Test Bank IM CH 13 MG Answers

Chapter 13
True / False Questions

1. Global competition has put more power in the hands of the seller.
FALSE
Global competition has shifted the power in the marketplace from a sellers’ to a customers’ market,
and the latter have more choices because more companies are competing for their attention. More
competition and more choices put more power in the hands of the customer, and that of course drives
the need for quality.
3. Consumer perceptions of a quality product often have more to do with market-perceived
quality than performance quality.
TRUE
Quality can be defined on two dimensions: market-perceived quality and performance quality. Both
are important concepts, but consumer perceptions of a quality product often have more to do with
market-perceived quality than performance quality.
6. In many countries the term product homologation is used to describe the changes mandated
by local product and service standards.
TRUE
In many countries, the term product homologation is used to describe the changes mandated by local
product and service standards.
7. Green marketing is the term frequently used to identify a marketer's efforts to reduce its
dependency on U.S. dollars as the standard for international exchange.
FALSE
Green marketing is a term used to identify concern with the environmental consequences of a variety
of marketing activities.
10. Adaptation of a product to a new culture requires changes in most of the physical attributes of
the product.
FALSE
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The meaning and value imputed to the psychological attributes of a product can vary among cultures
and are perceived as negative or positive. To maximize the bundle of satisfactions received and to
create positive product attributes rather than negative ones, adaptation of the nonphysical features of
a product may be necessary.
11. From a sociological point of view, any idea perceived as new by a group of people is an
innovation.
TRUE
From a sociological viewpoint, any idea perceived as new by a group of people is an innovation.
15. In general, the rate of diffusion of a product is negatively related to its relative advantage.
FALSE
The rate of diffusion of a product can be postulated as positively related to relative advantage,
compatibility, trialability, and observability but negatively related to complexity.
17. The packaging component of the product component model consists of the physical product
and all its design and functional features.
FALSE
The core component consists of the physical product—the platform that contains the essential
technology—and all its design and functional features. The packaging component includes style
features, packaging, labeling, trademarks, brand name, quality, price, and all other aspects of a
product’s package.
18. One of the core components in the product component model is the product platform.
TRUE
The core component of the product component model comprises the product platform that contains
the essential technology and all its design and functional features.
19. According to the product component model, the instructions for using the product and the
warranty of the product are included under the packaging component.
FALSE
The support services component includes repair and maintenance, instructions, installation,
warranties, deliveries, and the availability of spare parts.
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21. In countries with low-literacy rates, the pictures and symbols on products are literally taken as
instructions and information.
TRUE
It is easy to forget that in low-literacy countries, pictures and symbols are taken literally as instructions
and information. Care must be taken to ensure that corporate trademarks and other parts of the
packaging component do not have unacceptable symbolic meanings.
22. The support services component of the product component model contains such items as
repair and maintenance and availability of spare parts.
TRUE
warranties, deliveries, and the availability of spare parts.
23. Services such as insurance and dry cleaning are classified as tangible.
FALSE
Products are often classified as tangible, whereas services are intangible. Automobiles, computers,
and furniture are examples of products that have a physical presence; Insurance, dry cleaning, hotel
accommodations, and airline passenger or freight service, in contrast, are intangible.
24. Financial and legal services can not be regarded as a business service as they only provide
services to the consumers.
FALSE
A service can be marketed as both an industrial (business-to-business) and a consumer service,
depending on the motive of, and use by the purchaser. Financial services, hotels, insurance, legal
services, and others may each be classified as either a business or a consumer service.
27. A single global approach is the best way to market a brand worldwide.
FALSE
Ideally a global brand gives a company uniformly positive worldwide brand associations that enhance
efficiency and cost savings when introducing other products with the brand name, but not all
companies believe a single global approach is the best.
13-3
28. Brand image is at the very core of business identity and strategy.
TRUE
Brand image is at the very core of business identity and strategy.
29. Products from developing countries have the highest quality image.
FALSE
Countries are also often stereotyped on the basis of whether they are industrialized, in the process of
industrializing, or developing. Industrialized countries have the highest quality image, and products
from developing countries generally encounter bias.
Multiple Choice Questions

32. Which of the following is the most important criterion for consumers while purchasing
products?
A. Appearance
B. Size
C. Technology
D. Quality
E. Service
In most global markets, the cost and quality of a product are among the most important criteria by
which purchases are made. For consumer and industrial products alike, the reason often given for
preferring one brand over another is better quality at a competitive price.
33. What are the two dimensions that help in defining the quality of a product of quality?
A. Product quality and process quality.
B. Market-perceived quality and performance quality.
C. Product quality and service quality.
D. Actual quality and assumed quality.
E. Absolute quality and relative quality.
Quality can be defined on two dimensions: market-perceived quality and performance quality.
34. _____ is the term used to describe the changes mandated by local product and service
standards.
13-4
A. Product localization
B. Product blending
C. Product standardization
D. Product dilution
E. Product homologation
A product may have to change in a number of ways to meet the physical or mandatory requirements
of a new market, ranging from simple package changes to total redesign of the physical core product.
The term used to describe the changes mandated by local product and service standards is product
homologation.
36. A European chocolate manufacturer received several complaints from customers about the
quality of its product when it began selling them in a tropical country. The firm had to re-package its
chocolate bars in an extra plastic wrapper to protect it from the heat and dust. Which of the following
factors in the local market dictated product adaptation in the current scenario?
A. Legal requirements.
B. Economic requirements.
C. Political requirements.
D. Climatic requirements.
E. Technological requirements.
Legal, economic, political, technological, and climatic requirements of the local marketplace often
dictate product adaptation.
37. Booster bar is a popular brand of energy bars in Canada. The company sold these bars singly
or in packs of two in the South Asian markets, instead of their regular multiple-item packaging
containing 10 or 20 bars to make it more affordable for the consumers. Which of the following
requirements of the local market is influencing product adaptation in the above scenario?
B. Political requirement.
C. Economical requirements.
D. Technological requirements.
E. Cultural requirements.
13-5
The less economically developed a market is, the greater degree of change a product may need for
acceptance. To make a purchase more affordable in low-income countries, the number of units per
package may have to be reduced from the typical quantities offered in high-income countries.
39. Adore cosmetics had to increase the SPF value of their sunscreen lotions marketed in the
Middle East to provide more protection against UV radiation. Which of the following factors is dictating
product adaptation in the above scenario?
B. Cultural requirements.
C. Economic requirements.
D. Climatic requirements.
E. Political requirements.
dictate product adaptation. Changes may also have to be made to accommodate climatic differences.
40. Nuan, a television manufacturer in Korea, had to modify its televisions before introducing it to
the Zimbabwean markets, as the country did not have the skills to repair the product in case of a
malfunction. The local salesforce too, did not have the sufficient knowledge regarding the installation
of the product. The factor that is influencing product adaptation in the above scenario is ________.
A. legal requirements
B. climatic requirements
C. political requirements
D. cultural requirements
E. technological requirements
41. A clothing company in Singapore which specialized in women’s clothing, had to modify its
clothes before introducing them to Iranian markets, to suit the needs of women in that country.
Women in Iran are expected to cover themselves completely. The company mostly used opaque
material and provided accessories like scarves. Which of the following factors is dictating product
adaptation in the above scenario?
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B. Cultural requirements.
C. Technological requirements.
D. Economic requirements.
E. Climatic requirements.
43. HT motors is introducing a new technology in its cars to improve the mileage of the cars as
well as to reduce carbon emissions. The company is also taking measures to improve its production
facilities in order to reduce its carbon footprint. These measures employed by HT motors to meet the
guidelines issued by the government shows that the company is engaging in ________.
A. permission marketing
B. value-based marketing
C. green marketing
D. cause marketing
E. greenwashing
Green marketing is a term used to identify concern with the environmental consequences of a variety
of marketing activities.
46. Which of the following is a physical attribute of a product that is essential for its primary
function?
A. Colors
B. Prices
C. Components
D. Designs
E. Sizes
A product’s physical attributes generally are required to create its primary function. Few changes to
the physical attributes of a product are required when moving from one culture to another. The
psychological features like color, design, size, brand name, and price have little to do with its primary
function, but are important in providing customer satisfaction.
13-7
47. An important first step in adapting a product to a foreign market is to determine:
A. the degree of newness as perceived by the intended market.
B. the economic climate of the target market.
C. the advertising parallels with the domestic market.
D. the ability of a sales force to sell the product.
E. the compliancy to religious doctrine(s) in the foreign country.
An important first step in adapting a product to a foreign market is to determine the degree of
newness as perceived by the intended market. How people react to newness and how new a product
is to a market must be understood.
48. From a sociological viewpoint, any idea perceived as new by a group of people is considered
as a(n) _____.
A. creation
B. adaptation
C. ideation
D. homologation
E. innovation
From a sociological viewpoint, any idea perceived as new by a group of people is an innovation.
49. _____ is the process by which innovation spreads.
A. Diffusion
B. Filtering
C. Dissolution
D. Flighting
E. Cascading
Diffusion is the process by which innovation spreads and knowledge of this is helpful in developing a
successful product strategy.
53. Martin is comparing the characteristics of his company’s water filters with those that are
already being marketed in the local market. He realizes that there is lot of scope for his filters as they
are functionally more advanced, have longer life, and also can be marketed at a competitive price in
these markets. The characteristic of his product that will help in wide acceptance of his product is its
_____.
13-8
A. trialability
B. compatibility
C. observability
D. relative advantage
E. complexity
There are five characteristics of an innovation that can assist in determining the rate of acceptance or
resistance of the market to a product. A product’s (1) relative advantage (the perceived marginal value
of the new product relative to the old), (2) compatibility (its compatibility with acceptable behavior,
norms, values, and so forth), (3) complexity (the degree of complexity associated with product use),
(4) trialability (the degree of economic and/or social risk associated with product use), and (5)
observability (the ease with which the product benefits can be communicated) affect the degree of its
acceptance or resistance.
54. A product is said to be compatible if:
A. it provides greater value to the consumers compared to competitors’ products.
B. the risk associated with using the product is low.
C. it is user friendly.
D. it offer clear functional benefits over other products.
E. it complies with the accepted norms, values, and culture of the local market.
57. Mark Harmon has found that using his new digital camera is a snap. He did not even have to
read the instruction manual to determine how to turn the camera on, snap a digital picture, and export
the picture to his computer. The signs (symbols) on the camera body made it very clear what he was
to do to achieve digital photography success. Which of the following characteristics of Mark’s “new
product” made it easy for him to begin his digital experience?
A. relative advantage
13-9
B. compatibility
C. complexity
D. trialability
E. observability
58. Fiona asked her product manager for samples to give to potential consumers in Madrid, her
new European market. Fiona is trying to reduce the degree of economic and/or social risk, or _____
associated with product use.
B. compatibility
C. complexity
D. trialability
E. observability
60. Ingrid is developing promotional materials and product demonstrations to easily communicate
the benefits of her cleaning products. Ingrid is trying to enhance the _____ of her products.
B. compatibility
C. complexity
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D. complexity
E. observability
In general, the rate of diffusion can be postulated as positively related to relative advantage,
61. In general, the rate of diffusion can be postulated as negatively related to _____.
B. compatibility
C. trialability
D. complexity
E. observability
In general, the rate of diffusion can be postulated as positively related to relative advantage,
65. Simone Francis is a specialist in product design. She is responsible for a product’s aesthetic
as well as functional appearance. With respect to the product component model, in which of the
following component categories would Simone’s talents most likely be used?
A. Core component.
B. Support services component.
C. Packaging component.
D. Functional component.
E. Global component.
technology—and all its design and functional features. It is on the product platform that product
variations can be added or deleted to satisfy local differences.
66. If a company wished to alter a product’s platform so that the product could be manufactured
in a variety of forms, to meet local differences in five different foreign markets, the _____ of the
product component model would be in consideration.
A. support services component
B. packaging component
C. functional component
D. global component
13-11
E. core component
technology—and all its design and functional features. It is on the product platform that product
variations can be added or deleted to satisfy local differences.
69. Apple Computer had difficulties when it first entered the Japanese market with its Macintosh
computers. Some of the computers were returned unused after customers found the wrapping on the
instruction manual damaged. Though this would probably be no big deal in the U.S., it was certainly a
cause for concern in quality-conscious Japan. To fix the problem, Apple needed to concentrate on
which of the following components of the product component model?
A. Core component.
B. Support services component.
D. Functional component.
E. Global component.
The packaging component includes style features, packaging, labeling, trademarks, brand name,
quality, price, and all other aspects of a product’s package.
72. In some countries, maintenance of automobiles is not the norm. Cars are not repaired until
they break down. Since the consumer is automatically angry with the manufacturer when something
goes wrong with the car, repair and maintenance has become a concern of the various automobile
manufacturers in this market. In which of the following components of the product component model
would the management need to make improvements if problems such as the one above are to be
solved?
A. Core component.
B. Functional component.
D. Support services component.
E. Design component.
warranties, deliveries, and the availability of spare parts. Refer to Exhibit 13.2-Product Component
Model.
13-12
73. A Korean electronics company had to add detailed instructions regarding the repair and
replacement of its product to make it easy for the local consumers to maintain it. Which of the
following components of the product is being altered in the given scenario?
A. Support services component.
B. Design component.
C. Core component.
D. Packaging component.
E. Functional component.
warranties, deliveries, and the availability of spare parts. The literacy rates and educational levels of a
country may require a firm to change a product’s instructions.
75. Insurance, dry cleaning, and hotel accommodations have intrinsic value resulting from a
process, a performance, or an occurrence that only exists while it is being created. Which of the
following characteristics of services best matches to the above?
A. Intangibility.
B. Inseparability.
C. Profitability.
D. Heterogeneity.
E. Perishability.
Insurance, dry cleaning, hotel accommodations, and airline passenger or freight service, are
intangible and have intrinsic value resulting from a process, a performance, or an occurrence that
exists only while it is being created.
76. Because a service is individually produced and is virtually unique, the service is said to have
_____.
A. intangibility
B. inseparability
C. profitability
D. heterogeneity
E. perishability
A service is heterogeneous in that it is individually produced and is thus unique.
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77. Dr. Mark Townes is a dentist practicing in Denver. During a four-day stretch in March, it
snowed so heavily that not a single patient was able to visit him. Since all the appointments were
missed, he did not make any money for those four days, even though his normal expenses remained.
Which of the following characteristics of services is affecting Dr. Townes’ business?
A. Indivisibility
B. Inseparability
C. Profitability
D. Heterogeneity
E. Perishability
A service is perishable in that once created it cannot be stored but must be consumed simultaneously
with its creation.
82. Marketers of consumer services face four kinds of barriers in the global marketplace. Which
of the following of these barriers is in force when a foreign market requires that services (such as
banking or insurance) originate within the country itself and not from outside sources?
A. Protectionism.
B. Controls on transborder data flows.
C. Protection of intellectual property.
D. Cultural requirements for adaptation.
E. Language translation barriers.
Four kinds of barriers face consumer services marketers in this growing sector of the global
marketplace: protectionism, controls on transborder data flows, protection of intellectual property, and
cultural requirements for adaptation.
83. The Red Lobster seafood restaurant is considering opening branch operations in China.
However, the restaurant chain’s labor union has already pointed out a potential problem with this
expansion. In China, it is considered to be in bad taste to allow employees to collect tips for service.
Since a great portion of a typical wait-staff person’s compensation comes in the form of tips, the union
would like to know how employees would be compensated for this loss. The above example illustrates
which of the following barriers a consumer services marketer faces in a foreign market?
A. Protectionism.
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Because trade in services frequently involves people-to-people contact, culture plays a much bigger
role in services than in merchandise trade.
84. Maxcare, an insurance firm based in California had difficulties expanding their operations to
Asian markets, as most of their target countries had strict regulations on transferring the details of the
customers among the different branches of the firm. The company had to obtain an approval from its
customers before sharing their personal information with their branches in other countries. Which of
the following barriers is affecting the services of the insurance firm in the above scenario?
A. Protectionism.
Four kinds of barriers face consumer services marketers in this growing sector of the global
marketplace: protectionism, controls on transborder data flows, protection of intellectual property, and
cultural requirements for adaptation.
86. The Norton group, a manufacturer of toiletries and cleaning products uses the name Cleanex,
for most its products in all of their international markets. The name has created a universal appeal for
their products as customers identify their products with the name. Hence, Cleanex can be regarded as
a _____.
A. retailer’s brand
B. shelf brand
C. store brand
D. global brand
E. national brand
A global brand is defined as the worldwide use of a name, term, sign, symbol (visual and/or auditory),
design, or combination thereof intended to identify goods or services of one seller and to differentiate
them from those of competitors.
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90. In Russia, products are divided into two categories— “ours” and “imported.” This is an
example of:
A. cultural revisionism
B. ethnocentrism
C. conversion to capitalism
D. communist mentality
E. structural marketing orientation
Ethnocentrism can also have country-of-origin effects; feelings of national pride—the “buy local”
effect, for example—can influence attitudes toward foreign products. Russians prefer fresh,
homegrown food products but imported clothing and manufactured items.
Essay Questions
92. In the context of products and services for consumers, what is the importance of quality while
marketing products?
Quality can be defined on two dimensions: market-perceived quality and performance quality. The
market-perceived quality attributes are embedded in the total product, that is, the physical or core
product and all the additional features the consumer expects. Consumer perceptions of a quality
product often have more to do with market-perceived quality than performance quality. But, since the
consumer expects performance quality to be a given, quality to the consumer is more important than
compliance.
97. List out the five characteristics of an innovation that assist in determining the rate of
acceptance or resistance of the market to a product.
The five characteristics of an innovation that help to determine the rate of acceptance or resistance of
the market to a product are: (1) relative advantage (the perceived marginal value of the new product
relative to the old), (2) compatibility (its compatibility with acceptable behavior, norms, values, and so
forth), (3) complexity (the degree of complexity associated with product use), (4) trialability (the
degree of economic and/or social risk associated with product use), and (5) observability (the ease
with which the product benefits can be communicated) In general, the rate of diffusion can be
postulated as positively related to relative advantage, compatibility, trialability, and observability but
negatively related to complexity.
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98. What are the four barriers faced by consumer services marketers when they enter the global
market?
The barriers to consumer services are (a) protectionism, (b) controls on transborder data flows, (c)
protection of intellectual property, and (d) cultural requirements for adaptation.
13-17

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Chapter 13

True / False Questions

the need for quality.

3. Consumer perceptions of a quality product often have more to do with market-perceived

quality than performance quality.

market-perceived quality than performance quality.

by local product and service standards.

dependency on U.S. dollars as the standard for international exchange.

a product may be necessary.

compatibility, trialability, and observability but negatively related to complexity.

and all its design and functional features.

warranty of the product are included under the packaging component.

warranties, deliveries, and the availability of spare parts.

instructions and information.

packaging component do not have unacceptable symbolic meanings.

repair and maintenance and availability of spare parts.

warranties, deliveries, and the availability of spare parts.

accommodations, and airline passenger or freight service, in contrast, are intangible.

services to the consumers.

A service can be marketed as both an industrial (business-to-business) and a consumer service,

companies believe a single global approach is the best.

Brand image is at the very core of business identity and strategy.

from developing countries generally encounter bias.

Multiple Choice Questions

preferring one brand over another is better quality at a competitive price.

A. Product quality and process quality.

B. Market-perceived quality and performance quality.

C. Product quality and service quality.

D. Actual quality and assumed quality.

E. Absolute quality and relative quality.

dictate product adaptation.

product adaptation in the above scenario?

adaptation in the above scenario?

function, but are important in providing customer satisfaction.

A. the degree of newness as perceived by the intended market.

B. the economic climate of the target market.

C. the advertising parallels with the domestic market.

D. the ability of a sales force to sell the product.

E. the compliancy to religious doctrine(s) in the foreign country.

is to a market must be understood.

49. _____ is the process by which innovation spreads.

successful product strategy.

54. A product is said to be compatible if:

A. it provides greater value to the consumers compared to competitors’ products.

B. the risk associated with using the product is low.

D. it offer clear functional benefits over other products.

product” made it easy for him to begin his digital experience?

associated with product use.

compatibility, trialability, and observability but negatively related to complexity.

following component categories would Simone’s talents most likely be used?

B. Support services component.

variations can be added or deleted to satisfy local differences.

product component model would be in consideration.

A. support services component

variations can be added or deleted to satisfy local differences.

which of the following components of the product component model?

B. Support services component.

quality, price, and all other aspects of a product’s package.

D. Support services component.

following components of the product is being altered in the given scenario?

A. Support services component.

country may require a firm to change a product’s instructions.

following characteristics of services best matches to the above?