International Marketing

Chapter 14
Costs And Risks Associated
Costs And Risks
First Mover Advantages

TRUE
The set of choices the firm offers to its targeted markets is known as the marketing mix.

TRUE
The marketing mix is comprised of product attributes, distribution strategy, communication
strategy and pricing strategy.

FALSE
Most academics support Theodore Levitt's assertion that global markets are becoming more
standardized.

FALSE
The process of identifying distinct groups of consumers whose purchasing behavior differs from
others in important ways is known as the marketing mix.

TRUE
The goal of market segmentation is to optimize the fit between the purchasing behavior of
consumers in a given segment and the marketing mix, thereby maximizing sales to that segment.

TRUE
The structure of market segments may differ significantly from country to country.

TRUE
Products sell well when their attributes match consumer needs.

FALSE
The most important aspect of cultural differences is values.

FALSE
Firms based in less-developed nations tend to build a lot of extra performance attributes into
their products.

FALSE
Consumers in the most developed countries are typically willing to sacrifice their preferred
product attributes for lower prices.
TRUE
Differences in technical standards can prevent a firm from standardizing products across
markets.

TRUE
The four main differences between distribution systems are retail concentration, channel length,
channel exclusivity and channel quality.

FALSE
In a concentrated retail system, there are many retailers, no one of which has a significant share
of the market.

FALSE
Developing countries tend toward greater retail concentration.

FALSE
An increase in car ownership, the number of two-income households and the number of
households with a refrigerator have all contributed to the more fragmented retail system found in
developed countries.

TRUE
The number of intermediaries between the producer and the consumer is known as the channel
length.

TRUE
A channel is considered to be long when a producer sells through an import agent, a wholesaler
and a retailer.

FALSE
The most important determinant of channel length is the degree to which the retail system is
concentrated.

TRUE
Countries with fragmented retail systems tend to have long channels of distribution.

TRUE
The entry of large discount superstores such as Tesco and Carrefour have shortened channel
length in some countries.

FALSE
One benefit of a shorter channel is that it cuts selling costs when the retail sector is very
fragmented.

FALSE
Import agents are typically limited to independent trading houses.
TRUE
Source effects occur when the receiver of the message evaluates the message based on the status
or image of the sender.

FALSE
Source effects and country of origin effects are always negative.

FALSE
A company that depends on mass media advertising to communicate its marketing message to
potential consumers is using a push strategy.

TRUE
When a company emphasizes personal selling, the company is probably using a push strategy.

FALSE
A push strategy is generally favored by consumer goods firms that are trying to sell to a large
segment of the market.

TRUE
A push strategy makes sense when distribution channels are short.

TRUE
A firm may be prevented from using standardized advertising because of advertising regulations.

TRUE
Price discrimination involves charging whatever the market will bear.

FALSE
When a small change in price produces a large change in demand, demand is said to be inelastic.

TRUE
The use of price as a competitive weapon to drive weaker competitors out of a national market is
known as predatory pricing.

FALSE
Pricing decisions around the world must be delegated to the managers of various national
subsidiaries.

FALSE
The "customization versus standardization" debate is an all or nothing issue.

FALSE
The rate of new-product development seems to be lesser in countries where more money is spent
on basic and applied research and development.
FALSE
Over the past 20 years, the U.S. monopoly on new-product development has strengthened
significantly.

TRUE
New-product development has a high failure rate.

TRUE
A company's customers can be a primary source of new-product ideas.

FALSE
Designing for manufacturing increases not only product quality, but also costs involved.

TRUE
One solution many international businesses adopt for allocating product development
responsibilities to various centers involves establishing a global network of R&D centers.