Chapter 16 - test bank for international business PDF

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International Business: The New Realities, 4e (Cavusgil) Chapter 16 Marketing in the Global Firm1) In international business, marketing is concerned with ____. A) disseminating the organizational culture of a firm across global subsidiaries B) identifying, measuring, and pursuing customer needs and ...

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International Business: The New Realities, 4e (Cavusgil) Chapter 16 Marketing in the Global Firm 1) In international business, marketing is concerned with ________. A) disseminating the organizational culture of a firm across global subsidiaries B) identifying, measuring, and pursuing customer needs and market opportunities abroad C) maintaining a steady flow of product-based innovations D) interacting with global business leaders Answer: B Diff: 1: Easy Skill: Concept Objective: 16-1: Explain global market segmentation AACSB: Analytical Thinking 2) Which of the following best characterizes the purpose of a global marketing strategy? A) guides firms on hiring highly skilled resources B) provides managers with demographic data C) helps managers check high employee turnover D) guides firms in targeting the right customer segments Answer: D Diff: 1: Easy Skill: Concept Objective: 16-1: Explain global market segmentation AACSB: Analytical Thinking 3) ________ is the process of dividing the firm's total customer base into homogeneous clusters in a way that allows management to formulate unique marketing strategies for each group. A) Brand management B) Customer relationship management C) Market segmentation D) Market diversification Answer: C Diff: 1: Easy Skill: Concept Objective: 16-1: Explain global market segmentation AACSB: Analytical Thinking

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4) In international business, firms frequently formulate market segments by ________. A) selling only those products that create derived demand for other related products in the market B) grouping countries based on macro-level variables C) grouping competitors based on their hiring strategies D) grouping identical customers in underground economies Answer: B Diff: 1: Easy Skill: Concept Objective: 16-1: Explain global market segmentation AACSB: Analytical Thinking 5) A global market segment refers to ________. A) a group of customers who share similar characteristics across many national markets B) a group of customers belonging to the same generational group within a country C) a group of less-affluent customers in the global market D) a group of buyers in the international market who are largely unaffected by changes in pricing Answer: A Diff: 2: Moderate Skill: Concept Objective: 16-1: Explain global market segmentation AACSB: Analytical Thinking 6) Which of the following is true with regard to a global market segment? A) A global market segment refers to a group of customers belonging to the same generational group within a country. B) Firms target global market segments by using a relatively uniform marketing strategy and programs. C) Buyers in a global market segment are typically characterized by low spending power. D) Buyers in a global market segment rarely buy products representing luxury and style. Answer: B Diff: 2: Moderate Skill: Concept Objective: 16-1: Explain global market segmentation AACSB: Analytical Thinking

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7) ________ refers to a marketing strategy in which the firm develops both the product and its marketing to evoke a distinct impression in the customer's mind, emphasizing differences from competitors' offerings. A) Positioning B) Standardization C) Diversifying D) Adaptation Answer: A Diff: 1: Easy Skill: Concept Objective: 16-1: Explain global market segmentation AACSB: Analytical Thinking 8) Which of the following is true with regard to positioning? A) Unlike branding, positioning is not intended to evoke the specific attributes that consumers associate with a product. B) More often than not, positioning dilutes brand equity. C) Through positioning, firms emphasize differences from competitors' offerings. D) Positioning refers to the process of scaling up production in a market characterized by high demand. Answer: C Diff: 2: Moderate Skill: Concept Objective: 16-1: Explain global market segmentation AACSB: Analytical Thinking 9) Which of the following is true with regard to a global positioning strategy? A) A global positioning strategy does not address the shared expectations of a global customer market segment. B) More often than not, global positioning dilutes brand equity in the international market. C) A global positioning strategy reduces international marketing costs. D) Internationalizing firms rarely aim for a global positioning strategy. Answer: C Diff: 2: Moderate Skill: Concept Objective: 16-1: Explain global market segmentation AACSB: Analytical Thinking 10) Frequent business travelers, who are also affluent and eager spenders, represent a global market segment. Answer: TRUE Diff: 1: Easy Skill: Concept Objective: 16-1: Explain global market segmentation AACSB: Analytical Thinking

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11) Branding refers to the process of dividing a firm's total customer base into homogeneous clusters in a way that allows management to formulate unique marketing strategies for each group. Answer: FALSE Diff: 1: Easy Skill: Concept Objective: 16-1: Explain global market segmentation AACSB: Analytical Thinking 12) In international business, marketing is concerned with identifying, measuring, and responding to market opportunities abroad Answer: TRUE Diff: 1: Easy Skill: Concept Objective: 16-1: Explain global market segmentation AACSB: Analytical Thinking 13) A reputed American automaker competes in the premium car market segment. It targets affluent buyers with refined tastes who would not mind paying several thousand dollars for a premium car. This is an example of positioning. Answer: TRUE Diff: 2: Moderate Skill: Application Objective: 16-1: Explain global market segmentation AACSB: Analytical Thinking 14) What is market segmentation? In a short essay, discuss how international firms use market segmentation. Answer: Market segmentation refers to the process of dividing the firm's total customer base into homogeneous clusters in a way that allows management to formulate unique marketing strategies for each group. Within each market segment, customers exhibit similar characteristics regarding income level, lifestyle, demographic profile, or desired product benefits. In international business, firms frequently formulate market segments by grouping countries based on macro-level variables, such as level of economic development or cultural dimensions. Many MNEs group Latin American countries based on a common language (Spanish) or European countries based on similar economic conditions. This approach has proven most effective for product categories in which governments play a key regulatory role (such as telecommunications, medical products, and processed foods) or where national characteristics prevail in determining product acceptance and usage. Diff: 2: Moderate Skill: Concept Objective: 16-1: Explain global market segmentation AACSB: Analytical Thinking

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15) Explain the purpose of positioning. How does a global positioning strategy assist firms participating in international business? What benefit does a global positioning strategy offer? Answer: A key objective in pursuing global market segments is to create a unique position in the minds of target customers. Positioning is a marketing strategy in which the firm develops both the product and its marketing to evoke a distinct impression in the customer's mind, emphasizing differences from competitors' offerings. In the theme park business, Disney positions itself as standing for family values and "good, clean fun" to attract families around the world. Starbucks positions its products at customers with sophisticated tastes who do not mind paying several dollars for a cup of coffee. Positioning may also evoke the specific attributes that consumers associate with a product. Diet Coke elicits an image of someone who wants to lose or maintain weight. When Coca-Cola first entered Japan, research revealed that Japanese women do not like products labeled "diet," nor is the population considered overweight. Thus, management altered the product's positioning in Japan by changing the name to Coke Light. Internationalizing firms aim for a global positioning strategy, which positions the offering similarly in the minds of targeted buyers worldwide. Starbucks, Volvo, and Sony successfully use this approach. Consumers worldwide view these strong brands in the same way. Global positioning strategy reduces international marketing costs by addressing the shared expectations of a global customer market segment. Diff: 2: Moderate Skill: Concept Objective: 16-1: Explain global market segmentation AACSB: Analytical Thinking 16) Explain the importance of a global market strategy. How does a global market strategy affect the choice of adaption versus standardization for an international marketing program? Answer: A global marketing strategy is a plan of action that a firm develops for foreign markets that guides its decision-making on (1) how to position itself and its offerings, (2) which customer segments to target, and (3) to what degree it should standardize or adapt its marketing program elements. In addition to guiding targeting and positioning, global marketing strategy also articulates the degree to which the firm's marketing program should vary between different foreign markets. With adaptation, the firm modifies one or more elements of its international marketing program to accommodate specific customer requirements in a particular market. Standardization makes the marketing program elements uniform, with a view to targeting entire regions, or even the global marketplace, with the same product or service. Diff: 2: Moderate Skill: Synthesis Objective: 16-1, 16-2: Explain global market segmentation, Understand standardization and adaptation of international marketing AACSB: Analytical Thinking

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17) Taken together, the key elements of a company's marketing program are known as the ________. A) product mix B) value chain C) product lifecycle D) marketing mix Answer: D Diff: 1: Easy Skill: Concept Objective: 16-2: Understand standardization and adaptation of international marketing AACSB: Analytical Thinking 18) Adaptation is defined as ________. A) the firm's efforts to make its marketing program elements uniform, with a view to targeting entire regions, or even the global marketplace, with the same product or service B) the firm's attempt at altering its organizational structure to facilitate internationalization C) the firm's efforts to modify one or more elements of its international marketing program to accommodate specific customer requirements in a particular market D) the firm's effort to minimize employee attrition by rewarding performance Answer: C Diff: 2: Moderate Skill: Concept Objective: 16-2: Understand standardization and adaptation of international marketing AACSB: Analytical Thinking 19) In which of the following industries is standardization more likely to be pursued? A) local industries B) furniture C) publishing D) credit cards Answer: D Diff: 1: Easy Skill: Concept Objective: 16-2: Understand standardization and adaptation of international marketing AACSB: Analytical Thinking 20) A furniture company that makes its marketing program elements uniform, targeting entire regions with similar products, is demonstrating ________. A) product diversification B) customization C) standardization D) adaptation Answer: C Diff: 2: Moderate Skill: Application Objective: 16-2: Understand standardization and adaptation of international marketing AACSB: Analytical Thinking 6 Copyright © 2017 Pearson Education, Inc.

21) When managers attempt to standardize their international marketing program, they can expect ________. A) diminished efficiency B) cost reduction C) brand dilution D) very high profit margins Answer: B Diff: 1: Easy Skill: Concept Objective: 16-2: Understand standardization and adaptation of international marketing AACSB: Analytical Thinking 22) A global brand can best be defined as ________. A) a brand with a complicated value-chain B) a brand that focuses on a single generational group within a country C) a brand that uses a variety of marketing campaigns in different markets D) a brand whose positioning, advertising strategy, look, and personality are standardized worldwide Answer: D Diff: 1: Easy Skill: Concept Objective: 16-2: Understand standardization and adaptation of international marketing AACSB: Analytical Thinking 23) Adaptation is often necessitated due to ________. A) differences across countries in language, culture, economic conditions, and other factors B) unstable demand C) high import tariffs D) similarities in customer preferences across various demographic groups worldwide and the increased emphasis on the homogenization of global markets Answer: A Diff: 2: Moderate Skill: Concept Objective: 16-2: Understand standardization and adaptation of international marketing AACSB: Analytical Thinking

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24) In which of the following industries is an adaptation strategy LEAST likely to be appropriate? A) consumer electronics B) publishing C) furniture D) television broadcasting Answer: A Diff: 1: Easy Skill: Concept Objective: 16-2: Understand standardization and adaptation of international marketing AACSB: Analytical Thinking 25) Managers consider several different rationales when adapting marketing program elements, such as ________. A) high and relatively stable incomes of buyers belonging to the global market segment B) stable demand of consumer goods worldwide C) differences in living standards and economic conditions D) need for improved planning and control Answer: C Diff: 1: Easy Skill: Concept Objective: 16-2: Understand standardization and adaptation of international marketing AACSB: Analytical Thinking Refrigerator Adaptations (Scenario) Cold-Aire Inc. manufactures refrigerators from its facilities in the United States and China and ships them to retail stores around the world. Kitchen sizes vary around the world, and as a result, refrigerator sizes must vary as well. U.S. retailers want large refrigerators, while European and Asian retailers demand smaller units. Cold-Aire manufactures over 20 different models of refrigerators, which often vary in size by only a few inches. Cold-Aire managers are concerned that the firm is losing money because of product adaptations. Cold-Aire management is meeting to discuss the various cost-saving options for the firm. 26) Which of the following questions would be the most important for Cold-Aire managers to evaluate when determining how the firm could reduce production costs in a single market? A) Has the demand for Cold-Aire refrigerators declined in recent years? B) Are customized Cold-Aire refrigerators as user friendly as the ones that are not? C) Can Cold-Aire standardize its refrigerators? D) Is Cold-Aire refrigerators likely to have greater demand in warmer countries than in colder regions? Answer: C Diff: 3: Hard Skill: Critical Thinking Objective: 16-2: Understand standardization and adaptation of international marketing AACSB: Analytical Thinking; Environments and Reflective Thinking

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27) Which of the following most likely supports Cold-Aire implementing a regional strategy of refrigerator standardization? A) Refrigerator sizes within Latin America tend to be similar. B) Distribution channels in Asian countries are usually complicated. C) American kitchens are typically more spacious than Asian ones. D) Customers in Europe demand exterior ice and water dispensers. Answer: A Diff: 2: Moderate Skill: Critical Thinking Objective: 16-2: Understand standardization and adaptation of international marketing AACSB: Analytical Thinking; Environments and Reflective Thinking 28) Which of the following best supports Cold-Aire making fewer refrigerator adaptations? A) Adaptation caters to local consumer demands. B) Standardization reduces manufacturing expenses. C) Adaptation establishes a sense of buyer loyalty. D) Standardization limits choices available to consumers. Answer: B Diff: 2: Moderate Skill: Critical Thinking Objective: 16-2: Understand standardization and adaptation of international marketing AACSB: Analytical Thinking; Environments and Reflective Thinking 29) Which of the following would most likely be a result of increased standardization of ColdAire refrigerators? A) Cold-Aire would stop exporting refrigerators completely. B) Cold-Aire would open a facility to produce customized refrigerator models. C) Cold-Aire would implement a uniform international marketing campaign. D) Cold-Aire would hire fewer workers and pay lower wages. Answer: C Diff: 2: Moderate Skill: Critical Thinking Objective: 16-2: Understand standardization and adaptation of international marketing AACSB: Analytical Thinking; Environments and Reflective Thinking 30) Which of the following refers to an advantage for firms that adapt a unique marketing program for an individual market? A) By doing so, firms decrease their reliance on foreign market intermediaries for large sales. B) By doing so, firms scale up production substantially to meet the needs of a large and growing market. C) Products are tailored to specifically meet the exclusive needs of customers in that market. D) Governments provide heavy tax reliefs to firms that modify products and services. Answer: C Diff: 2: Moderate Skill: Concept Objective: 16-2: Understand standardization and adaptation of international marketing AACSB: Analytical Thinking 9 Copyright © 2017 Pearson Education, Inc.

31) Adaptation is more costly than standardization because ________. A) a firm that chooses adaptation over standardization is likely to lose customers in the long run B) adaptation often requires the firm to engage in substantial modifications to product design, manufacturing, pricing, distribution, and communications C) adaptation requires the firm to scale up production without regard to quality D) standardization holds no market risks Answer: B Diff: 1: Easy Skill: Concept Objective: 16-2: Understand standardization and adaptation of international marketing AACSB: Analytical Thinking 32) Perhaps the most important distinction between standardization and adaptation is that ________. A) standardization helps the firm customize products according to customer preferences, while adaptation helps the firm save time B) standardization helps the firm cut costs, while local adaptation helps the firm more precisely cater to local needs and requirements C) standardization helps the firm cater to the needs of local customers, while adaptation helps the firm save costs through mass production D) standardization helps the firm upgrade quality to suit the unique tastes of consumers, while adaptation emphasizes uniformity Answer: B Diff: 2: Moderate Skill: Concept Objective: 16-2: Understand standardization and adaptation of international marketing AACSB: Analytical Thinking 33) Adaptation refers to the process of making the marketing program elements uniform, with a view to targeting entire regions, or even the global marketplace, with the same product or service. Answer: FALSE Diff: 1: Easy Skill: Concept Objective: 16-2: Understand standardization and adaptation of international marketing AACSB: Analytical Thinking 34) A standardized marketing approach is inappropriate when products have universal specifications. Answer: FALSE Diff: 1: Easy Skill: Concept Objective: 16-2: Understand standardization and adaptation of international marketing AACSB: Analytical Thinking

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35) A standardized marketing approach is appropriate when customers seek similar features in the product or service. Answer: TRUE Diff: 1: Easy Skill: Concept Objective: 16-2: Understand standardization and adaptation of international marketing AACSB: Analytical Thinking 36) Commodities, industrial equipment, and technology products are difficult to standardize. Answer: FALSE Diff: 1: Easy Skill: Concept Objective: 16-2: Understand standardization and adaptation of international marketing AACSB: Analytical Thinking 37) Varying income levels among nations usuall...