belief among the Japanese that
they are unique in the world. Attitudes and beliefs are closely related to values. A value can be
defined as an enduring belief or feeling that a specific mode of conduct is personally or socially
preferable to another mode of conduct. Values represent the deepest level of a culture and are
present in the majority of the members of a particular culture. The Japanese, for example, strive
to achieve cooperation, consensus, self-denial, and harmony. Since these all represent feelings
about modes of conduct, they are values. Attitudes, beliefs, and values are all interrelated and
extremely important from a marketing point of view.
Difficulty: Difficult
Chapter LO: 2
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
87) Applying Hofstede's typology, show how Power Distance and Gender Differentiation can
influence the marketing of products and services in different countries.
Answer: Power Distance is the degree to which members of a particular society expect power to
be unequally shared. Hong Kong and France are both high power-distance cultures; low power
distance characterizes Germany, Australia, the Netherlands, and Scandinavia. The power
distance dimension reflects the degree of trust among members of society. The higher the power
distance, the lower the level of trust. Companies in high power-distance cultures prefer sole
ownership of subsidiaries because it provides them with more control. On the other hand,
companies in low power-distance cultures are more apt to use joint ventures.
Masculinity describes a society in which men are expected to be assertive, competitive, and
concerned with material success, and women fulfill the role of nurturer and are concerned with
issues such as the welfare of children. Femininity, by contrast, describes a society in which the
social roles of men and women overlap, with neither gender exhibiting overly ambitious or
competitive behavior. Japan and Austria ranked highest in masculinity; whereas Spain, Taiwan,
the Netherlands, and the Scandinavian countries were among the lowest. The masculinityfemininity dimension is likely to manifest itself in the relative importance of achievement and
possessions (masculine values) compared with a spirit of helpfulness and social support
(feminine values). An aggressive, achievement-oriented salesperson can be more successful in
Austria, Japan, or Mexico than in Denmark. The Japanese managers may react negatively to a
woman, especially if she is younger than they are.
Difficulty: Moderate
Chapter LO: 3
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
88) Reference to one's own cultural values or self-reference criterion (SRC) can create a cultural
myopia. It can consciously or unconsciously create considerable problems for marketing
professionals. Using Walt Disney's decision to build a theme park in France, address the
problem, following a systematic framework.
Answer: To address the problem and to eliminate or reduce cultural myopia, a systematic fourstep framework is proposed as described below:
Step 1. Define the problem or goal in terms of home-country cultural traits, habits and norms.
Disney executives believe there is virtually unlimited demand for American cultural exports all
over the world. Disney has a track record in exporting its American management system as seen
by the success of Tokyo Disneyland. However, Disney policies prohibit sale or consumption of
alcohol inside its theme parks.
Step 2. Define the problem or goal in terms of host-country cultural traits, habits, and norms.
Make no value judgments. Europeans in general and the French in particular are sensitive about
American cultural imperialism. Consuming wine with the midday meal is a long-established
custom in France. Many Disney characters are based on European folklore.
Step 3. Isolate the SRC influence and examine it carefully to see how it complicates the problem.
The differences noted in earlier steps suggest strongly that the needs upon which the American
and Japanese Disney theme parks were based did not exist in France
Step 4. Redefine the problem without the SRC influence and solve for the host-country market
situation. A modification in design of the theme park that is in keeping with French and
European cultural norms will solve the problem. Focus on French identity on the park.
Difficulty: Moderate
Chapter LO: 4
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
89) One of the basic elements of Roger's diffusion theory is the concept of adoption process
which deals with the mental stages through which an individual passes from the time of his or
her first knowledge of an innovation to the time of product adoption or purchase. Briefly
describe these stages given examples of Apples iPhone.
Answer: 1. Awareness. In the first stage the customer becomes aware for the first time of the
product or innovation. Mass media advertising was critical in informing customers about the new
iPhone. 2. Interest. Enough interest was generated by advertisement which did not fully disclose
the exciting features of iPhone but did provide some clues. 3. Evaluation. Customers became
curious and started mental assessment of the product's benefits in relation to present and
anticipated future needs. Also, comparative assessment was made to see how it is more versatile
than the existing technology. 4. Trial. Most customers did not purchase iPhone since it was
expensive and waited to get some "hands-on" experience. Such trials are common for many
products and services. 5. Adoption. This is the final stage where the individual will make a
decision to buy; purchases it; or adopts it. Personal sources of information are more important in
the entire process than impersonal sources. Word-of-mouth becomes a very important persuasive
force affecting the decision to buy.
Difficulty: Moderate
Chapter LO: 5
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
90) There are specific characteristics of innovations that affect which innovations are adopted.
Define those characteristics giving examples of products or services.
Answer: There are five different characteristics that are important in the adoption of
innovations. They are: 1. Relative advantage. This involves a comparative assessment of the
existing products or methods. If a product has a substantial relative advantage, it is likely to gain
quick acceptance. The popularity of jump drives is an example for their preference over floppy
disk. 2. Compatibility. This concerns with the extent to which a product is consistent with
existing values and past experiences of adopters. For example, the first consumer VCR, the Sony
Betamax, failed because it could only record for one hour. Most customers wanted to record for
longer periods of time and thus selected VHS-format, although the recording quality of SonyBetamax was superior to VHS. 3. Complexity. The degree to which an innovation or new
product is difficult to understand, operate, and use. The more complex a product is, the slower
will be its adoption. The new digital cameras are an example of their slow adoption since their
operations are very complex. 4. Divisibility. This is the ability of a product to be tried and used
on a limited basis without great expense. There are wide discrepancies in income levels around
the world as well as the storage conditions. Smaller cans of Coke and Pepsi are popular in many
countries, with affordable prices and less storage space requirement. 5. Communicability. It is
the degree to which benefits of an innovation or the value of a product may be communicated to
a potential market. Many of the software programs go unsold since their benefits are not fully
communicated to customers. These characteristics give a clear outline of what is needed for an
innovation to be successful.
Difficulty: Moderate
Chapter LO: 5
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
Chapter 6 Global Information Systems and Market Research
1) Although many professional women appreciated the conservative styling of the signature
Coach bag, they did not necessarily regard Coach's accessories as must-have fashion items.
Answer: TRUE
Difficulty: Easy
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
2) An intranet is a public network that allows authorized company personnel or outsiders to share
information electronically in a secure fashion.
Answer: FALSE
Difficulty: Easy
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
3) EDI links with vendors to enable retailers to improve inventory management and restock hotselling products in a timely, cost-effective manner.
Answer: TRUE
Difficulty: Easy
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
4) To prevent the most value-conscious shoppers from defecting to Walmart, Tesco mined its
database to identify Clubcard users who buy the lowest-priced grocery items.
Answer: TRUE
Difficulty: Easy
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
5) CRM tools allow companies like American Express, Dell, Sharp, and Sony to determine
which customers are most valuable and to react in a timely manner with customized products and
service offerings that closely match customer needs.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
6) Retailers are increasingly using a technique known as efficient consumer response (ECR) in
an effort to work more closely with vendors on stock replenishment.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
7) The term "Safe Harbor" agreement applies to privacy issues pertaining to the companies that
wish to transfer data to the United States from Europe.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 1
AACSB: Application of knowledge
Course LO: Discuss the fundamental concepts of marketing
8) Market research is the project-specific, systematic gathering of data and is the activity that
links the consumer, customer, and public to the marketer through information.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 1
AACSB: Application of knowledge
Course LO: Discuss the fundamental concepts of marketing
9) Africa represents a huge untapped market for shoes since most people walk barefoot. Thus, it
will be easy to alter entrenched consumer behavior pattern if shoes are available.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 2
AACSB: Application of knowledge
Course LO: Discuss the fundamental concepts of marketing
10) Market research should focus on finding out how a potential customer can be changed into
an actual customer.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 2
AACSB: Application of knowledge
Course LO: Discuss the fundamental concepts of marketing
11) Mattel toys thought that Barbie would be as popular in Japan as it is in the United States.
This assumption was due to the self-reference criterion (SRC).
Answer: TRUE
Difficulty: Moderate
Chapter LO: 2
AACSB: Application of knowledge
Course LO: Discuss the fundamental concepts of marketing
12) Companies wishing to minimize the cost and effort associated with market research should
start by collecting and analyzing primary data.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 2
AACSB: Analytical thinking
Course LO: Discuss the fundamental concepts of marketing
13) If a market researcher would like to know how much the typical Nigerian consumer spends
on soft drinks, the information can be obtained from GNP or GDP.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 3
AACSB: Analytical thinking
Course LO: Discuss the fundamental concepts of marketing
14) If Avon would like to sell cosmetics in India, a good estimate can be achieved by researching
the average wage of an office secretary.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
15) A latent market is, in essence, an undiscovered market segment.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
16) Traditional market research is the most effective means for identifying latent markets.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
17) Culture shapes attitudes and values in a way that directly affects people's willingness to
respond to interviewer questions.
Answer: TRUE
Difficulty: Difficult
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
18) Red Bull energy drink manufacturer, Dietrich Mateschitz, hired a market research firm to
assess the market potential for the drink. In the tests, consumers reacted negatively to the taste,
the logo, and the brand name. The company ignored the research completely.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 4
AACSB: Analytical thinking
Course LO: Discuss the fundamental concepts of marketing
19) An "incipient market" is a market that will emerge if a particular economic, demographic,
political, or sociocultural trend continues in a country.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Discuss the fundamental concepts of marketing
20) Volkswagen, Peugeot, Chrysler, and other global automakers have established
manufacturing operations in China since they consider it to be an incipient market.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
21) It will be convenient to do a telephone survey in rural areas in China since, according to the
Ministry of Information Industry reports, 40% of households have at least one fixed-line
telephone.
Answer: FALSE
Difficulty: Difficult
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
22) "Back translation" is a technique used to ensure that currency conversion is performed
correctly when financial statements of foreign subsidiaries are consolidated with financial
statements at headquarters.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
23) "Back translation" is a technique whereby a survey or other document that has been
translated is returned (i.e. "sent back") to the translator for corrections.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
24) It is difficult to obtain a representative sample in Brazil since the technological infrastructure
for gathering market data is minimal.
Answer: TRUE
Difficulty: Difficult
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
25) A marketer of breakfast cereals might send researchers to preselected households at 6 a.m. to
watch families go about their morning routines.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Discuss the fundamental concepts of marketing
26) When using a "projective technique," the researcher presents close-ended or ambiguous
stimuli to a subject in a focus group.
Answer: FALSE
Difficulty: Difficult
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Discuss the fundamental concepts of marketing
27) In global marketing research, it is important to establish scalar equivalence when obtaining
information from different countries.
Answer: TRUE
Difficulty: Difficult
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Discuss the fundamental concepts of marketing
28) In global marketing research, the results of a nonprobability sample can be projected with
statistical reliability.
Answer: FALSE
Difficulty: Difficult
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Discuss the fundamental concepts of marketing
29) If interaction between two variables is desired, factor analysis can be used to transform large
amounts of data into manageable units.
Answer: FALSE
Difficulty: Difficult
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Discuss the fundamental concepts of marketing
30) When research shows that Burberry and Ferragamo are perceived as the most similar by
consumers while Coach and Dior are the farthest apart, researchers can interpret the results to
show which brands are in direct competition.
Answer: TRUE
Difficulty: Difficult
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Discuss the fundamental concepts of marketing
31) Japan is Coach's second largest market, representing about 20% of global sales. All of the
following statements are true regarding the market for Coach's products compared to that in
America except:
A) Japanese consumers are enormously brand-centric.
B) Japanese consumers are not as brand loyal as American consumers.
C) American women tend to carry two or three brands while their Japanese counterparts tend to
carry as many as five.
D) The company's $500 handbags are especially popular with young women.
E) Coach has to work on improving its brand image in Japan.
Answer: E
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
32) One of the key advantages of an EDI (Electronic Data Interchange) system is:
A) it allows easy access to all company data to vendors.
B) its transaction formats are universal.
C) it allows third-party transmission connections to company data.
D) it saves both time and money by using different languages.
E) vendors receive orders by voice mail.
Answer: B
Difficulty: Easy
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
33) An ________ system allows a company's business units to submit orders, issue invoices, and
conduct business electronically with other company units as well as outside companies.
A) Internet
B) intranet
C) ECR
D) EDI
E) EPOS
Answer: D
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
34) An ________ is a company's private data network, accessible only by authorized persons
inside the organization.
A) EDI
B) Internet
C) intranet
D) EPOS
E) ECR
Answer: C
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
35) Which of the following is an IT tool designed specifically to help retailers work more closely
with vendors on stock replenishment?
A) BOLD
B) ECR
C) data warehouse
D) projection
E) EDI
Answer: B
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
36) Which of the following can be defined as a business philosophy that values two-way
communication between a company and individual customers?
A) ECR
B) CRM
C) EDI
D) EPOS
E) BOLD
Answer: B
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
37) CRM tools allow companies such as Credit Suisse, AT&T, Hewlett-Packard and others to
determine:
A) warranty of products sold to consumers.
B) amount paid by consumers in different countries.
C) which customers are most valuable.
D) the use of credit cards for payment.
E) the use of laptop computers by customers.
Answer: C
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
38) One challenge of using CRM is:
A) integrating data into customer relationship.
B) knowing amount paid by consumers in different countries.
C) understanding which customers are most valuable.
D) assessing the use of credit cards for payment.
E) knowing the use of laptop computers by customers.
Answer: A
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
39) Direct sensory perception provides a vital background for the information that comes from
human and documentary sources since:
A) it provides secondhand information.
B) it is easy and the most economical way of collecting data.
C) it means firsthand seeing, feeling, hearing, smelling, and tasting.
D) it involves reading and reviewing documents.
E) top executives are involved in getting firsthand information.
Answer: C
Difficulty: Difficult
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
40) CRM tools allow companies such as Credit Suisse, AT&T, Hewlett-Packard and others to
determine:
A) warranty of products sold to consumers.
B) amount paid by consumers in different countries.
C) which customers are most valuable.
D) the use of credit cards for payment.
E) the use of laptop computers by customers.
Answer: C
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
41) Although environmental scanning is a vital source of information, research has shown that
headquarters executives of global companies obtain as much as two-thirds of the information
they need from:
A) government publications.
B) professional publications.
C) trade publications.
D) census data.
E) personal sources.
Answer: E
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
42) Which of the following environmental factors may require marketers to adjust their approach
to conducting international as opposed to domestic marketing research?
A) Researchers must be prepared for new parameters of doing business.
B) Company personnel must come to grips with a new set of culture-based assumptions about
conducting business.
C) Research may help reduce psychological overload.
D) Researchers may have to broaden the definition of competitors to include competitive
pressures not present in the domestic market.
E) all of the above
Answer: E
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
43) A vice-president of a shoe company was in India to assess the market. He found that many
people in the southern part of India were walking bare footed. This can be indicative of either the
fact that there is a potential market for shoes or there is no market for shoes in that part of the
world. To formally confirm one instinct or the other the vice-president should:
A) establish an office to start manufacturing shoes in India.
B) give free shoe samples to a selected group of customers.
C) conduct research to find the potential and actual customers.
D) find out if that is true for other Asian countries.
E) give up the idea of doing business in India.
Answer: C
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
44) The first step in formulating and conducting research is:
A) to define the problem.
B) information requirement.
C) choosing unit of analysis.
D) examine data availability.
E) research design.
Answer: B
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
45) When Mattel first introduced Barbie in Japan, managers assumed that Japanese girls would
find the doll's design just as appealing as American girls did. This may be due to:
A) Barbie's physical features such as long legs and blonde hair.
B) Barbie being a symbol of American lifestyle.
C) the SRC tendency on the part of American managers.
D) the SRC tendency on the part of Japanese consumers.
E) the limited competition for dolls in Japan.
Answer: C
Difficulty: Moderate
Chapter LO: 2
AACSB: Application of knowledge
Course LO: Discuss the fundamental concepts of marketing
46) Which of the following lists some of the steps in the market research process in the correct
order?
A) determine information requirement→problem definition→choose unit of analysis→examine
data availability→assess value of research
B) problem definition→assess value of research→determine information requirement→choose
unit of analysis→examine data availability
C) examine data availability→problem definition→choose unit of analysis→assess value of
research→determine information requirement
D) choose unit of analysis→assess value of research→problem definition→determine
information requirement→examine data availability
E) examine data availability→assess the value of research→problem definition→presentation
Answer: A
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
47) Anyone undertaking a market research project should understand that the first step is:
A) setting the budget.
B) determining the methodology to use.
C) deciding who will see the final report.
D) defining the problem.
E) determining the information requirement.
Answer: E
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
48) For consumer products, qualitative research is especially well suited to:
A) get close to the consumer.
B) describe the cultural context of consumer behavior.
C) identify core brand equity.
D) identify what people really feel.
E) all of the above
Answer: E
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
49) The unit of analysis can be a single country or region; however, for all market-entry
decisions ________ data are not required.
A) specific city
B) statewide
C) provincial
D) district wise
E) country wide
Answer: E
Difficulty: Easy
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
50) The U.S. government's most comprehensive source of world trade data is:
A) National Trade Data Base (NTDB).
B) Census Bureau.
C) Bureau of Economic Analysis.
D) Eurostat.
E) Gross Domestic Product (GDP).
Answer: A
Difficulty: Easy
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
51) According to the Global Market Research Reports, data for Chinese markets are available
for:
A) cosmetics.
B) online music.
C) whiskies.
D) luxury goods.
E) pharmaceutical.
Answer: A
Difficulty: Easy
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
52) Potential markets can be subdivided into:
A) latent and parallel markets.
B) existing and incipient markets.
C) latent and incipient markets.
D) existing and latent markets.
E) incipient and existing markets.
Answer: C
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
53) Marketers must be aware of the impact of SRC and other cultural assumptions since:
A) it can have several positive effects on market planning.
B) it enhances management's willingness to pursue market research.
C) it can help ensure that the research effort is designed with minimal home-country bias.
D) it can help ensure that the research effort is designed with minimal second-country bias.
E) All of the above are correct.
Answer: E
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
54) Which of the following is not true of secondary data about global markets?
A) It was not gathered specifically for the research project at hand.
B) It is often so expensive that small companies can't afford to use it.
C) It can be accessed quickly.
D) A great deal is available from government agencies.
E) It cannot be retrieved online.
Answer: B
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
55) Harley-Davidson celebrates its 110th anniversary in 2013. The company has grown
impressively during its century of operations. All of the following mentioned facts regarding the
company are true except:
A) the company's international success came after years of neglecting overseas markets.
B) the company reacted swiftly to a growing threat from Japanese manufacturers.
C) early on, the company used an export-selling approach.
D) early on, it had an underdeveloped dealer network.
E) after the 1980s, they recruited dealers in the important Japanese markets.
Answer: B
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
56) Which of the following correctly reflects marketing expert David Arnold's recommendations
for companies engaged in global market research?
A) use multiple indicators
B) develop customized measures specific to an industry or product
C) conduct comparative assessments in neighboring countries
D) observation should be weighted more heavily than statements of purchase intention
E) all of the above
Answer: E
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
57) Which of the following is not recommended by expert David Arnold for companies engaged
in global market research?
A) use multiple indicators
B) develop customized measures specific to an industry or product
C) conduct comparative assessments in neighboring countries
D) observation should be weighted more heavily than statements of purchase intention
E) assess a particular market in isolation
Answer: E
Difficulty: Difficult
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
58) For consumer products, qualitative research is especially well suited to accomplish all of the
following tasks except:
A) provide consumer understanding.
B) describe the social and cultural context of consumer behavior.
C) identify core brand equity and brands.
D) assess consumer spending trends.
E) what consumers really feel.
Answer: D
Difficulty: Difficult
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
59) The decision by Toyota executives to introduce the Sienna minivan in the U.S. market was
based on their study of a(n) ________ market.
A) existing
B) latent
C) parallel
D) incipient
E) global
Answer: A
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
60) The international marketing manager of an office furniture company ordered a research
report on global telecommunications equipment sales. The report noted that, in the early 1990s,
AT&T was awarded a $4 billion contract to provide communication network products and
services in Saudi Arabia. The manager took this as a cue to put Saudi Arabia on her information
agenda, reasoning that office furniture sales would increase as the country's telephone system
was improved. As described here, the marketing manager is viewing Saudi Arabia as a(n):
A) latent market.
B) incipient market.
C) cluster market.
D) existing market.
E) primary market.
Answer: B
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
61) Predicting economic and income growth rates is particularly important when researching
which type of market?
A) existing markets
B) latent markets
C) parallel markets
D) incipient markets
E) local markets
Answer: D
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
62) When a survey questionnaire in English is translated into Korean for use in South Korea and
then translated back into English to check its accuracy, it is described as:
A) incipient translation.
B) comparative translation.
C) native translation.
D) parallel translation.
E) back translation.
Answer: E
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
63) Tools that can be used for collecting primary data include:
A) survey research and interviews.
B) consumer panels and observation.
C) focus groups and survey research.
D) interviews and observation.
E) all of the above
Answer: E
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
64) When a trained person is recording the items selected in a grocery cart or basket, the research
method is known as:
A) observation.
B) survey research.
C) focus study.
D) secondary data collection.
E) personal interviews.
Answer: A
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
65) Emerging markets present a number of challenges to anyone conducting market research,
which includes all of the following except:
A) underdeveloped technology infrastructure.
B) geographic issues.
C) data-gathering methodologies.
D) privacy issues.
E) lack of field teams.
Answer: E
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
66) A marketer of breakfast cereals might send researchers to preselected households at 6 A.M.
to watch families go about their morning routines. The client could also assign a researcher to
accompany family members to the grocery store to record their behavior under actual shopping
conditions. This type of research method is considered as:
A) focus group.
B) invasion of privacy.
C) consumer panel study.
D) factor analysis.
E) observation.
Answer: E
Difficulty: Moderate
Chapter LO: 3
AACSB: Application of knowledge
Course LO: Discuss the fundamental concepts of marketing
67) When the Coca-Cola Company convened focus groups in Europe and Asia to assess potential
market acceptance of a contoured aluminum soft drink can, it was attempting to collect
________ data.
A) primary
B) secondary
C) incipient
D) quantitative
E) MIS
Answer: A
Difficulty: Moderate
Chapter LO: 3
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
68) Manufacturers of Splenda, a low-calorie sugar, wanted to arrange a focus group to find out
its use in different markets. Open-ended questions were used in order to secure the unconscious
attitudes and biases held by the subjects. This type of technique is known as:
A) scaling technique.
B) qualitative technique.
C) projective technique.
D) reactivity technique.
E) MDS technique.
Answer: C
Difficulty: Difficult
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
69) In Singapore, Coca-Cola wanted to develop an advertisement program. They selected a
group of teenagers in a room, and a trained moderator facilitated discussion asking questions on
brand's image, advertisement, social trends, TV watching habits, and snack usage. This type of
research is called:
A) survey research.
B) observational studies.
C) comparison studies.
D) focus group research.
E) experimental research.
Answer: D
Difficulty: Moderate
Chapter LO: 4
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
70) In Mexico City, only 55-60% of the population owns a telephone. The number drops to less
than 50% in Guadalajara and Monterey, and 35% or lower in other cities. This will complicate
the task of market researchers hoping to use a telephone survey to obtain a ________ of the
Mexican population.
A) probability sample
B) convenience sample
C) secondary sample
D) focus group sample
E) quota sample
Answer: A
Difficulty: Moderate
Chapter LO: 4
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
71) Suppose Apple has collected extensive survey data about its new iPhone, and respondents
have rated it on twenty different features and benefits. Now researchers want to reduce the
amount of data to a few underlying dimensions. Which data analysis technique should the
researchers use?
A) analogy
B) conjoint analysis
C) factor analysis
D) multidimensional scaling
E) cluster analysis
Answer: C
Difficulty: Difficult
Chapter LO: 4
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
72) One study of adult involvement in household tasks revealed greater similarities between the
United Kingdom and the United States compared with France, Belgium, and French Canada.
Thus, the United States and United Kingdom were "twins" based on common language. This
study is an example of:
A) market latency.
B) conjoint analysis.
C) factor analysis.
D) multidimensional scaling.
E) cluster analysis.
Answer: E
Difficulty: Moderate
Chapter LO: 4
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
73) When consumers have difficulty in verbalizing their perceptions, and there are different
alternative brands of toothpaste, what is the best method of judging them in terms of similarity?
A) cluster analysis
B) MDS
C) dependence techniques
D) factor loading
E) focus group
Answer: B
Difficulty: Moderate
Chapter LO: 4
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
74) Campbell is the world's largest soup company, commanding about 80% of the U.S. canned
soup market. However, the company has a presence in only 6% of the world's soup markets.
Russians eat 32 billion servings of soup each year, and the Chinese consume 300 billion! By
contrast, Americans eat 15 billion servings each year. Sensing a huge opportunity, Campbell has
dispatched teams to observe Russian and Chines habits. This type of interpretation and decision
is based on:
A) demand pattern analysis.
B) income elastic analysis.
C) time series displacement.
D) polycentrism.
E) comparative analysis.
Answer: E
Difficulty: Moderate
Chapter LO: 4
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
75) A market researcher who uses multidimensional scaling (MDS) will:
A) attempt to estimate market size by analogy.
B) ask respondents to rate a particular product or brand in terms of multiple characteristics or
attributes.
C) ask respondents to evaluate product or brand pairs in terms of similarity.
D) attempt to determine the combination of product features that create the greatest utility for
consumers.
E) conduct a focus group.
Answer: C
Difficulty: Moderate
Chapter LO: 4
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
76) In India, only about 10% of men who shave use Gillette razors. Worldwide, 50% of male
shavers use Gillette products. To achieve greater penetration in India, Gillette rolled out a nofrills brand that costs 15 rupees—about 34 cents. The Gillette Guard has a lighter handle that is
cheaper to produce. It also lacks the lubrication strip found in Gillette's more expensive razors,
and replacement blades cost only 5 rupees (11 cents). This use of data and process are described
as:
A) demand pattern analysis.
B) income elastic analysis.
C) factor analysis.
D) market estimation by analogy.
E) multidimensional scaling.
Answer: D
Difficulty: Moderate
Chapter LO: 4
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
77) According to David Arnold, there are four possible approaches to forecasting by analogy,
which does not include which of the following?
A) Data is available on a comparable product in the same country.
B) Data is available on the same product in a comparable country.
C) Data is available on the same product from a dependent distributor in a neighboring country.
D) Data is available about a comparable company in the same country.
E) Data is available on the same product in every country.
Answer: E
Difficulty: Moderate
Chapter LO: 4
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
78) Which of the following is true about etic and emic approaches to country analysis?
A) The etic and emic approaches are identical.
B) An emic approach studies a culture from within; etic analysis is "from the outside."
C) An emic approach studies a culture "from the outside"; etic analysis studies a culture from
within.
D) The emic/etic distinction is not useful in cultural studies.
E) The emic/etic approaches cannot be applied to Asian countries.
Answer: B
Difficulty: Moderate
Chapter LO: 4
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
79) A market research study of soft drink consumption and distribution in Hungary
commissioned by an American company indicated that soft drinks were available in drugstores.
However, Western-style drugstores do not exist in Hungary. This illustrates an important issue in
global marketing research, namely:
A) inflated data.
B) using convenience samples.
C) market estimation by analogy.
D) comparability of data.
E) using multiple dimensional scaling.
Answer: D
Difficulty: Moderate
Chapter LO: 4
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
80) Whirlpool conducts usability studies that provide insight into the ways consumers interact
with its products. In one study in an emerging market, engineers and designers stood behind a
two-way mirror and watched as a volunteer put groceries away in a Kenmore Elite refrigerator.
The Whirlpool team recorded a variety of data, such as the amount of time required for the
volunteer to finish the task and the number of features used. The basis of this research study was
based on the fact that:
A) listening to customers is only possible in America.
B) data collected in the United States should be applicable in other countries.
C) consumers in different countries prefer different types of features.
D) in China, it will be difficult to find enough space in homes to put a refrigerator.
E) in India, refrigerators are seldom used by customers.
Answer: C
Difficulty: Moderate
Chapter LO: 4
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
81) Global competition intensifies the need for effective MIS and business intelligence that are
accessible throughout the company. How can IT provide valuable tools in fulfilling this need as
well as conducting global marketing research?
Answer: There are different IT programs that can provide valuable tools for marketing. EDI
(Electronic data interchange) links with vendors to enable retailers to improve inventory
management and restock popular products in a timely, cost-effective manner. Also, effective
consumer response (ECR) is another program which allows management to work more closely
with vendors on stock replenishment. ECR systems utilize electronic point of sale (EPOS) data
gathered by checkout scanners that help retailers identify product sales patterns as well as record
consumer preferences separated by geographical areas. All these tools are also helpful in
improving the ability of businesses to target consumers and increase loyalty. Customer
relationship management (CRM) is another method by which a relationship is developed with
the customer. It helps in determining which customers are most valuable and to react in a timely
manner with customized product and service offerings that closely match customer needs. It also
makes employees more productive and enhances corporate profitability. It also benefits
customers by providing value-added products and services. Data warehouses store a company's
CRM system as well as other IT systems. These data warehouses can provide multiple uses such
as helping retailers with multiple store locations fine-tune their product assortments. In addition
to Internet, intranet can be a valuable tool, which can connect individuals within a company on a
private basis.
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
82) Authors Michael Czinkota and Ilka Ronkainen identified four specific environmental factors
that may require international research efforts to be conducted differently than domestic
research. Describe those factors to outline the differences.
Answer: The four specific environmental factors that may require international research efforts
to be conducted differently than domestic research are: (1) Researchers must be prepared for new
parameters for doing business. The requirements and ways in which rules are applied may differ
from country to country. (2) A "cultural mega-shock" may occur as company personnel come to
grips with a new set of culture-based assumptions about conducting business. (3) A company
entering more than one new geographic market faces a burgeoning network of interacting
factors. Research may help prevent psychological overload in that case. (4) Company researchers
may have to broaden the definition of competitors in international markets to include competitive
pressures that would not be present in the domestic market.
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
83) If Coach, a luxury good marketer, would like to study the consumer perceptions of global
luxury brands, what would be the best approach since there are several competitors?
Answer: Consumers may differentiate one designer brand from another in various ways, such as
how easy it is to purchase each brand, how visible each brand is, whether or not the brand offers
diffusion lines, etc. A study can be conducted to study the perceptual dimension of "ubiquitous
verses rare." A five-point similarity judgment scale of selected designer brands can be
developed. The responses achieved help marketers understand which brands in a particular
category are in direct completion with each other and which are not. The responses can be
analyzed using an MDS program; the perceptual mapping. The perceptual map will show the
differences such as between ubiquity and rarity; or exclusivity and accessibility. The position of
Coach, thus can be studied from the map. This type of study could help Coach to respond to new
industry realities, which include a shift in the perception of what constitutes luxury and the
increasing fragmentation of consumer tastes. Such a map will be helpful in knowing up-andcoming fashion designer hoping to launch a new line.
Difficulty: Moderate
Chapter LO: 4
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
84) Many of the fast food operations are entering markets in Middle Eastern countries. In the
United States, breakfast items are very popular and are responsible for a bulk of profit from
sales, primarily through drive-in customers. However, to their dismay, managers found that there
was practically no demand for breakfast items. Firstly, due to hot weather conditions, people
sleep late and wake up late. Secondly, they do not eat burgers, and sausage or bacon is prohibited
food. Also, drive-in business is not popular since people go to work at different periods of time.
Explain the possible reason(s) behind such a decision and account for its/their failure.
Answer: When conducting research in a foreign country one has to be completely free from any
kind of bias or prejudice. A person's home-country values and beliefs may consciously or
unconsciously influence the assessment of a foreign culture or country. This is referred to as
SRC (self-reference criterion). The SRC tendency underscores the importance of understanding
the cultural environments of global markets. As in the above case, assumptions based on homecountry marketing success turned out to be wrong when applied in a Middle Eastern country. A
marketing program that is successful in one country does not guarantee success in another
country. Thus, marketers must be aware of the SRC and its impact. Such awareness can have
several positive effects. It can enhance management's willingness to conduct market research in
the first place. Also, an awareness of SRC can help in ensuring the validity of research with
minimal home-country or second-country bias. In other words, the research will have potentially
useful results which managers will be able to accept and implement.
Difficulty: Moderate
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
85) What are the secondary sources of data and how do these sources differ from primary
sources? Give examples of sources from which secondary data can be obtained.
Answer: A low-cost approach to market research and data collection begins with desk research.
There are a lot of secondary sources which are a good place to start. Data from census bureaus;
government and private agencies; trade associations; chamber of commerce; published reports;
academic institutions; and public libraries are not only extensive but can provide valuable
information in a very cost-effective manner. All of these are considered as secondary sources
since the data already exist and is not based on the research conducted by the company. Data
obtained by conducting research by the company is considered as a primary source. This may
also include the company's unpublished reports and other financial data. Other secondary sources
include the U.S. Government's National Trade Data Base (NTDB), an online resource from the
Department of Commerce. Similarly, there are other data which are published by almost all of
the federal government agencies. Most countries compile data related to the gross national
product (GNP), gross domestic product (GDP), consumption, investment, government
expenditures, price levels, and import/export expenditures. Demographic data are available from
the United Nations' agencies as well as other international agencies. The Statistical Yearbook of
the United Nations contains global data on agriculture, mining, manufacturing, construction,
energy production consumption, internal and external trade, health, housing, education and lots
of other services. Similar data are collected by the U.S. Central intelligence Agency which
publishes the World Fact book. Other sources are the World Bank and the International
Monetary Fund. The Economist and Financial Times regularly compile comprehensive surveys
of regional and country markets and include them in their publications. Data from many of these
sources are generally available in both print and electronic forms. There are also different
country Web sites which also provide some useful information. Syndicated studies published by
private research companies are another source of secondary data and information.
Difficulty: Moderate
Chapter LO: 4
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
86) Discuss the guidelines submitted by David Arnold pertaining to the importance of data
gathering for market research. Indicate the rationale behind each guideline.
Answer: David Arnold has offered certain guidelines for data gathering which are listed as
follows:
(a) Multiple indicators should be used rather than a single measure. This approach will decrease
the level of uncertainty for decision makers.
(b) Individual companies should develop customized indicators specific to the industry, product
market, or business model. Such indicators should leverage a company's previous experience in
global markets.
(c) Comparative assessments should always be conducted in multiple markets. Comparative
assessment enables management to develop a "portfolio" approach in which alternative priorities
and scenarios can be developed.
(d) Observations of purchasing patterns and other behavior should be weighed more heavily than
reports or opinions regarding purchase intention or price sensitivity. Sometimes it is difficult to
accurately survey consumer perceptions.
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
87) Grey China Advertising agency gathers a wealth of information about attitudes and buying
patterns of the Chinese in its Grey China Base Annual Consumer Study. Recent findings point to
growing concerns about the future, Westernization of grocery purchases, growing market
saturation, increasingly discerning customers and a rise in consumer willingness to try new
products. These data can be very inconsistent since conflicting findings were reported by
different agencies. For example, data gathered by Euromonitor International estimates soft-drink
consumption at 23 billion liters in China, while Coca- Cola's in-house marketing research team
places the figure at 39 billion liters. Similar differences were noted in other data published by
different agencies. What is the best approach in such situations so that finite decisions can be
made? What are the differences between latent and incipient markets?
Answer: These types of discrepancies are expected due to the research methodology, design,
analyses and scores of other factors. In such situations, and in countries where such data are not
available, researchers must first estimate the market size, the level of demand, or the rate of
product purchase or consumption. A second research objective in existing markets may be
assessment of the company's overall competitiveness in terms of product appeal, price,
distribution, and promotional coverage and effectiveness. Researchers may be able to find out
special aspects or weaknesses in competitors' way of doing business. Unserved market segments
may also be discovered. In some instances, there is no existing market to research. Such potential
markets can be further subdivided into latent and incipient markets. A latent market is, in
essence, an undiscovered market segment. It is a market in which demand would materialize if
an appropriate product or service were made available. In a latent market, demand is zero before
the product is offered. An incipient market is a market that will emerge if a particular economic,
demographic, political, or socio-cultural trend continues. A company is not likely to achieve
satisfactory results if it offers a product in an incipient market before the trends have taken roots.
After the trends have had a chance to unfold, the incipient market will become latent and, later,
an existing market.
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
88) How can observational studies and focus groups be used in marketing research? What are the
different methods by which these studies are conducted?
Answer: In the observation method, one or more trained observers or a mechanical device watch
and record the behavior of actual or prospective buyers. The research results are used to guide
marketing managers in their decision making. For example, observations are done as to how
male or female customers open the door of cars and sit. This simple act can be of tremendous
help in designing the doors of cars and the adjustment of seats. Similarly, observing how
consumers are picking items in a grocery store or observing the items in shopping carts can give
better understanding of the actual purchase behavior of consumers. It should be noted that since
consumers are unaware of being watched, actual behavior can be recorded and interpreted.
Marketers can also observe the eating behavior by observation or the plate wastages after dinner
to assess food preferences of consumers. Companies using observation as a research
methodology must be sensitive to public concerns about privacy issues, particularly if the
subjects know that they are being watched. In focus group research, a trained moderator
facilitates discussion of a product concept, a brand's image and personality, advertisement, social
trends, or other related topic with a group comprised of 6 to 10 people. Selection of focus group
participants has to be done very carefully since the number of participants is very limited. They
should also meet the criteria which closely fit the overall population under study. Usually focus
group meetings are conducted in a special equipment room in an undisturbed environment. The
questions are carefully framed and answers are solicited from all participants in an organized
manner. Recordings are made of the entire process and analyzed after the conclusion of the
session. A one-way mirror or a video screening is simultaneously conducted where focus group
participants are being watched. Also the trained moderator is connected by earphones with others
including business managers, so that appropriate instant questions may be prompted to be used in
discussion. Focus group research yields qualitative data that does not lend itself to statistical
projection. Such data are extremely valuable in the exploratory phase of a project and are
typically used in conjunction with data gathered via observation and other methods.
Difficulty: Moderate
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Discuss the fundamental concepts of marketing
89) What are "interdependence techniques" in the analysis of data? What type of measurement is
possible with this technique, and what are different methods that are used in marketing research?
Answer: Interdependence techniques show the interaction between variables and are comprised
of factor analysis, cluster analysis, and multidimensional scaling (MDS). Factor analysis can be
used to transform large amounts of data into manageable units. Specialized statistical programs
can reduce or group the data by distilling out certain meaningful factors. These factors are
selected by the program on the basis of attitudes and perceptions that can be closely aligned from
a multitude of survey responses.
Factor analysis is useful in psychographic segmentation studies. It can also be used to create
perceptual maps.
Cluster analysis allows the researcher to group variables into clusters that maximize withingroup similarities and between-group differences. Cluster analysis shares some characteristics of
factor analysis in that it does not classify variables as dependent or independent. It can also be
used in psychographic segmentation. It is well suited to global marketing research because
similarities and differences can be established between local, national, and regional markets of
the world. Cluster analysis can also be used to perform benefit segmentation and identify new
product opportunities.
MDS is another technique for creating perceptual maps. When the researcher is using MDS, the
respondent is given the task of comparing products or brands, one pair at a time, and judging
them in terms of similarity. The researcher then infers the dimensions that underlie the
judgments. MDS is particularly useful when there are many alternatives from which to choose
and when consumers may have difficulty verbalizing their perceptions. To create a well-defined
spatial map, a minimum of eight products or brands should be used.
Difficulty: Moderate
Chapter LO: 5
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
90) What is meant by Comparative Analysis and Market Estimation by Analogy? How can these
be helpful in marketing research?
Answer: In global marketing research, it may be necessary to conduct comparisons of market
potential and marketing performance in different countries or regional markets at the same point
in time. This analysis can be intra-company or cross-national comparison. There may be
differences even under similar conditions from one country to another. For example, catalog
sales in the United States represent about 3% of overall retail sales. By comparison, catalog sales
in Germany account for 5.8% of overall sales. This suggests that there is a catalog marketing
opportunity in Germany. Sometimes data may not be available for a particular country or
regional market. In such cases it is sometimes possible to draw an analogy. In other words the
comparison is based on partial resemblance since data are not available. Time-series
displacement is an analogy technique based on the assumption that an analogy between markets
exists in different time periods. The time displacement method requires a marketer to estimate
when two markets are at similar stages of development.
Difficulty: Difficult
Chapter LO: 5
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
Chapter 7 Segmentation, Targeting, and Positioning
1) "Frugal Engineering" and "Reverse Innovation" are some of the terms that GE, Proctor &
Gamble, Siemens, and Unilever are using to describe efforts to penetrate more deeply into
emerging markets.
Answer: TRUE
Difficulty: Easy
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
2) Global market segmentation is based on the premise that companies should attempt to identify
consumers in different countries who share similar needs and desires.
Answer: TRUE
Difficulty: Easy
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
3) Sushi, Falafel, Tandoori Chicken or Pizza is in demand in many parts of the world. This
phenomenon can be due to the pluralization of consumption and segment simultaneity.
Answer: TRUE
Difficulty: Easy
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
4) Dove, a division of Unilever, traditionally targeted men and women with its Dove-branded
skin care products.
Answer: FALSE
Difficulty: Easy
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
5) Global marketers must determine whether a standardized or an adapted marketing mix is
required to best serve the wants and needs of the consumers.
Answer: TRUE
Difficulty: Easy
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
6) For some consumer products such as cigarettes, soft drinks, and candy that have a low per-unit
cost, income is often a more valuable segmentation variable than population.
Answer: FALSE
Difficulty: Easy
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
7) About two-thirds of world GNI is generated in the Triad countries, whereas only about 12% of
the world's population is located in those countries.
Answer: TRUE
Difficulty: Easy
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
8) Ideally, GDP and other measures of national income converted to U.S. dollars, should be
calculated on the basis of purchasing power parities or through direct comparisons of actual
prices for a given product.
Answer: TRUE
Difficulty: Easy
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
9) Despite having comparable per capita incomes, other industrialized countries are nevertheless
quite small in terms of total annual income.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
10) Sweden's smaller population explains why IKEA, Saab, and Ericsson have looked beyond
their borders for significant growth opportunities.
Answer: TRUE
Difficulty: Easy
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
11) The vast majority of India's population comprises a "bullock cart" segment whose
households lack most comforts but typically owns a television.
Answer: TRUE
Difficulty: Easy
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
12) Categories such as "successful idealists" and "affluent materialists" can be used to describe
age segmentation.
Answer: FALSE
Difficulty: Easy
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
13) Sometimes it is preferable to market to a particular age group rather than a mind-set; in such
an instance psychographic studies can help marketers arrive at a deeper understanding of
consumer behavior than is possible with traditional segmentation variables.
Answer: FALSE
Difficulty: Easy
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
14) For behavior segmentation, marketers use the 80/20 rule when assessing the consumers'
usage rate, which means that 20% of the company's revenues or profits are accounted for by 80%
of the firm's products or customers.
Answer: FALSE
Difficulty: Easy
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
15) Pareto's Law suggests that 80% of a company's revenues or profits are accounted for by 20%
of a firm's products or customers.
Answer: TRUE
Difficulty: Easy
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
16) America's Hispanic population shares a common language, and so in ethnic segmentation
they can be grouped as one segment.
Answer: FALSE
Difficulty: Easy
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
17) When assessing potential country target markets, management should rely heavily on its
network of contacts as a primary criterion for targeting.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
18) India is the world's fastest growing cell phone market with the industry expanding at a rate of
50% annually with 5 million new subscribers added every month. This is an indication of
continued private-sector growth.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
19) One of the advantages of targeting a market segment globally is that although the segment in
a single-country market might be small, even a narrow segment can be served profitably if the
segment exists in several countries.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
20) A market segment or country market characterized by weak competition may be a segment
to avoid.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
21) Virgin chief executive Richard Branson learned that starting a soft-drinks war with CocaCola was crazy, although it was also one of the things that raised the profile of the Virgin name
in America.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
22) When making a decision about market entry timing, a company's management team should
understand that the first-mover always becomes the market leader.
Answer: FALSE
Difficulty: Easy
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
23) One of the first-mover disadvantages is that a late-mover competitor may reap benefit from
the investments made in marketing and establishing in a country.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
24) BMW's slogan "the ultimate driving machine," is an example of an attribute or benefit which
has proven successful in their positioning strategy.
Answer: TRUE
Difficulty: Easy
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
25) Standardized global marketing is analogous to mass marketing in a single country and is also
known as differentiated target marketing.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
26) Differentiated global marketing represents a more ambitious approach than concentrated
target marketing.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
27) Lexus developed new diesel models as well as a gas-hybrid engine because Germans want
the option of buying vehicles with diesel engines.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
28) IKEA, the home furnishings retailer based in Sweden, wraps itself in the Swedish flag–
literally, since inside and out, their stores are decorated in the national colors of blue and yellow.
This is an example of local consumer culture positioning.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
29) Benetton uses the slogan "United Colors of Benetton" to position itself as a brand concerned
with the unity of humankind. This type of strategy is referred to as GCCP (global consumer
culture positioning).
Answer: TRUE
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
30) In the cosmetics industry, Unilever pursues differentiated global marketing strategies by
targeting both ends of the perfume market.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
31) The efforts of global companies to reach low-income consumers in emerging markets
highlight the importance of skillful global market segmentation and targeting. Market
segmentation represents:
A) targeting prospective customers.
B) finding customers who can respond to advertisement.
C) promoting products and services internationally.
D) identifying customers who can help in promoting products.
E) an effort to identify and categorize customers based on common characteristics.
Answer: E
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
32) When identifying global market segments, a fundamental guiding principle should be the
need to determine:
A) shared demographic characteristics.
B) similar languages.
C) similar needs and buying behavior.
D) similar ethnic backgrounds.
E) similar geographic regions.
Answer: C
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
33) Demographic segmentation is based on measurable characteristics of populations which
includes all of the following examples except:
A) Asia is home to 500 million consumers aged 16 and younger.
B) India has more than half of the population younger than 25.
C) Consumers buying Porsche would like to be noticed.
D) The United States is home to 28.4 million foreign-born residents with combined income of $
233 billion.
E) In EU, the number of consumers aged 16 and under is rapidly approaching consumers aged
60.
Answer: C
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
34) Global marketing authority, Theodore Levitt, has noted that many ethnic and regional
foods—sushi, for example—are enjoying popularity in many countries of the world. This
observation is known as:
A) the pluralization of consumption.
B) the ethnicitization of consumption.
C) the democratization of consumption.
D) the sophistication of consumption.
E) the domestication of consumption.
Answer: A
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
35) A. Coskun Samli had developed a useful approach to global market segmentation that
compares and contrasts "conventional" versus "unconventional" wisdom. An example of
unconventional wisdom is:
A) since per capita income in India is about $1,420, assuming that all Indians have low incomes.
B) assuming that consumers in Europe and Latin America are interested in World Cup soccer
whereas Americans are not.
C) assuming that there is a presence of a higher-income middle-class segment in India.
D) assuming that the potential Indian customer base for a McDonald's is larger than the size of
entire developed countries.
E) assuming that there is no running water and electricity in India.
Answer: C
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
36) The process of global market segmentation begins with the choice of one or more variables
to use as a basis for grouping customers. All of the following are variables that are commonly
used except:
A) demographics.
B) polycentrics.
C) behavioral characteristics.
D) benefits sought.
E) psychographics.
Answer: B
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
37) Based on 2011 projections, the top ten nations ranked by per capita income does not include:
A) the United States.
B) Japan.
C) Russia.
D) Spain.
E) Italy.
Answer: C
Difficulty: Easy
Chapter LO: 1
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
38) Ericsson, IKEA, Saab, and other companies based in Sweden have looked beyond their
borders for significant growth market because:
A) Sweden has high total annual income.
B) Sweden has low total annual income.
C) Sweden has a smaller population.
D) Sweden is land locked geographically.
E) Sweden has relaxed export policies.
Answer: C
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
39) The concentration of income in the high-income and large-population countries means that a
company can be "global" by targeting buyers in:
A) just 50 countries.
B) just 20 countries.
C) just 10 or fewer countries.
D) just 30 countries.
E) none of the above
Answer: C
Difficulty: Moderate
Chapter LO: 2
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
40) A global segment is referred to as "global elite" which includes:
A) people between the ages of 12 and 19.
B) affluent, well-traveled persons.
C) graying population.
D) technology professionals.
E) persons having power.
Answer: B
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
41) In 2011, the ten most populous countries in the world accounted for just over ________
percent of the world income.
A) ten
B) twenty
C) thirty
D) forty
E) fifty
Answer: E
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
42) McDonald's operates in over 118 countries; however, 80% of its restaurants are located in
nine countries which does not include the following country market:
A) Australia.
B) Brazil.
C) Germany.
D) India.
E) Japan.
Answer: D
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
43) A global segment is referred to as "global teens" which includes:
A) people between the ages of 12 and 19.
B) affluent, well-traveled persons.
C) young global travelers.
D) technology professionals.
E) persons having power.
Answer: A
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
44) A global segment is referred to as "global teens" which includes:
A) people with shared interest in fashions.
B) affluent, well-traveled persons.
C) movie stars.
D) technology professionals.
E) persons having power.
Answer: A
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
45) Psychographic segmentation involves grouping people in terms of their:
A) combined household income.
B) age and income.
C) attitudes, values and lifestyle.
D) psychological well being.
E) gender.
Answer: C
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
46) Porsche AG uses the label "Top Guns" to describe one segment of its customers, namely
those who care about power and control and who expect to be noticed. Such a profile would be
based on which type of segmentation?
A) demographic
B) occupational
C) psychographic
D) behavioral
E) gender
Answer: C
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
47) SRI International developed Values and Lifestyles (VALS). Such a consumer profile would
be helpful for which type of segmentation?
A) demographic
B) occupational
C) psychographic
D) behavioral
E) gender
Answer: C
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
48) In the study entitled "The Euroconsumer: Marketing Myth or Cultural Certainty?" the
researchers identified four lifestyle groups. The group that represents mainstream European
consumers was labeled as:
A) Successful Idealists.
B) Affluent Materialists.
C) Young Professionals.
D) Trendy Teens.
E) Disaffected Survivors.
Answer: E
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
49) In a study entitled "The Euroconsumer: Marketing Myth or Cultural Certainty?" the
researchers identified different lifestyle groups. The segment that is concentrated in high-crime,
inner-city neighborhoods were classified as:
A) Successful Idealists.
B) Affluent Materialists.
C) Disaffected Survivors.
D) Trendy Teens.
E) Comfortable Belongers.
Answer: C
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
50) The law of disproportionality suggests that ________ percent of the company's menu or
profits are accounted for the 20% of a firm's products or customers.
A) 50
B) 60
C) 70
D) 80
E) 90
Answer: D
Difficulty: Moderate
Chapter LO: 2
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
51) The DMBB agency created a psychographic profile of the Russian market. The categories
include all of the following except:
A) Kuptsy.
B) Cossacks.
C) Elites.
D) Students.
E) Business Executives.
Answer: C
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
52) Sony's U.S. Consumer segments included all of the following except:
A) Affluent.
B) Zoomers.
C) SoHo.
D) Gen Y.
E) Fashionists.
Answer: E
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
53) "Usage rates" and "user status" are important criteria for which segmentation variable?
A) demographic
B) occupational
C) psychographic
D) behavioral
E) benefit
Answer: D
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
54) Campbell's Soup is making significant inroads into Japan's $500 million soup market as
time-pressed homemakers place a premium on convenience. This type of consumer segmentation
by Campbell's Soup is referred to as:
A) demographic.
B) occupational.
C) psychographic.
D) benefit.
E) behavioral.
Answer: D
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
55) Nutraceuticals are health food products which are manufactured by:
A) Kraft foods.
B) General Mills
C) Campbell's soups.
D) Nestlé foods.
E) Gerber foods.
Answer: D
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
56) Diageo PLC, V&S Vin & Spirit AB, and Seagram and other marketers know that Russians
consume a great deal of vodka. This type of market segmentation can be classified as:
A) demographic.
B) behavioral.
C) psychographic.
D) occupational.
E) benefit.
Answer: B
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
57) Several years ago, the DMBB agency created a single-country psychographic profile that
includes segment labels such as "Cossacks" and "Kuptsy." What country does the survey cover?
A) India
B) Japan
C) Russia
D) China
E) Vietnam
Answer: C
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
58) In response to increasing worldwide concerns about obesity, diabetes, and other food-related
health issues, some of the world's largest food companies are developing new products. Nestlé
and Groupe Danone SA have developed several health-foods which include all of the following
except:
A) Souvenaid.
B) Activa.
C) NutriChoice.
D) Nutraceuticals.
E) Medical Foods.
Answer: B
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
59) Procter & Gamble has identified a group of consumers in Europe who are willing to pay
premium prices for pet food that will improve the health of their pets. This is an example of
________ segmentation.
A) demographic
B) psychographic
C) ethnic
D) behavioral
E) benefit
Answer: E
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
60) Three Mexican retailers Famso, Grupo Gigant SA, and Grupo Commercial Chedraui SA
have opened stores in the United States. This is an indication of:
A) U.S. retailers were lagging behind in collecting demographic information.
B) the Mexican retailers provide better products than American stores.
C) the Hispanic American segments represent a great opportunity for marketers.
D) American businesses cannot compete with Mexican retailers.
E) the Mexican retailers would like to compete with businesses like Best Buy and Circuit City.
Answer: C
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
61) Which of the following is true about efforts by automakers to target the Hispanic segment in
the United States?
A) Honda, Toyota, Ford, and GM all began targeting the segment years ago.
B) Honda and Toyota began targeting the segment years ago; Ford and GM launched their
efforts more recently.
C) Ford and GM began targeting the segment years ago; Honda and Toyota launched their
efforts more recently.
D) Only Ford and GM are targeting the Hispanic segment.
E) none of the above
Answer: B
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
62) Which of the following criteria should marketers use when assessing opportunity in global
target markets?
A) current size of the segment
B) anticipated growth potential
C) competition
D) compatibility with company's overall objectives
E) all of the above
Answer: E
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
63) Global automakers are targeting the U.S. market with SUVs. All of the following SUVs are
assembled or manufactured in the listed country except:
A) Porsche in Germany.
B) Honda in Japan.
C) Volkswagen in Slovakia.
D) Kia in India.
E) Mercedes-Benz in the United States.
Answer: D
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
64) Managers must decide how well a company's product fits the country market by asking the
following questions except:
A) Will adaptation be required?
B) Will import restriction drive up the product price?
C) Is it advisable to source locally?
D) Will strong home currency have an adverse impact on product price?
E) Will it be possible to neglect home-country regulations?
Answer: E
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
65) The feasibility of targeting a particular market segment can be negatively impacted by
various factors which does not include:
A) regulatory hurdles.
B) cultural barriers.
C) lack of distribution system.
D) time required to establish business.
E) surplus demand.
Answer: E
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
66) The basis for global marketing expert David Arnold's framework for screening intercountry
comparisons include:
A) demographic data.
B) "top-down" segmentation analysis.
C) "bottom-up" segmentation analysis.
D) income level.
E) population data.
Answer: C
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
67) Basic criteria that marketers should keep in mind while assessing opportunities in global
markets include all of the following except:
A) current size of the market segment.
B) anticipated growth potential of the market.
C) compatibility with company's overall objectives.
D) competition in the market.
E) securing first mover advantage.
Answer: E
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
68) Companies like Coca-Cola had the first-mover advantage since they were the first company
to enter a global market. However, there are also first-mover disadvantages which include:
A) best chance of becoming world leader.
B) advantage in adapting to the local culture.
C) lead in advertising and promotion exposure.
D) gain business experience.
E) substantial investments in marketing.
Answer: E
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
69) Marketing that involves creating the same marketing mix for a broad mass market of
potential buyers is referred to as:
A) differentiated target marketing.
B) standardized global marketing.
C) concentrated global marketing.
D) competitive global marketing.
E) target benefit marketing.
Answer: B
Difficulty: Moderate
Chapter LO: 3
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
70) The Swatch Group markets watches in all price ranges, from the Swatch brand at the low end
to luxury brands such as Longines, Blancpain, and Breguet. Which target market strategy does
this illustrate?
A) standardized global marketing
B) concentrated global marketing
C) differentiated global marketing
D) psychographic global marketing
E) none of the above
Answer: C
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
71) Positioning refers to the act of:
A) determining on what points on the globe to target.
B) ensuring a choice retail shelf location.
C) differentiating a brand in customer's mind.
D) formulating a private label strategy.
E) formulating a companion product.
Answer: C
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
72) For years, ads for Volvo automobiles stressed safety features and protection in the event of a
crash. Thus, Volvo automobiles developed a reputation based on which positioning strategy?
A) use/user
B) attribute/benefit
C) competition
D) high touch
E) quality/price
Answer: B
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
73) Ads by BMW advertise it as the "ultimate driving machine" which is described as
positioning based on:
A) high touch.
B) use/user.
C) attribute/benefit.
D) competition.
E) quality/price.
Answer: C
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
74) Some of Body Shop's recent advertising has emphasized the difference between the
company's principles and those of "mainstream" cosmetics companies on such issues as animal
testing. As described here, Body Shop's ads illustrate positioning by:
A) competition.
B) niche.
C) quality/price.
D) attribute/benefit.
E) culture.
Answer: A
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
75) Which of the following is generally true about the marketing of high-touch products such as
fine china and crystal?
A) It relies equally on specialized information and image.
B) It relies less on image and more on specialized information.
C) It relies less on specialized information and more on image.
D) Neither image nor specialized information is relevant to the marketing of high-touch
products.
E) It relies partially on specialized information and partially on image.
Answer: C
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
76) Consumers shopping for high-touch products, such as fine perfume, are generally energized
by ________ motives.
A) emotional
B) rational
C) both emotional and rational
D) neither emotional nor rational
E) high-tech
Answer: A
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
77) When a marketer understands that a product satisfies a buyer's rational criteria while also
evoking an emotional response, the marketer should:
A) only target consumers in high-income countries.
B) utilize a multi-tiered targeting strategy rather than a concentrated strategy.
C) commission psychographic segmentation studies to augment demographic data.
D) create advertising that reflects a bipolar, high-tech and high-touch approach.
E) follow normal targeting strategy.
Answer: C
Difficulty: Moderate
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
78) Which of the following is true of advertising for the Heineken and Foster's brands in the
United States?
A) Both Heineken and Foster's utilize the GCCP strategy.
B) Both Heineken and Foster's utilize the FCCP strategy.
C) Heineken utilizes the GCCP strategy; Foster's utilizes the FCCP strategy.
D) Heineken utilizes the FCCP strategy; Foster's utilizes the GCCP strategy.
E) Heineken utilizes the LCCP strategy; Foster's utilizes the GCCP strategy.
Answer: C
Difficulty: Moderate
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
79) The world's best-known cosmetics companies are setting their sights on a lucrative new
market segment: the emerging middle classes in countries such as Brazil, Russia, India, and
China. However, these companies have to understand:
A) that women's preferences in those countries are almost similar.
B) that Chinese consumers are not willing to invest in beauty products.
C) what beauty means to Chinese women.
D) that working Indian women prefer only local brands.
E) cosmetics are preferred mostly by the top end of the market in China.
Answer: C
Difficulty: Moderate
Chapter LO: 4
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
80) The strategy that identifies a brand as a symbol of a particular global segment is known as:
A) foreign consumer culture positioning.
B) global consumer culture positioning.
C) local consumer culture positioning.
D) global market positioning.
E) demographic market positioning.
Answer: B
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
81) What is psychographic segmentation, and how do marketers use it in targeting different
world markets?
Answer: Psychographic segmentation involves grouping people in terms of their attitudes,
values, and lifestyles. Respondents are carefully selected by asking questions to assess their
attitudes, values, and lifestyles. There are different companies that provide services and help in
assessing these psychographic variables. Different groups are given names based on the
attributes which describe their attitudes, values, and lifestyles. Automakers rely on this
segmentation since the purchase behavior of a considerable size of consumers is dependent on
psychographic values. A psychographic study showed that Porsche buyers could be divided into
several distinct categories. One of the categories, "Top Gun" was found to buy Porsches and
expect to be noticed. Proud Patrons and Fantasists, on the other hand, found such conspicuous
consumption as irrelevant. Thus, automakers can design autos based on the preferences of
populations grouped under each category. It is preferable to market to a mind-set rather than a
particular age group. For finding such a group, psychographic studies are important. These
analyses are expensive and require careful interpretations. SRI International, one of the market
research organizations, has developed VALS/VALS 2 analyses of consumers based on
psychographic values. A research team in Europe identified four lifestyle groups: Successful
Idealists, Affluent Materialists, Comfortable Belongers and Disaffected Survivors. The first two
groups represent the elite, while the latter two represented the mainstream European consumers.
It should be noted that the segmentation and targeting approach used by a company can vary
from country to country. Methods that can truly assess a population segment of a country should
be employed for psychographic segmentation.
Difficulty: Moderate
Chapter LO: 1
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
82) Due to globalization "it is a small world after all." Also, vast scale migration of populations
due to various reasons, including opportunities, has created large segments of ethnic population.
Considering these facts, highlight the ethnic segmentation and its importance.
Answer: Due to several reasons, in many countries the population consists of ethnic groups. For
example, in the United States there are three major ethnic segments—African/Black Americans;
Asian Americans; and Hispanic Americans. In other countries there are different combinations of
ethnic population. Each segment shows great diversity and can be further subdivided. Even those
coming from one country may have differences in language, culture, religion, and other
attitudinal aspects. Their purchasing behavior is different within groups and sub-groups. From a
marketing standpoint these groups offer great opportunity. Companies in a variety of industry
sectors, primarily food and beverages, household goods, and financing services can benefit by
targeting these groups. For example, Japanese automakers have been successful in targeting
ethnic populations in different parts of the world.
Difficulty: Difficult
Chapter LO: 2
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
83) What are some of the pitfalls in assessing market potential and choosing target markets or
segments?
Answer: After segmenting the market, the next important step is to assess the attractiveness of
the identified segments. This is an important part when assessing emerging country markets as
potential targets. Several potential pitfalls in assessment should be taken into account. In general,
there is a tendency to overstate the size and short-term attractiveness of individual country
markets. This can happen if estimates are based primarily on demographic data such as income
and population. For example, the population figures in India and China can create a bloated
image. Short-term profitability may be hard due to prevailing conditions in these emerging
markets. Persistence and long-term outlook often pays off in new markets. A second pitfall may
originate from pressures placed on marketers by shareholders or competitors. The possibility of
missing out on entering a condition is in itself a stress-causing factor. Marketers may find
themselves overwhelmed at times by such pressures and the urge to react quickly. Another factor
may be the decisions made based on convenience or opinion of persons/advisors not residing in
the home country. The right representatives or distributors should be selected in order to be
successful.
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
84) What important lessons did Virgin chief executive Richard Branson learn in the mid-1990s
when he launched Virgin Cola, directly targeting Coca-Cola's core market?
Answer: Starting a soft-drinks war with Coca-Cola was crazy. It was one of their highest profile
business mistakes, though it was also one of the things that raised the profile of the Virgin name
in America. Launching Virgin Cola they were having fun and reveling in bravado. However,
taking on Coke taught them two lessons: how to make a great cola with a different taste; and how
to antagonize a global business that brought in $28 billion in 2007, with profits of $5 billion.
They underestimated the power and the influence of a global brand that epitomizes the strength
and reach of American capitalism.
Difficulty: Difficult
Chapter LO: 5
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
85) Assume that the market segment is judged to be large enough, and the strong competitors are
either absent or deemed to be vulnerable, then is it safe to enter the country? Justify your answer
by giving reasons.
Answer: If the market segment is judged to be large enough, and there are no strong existing or
potential competitors, one should not assume that it is safe to enter the country. There are several
other factors that can negatively impact a business. For example, significant regulatory hurdles
may be present that limit market access. The company may also encounter cultural barriers or
religious restrictions. Other marketing-specific issues can arise. For example, in India, three to
five years are required to build an effective distribution system for many consumer products.
Also, the approvals may take a considerably long period of time. Thus, apparent potential does
not guarantee success. Managers have a difficult decision in such conditions. If there are certain
prevailing conditions that require adaptation of products, then that should be taken into account.
Also, it is important to consider the question of whether targeting a particular segment is
compatible with the company's overall goals, its brand image, or established sources of
competitive advantage.
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
86) Discuss the basics of a framework for selecting target markets highlighting the salient
features of David Arnold's framework.
Answer: A framework for selecting target markets should take into account the market size of
the targeted market. The market size should then be multiplied by the competitive advantage in
that country. Multiplying the market size and competitive advantage index yields a market
potential. The next step in the analysis requires an assessment of the various market access
considerations. Finally, multiplying the market potential by the terms of access index gives the
final market potential. This framework takes into account the competitive advantage, market
potential and the terms of access. This framework should prove useful as a preliminary screening
tool for inter-country comparisons. However, it does not go far enough in terms of assessing
actual market potential. Global marketing expert David Arnold has developed a framework that
goes beyond demographic data and considers other marketing-oriented assessments of market
size and growth potential. Thus, instead of a "top-down" segmentation analysis beginning with,
for example, income or population data from a particular country, Arnold's framework is based
on a "bottom-up" analysis that begins at the product-market level. The product-market refers to a
market defined by a product category. For example, in the automotive industry that would refer
to luxury car market. Arnold's framework incorporates two core concepts: marketing model
drivers and enabling conditions. Marketing model drivers are key elements or factors required
for a business to take root and grow in a particular country market environment. The drivers may
differ depending on whether a company serves consumer or industrial markets. Enabling
conditions are structural market characteristics whose presence or absence can determine where
the marketing model can succeed. For example, in India, refrigeration is not widely available in
shops and market food stalls. This creates challenges for storing dairy products and confections.
So the enabling conditions are very important. After marketing-model drivers and enabling
conditions have been identified, the management should weigh the estimated costs associated
with entering and serving the market with potential short- and long-term revenue streams. One
way to determine the marketing model drivers and enabling conditions is to create a productmarket profile.
Difficulty: Moderate
Chapter LO: 3
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
87) After evaluating the identified segments, decisions have to be made whether to pursue a
particular opportunity or not. Assuming the decision is made to proceed, an appropriate targeting
strategy must be developed. Explain the basic categories of target marketing strategies and how
they can be implemented.
Answer: The three basic categories of target marketing strategies are: standardized marketing,
concentrated marketing, and differentiated marketing. Standardized global marketing is
analogous to mass marketing in a single country. It involves creating the same marketing mix for
a broad mass market of potential buyers. It is also known as undifferentiated target marketing
since it is based on the premise that a mass market exists around the world. Product adaptation is
minimized, and a strategy of intensive distribution ensures that the product is available in the
maximum number of retail outlets. The appeal of standardized global marketing is due to the
lower production costs. The concentrated target marketing involves devising a marketing mix to
reach a niche. A niche is a single segment of the global market. For example, in cosmetics,
Chanel has targeted the upscale, prestige segment of the market. Concentrated targeting is also
the strategy employed by the hidden champions of global marketing—companies unknown to
most people that have succeeded by serving a niche market that exists in many countries. These
companies define their markets narrowly and strive for global depth rather than national breadth.
The narrowing of market definition is the key principle in this strategy. The third category
differentiated global marketing, represents a more ambitious approach than concentrated target
marketing. It is also known as multi-segment targeting. It entails targeting two or more distinct
market segments with multiple marketing mix offerings. This strategy allows a company to
achieve wider market coverage. For example, in the sport utility vehicle segment, Rover has a
Range Rover at the high end of the market. A scaled down version, the Land Rover Discovery, is
offered which competes directly with the Jeep Grand Cherokee. The Freelander, its newest
vehicle, has been on sale in Europe for several years. Thus, there is a multi-pronged approach to
marketing.
Difficulty: Moderate
Chapter LO: 3
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
88) The world's best-known cosmetics companies are setting sights on a lucrative new market
segment: the emerging middle classes in countries such as Brazil, Russia, India, and China. What
understandings and factors should be considered by these companies to be successful in markets
in those countries?
Answer: Noting that there is no "one-size-fits-all" ideal of beauty, cosmetic marketers should
consider the sensitivity to local cultural preferences. Each customer is free to have her own
aspirations. They have to offer the best quality and the best product to satisfy local customers.
Many Asian women use whitening creams to lighten and brighten their complexion. In China,
white skin is associated with wealth. Companies have to understand what beauty means to
Chinese women and what they look for. Product offerings and communications therefore have to
be adjusted accordingly. Market research is critical to understanding women's preferences in
different parts of the world. Japanese women prefer to use a compact foundation rather than a
liquid. Humid conditions in tropical countries, like India, should be taken into account. How
many times women clean their faces should be taken into account. In China, mass-market and
premium brands should be considered in order to fulfill requirements of the top and general
market. In India, the number of working women is increasing dramatically, and consumer
attitudes are shifting. Due to advances in technology and access to television, women are getting
more beauty conscious. Coloring gray hairs is also an important consideration for women in
India. Thus, for each country different factors have to be considered since preferences for beauty
products vary from country to country.
Difficulty: Moderate
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
89) Colgate Total toothpaste is positioned as the brand that addresses all aspects of oral health.
Such positioning is very important from the business point of view. How does positioning help in
deciding on a marketing strategy? What are the differences between using "attribute or benefit"
and "quality and price" as positioning strategy?
Answer: Positioning refers to the act of differentiating a brand in customers minds in relation to
competitors in terms of attributes and benefits that the brand does and does not offer. It is the
process of developing strategies for marketing purposes. It is frequently used in conjunction with
the segmentation variables and targeting strategies. "Attribute or benefit" strategies are used to
expose a particular product attribute, benefit or other special feature. Aspects such as economy,
reliability, multiple uses, durability, and simplicity are very commonly used to describe the
attributes of a product or service. For example, Visa's advertising theme "It's Everywhere You
Want to Be" exposes its benefit of being useful at any place in the world. Thus, these types of
slogans, themes, or jingles very cleverly outline the benefits or attributes of a product. A similar
strategy that is used is related to "Quality and Price." This strategy can be considered in light of a
continuum from high fashion/quality and high price to good value. Swatch watches advertise
their quality, Swiss origin, as well as affordable price. This way price is always tied to the quality
and durability of the product or service.
Difficulty: Moderate
Chapter LO: 5
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
90) What are the major differences between global, foreign, and local consumer culture
positioning? Why are these differences significant? Give examples of how companies are trying
to lure customers using these positioning strategies.
Answer: Global consumer culture positioning (GCCP) is defined as a strategy that identifies the
brand as a symbol of a particular global culture or segment. It has proven to be an effective
strategy for communicating with global teens, cosmopolitan elites, and globe-trotting laptop
warriors who consider themselves members of a transnational commerce culture. For example,
Sony's slogan "My First Sony" is positioned as the electronics brand for youngsters around the
globe with discerning parents. Benetton uses the slogan "United Colors of Benetton" to position
itself as a brand concerned with the unity of humankind. Categories of products that lend
themselves to this positioning are both associated with high levels of customer involvement and
by a shared "language" among users. High tech products such as iPod, iPhone, MP3 players,
video cameras, and all such technology-prone items fall into these categories.
Foreign consumer culture positioning (FCCP) associates the brand's users, use occasions, or
production origins with a foreign country or culture. Foster's Brewing Group's U.S. advertising
proudly uses the brand's nation of origin in all of its print ads and other promotions as being
Australian. Local consumer culture positioning (LCCP) strategy associates the brand with local
cultural meanings, reflects the local culture's norms, portrays the brand as consumed by local
people in the national culture, or depicts the product as locally produced for local consumers.
Budweiser's U.S. advertising particularly focuses on local aspects.
Difficulty: Easy
Chapter LO: 4
AACSB: Application of knowledge
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
Chapter 13 Global Marketing Communications Decisions I: Advertising and Public
Relations
1) The elements of the promotion mix are advertising, public relations, personal selling, process,
and sales promotion.
Answer: FALSE
Difficulty: Easy
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
2) According to data published by Advertising Age in 2012, Proctor & Gamble ranks # 2 in
worldwide advertisement spending.
Answer: FALSE
Difficulty: Easy
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
3) The "extension versus adaptation" debate is essentially a debate over "standardized versus
localized" advertising.
Answer: TRUE
Difficulty: Easy
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
4) Recently, global companies have embraced a technique known as "pattern advertising" which
is analogous to the concept of global product platforms.
Answer: TRUE
Difficulty: Easy
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
5) Standardized print campaigns can be used for industrial products or for technology-oriented
consumer products such as Apple iPhone and iPad.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
6) According to the worldwide revenue figures for 2012, Omnicom Group is the world's largest
advertising organization.
Answer: FALSE
Difficulty: Easy
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
7) Despite an unmistakable trend toward using global advertising agencies to support global
marketing efforts, companies with geocentric orientations will adapt to the global market
requirements and select the best agency or agencies accordingly.
Answer: TRUE
Difficulty: Difficult
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
8) Western advertising agencies still find markets such as China and Japan to be very complex,
as Asian agencies find it just as difficult to establish local agency presence in Western markets.
Answer: TRUE
Difficulty: Difficult
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
9) A German agency devised McDonald's "I'm lovin' it" tagline.
Answer: TRUE
Difficulty: Easy
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
10) Some of the world's most memorable advertising campaigns originate from "big" ideas with
an unlimited number of new executions. Such a campaign is said to have "legs."
Answer: TRUE
Difficulty: Difficult
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
11) When creating global advertising, it is important to remember that the "advertising appeal"
should be based on the agency's understanding of the target audience's buying motives.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 2
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
12) The way a product's appeal or proposition is presented is called the "creative execution."
Answer: TRUE
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
13) Copywriters are specialists who check advertisements to see that they meet copyright
regulations in different countries.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
14) The challenge of encoding and decoding slogans and taglines in different national and
cultural contexts can lead to unintentional errors.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
15) In China, McDonald's is careful not to advertise prices with multiple occurrences of the
number four since, in Cantonese, the pronunciation of the word four sounds similar to that of the
word death.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 3
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
16) In China, a humorous TV ad showing a student humiliating a teacher in the classroom would
be an effective execution for a soft drink brand.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 3
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
17) In Japan, intimate scenes between men and women are in bad taste, and in Saudi Arabia such
ads are outlawed.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 3
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
18) When photographing a couple entering a restaurant or theater, women should be shown
preceding the man in Germany and France.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 3
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
19) Partial nudity and same-sex couples are frequently seen in ads in Latin America and Europe.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 3
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
20) Food is the product category most likely to elicit cultural sensitivity.
Answer: TRUE
Difficulty: Easy
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
21) Ads based on a rational appeal depend on logic and speak to the audience's intellect.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
22) Many companies utilize corporate advertising which, despite the name, is generally
considered part of the PR function.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 5
AACSB: Analytical thinking
Course LO: Discuss the fundamental concepts of marketing
23) Benetton's striking print and outdoor advantage campaigns keyed to the "United Colors of
Benetton" generated both controversy and widespread media attention.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 5
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
24) Publicity is similar to advertising in that companies pay the media for placement of stories
and news items.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 5
AACSB: Analytical thinking
Course LO: Discuss the fundamental concepts of marketing
25) Image advertising is used by global companies to present themselves as good corporate
citizens in foreign countries.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 5
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
26) Advocacy advertising enhances the public's perception of a company, creates goodwill, or
announces a major change.
Answer: FALSE
Difficulty: Difficult
Chapter LO: 5
AACSB: Analytical thinking
Course LO: Discuss the fundamental concepts of marketing
27) Fires and collapsed buildings at garment factories in Bangladesh revived concerns about the
global supply chain and the human cost of low-priced goods. This created negative publicity for
Walmart.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 5
AACSB: Analytical thinking
Course LO: Discuss the fundamental concepts of marketing
28) Fires caused by faulty lithium-ion batteries on the new 787 Dreamliner resulted in all aircraft
being grounded until the problem could be resolved. This is an example of negative publicity
affecting global marketers.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 5
AACSB: Analytical thinking
Course LO: Discuss the fundamental concepts of marketing
29) Any company that is increasing its activities outside the home country can utilize PR
personnel as boundary spanners between the company and employees, unions, stockholders,
customers, the media, financial analysts, governments, or suppliers.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 5
AACSB: Analytical thinking
Course LO: Discuss the fundamental concepts of marketing
30) A company that is ethnocentric in its approach to PR will not extend home-country PR
activities into host countries.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 5
AACSB: Analytical thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
31) As companies recognize and embrace new concepts such as the globalization of coffee
culture, the potential for effective global advertising:
A) decreases.
B) increases.
C) remains the same.
D) becomes evident.
E) is ignored.
Answer: B
Difficulty: Moderate
Chapter LO: 1
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
32) Advertising, public relations, and other forms of communication are critical tools in the
marketing program and reflect the ________ P of the marketing mix.
A) Product
B) Promotion
C) Price
D) Place
E) Process
Answer: B
Difficulty: Easy
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
33) A ________ company possesses a critical marketing advantage with respect to marketing
communications.
A) domestic
B) local
C) global
D) glocal
E) multinational
Answer: C
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
34) Which of the following product category/company pairings best illustrates the concept of
"product cultures"?
A) earth-moving equipment/Caterpillar
B) personal hygiene/Procter & Gamble
C) coffee bars/Starbucks
D) batteries/Duracell
E) automobiles/Ford
Answer: C
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
35) Because advertising is often designed to add ________ value to product or brand, it plays a
more important communications role in marketing consumer products than in marketing
industrial products.
A) social
B) monetary
C) cultural
D) psychological
E) emotional
Answer: D
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
36) Landor Associates, a company specializing in brand identity and design, recently determined
that ________ has the number one brand-awareness and esteem position in the United States,
number two in Japan, and number six in Europe.
A) McDonald's
B) Toyota
C) Sony
D) Pepsi
E) Coke
Answer: E
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
37) Which company ranks number one in terms of worldwide ad spending for the year 2011?
A) General Motors
B) Philip Morris
C) Unilever
D) Procter & Gamble
E) Coca-Cola
Answer: D
Difficulty: Easy
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
38) Which company ranks number one in terms of ad spending in Europe (2011)?
A) General Motors
B) Philip Morris
C) Unilever
D) Procter & Gamble
E) Coca-Cola
Answer: C
Difficulty: Easy
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
39) What do Unilever and Procter & Gamble have in common?
A) Revenues at both companies have been hurt by regulations concerning tobacco advertising
and promotion.
B) Both companies utilize extension approaches to advertising.
C) Both companies rank high in terms of non-U.S. ad spending.
D) Both companies use a great deal of corporate advertising.
E) Both companies use the same advertising agency.
Answer: C
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
40) A company's efforts to effectively communicate with customers is very important. All of the
following are major difficulties which can compromise an organization's attempt to communicate
with customers except:
A) the message does not reach the intended recipient.
B) the message reaches the intended recipient but is misunderstood.
C) the message reaches the intended recipient and is understood, but the recipient may fail to
take action.
D) the message is distorted by noise.
E) the message is only in one language.
Answer: E
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
41) Competitive advertising may impair the effectiveness of the message due to the fact that it
may:
A) not reach the intended recipient.
B) reach the intended recipient but is misunderstood.
C) reach the intended recipient and is understood, but the recipient may fail to take action.
D) get distorted by noise.
E) only be in one language.
Answer: D
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
42) ________ is the phrase global marketers use to describe ads with common design elements
into which localized elements are inserted for individual country markets.
A) "Pattern advertising"
B) "Template advertising"
C) "Cookie-cutter advertising"
D) "Model advertising"
E) "Stereotype advertising"
Answer: A
Difficulty: Moderate
Chapter LO: 2
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
43) In the language of global marketing, ________ is the phrase used to describe advertising that
represents a middle ground between 100% standardization and 100% localization.
A) "stereotype advertising"
B) "template advertising"
C) "cookie-cutter advertising"
D) "compromise advertising"
E) "pattern advertising"
Answer: E
Difficulty: Moderate
Chapter LO: 2
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
44) When the subheads and body copy of an advertisement are localized, not simply translated,
is an example of:
A) local advertising.
B) global advertising.
C) pattern advertising.
D) advocacy advertising.
E) stereotype advertising.
Answer: C
Difficulty: Moderate
Chapter LO: 2
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
45) Standardized print campaigns can be used in all of the following except:
A) visual appeal.
B) industrial products.
C) high-tech consumer products.
D) voiceovers TV commercials.
E) stereotype advertising.
Answer: E
Difficulty: Moderate
Chapter LO: 3
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
46) According to data published by Advertising Age (2012), which of the following is the largest
global advertising organization based on worldwide revenues?
A) WPP Group
B) Interpublic Group
C) Omnicom Group
D) Dentsu Inc.
E) Havas
Answer: A
Difficulty: Easy
Chapter LO: 3
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
47) According to data published by Advertising Age (2012), which of the following is the largest
global advertising agency network based on worldwide revenues?
A) WPP Group
B) Interpublic Group
C) Omnicom Group
D) Dentsu Inc.
E) Havas
Answer: D
Difficulty: Easy
Chapter LO: 3
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
48) In selecting an advertising agency, all but one of the following issues should be taken into
consideration:
A) company organization.
B) national responsiveness.
C) area coverage.
D) buyer perception.
E) franchise or company owned status.
Answer: E
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
49) Japanese companies are less inclined to use this approach for selecting advertising agencies:
A) designate global agencies.
B) designate local agencies.
C) use ads in-house.
D) use outside agencies.
E) use in-house marketing.
Answer: A
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
50) The kind of brand awareness a company wants to project is identified by:
A) area coverage.
B) buyer perception.
C) company organization.
D) national responsiveness.
E) in-house marketing.
Answer: B
Difficulty: Difficult
Chapter LO: 3
AACSB: Analytical thinking
Course LO: Discuss the fundamental concepts of marketing
51) The significance of tobacco advertising is highlighted by the fact that ________ million
people die each year as a direct result of consuming tobacco products.
A) two
B) three
C) four
D) five
E) six
Answer: D
Difficulty: Easy
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
52) The country which has a massive potential for cigarette manufacturers is:
A) Egypt.
B) Spain.
C) Turkey.
D) China.
E) Vietnam.
Answer: D
Difficulty: Easy
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
53) Some of the world's most memorable advertising campaigns have achieved success because
they originate from an idea that is so big that the campaign offers opportunities for a seemingly
unlimited number of new executions. Such a campaign is said to have:
A) "life."
B) "legs."
C) "love."
D) "fun."
E) "toes."
Answer: B
Difficulty: Moderate
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
54) Tobacco companies in Central Europe face the prospect of tougher marketing and
advertisement regulations due to:
A) the growing concern about health hazards associated with smoking.
B) a dislike of global brands crowding out local brands.
C) a desire to return to communist-era policies.
D) a desire to comply with EU entry requirements.
E) the pressure from neighboring countries.
Answer: D
Difficulty: Moderate
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
55) The advertising promise that captures the reason that people buy products is known as:
A) creative strategy.
B) the advertising appeal.
C) the selling proposition.
D) the creative execution.
E) the big idea.
Answer: C
Difficulty: Moderate
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
56) In many parts of the world, McDonald's utilizes TV advertising that shows parents
interacting with their happy children. Such advertising utilizes:
A) rational appeals.
B) emotional appeals.
C) SRC appeals.
D) melodramatic appeals.
E) localized appeal.
Answer: B
Difficulty: Moderate
Chapter LO: 4
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
57) Ads that tickle the funny bone of the intended audience and evoke response that will direct
purchase behavior are based on:
A) rational appeals.
B) emotional appeals.
C) SRC appeals.
D) melodramatic appeals.
E) localized appeal.
Answer: B
Difficulty: Moderate
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
58) The choice between demonstration, slice-of-life, straight sell, and other advertising forms is a
matter of:
A) the creative strategy.
B) the advertising appeal.
C) the selling proposition.
D) the creative execution.
E) the big idea.
Answer: D
Difficulty: Moderate
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
59) A recent global campaign for IKEA, the Swedish home furnishings retailer, positioned
houses as homes as a place for love, memories, and laughter. This is a classic example of:
A) emotional appeal.
B) rational appeal.
C) selling proposition.
D) advertising appeal.
E) creative appeal.
Answer: A
Difficulty: Moderate
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
60) In advertising, a(n) ________ is an agent who chooses graphics, pictures, type styles, and
other visual elements and has general responsibility for the overall look of an advertisement.
A) art director
B) copywriter
C) IMC manager
D) PR practitioner
E) stylist
Answer: A
Difficulty: Moderate
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
61) The words that are the spoken or written communication elements in advertisements are
known as:
A) copy.
B) manuscript.
C) idea.
D) script.
E) writings.
Answer: A
Difficulty: Moderate
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
62) In Southern China, McDonald's is careful not to advertise prices with multiple occurrences of
the number four because:
A) prices ending in odd numbers are preferred in China.
B) there is no number four in the Chinese language.
C) the word four is pronounced similar to the word death in Cantonese.
D) multiple occurrences are considered as unlucky in China.
E) prices are not included on menus in China.
Answer: C
Difficulty: Moderate
Chapter LO: 4
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
63) Which of the following is true about advertising expenditures in Germany and Brazil?
A) Television is the leading medium in both Germany and Brazil.
B) Newspapers are the leading medium in both Germany and Brazil.
C) Television is the leading medium in Brazil; newspapers are the leading medium in Germany.
D) Television is the leading medium in Germany; newspapers are the leading medium in Brazil.
E) Magazines are the leading medium in Brazil and Germany.
Answer: C
Difficulty: Moderate
Chapter LO: 4
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
64) The United States and ________ are the two top-ranked countries in terms of ad spending
across all measured media in 2012.
A) the United Kingdom
B) France
C) Canada
D) Japan
E) Germany
Answer: D
Difficulty: Easy
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
65) In which country are global marketers likely to encounter the most restrictions on
advertising?
A) the United States
B) Japan
C) Saudi Arabia
D) Russia
E) Germany
Answer: C
Difficulty: Moderate
Chapter LO: 4
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
66) U.S. advertisements contain more ________ information, and are more likely to include
comparative appeals than Arabic ads.
A) people
B) process
C) price
D) sex
E) context
Answer: C
Difficulty: Moderate
Chapter LO: 4
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
67) Which promotional mix element is most closely associated with activities designed to foster
goodwill and understanding with various constituents both inside and outside the company?
A) personal selling
B) advertising
C) public relations
D) sales promotion
E) publicity
Answer: C
Difficulty: Moderate
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
68) One task of the ________ department is to generate nonpaid forms of communication to
foster goodwill among customers and others.
A) sales promotion
B) global marketing
C) headquarters
D) public relations
E) advertising
Answer: D
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
69) Generally speaking, a company has little control over media. To compensate for this lack of
control, many companies utilize:
A) image advertising.
B) advocacy advertising.
C) corporate advertising.
D) TV advertising.
E) radio advertising.
Answer: C
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
70) What do Ford Motor Company, Coca-Cola, Nike, and McDonald's all have in common?
A) They are all consumer packaged-goods companies.
B) They all have foreign CEOs.
C) They have all received a great deal of negative publicity in recent years.
D) They all rely exclusively on TV advertising.
E) They spend more in advertising in foreign markets than home markets.
Answer: C
Difficulty: Moderate
Chapter LO: 5
AACSB: Analytical thinking
Course LO: Discuss the fundamental concepts of marketing
71) Fires caused by faulty lithium-ion batteries on the new 787 Dreamliner resulted in all aircraft
being grounded until the problem could be resolved caused ________ for Boeing Corporation in
the United States.
A) pricing problems
B) distribution problems
C) sales promotion problems
D) public relations problems
E) advertising problems
Answer: D
Difficulty: Moderate
Chapter LO: 5
AACSB: Analytical thinking
Course LO: Discuss the fundamental concepts of marketing
72) Fires and collapsed buildings at garment factories in Bangladesh revived concerns about the
global supply chain and the human cost of low-priced goods. This caused ________ for Walmart
Corporation in the United States.
A) pricing problems
B) distribution problems
C) sales promotion problems
D) public relations problems
E) advertising problems
Answer: D
Difficulty: Moderate
Chapter LO: 5
AACSB: Analytical thinking
Course LO: Discuss the fundamental concepts of marketing
73) Japan's Fuji Photo Film asked its advertising agency to develop an advocacy campaign for
the United States targeted to appeal both to Walmart and to its customers. This is an example of:
A) local advertising.
B) pattern advertising.
C) global advertising.
D) advocacy advertising.
E) image advertising.
Answer: D
Difficulty: Moderate
Chapter LO: 5
AACSB: Analytical thinking
Course LO: Discuss the fundamental concepts of marketing
74) Suicides by employees at Chinese supplier Foxconn Technologies caused negative publicity
affecting:
A) Sony.
B) Apple.
C) Google.
D) Toyota.
E) Nike.
Answer: B
Difficulty: Moderate
Chapter LO: 5
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
75) Even in the face of such tough and growing competition, Adidas still enjoys high brand
loyalty among older Europeans. The company recruits young people and pays them to wear
Adidas shoes in public. This is an example of:
A) local advertising.
B) pattern advertising.
C) global advertising.
D) advocacy advertising.
E) image advertising.
Answer: E
Difficulty: Moderate
Chapter LO: 4
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
76) Which of the following most accurately describes the state of global public relations (PR)
today?
A) Expenditures on PR are dropping.
B) Expenditures on PR are increasing.
C) PR practices are standardized worldwide.
D) PR is not important in emerging markets like India.
E) Foreign investments are increasing.
Answer: B
Difficulty: Moderate
Chapter LO: 4
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
77) A company adopting a(n) ________ approach to worldwide PR activities gives the hostcountry practitioner maximum leeway to incorporate local customs and practices into the PR
effort.
A) ethnocentric
B) regiocentric
C) local
D) polycentric
E) publicity
Answer: D
Difficulty: Moderate
Chapter LO: 5
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
78) China's ongoing trade-related friction with the United States highlights the need for:
A) a better distribution system.
B) a better PR effort.
C) sales promotion.
D) a better transportation system.
E) pattern advertising.
Answer: B
Difficulty: Moderate
Chapter LO: 5
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
79) A company that is ________ in its approach to public relations will extend home-country PR
activities into host countries.
A) regiocentric
B) polycentric
C) ethnocentric
D) domestic
E) hostile
Answer: C
Difficulty: Moderate
Chapter LO: 5
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
80) In developing countries, such as Ghana, the best way to communicate with market segments
may be through:
A) mass media.
B) written word.
C) magazine ads.
D) TV ads.
E) dance, songs, and storytelling.
Answer: E
Difficulty: Moderate
Chapter LO: 5
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
81) A global company that has the ability to successfully transform a domestic campaign into a
worldwide one or to create a new global campaign from the ground up possesses a critical
marketing advantage. Explain this statement in light of the global advertising.
Answer: Advertising can be any sponsored, paid message that is communicated in a nonpersonal way. Global advertising can be defined as messages whose art, copy, headlines,
photographs, tag lines, and other elements have been developed expressly for their worldwide
suitability. Many companies have used local, international, and global themes from time to time
for domestic or worldwide use. A global company may use single-country advertising in addition
to campaigns that are regional and global in scope. The search for a global advertising campaign
should bring together everyone involved with the product to share information. Regional market
areas such as Europe are experiencing an influx of standardized global brands as companies align
themselves. This phenomenon is accelerating the growth of global advertising. The potential for
effective global advertising also increases as companies recognize and embrace new concepts
such as "product cultures." An example of such cultures can be coffee culture which has created
market opportunities for Starbucks Company. Companies also realize that some market segments
can be defined on the basis of global demography such as youth culture. MTV, for example, is
just one of the media vehicles that enable people virtually anywhere to see how the rest of the
world lives and to learn about products that are popular in other cultures. Global advertising also
offers companies economies of scale in advertising as well as improved access to distribution
channels. A global brand supported by global advertising may be very attractive from the
retailer's standpoint; a global brand is less likely to languish on the shelves. Although
standardization is recommended for some products it is not always required or necessary. For
example, Nestlé's Nescafe coffee is marketed as a global brand, even though advertising
messages and product formulation vary to suit cultural differences.
Difficulty: Moderate
Chapter LO: 1
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
82) There is an ongoing debate between "standardization" versus "adaptation" pertaining to
global advertising. Explain how different sides of the arguments fit into the global context.
Answer: Communication experts generally agree that the overall requirements of effective
communication and persuasion are fixed and do not vary from country to country. The same is
true for the components of communication process whereby the marketer is the source of the
message; the message must be encoded, conveyed via the appropriate media, and decoded by a
member of the target audience. Also, that the message is fully communicated when there is
desired feedback. Four major difficulties can compromise an organization's attempt to
communicate with customers in any location: (a) the message may not get through to the
intended audience. This may be due to advertiser's lack of knowledge or experience about
appropriate media to reach certain types of audiences; (b) the message may reach the target
audience but may not be understood or may even be misunderstood. This may be due to
inadequate understanding of the target audiences; (c) the message may reach the target audience
and may be understood but still may not compel the recipient to take action. This could be due to
the lack of cultural knowledge about a target audience, and the effectiveness of the message can
be impaired by noises, which in this case are external influences such as competitive advertising,
other prejudices and related factors. All these factors compel a marketer to think and decide
whether to use adaptations in advertising from country to country and region to region.
Proponents of the "one world, one voice" approach to global advertising believe that the era of
the global village has arrived and that tastes and preferences are converging worldwide.
According to the standardization arguments, people everywhere want the same products for the
same reasons. Advertisers who prefer the localized approach are skeptical of the global village
argument. They assert that consumers still differ from country to country and must be reached by
advertising tailored to their respective countries. Proponents of localization point out those very
costly blunders have occurred since advertisers have failed to understand or adapt to different
cultures. Currently, the argument remains unresolved and companies are using both standardized
advertising as well as adapting where necessary.
Difficulty: Moderate
Chapter LO: 2
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
83) What issues must be considered in selecting an advertising agency for global advertising?
Answer: Care should be taken in selecting advertising agencies, particularly when entering a
new market in a foreign country. The following issues should be considered: (a) company
organization–companies that are decentralized may want to leave the choice to the local
subsidiary; (b) national responsiveness–the global agency should be familiar with the local
culture and buying habits in a particular country. If not, a local agency might be more suitable;
(c) area coverage–does the agency cover the areas, regions, or countries targeted; and (d) buyer
perception–what kind of brand awareness does the company want to project? For example, if a
product needs a strong local identification, it would be best to select a national agency. Despite
the trend toward using global agencies to support global marketing efforts, companies with
geocentric orientations will adapt to the global market requirements and select the best agency or
agencies accordingly.
Difficulty: Moderate
Chapter LO: 2
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
84) Considering the fact that the "message" is at the heart of advertising, discuss how creative
strategy and different types of appeals can be created in global advertising.
Answer: The particular message and the way it is presented will depend primarily on the
advertiser's objectives; whether the ad is meant for informing, entertaining, reminding, or
persuading. Moreover, in a world characterized by information technology, ads must break
through the clutter, grab the audience's attention, and linger in their minds for a desired period of
time. All this requires developing an original and effective creative strategy. Advertising
agencies can be thought of as "idea factories" since they have to create ideas from scratch,
sometimes referred to as the "big idea." Some of the world's most memorable advertising
campaigns have achieved success because they originate from an idea that is big enough to offer
opportunities that will last for a long period of time. Companies seek for such big ideas since
they bring a lot of profitability and exposure to the products and their companies. The advertising
appeal is the communications approach that relates to the motives of the target audience. For
example, ads based on a rational appeal depend on logic and speak to the audience's intellect.
Rational appeals are based on consumers' needs for information. Ads using an emotional appeal
may be directed to evoke a feeling response that will direct purchase behavior. The message
elements in a particular ad will depend, in part, on which appeal is being employed. The selling
proposition is the promise or claim that captures the reason for buying the product or the benefit
that ownership confers. Because products are frequently at different stages in their life cycle in
various markets, and because of cultural, social, and economic differences that exist in those
markets, the most effective appeal or selling proposition for a product may vary from market to
market.
Difficulty: Difficult
Chapter LO: 2
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
85) Food is a product category most likely to exhibit cultural sensitivity. Using Heinz ketchup as
an example, discuss how the company has used its advertising taking into account cultural
sensitivities in different parts of the world.
Answer: Marketers of food and food products have to consider cultural sensitivities in different
parts of the world since food preferences vary from country to country. Localization of the
advertising is highly preferable in the case of food and food product advertising. A good example
is the effort by H.J. Heinz Company to advertise its ketchup products in different markets.
Heinz's strategy involved adapting both the product and advertising to target country tastes. For
example, in Greece, ads show ketchup pouring over pasta, eggs, and cuts of meat. In Japan, they
instruct Japanese homemakers on using ketchup as an ingredient in Western-style food such as
omelettes, sausages, and pasta. Americans like a sweet ketchup, whereas Europeans prefer a
spicier, more piquant variety. Apparently, Heinz's foreign marketing efforts are most successful
when the company quickly adapts to local cultural preferences. In Sweden, the made-in-America
theme is so muted in Heinz's ads that Swedes do not realize that Heinz is American and consider
it to be German because of its name. In contrast, American themes still work well in Germany.
Difficulty: Moderate
Chapter LO: 3
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
86) Much academic research has been devoted to the impact of culture on advertising.
Researcher Tamotsu Kishii identified seven characteristics that distinguish between Japanese and
American creative strategy. Briefly describe those characteristics.
Answer: The seven characteristics outlined by researcher Tamotsu Kishii show how Japanese
ads differ from the American ads which can be summarized as follows: (1) indirect forms of
expression are used in Japan where many television ads do not mention what is desirable and let
the audience judge for themselves; (2) there is often little relationship between advantages
content and the advertised product; (3) in the Japanese culture, the more one talks, the less others
will perceive him or her as trustworthy, so only a brief dialogue or narration is preferred; (4)
humor is used to create a bond of mutual feelings and not to dramatize others in a humorous
way; (5) famous celebrities appear as close acquaintances or everyday people; (6) priority is
placed on company trust rather than product quality. Japanese tend to believe that if a company
is large and has a good image, the quality of its products should also be outstanding; and (7) the
product name is impressed on the viewer with short and brief commercials.
Difficulty: Difficult
Chapter LO: 3
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
87) One of the issues facing advertisers is which medium or media to use when communicating
with global target markets. Discuss how these media differ from country to country, giving
examples.
Answer: Media availability varies from country to country. Some companies like Coca-Cola
utilize every media that is available in a country. The available alternatives can be broadly
classified as print media, electronic media, and other. Print media includes newspapers to
magazines and business publications with national, regional, or international audiences.
Electronic media includes broadcast television, cable television, radio, and the Internet. Other
media may include outdoor, transit, and direct mail advertising. Globally, media decisions must
take into account country-specific regulations such as in France retailers are banned from
advertising on television. Worldwide, television is the number one advertising medium;
however, there are some exceptions. In the United States and Japan, television is the number one
medium, whereas in Germany newspapers are the leading medium. Therefore, more companies
use newspaper as a medium for advertising. Television is also important in Latin American
countries. In Mexico, an advertiser that can pay for full-page advertising may get the front page,
while in India, paper shortages may require booking an ad six months in advance. In some
countries, especially those where the electronic media are government owned, television and
radio stations can broadcast only a restricted number of advertising messages. In Saudi Arabia,
no commercial television advertising was allowed prior to 1986 and currently ad content and
visual presentation are restricted. Also, radio can be an effective advertising media in many
countries. The latest trend, however, is to use the electronic media, and, therefore, Internet
advertising is gaining popularity at the expense of television and print advertising. Outdoor
advertising may also be a major medium of choice in countries such as Russia and India.
Cultural considerations are important when selecting the advertising message as well as the
media.
Difficulty: Moderate
Chapter LO: 4
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
88) Because of its size and presence in more than 200 countries, the Coca-Cola Company is
often the target of anti-globalization protests. Giving examples, show how negative publicity
affects global marketers.
Answer: A large group of Indian protestors protested against the use of water by Coke in India,
where getting water for drinking was a problem. With negative publicity due to vast coverage in
news media, the company has to take some reactionary measures. A rapid reaction is necessary
to do any damage control. Hyundai and Samsung in South Korea had to face negative publicity
when their executives were portrayed for embezzlement or bribery. Coca-Cola and Pepsi had to
face negative publicity in India when both companies were alleged to have pesticide residues in
their soft drinks. The sales dropped as soon as the news hit the media. Halliburton in the United
States also suffered when it was revealed that the company overcharged the U.S. government for
supplies and services rendered in Iraq. Ford Motor Company and Bridgestone/Firestone had a
tough time defending their relationship when a rash of tire failures occurred in Ford
manufactured autos. Ultimately, Ford severed its decades-old relationship with Firestone.
Firestone is still recovering from the loss of public confidence. Nike has been continuously
responding to the criticism that its subcontractors operate factories in which sweatshop
conditions prevail. McDonald's is faced with public concerns due to mad cow disease in Europe;
legal battles originating from beef contamination in french fries; links of food to obesity; and
some problems with subcontractors. Thus, there are several large companies that have faced
problems due to negative publicity. The best thing is to take all precautions and try to prevent
any situations which might lead to negative publicity. In case it happens, then they should have a
plan to react in a swift and effective manner.
Difficulty: Moderate
Chapter LO: 5
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
89) Companies use corporate advertising; image advertising, and advocacy advertising from time
to time. How are these advertising methods used and what are are the circumstances under which
they are used?
Answer: Companies do not have free access to the media and cannot control what they write. In
order to have control, many companies utilize "corporate advertising" which is generally
considered part of the PR function. A company or organization pays for the corporate
advertising. In the context of IMC, corporate advertising is often used to call attention to the
company's other communications efforts, rather than enticing the customers. On the other hand,
"image advertising" enhances the public's perception of a company, creates goodwill, or
announces a major change, such as a merger or acquisition. Global companies frequently use
image advertising in an effort to present themselves as good corporate citizens in foreign
countries. In "advocacy advertising," a company presents its point of view on a particular issue.
Examples of such advertising methods include the following: Nokia purchased full-page
newspaper ads to congratulate the University of Florida Gators for winning the 1997 Sugar
Bowl. Also, Japan's Fuji Photo Film did an advertising campaign in the United States while they
were competing with Kodak. They were able to secure a contract with Walmart, which gave
them access to many customers of a large discount store. Thus, companies use advertising for
enhancing their image, advocating a cause, or putting their point across to consumers, regulatory
agencies, suppliers, competitors, or government at home or in a foreign country.
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
90) How do the public relations differ around the world? Explain giving examples to show the
importance of public relations for a global company.
Answer: Cultural traditions, social and political contexts, and economic environments in specific
countries can affect PR practices. The mass media and the written word are important vehicles
for information dissemination in many of the industrial countries. In developing countries these
may not be as effective or the only source of communication. In Ghana, dance, songs, and
storytelling are important communication channels. In India, where half of the population cannot
read, written communication is of no importance, mostly in the extensive rural areas. Even in
industrialized nations PR practices vary to a great extent. In the United States, the hometown
news release comprises much of the news in a small, local newspaper. In Europe, PR
professionals are viewed as part of the marketing function rather than as distinct and separate
specialists in a company. A company that is ethnocentric in its approach to PR will extend homecountry PR activities into host countries. The rationale behind this approach is that people
everywhere are motivated and persuaded in much the same manner; a company adopting a
polycentric approach to PR gives the host-country practitioner more leeway to incorporate local
customs and practices into the PR effort.
Difficulty: Moderate
Chapter LO: 5
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they
Chapter 14 Global Marketing Communications Decisions II: Sales Promotion, Personal
Selling, and Special Forms of Marketing Communication
1) At concerts and other events, street teams pass out free samples while driving specially
modified cars with giant Red Bull cans mounted on them.
Answer: TRUE
Difficulty: Easy
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
2) From the point of view of the marketer, sales promotion provides accountability.
Answer: TRUE
Difficulty: Easy
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
3) A marketer of fine French cognac offers a fancy cigar ashtray to persons who correctly solve a
crossword puzzle and mail it in. This is an example of a trade promotion.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
4) Overall, sales promotion tools, such as coupons, are used less frequently as consumer products
companies increase budget allocations for media advertising.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
5) In a contest in 45 different languages covering 60 countries, marketers for Axe Apollo invited
consumers to fill out an "astronaut profile."
Answer: TRUE
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
6) In a low-income country, free samples are likely to be a more effective promotional tool than
coupons or on-pack premiums.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
7) Market maturity can also be different from country to country; consumer sampling and
coupons are appropriate for mature markets.
Answer: FALSE
Difficulty: Difficult
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
8) Fifty years ago, Kikkoman brand soy sauce was unknown in the United States. The company
used sampling and even today continues to make extensive use of shopper marketing as a
communication tool.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
9) Cross coupons offer its users deal-of-the-day that are sponsored by local businesses.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
10) In China, consumers are reluctant to buy full-sized packages of unfamiliar imported
products. In such a marketing environment, sampling is an appropriate promotional strategy.
Answer: TRUE
Difficulty: Difficult
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
11) Social couponing is one of the hottest online sales promotion trends. It offers its followers
deal-of-the-day coupons that are sponsored by local businesses.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
12) When MCI Communications first entered Latin America, it utilized expatriate Americans
despite the high cost of doing so.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
13) The Strategic/Consultative Selling Model consists of five interdependent steps, each with
three prescriptions that can serve as a checklist for sales personnel.
Answer: TRUE
Difficulty: Difficult
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
14) Relationship marketing, which stresses an approach on developing long-term relationships
with customers, has been embraced by many U.S. companies.
Answer: TRUE
Difficulty: Difficult
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
15) The U.S.-style "I'll do whatever it takes to get your business" has proven to be a successful
selling approach throughout the world.
Answer: FALSE
Difficulty: Easy
Chapter LO: 2
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
16) The final step in the 6-step sales presentation plan is closing the sale.
Answer: FALSE
Difficulty: Difficult
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
17) Ethnocentric companies are likely to use an expatriate sales force in countries at all levels of
economic development.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 3
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
18) In companies where a polycentric management orientation prevails, host-country nationals
will be used in most selling situations with the exception of high-tech products sold in developed
countries.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 3
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
19) A company with a regiocentric orientation is likely to utilize third-country nationals for its
sales force in less developed countries.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 3
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
20) Host-country nationals may possess work habits or selling styles that do not mesh with those
of the parent company.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 3
AACSB: Diverse and multicultural work environment
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
21) Worldwide, the popularity of direct marketing has been steadily decreasing in recent years.
Answer: FALSE
Difficulty: Easy
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
22) Direct marketing does not work well as a global marketing tool because it is not well suited
to the task of addressing cultural differences among consumers.
Answer: FALSE
Difficulty: Easy
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
23) On a per capita basis, German consumers are world-leader mail-order shoppers.
Answer: TRUE
Difficulty: Easy
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
24) Following the economic crisis in Asia, many companies in that region have turned to direct
mail in order to save costs.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
25) In Hong Kong and Singapore, efficient postal services, highly educated populations, wide
use of credit cards, and high per capita income are attracting the attention of catalog marketers.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
26) Industry observers expect the popularity of home shopping to decrease during the next few
years as interactive television technology is introduced into more households.
Answer: FALSE
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
27) France is leading in the rankings showing expenditures for outdoor advertising as percentage
of total ad spending.
Answer: TRUE
Difficulty: Easy
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
28) Some advertisers acknowledge that, in Brazil, traditional outdoor advertising may not be the
best communication channel.
Answer: TRUE
Difficulty: Easy
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
29) At one time Shanghai was known as the "Paris of the Orient."
Answer: TRUE
Difficulty: Easy
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
30) Red Bull has been involved in Music Academy which is a series of concerts, workshops, art
installations, and other cultural events that rotate from year to year among different international
cities.
Answer: TRUE
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
31) A marketer of fine French cognac offers fancy cigar ashtrays as prizes to consumers who
correctly solve a crossword puzzle. Which of the following most accurately describes this offer?
A) price promotion
B) non-price promotion
C) trade sales promotion
D) sweepstakes promotion
E) sampling
Answer: B
Difficulty: Easy
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
32) Which of the following is not an advantage of using sales promotions?
A) provides a tangible incentive to buyers
B) provides accountability to marketing managers
C) enables company to build its database
D) builds long-term brand awareness
E) develops relationship with customers
Answer: C
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
33) In a contest of 45 different languages covering 60 countries, marketers for Axe Apollo
invited consumers to fill out an "astronaut profile." This is an example of:
A) promotion of different types for marketing.
B) promotion of interest in space exploration.
C) people in different countries prefer different topics.
D) astronaut profile varies from country to country.
E) sales promotion by global marketer.
Answer: E
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
34) To fight counterfeiting, the "Disney Magical Journey" promotion was keyed to mail-in
hologram stickers on genuine Disney products. Participants could win Disney DVDs, TV sets,
and trips to Hong Kong Disneyland. This is an example of:
A) promotion of different types for marketing.
B) promotion of Disney Magical Journey.
C) people in many countries prefer mail-in hologram.
D) "Disney Magical Journey" is popular worldwide.
E) sales promotion by global marketer.
Answer: E
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
35) Which promotional technique is best suited to a situation in which a company wants
consumers to actually try its product or service at no cost?
A) sampling
B) sweepstakes
C) couponing
D) free-standing inserts
E) personal selling
Answer: A
Difficulty: Easy
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
36) The success of the Stratos project helps the Red Bull by:
A) having their logo on NASCAR cars.
B) using You Tube as an effective marketing tool.
C) standing out from a crowded field of competitors.
D) utilizing free-standing inserts.
E) personal selling.
Answer: C
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
37) Critical marketing tool for global companies such as Red Bull is:
A) sampling.
B) sweepstakes.
C) couponing.
D) event marketing.
E) personal selling.
Answer: D
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
38) Promotions designed to increase product availability in distribution channels are known as:
A) sales promotions.
B) price promotions.
C) trade sales promotions.
D) consumer sales promotions.
E) nonprice promotions.
Answer: C
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
39) Spoexa, a food-marketing company was hired by French Ministry of Agriculture to organize
cocktail parties in 19 countries in order to:
A) promote French wines.
B) promote French cheese.
C) show that French cuisine is laid back.
D) show that French wines are superior.
E) show how to use French cuisine.
Answer: C
Difficulty: Moderate
Chapter LO: 1
AACSB: Analytical thinking
Course LO: Discuss the fundamental concepts of marketing
40) PepsiCo experienced great success in Latin America with its Numeromania contest, which
lured consumers by promise of big cash prizes. They used the same contest in Poland
successfully. This shows that:
A) Numeromania can be used in different languages.
B) Numeromania can be used in cash starved countries.
C) leverage experience gained in one country can be used in another country.
D) economically squeezed consumers love Pepsi.
E) Numeromania helped in developing a taste for Pepsi in both countries.
Answer: C
Difficulty: Moderate
Chapter LO: 1
AACSB: Analytical thinking
Course LO: Discuss the fundamental concepts of marketing
41) Unilever hired a promotional marketing firm to pass out Lever 2000 hand wipes in food
courts and petting zoos. This is an example of:
A) point-of-use sampling.
B) point-of-sale sampling.
C) point-of-dirt sampling.
D) point-of-event sampling.
E) point-of-work sampling.
Answer: C
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
42) Coupons are not a favorite promotion tool for use in:
A) the United Kingdom.
B) Belgium.
C) the United States.
D) Italy.
E) Malaysia.
Answer: E
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
43) A box of Crest toothpaste contains a coupon entitling the buyer to save 50 cents when
purchasing a Crest toothbrush. What type of sales promotion does this represent?
A) cross coupon
B) product placement coupon
C) trade promotion coupon
D) freestanding coupon
E) online coupon
Answer: A
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
44) Social couponing is one of the hottest sales promotion trends today. This refers to:
A) sampling.
B) Groupons.
C) sweepstakes.
D) freestanding inserts.
E) personal selling.
Answer: B
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
45) It was found that Malaysians hesitate to use coupons due to the:
A) lower power distance.
B) higher uncertainty avoidance.
C) fear of public embarrassment.
D) impact of religion.
E) general dislike for coupons.
Answer: C
Difficulty: Difficult
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
46) Environmental issues and challenges faced by a company which is in the initial stages of
implementing a personal selling strategy include all of the following except:
A) political risks.
B) regulatory hurdles.
C) product innovation.
D) currency fluctuations.
E) market unknowns.
Answer: C
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
47) Which of the following is not one of the steps in the Strategic/Consultative Selling Model?
A) develop personal selling philosophy
B) develop relationship strategy
C) develop product strategy
D) develop ethnocentric policy
E) develop customer strategy
Answer: D
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
48) Which of the following is not a step in the strategic/consultative selling model?
A) develop a marketing mix
B) develop a personal selling philosophy
C) develop a product strategy
D) develop a relationship strategy
E) develop a presentation strategy
Answer: A
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
49) Building a prospect base is typically part of which step of the strategic/consultative selling
model?
A) development of a customer strategy
B) development of a personal selling philosophy
C) development of a product strategy
D) development of a relationship strategy
E) development of a presentation strategy
Answer: A
Difficulty: Difficult
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
50) In the six-step presentation plan, the first and last steps are respectively:
A) presentation; demonstration.
B) approach; close.
C) presentation; negotiation.
D) approach; presentation.
E) approach; servicing the sale.
Answer: E
Difficulty: Difficult
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
51) Negotiation requires both customer and the salesperson:
A) to be persistent in their point of view.
B) to be subjected to arm-twisting.
C) to agree to disagree.
D) come away as winners.
E) come away as losers.
Answer: C
Difficulty: Easy
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
52) A company in which an ethnocentric orientation prevails is likely to utilize primarily
________ in its sales force.
A) host-country nationals
B) third-country nationals
C) expatriates
D) agents of any nationality
E) agents of host country
Answer: C
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
53) A company with a polycentric orientation is likely to employ host-country nationals in all but
which of the following selling situations?
A) selling high-tech products in developed countries
B) selling high-tech products in less-developed countries
C) selling low-tech products in developed countries
D) selling low-tech products in less-developed countries
E) none of the above
Answer: A
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
54) Which type of sales person is best suited to selling technologically-sophisticated products in
developed countries?
A) expatriates
B) third-country nationals
C) host-country nationals
D) agents of any nationality
E) none of the above
Answer: A
Difficulty: Difficult
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
55) Which of the following is a disadvantage of using an expatriate sales force?
A) superior product and company knowledge
B) capability to institute the acceptable practices
C) follow policies of the home office
D) enhanced promotion prospects
E) maintaining is very expensive
Answer: E
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
56) When a company must decide on the composition of its foreign sales force, which alternative
is generally the most expensive?
A) expatriates
B) third-country nationals
C) host-country nationals
D) agents of any nationality
E) agents of host country
Answer: A
Difficulty: Moderate
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
57) Other international personal selling approaches that fall somewhere between sales agents and
full-time employee teams include all of the following except:
A) exclusive license arrangements.
B) contract manufacturing or production.
C) management-only agreements.
D) franchising.
E) joint ventures.
Answer: B
Difficulty: Moderate
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
58) After much trial and error in creating sales forces, most companies today attempt to establish
a:
A) hybrid sales force composed of expatriates and in-country nationals.
B) sales force composed of a majority of expatriates.
C) hybrid sales force composed of expatriates and third country nationals.
D) sales force composed of third country nationals.
E) sales force consisting of all in-country nationals.
Answer: A
Difficulty: Difficult
Chapter LO: 3
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
59) Benefits for using sales agents include all of the following except:
A) agents work under contract rather than as full-time employees.
B) agents are less expensive than full-time, in-country national sales representatives.
C) agents possess the same market knowledge as in-country nationals.
D) agents can eventually replace manufacturer's sales agents.
E) agents possess the same cultural knowledge as in-country nationals.
Answer: D
Difficulty: Difficult
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
60) Peppers and Rogers described different steps that are involved in one-to-one marketing.
These steps include all of the following except:
A) identify.
B) differentiate.
C) interact.
D) evaluate.
E) customize.
Answer: D
Difficulty: Easy
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
61) Which of the following is not characteristic of direct marketing?
A) A marketer relinquishes control of product when it is turned over to channel intermediaries.
B) Advertising serves to generate an immediate inquiry or purchase.
C) Repetition is used in individual advertisements.
D) The customer experiences high perceived risk.
E) Direct response advertising is used.
Answer: A
Difficulty: Moderate
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
62) Which of the following is not characteristic of mass marketing?
A) Product benefits do not typically include home delivery.
B) Advertising is used to generate an immediate inquiry or purchase.
C) Repetition of ads is the key to awareness and remembering.
D) The customer perceives relatively little risk.
E) Purchase action is deferred.
Answer: B
Difficulty: Moderate
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
63) Which of the following environmental characteristics affects use of direct marketing in
Europe?
A) the European Commission's concern about privacy
B) high postal rates in several European countries
C) industries in Europe are still developing complete mailing lists
D) linguistic, cultural, and regional diversity
E) all of the above
Answer: E
Difficulty: Moderate
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
64) Which of the following is not a useful guideline for U.S.-based direct marketers wishing to
reach global customers?
A) Do not treat prospects as though they are Americans.
B) Do not automatically assume that a direct-mail campaign that works in one country will work
in another country.
C) Do not assume that all Europeans are similar in their tastes and wants.
D) Customers should be able to return products to an address in their local country market.
E) Focus on all countries included in the European Union.
Answer: E
Difficulty: Moderate
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
65) Which country or region offers direct marketers the advantage of a well-developed mailing
list industry?
A) the United States
B) Japan
C) Western Europe
D) Latin America
E) South Korea
Answer: A
Difficulty: Easy
Chapter LO: 4
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
66) The term magalog is used to describe which communication medium?
A) direct mail
B) Groupons
C) coupons
D) catalogs
E) infomercials
Answer: D
Difficulty: Easy
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
67) In Hong Kong and Singapore, Western catalogers are finding it easy to market because of all
of the following reasons except:
A) efficient postal services.
B) highly educated populations.
C) wide use of credit cards.
D) few mail-order companies.
E) high per capita income.
Answer: D
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
68) Thomas Burke, an executive at Saatchi & Saatchi, is quoted as saying ________ are "the
most powerful form of advertising ever created."
A) corporate advocacy ads
B) infomercials
C) banner ads on the Internet
D) direct mail campaigns
E) catalog sales
Answer: B
Difficulty: Easy
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
69) Chinese direct-response television has learned that there are many obstacles that still need to
be overcome, which include all of the following except:
A) consumers' savings rate is very low.
B) limited number of private telephones.
C) low penetration of credit cards.
D) delivery logistics in Beijing.
E) delivery logistics in Shanghai.
Answer: A
Difficulty: Easy
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
70) Industry observers expect the popularity of home shopping to increase during the next few
years due to:
A) the formation of European Union.
B) the economic development in India.
C) the introduction of interactive television.
D) the introduction of iPhone.
E) the introduction of TV shops.
Answer: C
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
71) Interactive television (ITV) allows viewers to see the ad in its entirety by pressing a remote
button; to order products from home-shopping channels; or choose different camera angles, such
as in sports events. Comments by James Pennefather, brand manager for Smirnoff, UK, based on
comparison of traditional TV ads to ITV features included all of the following except:
A) "it allows viewers to interact with programming."
B) "it is a lot more unproven."
C) "it needs further testing."
D) "it is a calculated risk."
E) "it may or may not succeed."
Answer: A
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
72) Traditional support media include:
A) indoor posters.
B) billboards.
C) newspapers.
D) magazines.
E) catalogs.
Answer: B
Difficulty: Easy
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
73) A ban on billboards in Brazil meant they have to come down, and in addition, transit ads on
buses and taxis were not allowed. Denied access to traditional outdoor advertising, companies
devised a number of alternative ways to communicate with prospective customers. These ways
included all of the following except:
A) Citibank used the color blue in much of its advertising.
B) ads were placed indoors in elevators.
C) ads were placed in rest rooms and other indoor traffic areas.
D) ads were placed on buses.
E) ads were placed using social media or online channels.
Answer: D
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
74) Worldwide spending on outdoor advertising amounts to about ________ of total ad
spending.
A) 1%
B) 2%
C) 4%
D) 6%
E) 10%
Answer: D
Difficulty: Easy
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
75) Chinese authorities ratified the WHO's Framework Convention on Tobacco Controls; which
means:
A) Chinese TV can show tobacco ads only after midnight.
B) tobacco companies cannot show ads on TV but can sponsor sports events.
C) all forms of tobacco promotion and sponsorships will be phased out by the year 2010.
D) tobacco companies can use sponsorships of health and sporting events.
E) tobacco companies can sponsor China's national soccer tournament after the year 2010.
Answer: C
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
76) Product placement has reached the world of live theater and opera. The difference between
product placement and other forms of promotion is:
A) ethical concerns are not taken into account.
B) viewers are being marketed to subliminally without their consent.
C) products are focused showing different angles.
D) prominent personalities add a message about the product.
E) sponsors are recognized for their contribution.
Answer: B
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
77) In fall 2002, a new Broadway production of Puccini's La Boheme was set in Paris circa 1957.
The stage set included billboards for luxury pen maker Montblanc and Piper-Heidsieck
champagne. This is an example of:
A) consumer sales promotion.
B) sampling.
C) product placement.
D) trade sales promotion.
E) global awareness.
Answer: C
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
78) Celeste Atkinson is a lifestyle and entertainment manager for Audi, and her job is to create
buzz by ensuring that vehicles such as the Audi A8L and the S8 sports sedan figure in paparazzi
photos. This is referred to as:
A) lifestyle placement.
B) blockbuster placement.
C) promotion placement.
D) product placement.
E) photo placement.
Answer: D
Difficulty: Difficult
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
79) The effective integration of products and brands with entertainment can be seen on the TV
hit American Idol. This type of trend is referred to as:
A) advertising age.
B) traditional advertising.
C) global advertising.
D) branded entertainment.
E) image entertainment.
Answer: D
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
80) Dietrich Mateschitz, Red Bull's creator, stated "When we first started, we said that there is
not an existing market for Red Bull." The reasons behind Red Bull's success include all of the
following except:
A) a market was created for Red Bull.
B) a market segment was found with unmet needs.
C) the blue-and-silver color on cans helped in Red Bull's popularity.
D) orthodox advertising strategies were used with tactics.
E) The Red Bulletin magazine helped in Red Bull's popularity.
Answer: C
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
81) Discuss what makes the use of sales promotion so effective and popular. Describe different
types of sales promotions.
Answer: Sales promotion refers to any paid consumer or trade communication program of
limited duration that adds tangible value to a product or brand. In a price promotion, tangible
value may take the form of a price reduction, coupon, or mail-in refund. Non-price promotions
may take the form of free samples, premiums, "buy one get one free" offers, sweepstakes, and
contests. Consumer sales promotions may be designed to make consumers aware of a new
product, to stimulate nonusers to sample an existing product, or to increase overall consumer
demand. Trade sales promotions are designed to increase product availability in distribution
channels. The reason why worldwide there is an increase in the popularity of sales promotions as
a marketing communication tool is due to several of its strengths and advantages. Besides
providing a tangible incentive to buyers, sales promotions also reduce the perceived risk buyers
may associate with purchasing the product. From the point of view of the sponsoring company,
sales promotions provide accountability; the manager in charge of the promotions can
immediately track the results of the promotions. Overall promotional spending is increasing at
many companies as they shift available allocations away from traditional print and broadcast
advertising. Also, sweepstakes, rebates, and other forms of promotions require consumers to fill
out a form and return it to the company, which can then build up information in its database for
use when communicating with customers in the future. A global company can sometimes
leverage experience gained in one country market and use it in another market.
Difficulty: Moderate
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
82) The authors of one study noted that Nestlé and other large companies that once had a
polycentric approach to consumer and trade sales promotions have redesigned their efforts.
Based on a study by Kashani and Quelch, identify factors that contribute to more headquarters
involvement in the sales promotions effort.
Answer: As with other aspects of marketing communication, a key issue is whether headquarters
should direct promotion efforts or leave it to local country managers. Kashani and Quelch
identified four factors that contribute to more headquarters involvement in the sales promotion
effort, namely, cost, complexity, global branding, and transnational trade as follows: (1) as sales
promotions command ever-larger budget allocations, headquarters naturally takes a greater
interest; (2) the formulation, implementation, and follow-up of a promotion program may require
skills that local managers lack; (3) the increasing importance of global brands justifies
headquarters involvement to maintain consistency from country to country and ensure that
successful local promotions programs are leveraged in other markets; and (4) as mergers and
acquisitions lead to increased concentration in the retail industry and as the industry globalizes,
retailers will seek coordinated promotional programs from their suppliers.
Difficulty: Difficult
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
83) A number of factors must be taken into account when determining the extent to which the
promotions must be localized. List and describe those factors giving examples.
Answer: The number of factors that must be taken into account when determining the extent to
which the promotions must be localized can be summarized as follows: (a) in countries with low
levels of economic development, low incomes limit the range of promotional tools available. In
such countries, free samples and demonstrations are more likely to be helpful than coupons or
on-pack premiums; (b) market maturing can be different from country to country; consumer
sampling and coupons are appropriate in growing markets, but mature markets might require
trade allowances or loyalty programs; (c) local perceptions of a particular promotional tool or
program can vary. Japanese consumers, for example, are reluctant to use coupons at the checkout
counter. A particular premium can be seen as a waste of money; (d) local regulations may rule
out use of a particular promotion in certain countries. There are countries which regulate coupon
distribution; (e) trade structure in the retailing industry can affect the use of sales promotions.
For example, in the United States and parts of Europe, the retail industry is highly concentrated.
This situation requires significant promotional activity at both the trade and consumer level.
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
84) Giving examples, show how sampling can be an effective sales promotion technique.
Answer: Sampling is a sales promotional technique that provides potential customers with the
opportunity to try a product or service at no cost. A typical sample is an individual portion of a
consumer product, such as breakfast cereal, shampoo, cosmetics, or detergent, distributed
through the mail, door-to-door or at a retail location. Kikkoman brand soy sauce was unknown in
the United States until they initiated a sampling program in American supermarkets and gave
free samples of food seasoned with Kikkoman. Today they have a considerable size market in
the United States. Similarly, Unilever launched Axe deodorant body spray in the United States
with print ads and in-store sampling as promotion strategy. They hired female models to offer
samples to male shoppers at Walmart and Costco stores. This was also very successful. Cost is
one of the major disadvantages associated with sampling. It may also be difficult to assess the
contribution a sampling program makes to return on investment. Event marketing and
sponsorships are used to distribute samples at concerts, sports events, or special events where
food and beverages are served to large numbers of people. Sampling may also consist of nonfood items such as free viewing of cable TV channel at no cost for a certain period of time or nocost trial subscriptions to a computer service or newspaper service. Web sites can also be used
for requesting free samples. Compared to the other forms of marketing communication, sampling
is more likely to result in actual trial of the product. To ensure trial, consumer products
companies are increasingly using a technique known as "point-of-use" sampling. In another
example "point-of-dirt" sampling was conducted by Unilever. Unilever recently hired a
promotional marketing firm to pass out Lever 2000 hand wipes in food courts and petting zoos.
Sampling can be especially important if consumers are not persuaded by claims made in
advertising or other channels. In China, for example, shoppers are reluctant to buy full-sized
packages of imported consumer products that they have not tried or if products have higher
prices than local brands. Proctor & Gamble's dominance in China's shampoo market can be
attributed to the company's skilled use of market segmentation coupled with an aggressive
sampling program. They distributed millions of free samples of its shampoo products. After the
no-risk trial, many consumers became adopters.
Difficulty: Difficult
Chapter LO: 1
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
85) Coupons are a favorite promotion tool of consumer packaged goods companies such as
Proctor & Gamble and Unilever. How does the couponing work, and what are the advantages for
using different types of coupons?
Answer: A coupon is a printed certificate that entitles the bearer to a price reduction or some
other special consideration for purchasing a particular product or service. In the United States,
marketers rely heavily on newspapers to deliver coupons. Most of the coupons are distributed in
a printed ride-along vehicle referred to as a "free-standing insert (FSI)." "On-pack coupons" are
those that are attached to, or part of, the product package; they can frequently be redeemed
immediately at checkout. "In-pack coupons" are placed inside the package. Coupons have
flexibility since they can also be handed out in stores, offered on a self-service basis from onshelf dispensers, delivered to homes by mail, or distributed electronically at the checkout
counter. Also, the number of coupons distributed via the Internet is growing. "Cross coupons"
are distributed with one product but redeemable for a different product. The United States leads
the world in the number of coupons issued by a wide margin. The goal of couponing is to reward
loyal users and stimulate product trial by nonusers. In the EU, couponing is widely used in the
United Kingdom and Belgium. Couponing is not as prevalent in Asia where saving face is
important. Although Asian consumers have a reputation for thriftiness, some are reluctant to use
coupons because doing so might bring shame upon them or their families. Thus, couponing also
depends on the culture of a particular country. There are also regulations in many countries
pertaining to the use of coupons by manufacturers.
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
86) What are the issues and problems related to sales promotion in different parts of the world?
Answer: Many companies are very selective in targeting their sampling programs. In the case of
coupons, retailers must bundle the redeemed coupons together and ship them to a processing
point. Many times, coupons are not validated at the point of purchase; fraudulent redemption
costs marketers hundreds of millions of dollars each year. Sometimes the code on packaging can
be read easily and used without purchasing the product. Thus, the formulation and execution of
sales promotion requires planning in addition to creativity. In some emerging markets, sales
promotion efforts can raise eyebrows if companies appear to be exploiting regulatory loopholes
and lack of consumer resistance to intrusion. Sales promotion in Europe is highly regulated,
whereas it is very popular in Scandinavia. In the Nordic countries there are regulations pertaining
to sales promotion. A recent study examined coupon usage and attitudes toward both coupons
and sweepstakes in Taiwan, Thailand, and Malaysia. The study has particular relevance to global
companies that are targeting these and other developing nations in Asia. All three countries in the
studies were collectivist, and the researchers found that positive attitudes of family members and
society as a whole influence an individual's positive attitude toward coupons and coupon usage.
However, the three nations show some differences in value orientation. For example, Malaysia
has a higher power distance and lower uncertainty avoidance than the others. For Malaysians, the
fear of public embarrassment was a constraint on coupon usage. In all three countries, media
consumption habits were also a factor; persons who were not regular readers of magazines or
newspapers were less likely to be aware that coupons were available. Consumers in Taiwan and
Thailand look more favorably upon coupons than sweepstakes. Thus, one implication for
marketing in developing countries is that, despite cultural differences, increased availability of
promotions will result in higher levels of consumer utilization.
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
87) The Strategic/Consultative Selling Model has gained wide acceptance in the United States.
Describe briefly what the model consists of and how it can serve as a checklist for sales
personnel.
Answer: The Strategic/Consultative Selling Model consists of five interdependent steps, each
with three prescriptions that can serve as a checklist for sales personnel. The first step requires a
sales representative to develop a personal selling philosophy. A commitment to the marketing
concept and a willingness to adopt the role of problem solver or partner in helping customers is
required at this first step. The second step is to develop a relationship strategy, which is a game
plan for establishing and maintaining high-quality relationships with prospects and customers.
This step connects sales personnel directly to the concept of relationship marketing. The third
step, developing a product strategy, results in a plan that can assist the sales representative in
selecting and positioning products that will satisfy consumer needs. The next step deals with
customer strategy, which is a plan that ensures that the sales professional will be maximally
responsive to customer needs. For this, a general understanding of consumer behavior is needed.
The final step, the actual face-to-face selling situation, requires a presentation strategy. This
consists of setting objectives for each sales call and establishing a presentation plan to meet those
objectives. The presentation strategy must be based on the sales representative's commitment to
provide outstanding service to customers. A presentation plan that is the heart of the presentation
strategy typically consists of six stages: approach, presentation, demonstration, negotiation,
closing, and servicing the sale.
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Discuss the fundamental concepts of marketing
88) Basic issues for companies that sell globally are the composition of the sales force in terms
of nationality. List choices that are available to companies for selecting a sales force. Outline
advantages and disadvantages of each choice.
Answer: It is possible to utilize expatriate salespersons, hire host-country nationals, or utilize
third-country sales personnel. The staffing decisions are based on several factors, including
managements' orientation, the technological sophistication of the product and the stage of
economic development exhibited by the target country. A company with an ethnocentric
orientation is likely to prefer expatriates and adopt a standardized approach without regard to
technology or the level of economic development in the target country. On the other hand,
polycentric companies selling in developed countries may opt for expatriates to sell
technologically sophisticated products; a host-country sales force can be used when
technological sophistication is lower. In less-developed countries, host-country nationals may be
used for products in which technology is a factor and host-country agents may be used for lowtech products. The widest diversity of sales force nationality is found in a company in which a
regiocentric orientation prevails. Except in the case of high-tech products in developed countries,
third-country nationals are likely to be used in all situations. Management should weigh in
advantages and disadvantages of each nationality type. Expatriates, since they come from the
home country, often possess a high level of product knowledge and are likely to be thoroughly
versed in their company's commitment to after-sales service. They are also better able to institute
policies and standards. It is also very easy to train them for promotion. The disadvantages
include that there is high cost involved and with the high turnover the costs can go up further.
Also, the cost for language and cross-cultural training has to be taken into account. Host-country
hiring is economical, they have superior market knowledge, good language skills, superior
cultural knowledge, and they can implement actions rapidly. The disadvantages include that they
need product training and may be held in low esteem. Also, language skills may not be
important, and it is difficult to ensure their loyalty. Using the third-country salesperson has
advantages of cultural sensitivity, language skills, economy and the possibility of regional sales
coverage. The disadvantages include that they face identity problems, promotions may be
limited, and there may be income gaps based on the country they are coming from. They will
need product or company training; however, their loyalty is not assured. After much trial and
error in creating sales forces, most companies today attempt to establish a hybrid sales force
comprised of a balanced mix of expatriates and in-country nations.
Difficulty: Moderate
Chapter LO: 2
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
89) Direct marketing and mass marketing are becoming a very popular method for
communicating with consumers. Giving reasons for their worldwide popularity, show the
differences between direct and mass marketing.
Answer: Direct marketing is defined as any communication with a consumer or business
recipient that is designed to generate a response in the form of an order, a request for further
information, and/or a visit to a store or other place of business. Mass marketing communications
are typically aimed at broad segments of consumers with certain demographic, psychographic, or
behavioral characteristics in common. More sophisticated techniques and tools are being used for
direct marketing as well as for mass marketing. Also, one-to-one marketing is developed on the
basis of CRM by treating different customers differently based on their previous purchase history
or past interactions with the company. Worldwide, the popularity of direct marketing has been
steadily increasing in recent years partly due to the availability of credit cards as a convenient
payment mechanism for direct response purchase. Another reason is societal, since dual-income
families have more money to spend but less time to shop outside the home. Technological
advancements have also made it easier for companies to reach customers directly. Cable and
satellite television allow advertisers to reach specific audiences on a global basis. The European
Commission expects investment in direct marketing to surpass expenditures for traditional
advertising in the near future. The primary differences between direct marketing and mass
marketing include marketers add value in direct marketing by arranging for delivery of products
to the customer's door and control the product all the way through to delivery. Another
difference is that in direct marketing, direct response is used to generate an immediate enquiry or
order. Also, in direct marketing, the customer perceives higher risk because the product is bought
unseen and recourse may be viewed as distant or inconvenient.
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global
90) Describe how Red Bull's creator trusted his entrepreneurial instincts instead of relying on
traditional marketing research to make it so globally successful.
Answer: Dietrich Mateschitz, Red Bull's creator, trusted his entrepreneurial instincts instead of
relying on traditional marketing research. As Mateschitz recalls, "When we first started, we said
that there is not an existing market for Red Bull, but Red Bull will create it. And this is what
finally became true." In other words, Mateschitz succeeded at accomplishing one of the most
basic goals in marketing: He discovered a market segment with needs that weren't being met by
any existing product. Today, Red Bull's blue-and-silver cans emblazoned with the iconic
charging bulls logo are recognized around the globe. With typical entrepreneurial flair,
Mateschitz pursues alternatives to orthodox advertising strategies and tactics. The Red Bulletin is
a monthly magazine produced by Red Bull Media House. Red Bull distributes more than 3
million copies of each issue through newsstand sales, subscriptions, and as a free iPad app. The
magazine is available in Austria, Germany, Great Britain, Kuwait, New Zealand, Poland, and
South Africa. In 2011, The Red Bulletin was launched in the United States; 1.2 million free
copies were distributed in major newspapers such as The Los Angeles Times, The Chicago
Tribune, and The New York Daily News. The first U.S. issue featured San Francisco Giants
pitcher Tim Lincecum, one of hundreds of athletes who are sponsored by Red Bull. Since 1998,
Red Bull has been involved in another high-profile initiative. The Red Bull Music Academy is a
series of concerts, workshops, art installations, and other cultural events that rotate from year to
year among different international cities. Red Bull Music Academy also sponsors stages at
international music festivals such as Montreaux Jazz; RBMA Radio is a Web resource where
listeners can access new music, live concerts, interviews, and other content. Needless to say, the
Red Bull logo is visible everywhere, and coolers filled with the drink are placed in strategic
locations.
Difficulty: Moderate
Chapter LO: 5
AACSB: Reflective thinking
Course LO: Describe the global marketing environment today and explain the options
companies consider as they go global