International Marketing 3rd Edition Dana Test Bank

International Marketing 3rd Edition
Dana Test Bank

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Chapter 7: International Strategic Planning
TRUE/FALSE
1. An international marketing strategy involves developing and maintaining a strategic fit between the
international company’s objectives, competencies, and resources and the challenges presented by its
international market or markets.
ANS: T
An international marketing strategy involves developing and maintaining a strategic fit between the
international market or markets. This is found in the section entitled “Developing an International
Marketing Strategy”(7-1).
PTS: 1 DIF: Easy
2. At the corporate level, the strategic plan allocates resources and establishes objectives for the whole
enterprise, worldwide.
ANS: T
At the corporate level, the strategic plan allocates resources and establishes objectives for the whole
enterprise, worldwide. The corporate plan has a long-term focus and involves the highest levels of
management. This is found in the section entitled “Developing an International Marketing
Strategy”(7-1).
PTS: 1 DIF: Easy
3. At the corporate level, within each country, decisions are made regarding which consumer segments to
target.
ANS: F
At the business unit level, within each country, decisions are made regarding which consumer
segments to target, using criteria described in this chapter. This is found in the section entitled
“Developing an International Marketing Strategy”(7-1).
PTS: 1 DIF: Medium
4. At the corporate level, the strategic plan allocates funds to each business unit based on division goals
and objectives.
ANS: F
At the division level, the strategic plan allocates funds to each business unit based on division goals
and objectives. This is found in the section entitled “Developing an International Marketing
Strategy”(7-1).
PTS: 1 DIF: Easy
5. At the product level, a marketing plan is developed for achieving objectives.
ANS: T
At the product level (line, brand), a marketing plan is developed for achieving objectives. This is found
in the section entitled “Developing an International Marketing Strategy”(7-1).
PTS: 1 DIF: Easy
6. A product will most likely be first manufactured in a low-cost labor country and exported to the rest of
the world to take advantage of low-cost labor.
ANS: F
A product in the early stages of its life cycle will most likely be sold to consumers in highly
industrialized countries for a high price, accompanied by heavy promotion. A product will most likely
be manufactured in a developed country and exported to the rest of the world. This is found in the
section entitled “Developing an International Marketing Plan”(7-1a).
PTS: 1 DIF: Medium
7. A product in the later stages of its life cycle will be sold to consumers worldwide, regardless of
country development level.
ANS: T
A product in the later stages of its life cycle will be sold to consumers worldwide, regardless of
country development level. This is found in the section entitled “Developing an International
Marketing Plan” (7-1a).
PTS: 1 DIF: Medium
8. The company selling a product in a later stage of the life cycle will most likely manufacture the
product in a developing country, where labor is inexpensive, to sell it all over the world.
ANS: T
The company selling a product in a later stage of the life cycle will heavily compete on price and, thus,
most likely manufacture the product in a developing country, where labor is inexpensive, to sell all
over the world. Most likely, the company will have at least one subsidiary located in the country of
product manufacture. This is found in the section entitled “Developing an International Marketing
Plan” (7-1a).
PTS: 1 DIF: Medium
9. The Wonderbra's failed introduction into the Middle East serves as an example of what not to do in
terms of target marketing.
ANS: F
The Wonderbra is selling very well in Islamic countries. Research determined that women dress
primarily to impress other women in many Islamic countries, in a friendly competitive way. This is
found in the "Requirements for International Segmentation" section (7-3a).
PTS: 1 DIF: Hard
10. Communicating with Indian and Chinese consumers necessitates expensive translation into the local
languages.
ANS: F
Communicating with Indian consumers necessitates expensive translation into the local languages.
Although accessibility issues exist for the Chinese market as well, the costs of translation are not a
primary concern when entering the Chinese market. This is found in the "Requirements for
International Segmentation" section (7-3a).
PTS: 1 DIF: Medium
11. Stability of a segment over times used to be a primary consideration mainly for developing,
low-income, countries.
ANS: F
Stability of a segment over times used to be a primary consideration mainly for developed,
high-income, countries. Today, however, this is an important consideration in a world environment
where products are in different lifecycle stages, and where preferences are continuously changing with
the advent of the Internet and on-line ordering across borders from countries of all development levels.
This is found in the "Requirements for International Segmentation" section (7-3a).
PTS: 1 DIF: Hard
12. Individual market segments should be easy to identify and measure.
ANS: T
The requirements for international segmentation include measurability, substantiality, stability over
time, accessibility, actionability, and differential response. Although it is challenging in international
marketing, a segment should be easy to identify and measure. This is found in the "Requirements for
PTS: 1 DIF: Easy
13. Market segments should be similar to each other to improve marketing efficiency.
ANS: F
Market segments should be easy to distinguish from each other. They should respond differently from
other market segments to marketing strategies. If consumers all over the world are similar then there is
no need for target marketing. This is found in the "Requirements for International Segmentation"
section (7-3a).
PTS: 1 DIF: Medium
14. Market segments should be homogeneous in relation to other segments to improve marketing
efficiency.
ANS: F
Market segments should be easy to distinguish from each other (i.e., they should be heterogeneous
relative to other segments). They should respond differently from other market segments to marketing
strategies. If consumers all over the world are similar then there is no need for target marketing. This is
PTS: 1 DIF: Medium
15. PepsiCo International did not consider profit as the main criterion when they approached the former
Soviet Union to establish a countertrade agreement.
ANS: T
PepsiCo International did not consider profit as the main criterion when they approached the former
Soviet Union to establish a countertrade agreement. Instead, market size and ultimate potential of the
market were the company's primary concerns. This is found in the "Macro-Segmentation: Country
Attractiveness Analysis" section (7-3b).
PTS: 1 DIF: Medium
16. The potential of a market can be evaluated based on the rate of economic development, as expressed
through validated, reliable market indicators such as consumer buying power.
ANS: T
The potential of a market can be evaluated based on the rate of economic development, as expressed
through validated, reliable market indicators such as consumer buying power, GDP per capita,
industrial and agricultural sectors statistics, market size and potential, and international investment
figures. Such indicators identify countries and markets where the company should invest important
resources. This is found in the "Macro-Segmentation: Country Attractiveness Analysis" section (7-3b).
PTS: 1 DIF: Easy
17. The Baltic Republics, Russia and Belarus are attractive markets that are being actively targeted by
multinationals.
ANS: T
Countries of the former Soviet Union are plagued by inflation and instability, but they also have a
literate, educated work force and an excess of highly qualified labor. They also have a consuming
public that is eager to experience new products. Among attractive markets of the former Soviet Union
are the Baltic Republics, Russian and Belarus. This may be found in the "Macro-Segmentation:
Country Attractiveness Analysis" section (7-3b).
PTS: 1 DIF: Easy
18. According to the text, Sri Lanka is an attractive, small country that has a strong export market.
ANS: F
Sri Lanka is described as an attractive, small country located southeast of the Indian subcontinent,
which no longer has a viable export market. Tamil separatists have actively target Sri Lanka's airport.
This has demolished the economy. This may be found in the "Macro-Segmentation: Country
PTS: 1 DIF: Medium
19. The recent discovery of oil reserves in the Sudan has helped to stabilize the economy and make it an
attractive country for foreign direct investment.
ANS: F
The Sudan's oil reserves have further fueled an ethnic civil war that has been raging for over two
decades. Although exporting to the Sudan is still a viable entry-mode alternative, the country
undoubtedly still represents risks for long-term investment and has not attracted foreign direct
investment. This may be found in the "Macro-Segmentation: Country Attractiveness Analysis" section
(7-3b).
PTS: 1 DIF: Hard
20. Ambiguities in a legal system can create an environment that renders the company vulnerable to
competitive theft, to lack of trademark protection, to bribery, and to employee theft.
ANS: T
Ambiguities in a legal system can create an environment that renders the company vulnerable to
competitive theft, to lack of trademark protection, to bribery pressers, and to employee theft. In such
an environment, where everything is perceived as allowed unless expressly forbidden, even exporting
could pose difficulties. This may be found in the "Macro-Segmentation: Country Attractiveness
Analysis" section (7-3b).
PTS: 1 DIF: Easy
21. The lead/lag concept is closely linked to the political structure of a country and is particularly relevant
to firms that sell products of mass consumption.
ANS: F
The lead/lag concept is closely linked to the level of economic development of a country and is
particularly relevant to firms that are at the forefront of technology. These firms usually first introduce
their products in lead countries. This may be found in the Macro-Segmentation: Country
PTS: 1 DIF: Medium
22. Firms that are at the forefront of technology usually first introduce their products in lead countries.
ANS: T
Firms that are at the forefront of technology usually first introduce their products in lead countries.
This may be found in the Macro-Segmentation: Country Attractiveness Analysis" section (7-3b).
PTS: 1 DIF: Medium
23. The purpose of macro-segmentation is to identify clusters of consumers that respond in a similar
fashion to a company's marketing strategies.
ANS: F
The purpose of micro-segmentation is to identify clusters of consumers that respond in a similar
fashion to a company's marketing strategies. Macro-segmentation is concerned with looking at markets
at the country level. This is found in the "Micro-Segmentation: Focusing on the Target Consumer"
section (7-3c).
PTS: 1 DIF: Hard
24. Demographics are easy to measure and to compare across countries.
ANS: T
Demographics are easy to measure and to compare across countries. For this reason,they are widely
used by international companies. This is found in the "Micro-Segmentation: Focusing on the Target
Consumer" section (7-3c).
PTS: 1 DIF: Medium
25. The Scandinavian counties have a rapidly aging population and present different challenges to
international firms than countries with half of their population under the age of twenty, like Brazil.
ANS: T
Countries that have a rapidly aging population (the Scandinavian countries for example) present
different challenges and opportunities to international firms than countries with half of their population
under the age of twenty (such as Brazil and most countries in Sub-Saharan Africa). This is due to
different segmentation strategies. Products that work well in one country may not work well in the
other type of country or may need to be positioned quite differently. This is found in the
"Micro-Segmentation: Focusing on the Target Consumer" section (7-3c).
PTS: 1 DIF: Easy
26. While multinationals such as Coca-Cola and Kodak actively target middle class consumers in the
industrialized countries with their global brands, in China, they target their global brands primarily to
the very large lower class.
ANS: F
While multinationals such as Coca-Cola and Kodak actively target middle class consumers in the
industrialized countries with their global brands, in China, they target their global brands primarily to
yuppies. For the remaining 85% of the population, they have developed or acquired local brands in
addition to their premium global brands. This is found in the "Micro-Segmentation: Focusing on the
Target Consumer" section (7-3c).
PTS: 1 DIF: Hard
27. Countries that were formerly communist, and countries that are under communist rule have a high
literacy rate and heavily emphasize education.
ANS: T
Countries that were formerly communist, and countries that are under communist rule have a high
literacy rate and heavily emphasize education. Countries where education is stressed will present
opportunities for education institutions intending to expand globally, to firms selling training
technology, and software. Thus, literacy and education are important bases for segmentation. This is
found in the "Micro-Segmentation: Focusing on the Target Consumer" section (7-3c).
PTS: 1 DIF: Easy
28. The gay and lesbian segment is a market segment characterized by brand switching behavior.
ANS: F
TThe gay and lesbian segment has been identified as a loyal segment, purchasing brands that are
positioned as gayfriendly. It has also been identified as a segment with a high percentage of disposable
income—and with a willingness to spend it for travel, entertainment, and This is found in the
PTS: 1 DIF: Medium
29. The marketing mix typically used to target the "global elite" segment focuses on selective distribution,
value pricing, and status-oriented advertising messages.
ANS: F
The marketing mix typically used to target the "global elite" segment focuses on exclusive distribution,
high price, and status-oriented advertising messages. Examples of brands targeting this segment
include Rolex, Prada, and Mercedes. This is found in the "Micro-Segmentation: Focusing on the
PTS: 1 DIF: Medium

30. In the youth-driven Euroculture, national heritage is becoming increasingly important.
ANS: F
National heritage has become less important for a multi-lingual, educated, and well-traveled
cosmopolitan youth-driven Euroculture. Commonalities are developing based on continental values
and lifestyles. This is found in the "Micro-Segmentation: Focusing on the Target Consumer" section
(7-3c).
PTS: 1 DIF: Medium
31. The majority of consumers in developing countries are very concerned with brand names since they
portray a Western image.
ANS: F
The majority of consumers in developing countries are not as much interested in brand names as they
are in product performance and value. Marketing strategies catering to these preferences have
succeeded in China. For example, Philips Electronics has introduced a very popular combination
video/CD player, which Chinese consumers perceived as good value for the money. This is found in
the "Micro-Segmentation: Focusing on the Target Consumer" section (7-3c).
PTS: 1 DIF: Medium
32. Bounty brand paper towels failed in Europe because consumers prefer to use cloth towels in the
kitchen.
ANS: F
The paper towel offering in Europe had been rather limited before the introduction of the Bounty
brand. European consumers typically used cloth towels in the kitchen, since the brands available
locally did not have sufficient absorption ability for cleaning jobs. Bounty, however was a heavy-duty
paper towel that was accompanied by heavy promotion. The brand quickly took off, and now most
households have a paper towel holder. This is found in the "Micro-Segmentation: Focusing on the
PTS: 1 DIF: Hard
33. Geographic segmentation can be performed at the macro-segmentation level.
ANS: T
Because "macro" segmentation is country-level segmentation, geographic segmentation can be
performed at the macro-segmentation level. In macro-segmentation the marketer typically looks at
indicators such as membership in international trade forums, regional blocks and country analysis.
This is found in the "Micro-Segmentation: Focusing on the Target Consumer" section (7-3c).
PTS: 1 DIF: Medium
34. Companies that have ample resources can, and often do, address the needs of all segments of
consumers.
ANS: T
Companies that have ample resources can, and often do, address the needs of all segments of
consumers. Proctor & Gamble, Henkel, and Kraft all attempt to target all consumers with the products
they sell, filling the supermarket and discount store shelf space with what seemingly are competing
brands and saturating the media with their communication, meeting all related needs of the global
consumer. This is found in the "Target Market Decisions: The Target Market Strategy" section (7-4a).
PTS: 1 DIF: Medium
35. Procter & Gamble pursues a differentiated target strategy.
ANS: T
Procter & Gamble indeed pursues a differentiated target strategy. It offers a variety of laundry
detergents in North America, for example, in an attempt to appeal to almost every conceivable market
segment. This is found in the "Target Market Decisions: The Target Market Strategy" section (7-4b).
PTS: 1 DIF: Medium
36. Mont Blanc pursues a concentrated targeting strategy.
ANS: T
By offering a relatively limited product selection that it markets using the same theme worldwide,
Mont Blanc pursues a concentrated targeting strategy. Throughout the world, Mont Blanc's
high-quality pens are targeted at the professional class. This is found in the "Target Market Decisions:
The Target Market Strategy" section (7-4b).
PTS: 1 DIF: Medium
37. Coke is marketed using a standardized, undifferentiated strategy throughout the world.
ANS: F
Even though Coke is a global brand, it is not marketed using a standardized, undifferentiated strategy.
Coke is sold primarily in recyclable glass and plastic bottles requiring a high deposit in Africa and
Europe, while in the U.S. it is sold in disposable cans and plastic bottles. Even Coke's formula is
different in different markets. This is found in the "Target Market Decisions: The Target Market
Strategy" section (7-4b).
PTS: 1 DIF: Medium
38. Most services do not lend themselves to a standardized strategy.
ANS: T
Certain products, such as food and other culture-bound products, and most services do not lend
themselves to a standardized strategy. They need to be customized to meet the specific needs and
preferences of consumers. This is found in the "Target Market Decisions: The Target Market Strategy"
section (7-4b).
PTS: 1 DIF: Medium
39. Both K-Mart and Mercedes-Benz use a price/quality positioning.
ANS: T
K-mart places emphasis on the value aspect of its offering. Mercedes-Benz, on the other hand,
suggests that its product is the best money can buy. In both instances, the company is using a
price/quality positioning strategy. Thus, both K-Mart and Mercedes-Benz use a price/quality
positioning. This is found in the "Positioning the Brand" section (7-5).
PTS: 1 DIF: Medium
40. When Airbus asks readers of The Financial Times whether they would be more comfortable with two
or four engines when they are up in the air, they engage in product class positioning.
ANS: F
When Airbus asks readers of The Financial Times whether they would be more comfortable with two
or four engines when they are up in the air, it makes implicit reference to Boeing; thus engaging in
competitor positioning. This is found in the "Positioning the Brand" section (7-5).
PTS: 1 DIF: Medium
MULTIPLE CHOICE
1. The international strategic plan creates a link between the company resources and its
a. International goals c. International market
b. International objectives d. All of the above
ANS: D
The international strategic plan forges a link between the company’s resources and its international
goals and objectives in a complex, continuously changing international environment. This is found in
the section entitled “Developing an International Marketing Strategy”(7-1).
PTS: 1 DIF: Medium
international market and all those elements listed below, except
a. Objectives c. Government
b. Competencies d. Resources
ANS: C
Marketing Strategy” (7-1).
PTS: 1 DIF: Medium
3. At which level does the strategic plan allocate resources and establish objectives for the company’s
worldwide operations?
a. Corporate level c. Product level
b. Division level d. Business unit level
ANS: A
management. This is found in the section entitled “Developing an International Marketing Strategy”
(7-1).
PTS: 1 DIF: Easy
4. Decisions on which country or countries to target take place at the ____ level.
ANS: A
management. Planning at this level involves international target market selection decisions: deciding
which country or countries to target based on specific screening criteria and processes. This is found in
the section entitled “Developing an International Marketing Strategy”(7-1).
PTS: 1 DIF: Medium
5. At which level does the strategic plan allocate funds to each business unit level?
ANS: B
At the division level, the strategic plan allocates funds to each business unit based on division goals
and objectives. This is found in the section entitled “Developing an International Marketing
Strategy”(7-1).
PTS: 1 DIF: Easy
6. At which level of the strategic plan is a marketing plan is developed for achieving brand or product
line objectives?
ANS: C
At the product level (line, brand), a marketing plan is developed for achieving objectives. This is found
in the section entitled “Developing an International Marketing Strategy” (7-1).
PTS: 1 DIF: Medium
7. At which level of the strategic plan are decisions made regarding which consumer segments to target,
within each country?
ANS: D
At the business unit level, within each country, decisions are made regarding which consumer
segments to target, using criteria described in this chapter. This is found in the section entitled
“Developing an International Marketing Strategy” (7-1).
PTS: 1 DIF: Medium
international market and the company’s
a. Objectives c. Resources
b. Competencies d. All of the above
ANS: D
Marketing Strategy” (7-1a).
PTS: 1 DIF: Medium
9. A product in the early stages of its life cycle will

a. Be most likely sold to consumers in industrialized countries.
b. Be most likely sold for a high prices.
c. Be most likely accompanied by heavy promotion.
d. All of the above.
ANS: D
A product in the early stages of its life cycle will most likely be sold to consumers in highly
industrialized countries for a high price, accompanied by heavy promotion. A product will most likely
be manufactured in a developed country and exported to the rest of the world. This is found in the
section entitled “Developing an International Marketing Plan” (7-1a).
PTS: 1 DIF: Medium
10. A product in the later stages of its life cycle, such as a videocassette recorder, will be
a. Sold to consumers worldwide, regardless of country development level.
b. Compete on price.
c. Most likely manufactured in a developing country where labor is inexpensive.
d. All of the above.
ANS: D
A product in the later stages of its life cycle, such as a videocassette recorder, will be sold to
consumers worldwide, regardless of country development level. The company selling the product will
heavily compete on price and, thus, most likely manufacture the product in a developing country,
where labor is inexpensive, to sell all over the world. Most likely, the company will have at least one
subsidiary located in the country of product manufacture. This is found in the section entitled
“Developing an International Marketing Plan” (7-1a).
PTS: 1 DIF: Medium
11. When a marketer identifies countries and segments of international consumers that are similar with
regard to key traits, who would respond well to a product and related marketing mix, he or she is
engaging in:
a. international market segmentation. c. market positioning.
b. international market targeting. d. a concentrated targeting strategy.
ANS: A
When a marketer identifies countries and segments of international consumers that are similar with
engaging in international market segmentation. International market targeting involves selecting the
countries and segments that the company can serve most efficiently. Offering the products to the
market, communicating, through the marketing mix, product traits and benefits that differentiate it in
the consumer's mind is market positioning. A concentrated targeting strategy is a form of international
market targeting. This is found in "The Rationale for Target Marketing" section (7-2).
PTS: 1 DIF: Medium

12. When a marketer selects the countries and segments that the company can serve most efficiently he or
she is engaging in:
a. international market segmentation. c. market positioning.
b. international market targeting. d. psychographic segmentation.
ANS: B
When a marketer identifies countries and segments of international consumers that are similar with
engaging in international market segmentation. International market targeting involves selecting the
countries and segments that the company can serve most efficiently. Offering the products to the
market, communicating, through the marketing mix, product traits and benefits that differentiate it in
the consumer's mind is market positioning. Psychographic segmentation is an example of international
market segmentation. This is found in "The Rationale for Target Marketing" section (7-2).
PTS: 1 DIF: Medium
13. Which requirement does not apply to both country and consumer segmentation?
a. Measurability c. Differential response
b. Accessibility d. All of the above apply.
ANS: D
The requirements for international segmentation, which apply equally to country and consumer
segmentation are: measurability, substantiality, stability over time, accessibility, actionability, and
differential response. Thus, all of the above apply to both country and consumer segmentation. This is
PTS: 1 DIF: Medium
14. The level of foreign direct investment in a country is a measure of which segmentation requirement?
a. Measurability c. Accessibility
b. Substantiality d. Actionability
ANS: B
A segment's growth potential is a way of measuring the substantiality of a segment. Growth potential
may be evaluated with surrogate statistics, such as economic development measures (e.g., foreign
direct investment). This is found in the "Requirements for International Segmentation" section (7-3a).
PTS: 1 DIF: Medium
15. Which segmentation requirement may be adversely affected by expensive translation required to
communicate with Indian consumers?
a. Measurability c. Stability over time
b. Substantiality d. Accessibility
ANS: D
Accessibility is the ability to communicate with the target market. Internationally, the differences in
language in individual countries, like India, may pose obstacles, greatly increasing the cost of
advertising and other promotion (i.e., accessibility). This is found in the "Requirements for
PTS: 1 DIF: Medium
16. Which segmentation requirement is most likely to be affected by a country with a large rural
population?
a. Measurability c. Accessibility
b. Substantiality d. Differential response
ANS: C
Accessibility is the ability to communicate with the target market. Rural populations tend to have a
more limited access to technology. This may make it difficult to communicate with the segment. This
is an accessibility problem. This is found in the "Requirements for International Segmentation" section
(7-3a).
PTS: 1 DIF: Medium
17. What is the first step in the segmentation process?

a. Micro-segmentation c. Demographic segmentation
b. Macro-segmentation d. Psychographic segmentation
ANS: B
As a first step in the segmentation process, companies engage in macro-segmentation.
Macro-segmentation is the grouping of countries based on such criteria as economic performance,
evaluating the potential of a particular market, etc. It is important to look at macro-segmentation (i.e.,
country-level segmentation) before considering micro-segmentation (i.e., consumer-level
segmentation). Demographic and psychographic segmentation are both examples of
micro-segmentation. This may be found in the "Macro-Segmentation: Country Attractiveness
Analysis" section (7-3b).
PTS: 1 DIF: Easy
18. Which of the following is not a criteria that a firm should use to group countries to determine which
country held the most opportunity for the firm?
a. Market potential c. Marketing support infrastructure
b. Political environment d. All of the above could be used.
ANS: D
Macro-segmentation should be used to determine which countries hold the most opportunity for a
company. Elements of macro-segmentation consist of market potential, the political, legal, and
financial environment of a country, the marketing support infrastructure in the country, how the
brand/company compares to competing brands/companies (i.e., when the firm already has a presence
in the market), and the degree of market fit with the company policies, goals and resources. Thus, all
of the options listed could be used to determine which country held the most opportunity for the firm.
This may be found in the "Macro-Segmentation: Country Attractiveness Analysis" section (7-3b).
PTS: 1 DIF: Easy
19. Which statement regarding the countries of the former Soviet Union is not true?
a. The countries are experiencing high inflation.
b. The countries have a high illiteracy rate.
c. The countries have an excess of highly qualified labor.
d. The countries have a consuming public that is eager to experience new products.
ANS: B
The countries are plagued by a high inflation and instability. However, years of mandatory education
have produced a literate, highly qualified workforce. The opening of borders and trade have caused the
consuming public to desire new products. This may be found in the "Macro-Segmentation: Country
PTS: 1 DIF: Medium

20. Which of the following is not a criterion that should be considered when evaluating a potential country
for entry?
a. Ethnic conflict in a region
b. Recent nationalization activity
c. Legal ambiguity
d. All of the above should be considered.
ANS: D
In macro-segmentation, the political, legal, and financial environment of a country should be
considered. The text indicates that the following criteria should be considered when evaluating a
potential country for entry: ethnic conflict in the region, history of war engagement, anti-foreigner
rhetoric, recent nationalization activity, legal ambiguity - especially in business, trade barriers erected
by government to protect local business, and exchange rate controls. In each case the political risk
increases and the attractiveness of market entry diminishes. This may be found in the
"Macro-Segmentation: Country Attractiveness Analysis" section (7-3b).
PTS: 1 DIF: Easy
21. For large multinationals attempting to enter the Turkish market, Sabanci Holdings is in great demand
and already boasts join venture and distribution partners in companies as varied as Carrefour
supermarkets, Dresdner Bank, and DuPont. Which macro-segmentation consideration does this
exemplify?
a. Market potential c. Marketing support infrastructure
b. Financial Environment d. None of the above
ANS: C
The marketing support infrastructure of the target country is an important determinant of country
attractiveness. Important to international firms are the availability and reliability of distribution and
logistics providers in order to ensure that the product is delivered in a timely fashion at locations
convenient to consumers. Thus, Sabanci Holdings controlling the distribution networks in Turkey is an
example of marketing support infrastructure. This may be found in the "Macro-Segmentation: Country
PTS: 1 DIF: Medium
22. Which market segment does Coca-Cola and Kodak target in China with their global brands?
a. "Working Poor" c. "The salaried class"
b. "The Little Rich" d. "Yuppies"
ANS: D
China's working class falls into four segments: "working poor" and "salaried class" - together
accounting for 80% of the urban population; "the little rich," 15% of the urban population, and
"yuppies," representing nearly 5% of the urban household. Coca-Cola and Kodak target their global
brands primarily to "yuppies" in China since they are more likely to desire (and be able to purchase)
Western brands. This may be found in "Micro-Segmentation: Focusing on the Target Consumer"
section (7-3c).
PTS: 1 DIF: Hard
23. Which of the following is not included in a psychographic analysis?

a. Income c. Attitudes
b. Lifestyle d. Opinions
ANS: A
Income is a demographic element. Psychographics include lifestyles, values, attitudes, interests, and
opinions. This may be found in "Micro-Segmentation: Focusing on the Target Consumer" section
(7-3c).
PTS: 1 DIF: Medium
24. According to the text, a recent study classified the Scandinavian countries according to Hofstede's
typology. They rate:
a. low in power/distance. c. low in individualism.
b. high in uncertainty/avoidance. d. high in masculinity.
ANS: A
Hofstede's dimensions can be used to segment countries based on individualism/collectivism,
masculinity/femininity, uncertainty avoidance, and power distance. The Scandinavian countries have a
small power/distance (i.e., are more egalitarian), have a low uncertainty/avoidance (i.e., take more
risks), rate high on individualism, and have a low level of masculinity (i.e., low ambition and
competitiveness). This may be found in "Micro-Segmentation: Focusing on the Target Consumer"
section (7-3c).
PTS: 1 DIF: Hard
25. Which psychographic segmentation system has developed a tool for both the U.S. and Japanese
markets?
a. PRIZM c. ACE
b. VALS d. MicroVision
ANS: B
VALS has developed a survey that is especially designed for the Japanese market as well as the U.S.
market. PRIZM and MicroVision offer psychographic tools for the U.S. market but do not offer
instruments for the Japanese market. ACE is not a psychographic offering. This may be found in
PTS: 1 DIF: Medium
26. Which of the following statements regarding "global teenagers" is accurate?

a. They are described as astute consumers with precise desires.
b. Prada has successfully targeted them through a status-oriented advertising message.
c. They are also called the "global elite."
d. None of the above are true.
ANS: A
Global teenagers are psychographically described as astute consumers with precise desires for
brand-name clothing products and for entertainment. The "global elite" segment is a separate segment.
The global elite have the highest income of all consumers. From a psychographic perspective they
travel the globe, often have homes in more than one country, and spend money on luxury brands, such
as Prada. This may be found in "Micro-Segmentation: Focusing on the Target Consumer" section
(7-3c).
PTS: 1 DIF: Medium
27. Consumers in the U.S. purchase soft drinks such as Coke and Pepsi to quench their thirst, but in
Eastern Europe, these brands are purchase primarily as a special occasion drink. What type of
segmentation does this example illustrate?
a. Psychographic segmentation c. Benefit segmentation
b. Usage segmentation d. Demographic segmentation
ANS: C
Important differences exist between the benefits sought from purchasing a particular product. In the
soft drink example, some consumers seek the benefit of "thirst quencher" while other consumers seek a
status or "special occasion" benefit. Usage segmentation focuses on the rate of use (e.g., heavy users
vs. light users) not the type of use. This may be found in "Micro-Segmentation: Focusing on the Target
Consumer" section (7-3c).
PTS: 1 DIF: Hard
28. Regarding fast food segmentation, the international marketer knows that consumers in emerging
markets are particularly attracted to:
a. speedy service c. clean environment
b. convenience d. all of the above
ANS: C
Consumers in the United States seek speedy service, quality food, and convenience in fast food chains.
However, consumers in emerging markets are particularly attracted to the clean environment, pleasant
ambience, polite staff, and air conditioning. This may be found in "Micro-Segmentation: Focusing on
the Target Consumer" section (7-3c).
PTS: 1 DIF: Hard
29. French women are heavy users of perfume. With this knowledge a marketer may decide to take
advantage of:
a. Psychographic segmentation c. Usage segmentation
b. Benefit segmentation d. None of the above
ANS: C
Usage rate indicates the extent to which individuals are nonusers, occasional users, medium and heavy
users. Therefore, this is an example of usage segmentation. Psychographic segmentation deals with
attitudes, interests, and beliefs and is not directly related to this question. Benefit segmentation deals
with the different benefits sought in a product. For instance, it may be possible that some women
consume perfume to attract the opposite sex while others use the product simply because they like the
smell. However, this was not indicated in the question; thus, benefit segmentation is not an accurate
response. This may be found in "Micro-Segmentation: Focusing on the Target Consumer" section
(7-3c).
PTS: 1 DIF: Easy
30. What is the correct order in country screening and selection?

a. Evaluating country performance on each of the screening criteria, assigning an importance
score to country screening criteria, and calculating a country attractiveness score.
b. Calculating a country attractiveness score, assigning an importance score to country
screening criteria, and evaluating country performance on each of the screening criteria.
c. Assigning an importance score to country screening criteria, calculating a country
attractiveness score, and evaluating country performance on each of the screening criteria.
d. Assigning an importance score to country screening criteria, evaluating country
performance on each of the screening criteria, and calculating the country attractiveness
score.
ANS: D
The first step in a screening process is to aggregate a selection of criteria discussed in the
macro-segmentation section and to assign importance scores to them. In the second stage, potential
target countries are rated on each of the criteria. Finally, the importance score is multiplied by the
performance score for each of the screening variables. The total score for each country is then
calculated. This is found in the “Target Market Decisions: Country Screening and Selection" section
(7-4a).
PTS: 1 DIF: Medium
31. How is the country attractiveness score in a country screening and selection process calculated?
a. An importance score is added to the performance score for each of the screening variables.
b. An importance score is multiplied by the performance score for each of the screening
variables.
c. The Delphi Method is used.
d. A time series analysis is performed on leading economic indicators.
ANS: B
In calculating the country attractiveness score, an importance score must first be developed. Important
segmentation variables are identified. Then the variables are assigned an importance weight that
denotes the extent to which the firm considers a particular trait important in the decision to enter the
market. Potential targets are then rated on each of the criteria. Finally, to calculate the attractiveness
score, the importance score is multiplied by the performance score for each of the screening variables.
The total score for each country is calculated by adding the resulting scores. This is found in the
“Target Market Decisions: Country Screening and Selection" section (7-4a).
PTS: 1 DIF: Medium
32. When a company identifies or creates market segments that want different benefits from a product and
target them with different brands, using different marketing strategies, the company is pursuing a(n):
a. differentiated targeting strategy. c. undifferentiated targeting strategy.
b. concentrated targeting strategy. d. standardized targeting strategy.
ANS: A
Companies that use a differentiated targeting strategy identify, or even create, market segments that
want different benefits from a product and targets them with different brands, using different
marketing strategies. A concentrated strategy is a niche strategy that would pursue a single segment.
Both an undifferentiated and a standardized strategy ignores differences between segments. This is
found in the “Target Market Decisions: The Target Market Strategy " section (7-4b).
PTS: 1 DIF: Easy
33. When The Body Shop caters to consumers who are environmentally concerned and who want to
purchase natural products that have not been tested on animals it is pursuing a(n):
a. differentiated targeting strategy. c. undifferentiated strategy.
b. concentrated targeting strategy. d. None of the above.
ANS: B
When a company selects a single market, it is pursuing a concentrated targeting strategy. The Body
Shop focuses on one segment. Thus, it is pursuing a concentrated targeting strategy. This is found in
the “Target Market Decisions: The Target Market Strategy " section (7-4b).
PTS: 1 DIF: Easy
34. Which category is most likely to pursue an undifferentiated targeting strategy?

a. Food c. Pharmaceuticals
b. Clothing d. Services
ANS: C
Certain products such as food and culture-bound products, and most services no not lend themselves to
a standardized strategy. They need to be customized to meet the specific needs, tastes, and preferences
of consumers. Pharmaceuticals on the other hand, serve a common need across countries. For this
reason, a pharmaceutical firm is more likely to pursue an undifferentiated strategy. This is found in the
“Target Market Decisions: The Target Market Strategy " section (7-4b).
PTS: 1 DIF: Medium
35. ____ entails placing the brand in the consumer's mind in relation to other competing products, based
on product traits and benefits that are relevant to the consumer.
a. Segmenting c. Targeting
b. Positioning d. Actionability
ANS: B
Positioning entails placing the brand in the consumer's mind in relation to other competing products,
based on product traits and benefits that are relevant to the consumer. Actionability is a requirement of
segmentation. Segmentation must occur before positioning. Positioning is a way to target consumers.
This may be found in the "Positioning the Brand" section (7-5).
PTS: 1 DIF: Easy
36. Procter & Gamble positions Dreft as a powder laundry detergent for babies and people with sensitive
skin. This is an example of:
a. attribute/benefit positioning. c. use or applications positioning
b. price/quality positioning d. product class positioning.
ANS: A
"Fabric softening" and "pill/fuzz removal" are benefits that a user receives by using Bold. Thus, this is
an example of attribute/benefit positioning. Most of Procter & Gamble's detergents follow an
attribute/benefit positioning strategy. This is found in the "Attribute/Benefit Positioning" section
(7-5a).
PTS: 1 DIF: Medium
37. Procter & Gamble's Era is positioned as a high-technology detergent that pretreats and washes fabrics
that suspends dirt. This is an example of:
a. attribute/benefit positioning. c. use or applications positioning.
b. price/quality positioning. d. product class positioning.
ANS: C
Procter & Gamble's Era is positioned as a high-technology detergent that pretreats and washes fabrics
that suspends dirt. This is a very precise application that differentiates it in the consumers' minds from
other laundry detergents that have a more general use. Therefore, this is an example of "use or
applications" positioning. This is found in the "Use or Applications Positioning" section.
PTS: 1 DIF: Hard
38. The Mont Blanc pen is usually pictured along with a quality business letterhead, with a passport,
and/or with an attaché case. This is an example of:
a. attribute/benefit positioning c. product user positioning
b. price/quality positioning d. product class positioning
ANS: C
The letterhead, passport, and attaché case are associating the pen with a business executive anywhere
in the world. In this case, the pen is positioned by the product user. This is found in the "Product User
Positioning" section (7-5d).
PTS: 1 DIF: Hard
39. Disney sells magic, not just entertainment. Harley sells excitement not just motorcycles. These are
examples of:
a. price quality positioning. c. product user positioning.
b. use or applications positioning. d. product class positioning.
ANS: D
Products using a product class positioning differentiate themselves as leaders in a product category, as
they define it. Disney selling "magic" is defining the product category. This is found in the "Product
Class Positioning" section (7-5e).
PTS: 1 DIF: Medium
40. When Airbus asks the readers of The Financial Times if they would be more comfortable with two or
with four engines when they are up in the air, it is using which form of positioning?
a. product user positioning c. use or applications positioning
b. competitor positioning d. price/quality positioning
ANS: B
The comparison of two or four engines is an implicit reference to Boeing (i.e., a competitor).
Therefore, this is an example of competitor positioning.This is found in the “Competitor Positioning"
section (7-5a).
PTS: 1 DIF: Medium
COMPLETION
1. At the ____________________ level, the strategic plan allocates resources and establishes objectives
for the whole enterprise worldwide.
ANS: Corporate
PTS: 1 DIF: Medium

NOT: This is found in the "Developing and International Strategy" section (7-1).
2. The ____________________-level plan has a long-term focus and involves the highest levels of
management.
ANS: Corporate
PTS: 1 DIF: Medium

3. At the ____________________ level, the strategic plan allocates funds to each business unit based on
division goals and objectives.
ANS: Division
PTS: 1 DIF: Medium
4. At the _________________________ level, within each country, decisions are made regarding which
consumer segments to target, using criteria described in this chapter.
ANS: Business unit
PTS: 1 DIF: Medium

5. At the ____________________ level, a marketing plan is developed for achieving objectives.
ANS: Product
PTS: 1 DIF: Medium

6. At the country level, ____________________ analysis identifies countries that are similar in aspects
relevant to the company.
ANS: Segmentation
PTS: 1 DIF: Easy

NOT: This is found in the "International Market Segmentation" section (7-3).
7. Individual market segments should be easy to identify and ____________________.
ANS: Measure
PTS: 1 DIF: Medium

NOT: This is found in the "Requirements for International Segmentation" section (7-3a).
8. ____________________ indicates that a segment is large enough to warrant investment.
ANS: Substantiality
PTS: 1 DIF: Medium

9. ____________________ of a segment over time used to be a primary consideration mainly for

developed countries. Today, however, this is an important consideration in a world environment where
products are in different lifecycle stages.
ANS: Stability
PTS: 1 DIF: Medium

10. ____________________ involves having the ability to communicate with the target market.
ANS: Accessibility
PTS: 1 DIF: Medium

11. The market should respond to the market strategies used is another way of saying that the segment
should be ____________________.
ANS: Actionable
PTS: 1 DIF: Easy

12. As a first step in the segmentation process, companies engage in _________________________.
ANS:
Macro-segmentation
Macro segmentation
PTS: 1 DIF: Medium

NOT: This is found in the "Macro-Segmentation: Country Attractiveness Analysis" section (7-3b).
13. GDP per capita, industrial sector statistics, and consumer buying behavior are all indicators of
_________________________.
ANS: Market potential
PTS: 1 DIF: Medium

NOT: This is found in the "Macro-Segmentation: Country Attractiveness Analysis" section (7-3b).
14. Companies at the forefront of technology usually first introduce their products in
____________________ countries.
ANS: Lead
PTS: 1 DIF: Medium

NOT: This is found in the "Micro-Segmentation: Focusing on the Target Consumer" section (7-4b).
15. The purpose of _________________________ is to identify clusters of consumers that respond in a

similar fashion to a company's marketing strategies.
ANS:
Micro-segmentation
Micro segmentation
PTS: 1 DIF: Hard

NOT: This is found in the "Micro-Segmentatin: Focusing on the Target Consumer" section (7-3c).
16. ____________________ are statistics that describe the population, such as age, gender, race, income,
education, occupation, social class, lifecycle stage and household size.
ANS: Demographics
PTS: 1 DIF: Easy

17. _________________________ are described as astute consumers with precise desires for brand-name
clothing products and for entertainment.
ANS: Global teenagers
PTS: 1 DIF: Medium

18. _________________________ indicates the extent to which individuals are nonusers, occasional
users, medium and heavy users.
ANS:
Usage
Usage rate
PTS: 1 DIF: Medium

19. Companies that use a(n) ____________________ targeting strategy identify, or even create, market
segments that want different benefits from a product and target them with different brands, using
different marketing strategies.
ANS: Differentiated
PTS: 1 DIF: Medium

NOT: This is found in the "Target Market Decisions: The Target Market Strategy" section (7-4b).
20. When companies select only one market, and segment and target it with one single brand, it is using
a(n) ____________________ targeting strategy.
ANS: Concentrated
PTS: 1 DIF: Medium

21. Pure ____________________ can be described as an undifferentiated marketing strategy.
ANS: Standardization
PTS: 1 DIF: Hard

22. ____________________ entails placing the brand in the consumer's mind in relation to other
competing products, based on product traits and benefits that are relevant to the consumer.
ANS: Positioning
PTS: 1 DIF: Easy

NOT: This is found in the "Positioning the Brand" section (7-5).
23. Dreft is positioned as a detergent that removes tough baby stains and protects garment colors. This is
an example of ____________________ positioning.
ANS:
Attribute
Benefit
PTS: 1 DIF: Hard

NOT: This is found in the "Attribute/Benefit Positioning" section (7-5a).
24. In Asia a bicycle may be positioned as an efficient transportation machine, but in the U.S. it is likely to
be positioned as a high-performance recreation instrument. This is an example of
____________________ positioning.
ANS:
Use
Applications
PTS: 1 DIF: Medium

NOT: This is found in the "Use or Applications Positioning" section (7-5c).
25. Parliament (a cigarette manufacturer) sells glamorous, romantic America all over the world, not just
cigarettes. This is an example of _________________________ positioning.
ANS: Product class
PTS: 1 DIF: Hard

NOT: This is found in the "Product Class Positioning" section (7-5e).
ESSAY
1. Describe the requirement for international segmentation.
ANS:
The requirements for international segmentation include measurability, substantiality, stability over
time, accessibility, actionability, and differential response. Measurability indicates that a segment is
identifiable. Substantiality indicates that the segment is large enough to be profitable. Stability over
time is important for long-term success. Accessibility indicates that the segment is reachable. For
example, rural consumers in China may be measurable and substantial, but they are difficult to reach
and are therefore not very accessible. Actionability indicates that the segment should respond to the
marketing strategies used. Finally differential response indicates that segments should be easy to
distinguish from each other and they should respond differently from other market segments to
marketing strategies. This may be found in the "Requirements for International Segmentation" section
(7-3).
PTS: 1 DIF: Medium
2. Discuss the criteria used in macro-segmentation.
ANS:
Some criteria that firms may use to group countries in order to determine which country to target
include market potential, the political, legal, and financial environment of the country, the marketing
support infrastructure in the country, current brand presence in the country, and the degree of market
fit with the company policies, goals, and resources. Indicators of market potential include, GDP,
consumer behavior, and industry and consumer statistics. All else being equal, a company would
prefer to enter a country with a stable political environment and one in which the legal environment
was not ambiguous. It is important for marketing infrastructure (e.g., distributors) to be developed as
well. This may be found in the "Macro-Segmentation: Country Attractiveness Analysis" section
(7-3b).
PTS: 1 DIF: Medium
3. Discuss the bases for micro-segmentation.
ANS:
In micro-segmentation, clusters of consumers that respond in a similar fashion to a company's
marketing strategies are identified. Bases of micro-segmentation include demographic and
psychographic segmentation, benefit segmentation, usage and user status segmentation, and
geographic segmentation. Demographic variables include age, income, and religion. Psychographic
variables involve attitudes, opinions, and lifestyles. Benefit segmentation demonstrates that different
segments seek different benefits from a product. For example some consumer purchase baking soda to
bake with while other consumers purchase baking soda to remove odors from their refrigerator. Usage
and user status refers to the difference between heavy users and other users of a product/brand.
Geographic segmentation realizes that differences exists between different physical locations. This is
found in the “Target Market Decisions: The Target Market Strategy” section (7-4b).
PTS: 1 DIF: Medium
4. Describe the process of country screening and selection.
ANS:
An international company would typically aggregate a selection of criteria discussed in the
macro-segmentation section that are deemed important by the company (e.g., market potential, degree
of political and financial stability, etc.). The criteria deemed important are selected from brand
managers or other decision makers in different international markets. The criteria are then assigned an
importance weight which denotes the extent to which the company considers a particular trait
important its decision to enter the market. The potential target countries are then rated on each of the
criteria. Finally, an importance score is multiplied by the performance score for each of the screening
variables. The total score for each country is then calculated by adding the resulting scores. This is the
country attractiveness score that can be used to compare between potential target countries. This is
found in the “Target Market Decisions: The Target Market Strategy” section (7-4b).
PTS: 1 DIF: Hard
5. Describe the targeting strategies discussed in the text.
ANS:
The text discusses the following targeting strategies: differentiated targeting, concentrated targeting,
and undifferentiated strategies. Differentiated targeting target segments that want different benefits
from a product and target them with different brands using different marketing strategies. Procter &
Gamble typically uses this strategy with its detergent brands. Companies that can't afford to wage a
differentiated strategy may choose to employ a concentrated strategy. A concentrated strategy targets a
single segment with one brand. Mont Blanc targets the professional class with its pen. In the
undifferentiated targeting strategy, a firm uses a standardized product and campaign. This increases
profitability through economies of scale. This is found in the "Target Market Decisions: The Target
Market Strategy" section (7-4b).
PTS: 1 DIF: Easy

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PTS: 1 DIF: Easy

PTS: 1 DIF: Easy

PTS: 1 DIF: Medium

PTS: 1 DIF: Easy

5. At the product level, a marketing plan is developed for achieving objectives.

PTS: 1 DIF: Medium

PTS: 1 DIF: Medium

PTS: 1 DIF: Medium

PTS: 1 DIF: Hard

PTS: 1 DIF: Hard

12. Individual market segments should be easy to identify and measure.

PTS: 1 DIF: Easy

PTS: 1 DIF: Medium

PTS: 1 DIF: Medium

PTS: 1 DIF: Easy

PTS: 1 DIF: Easy

PTS: 1 DIF: Medium

PTS: 1 DIF: Hard

PTS: 1 DIF: Easy

PTS: 1 DIF: Medium

PTS: 1 DIF: Medium

PTS: 1 DIF: Hard

24. Demographics are easy to measure and to compare across countries.

PTS: 1 DIF: Medium

PTS: 1 DIF: Easy

PTS: 1 DIF: Hard

PTS: 1 DIF: Easy

PTS: 1 DIF: Medium

PTS: 1 DIF: Medium

PTS: 1 DIF: Medium

PTS: 1 DIF: Medium

PTS: 1 DIF: Hard

33. Geographic segmentation can be performed at the macro-segmentation level.

PTS: 1 DIF: Medium

PTS: 1 DIF: Medium

35. Procter & Gamble pursues a differentiated target strategy.

PTS: 1 DIF: Medium

36. Mont Blanc pursues a concentrated targeting strategy.

PTS: 1 DIF: Medium

PTS: 1 DIF: Medium

38. Most services do not lend themselves to a standardized strategy.

PTS: 1 DIF: Medium

39. Both K-Mart and Mercedes-Benz use a price/quality positioning.

PTS: 1 DIF: Medium

PTS: 1 DIF: Medium

PTS: 1 DIF: Medium

PTS: 1 DIF: Medium

PTS: 1 DIF: Medium

PTS: 1 DIF: Easy

PTS: 1 DIF: Medium

PTS: 1 DIF: Medium

PTS: 1 DIF: Medium

9. A product in the early stages of its life cycle will

PTS: 1 DIF: Medium

PTS: 1 DIF: Medium

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PTS: 1 DIF: Medium

PTS: 1 DIF: Medium

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17. What is the first step in the segmentation process?