Global Marketing Test Bank

Global Marketing Test Bank

This review page is divided into three sections: major models and frameworks, sample questions,

and case analysis. No additional modifications will be made.

MAJOR MODELS AND FRAMEWORKS :

We have covered several major models and analytical frameworks during this course that enable

you to analyze a situation in making marketing-related decisions.

1. Changes in consumer buying and usage habits in recessionary conditions (p. 93)

2. ABCD Model (p. 108): consumer access, buying, consumption, disposal as a framework to

organize the examination of the various aspects of consumer response. Built on industrial models

of B2B.

3. Drivers Model (p. 254): organizes a four-component model of various major factors that

affect a business's strategies

4. Opportunity Matrix (p. 286): allows the company to compare perceived level of political risk

and perceived level of opportunity in a destination market.

5. Types of Tariffs (p. 151)

6. Segmentation (p. 219) - grouping of consumers based on factors meaningful to our business.

7. Positioning (p. 235, 236, 240): Definition, gap analysis, types, use of positioning

8. Market Entry Flowchart (p. 283, 288) - a systematic analysis

9. Market Entry Table (p. 309) - why are certain methods chosen?

10. Analytical product models, comparative analysis of attributes (p. 357, 363): taste tests,

product concept tests, conjoint analysis, analogy - these are methods from new product

development that allow us to analyze consumer reactions to various product attributes

11. Product standardization, adaptation - in creating a global brand, when and what can be

standardized? What can and should be adapted? Sanex case example

12. Branding and Country of Origin Effects (p. 404) - what types of brand emphasis can be

given? What attributes of a brand contribute to the brand image?

13. Pricing (425, 435, 478): euro

14. Communications: model, adaptations - we examine the specific encoding that is chosen

when communicating with consumers in various cultures. Do our meanings communicate what

we intend? Can the message be decoded appropriately?

15. Sales, Table p. 494

16. Global E-commerce issues: p. 605, 611

QUESTIONS:

The questions below illustrate the types of major issues that we have been covering in the course

since the Midterm. There are varied formats. The test bank will be updated periodically to

represent our discussions.

Chapter 11 – PRODUCT CONCEPTS

Ikea, the Swedish furniture chain, insists that all its stores carry the basic product line with little

room for adaptation to local tastes. If research of the U.S. market showed that Americans

preferred larger beds than their Swedish counterparts, which

of the following strategies would be advisable for Ikea?

a. standardization.

b. new product development.

c. adaptation.

d. withdraw from market.

e. lower prices to encourage attitude change.

Answer: (c) Difficulty: (1) Knowledge: (A) Page: 346

In the Australian market, rather than manufacturing disposable diapers, Proctor & Gamble

decided to import them since the size of the market did not warrant local manufacturing

according to P&G. Unfortunately, by using packaging designed for the Asian region with non-

English labeling, P&G alienated its customers in Australia. This is an example of improper:

a. global policy decisions.

b. pricing decisions.

c. brand policy decisions.

d. product policy decisions.

e. company policy decisions.

Answer: (d) Difficulty: (3) Knowledge: (F) Page: 347

Explain what could have been done to prevent the problem.

Suppose that you have been hired to correct the problem. What would you do?

The primary advantage to using a standardization approach to marketing a product in the

international arena is:

a. minimization of costs (which can be passed on to customers).

b. more profit.

c. less service complaints.

d. less product returns.

e. standard budgets.

Answer: (a) Difficulty: (2) Knowledge: (F) Page: 351

Which of the following would NOT be one of the five key product characteristics that contribute

to its acceptance?

a. low service maintenance

b. relative advantage

c. compatibility

d. complexity

e. trialability

Answer: (a) Difficulty: (3) Knowledge: (F) Page: 357-358

In the new product roundtable, a student brought in a product that promised to be a “tea for

babies” that numbed their gums during teething. To what extent does the new product offer more

perceived value to potential adopters than existing alternatives, would be a question that best fits

with which of the following key product characteristics acceptance categories?

a. observability


c. compatibility

d. complexity

e. trialability

Answer: (b) Difficulty: (1) Knowledge: (A) Page: 357

Is the product consistent with existing values and attitudes of the individuals in the social system,

would be a question that best fits with which of the following key product characteristics

acceptance categories?

a. observability


c. compatibility

d. complexity

e. trialability


Another student brought a “white fungus” product that required two hours of soaking before it

could be used in a recipe for soup or stew. Is the product easy to understand or use, would be a

question that best fits with which of the following key product characteristics acceptance

categories?

a. observability


c. compatibility

d. complexity

e. trialability

Answer: (d) Difficulty: (3) Knowledge: (A) Page: 358

Also – a product example could consider how much change is required of the consumer in

adopting the product into their own lives.

Congruent innovations

Continuous innovations

Dynamically continuous innovations

Discontinuous innovations

If a consumer considered four attributes to be important in the purchase of a TV, by using

________________ the researcher might be able to determine the trade-offs between the

different product attributes (such as purchase price or number of channels that could be received)

when the consumer evaluated the alternatives for eventual purchase.

a. chi-square

b. correlation analysis

c. focus groups

d. regression analysis

e. conjoint analysis

Answer: (e) Difficulty: (3) Knowledge: (A) Page: 363

A(n) ________________ is essentially a field experiment where the new product is marketed in

a select set of cities to assess its sales potential and scores of other performance measures.

a. attitude screen

b. product model

c. product concept

d. test market

e. focus concept


CHAPTER 12 – BRAND CONCEPTS

A ____________ is a name, term, sign, symbol, or combination of them which is intended to

identify the goods and services of one seller or group of sellers and to differentiate them from

those of competitors.

a. trademark

b. patent

c. signature

d. brand equity

e. brand

Answer: (e) Difficulty: (1) Knowledge: (F) Page: 377

Brand-name awareness, perceived quality, and other associations invoked by the brand name in

the customer’s mind are all illustrations of the concept called _______________.

a. proprietary investments.

b. brand equity.

c. brand warranty.

d. local brand name.

e. brand mark.

Answer: (b) Difficulty: (3) Knowledge: (F) Page: 377

. All of the following are items that might be used as a checklist for analyzing globalization

propositions EXCEPT:

a. What is the cost of creating and maintaining awareness and associations for a

local brand versus a global one?

b. Are there significant economies of scale in the creation and running of a communication

program globally?

c. Is there value to associations of a global brand or of a brand associated with the source

country?

d. Is global branding a requirement of forming strategic alliances?

e. What local associations will be generated by the global name?


With respect to a brand name changeover strategy, the _________________ strategy ties the new

global brand name to the existing local brand name. After a transition period, the old name is

dropped.

a. transparent forewarning

b. summary axing

c. fade-in/fade-out

d. pyramid focusing

e. parallel dimension

Answer: (c) Difficulty: (1) Knowledge: (F) Page: 386

Euro Disney eventually becoming Disneyland Paris (where the Euro shrunk until “land” could

be added in its place) is an example of which of the following brand name changeover strategies?


b. summary axing

c. fade-in/fade-out

d. pyramid focusing



When Mars candy company took over Raider candy products and used the theme line “Now

Raider becomes Twix, for it is Twix everywhere in the world,” the company used the

________________ strategy for changing brand names.


b. summary axing

c. fade-in/fade-out

d. pyramid focusing


Answer: (a) Difficulty: (3) Knowledge: (A) Page: 387

When Matsushita uses brand names like JVC and Panasonic as their banner brands, they are

using a(n) ___________________ system.

a. domestic branding

b. national branding

c. manufacturer’s branding

d. store branding or private labeling

e. umbrella (corporate) branding


. When Nokia (a leading maker of cellular phones) consolidated scores of brand names into their

one ____________________ brand, they found that strength occurred because consumers were

able to equate the Nokia quality with more products.

a. domestic brand

b. national brand

c. manufacturer’s brand

d. store brand or private label

e. umbrella or banner brand


Deciding to move toward global branding is a difficult decision. This must often be considered

with respect to the globalization versus localization issue. What are the questions that might be

useful in reaching a decision as to whether to pursue globalization over localization?

Answer:

The question asks you to speculate on the applicability of global versus local brand

names. Obviously, cultural differences are a heavy factor. One way to begin the discussion is to

remind the students of David Aaker’s list for analyzing global propositions:

1). What is the cost of creating and maintaining awareness and associations for

a local brand versus a global one?

2). Are there significant economies of scale in the creation and running of a

communication program globally?

3). Is there value to associations of a global brand or of a brand associated with

the source country?

4). What local associations will be generated by the global name? symbol?

slogan? imagery?

5). Is it culturally and legally do-able to use the brand name, symbol, slogan

across the different countries?

6). What is the value of the awareness and associations that a regional brand

might create?

CHAPTER 13 - PRICING

When developing a pricing strategy for its global markets, one of the first steps that a company

must go through is to decide:

a. what the actual price should be.

b. how high or low to price.

c. how much money will the price bring in.

d. what it wants to accomplish with its strategy.

e. what form of controls will regulate price.


. In the international marketplace, _________________ pricing adds international costs and a

mark-up to the domestic manufacturing cost.

a. dynamic incremental pricing

b. export price

c. import price

d. cost-plus price

e. target-return price

Answer: (d) Difficulty: (3) Knowledge: (F) Page: 416-417

Examples of exporting-related ____________________ include manufacturing costs, shipping

expenses, insurance, and overseas promotional costs.

a. incremental costs

b. demand costs

c. fixed costs

d. target costs

e. service costs


When demand is highly price sensitive, the company needs to consider how it

can _________________ from a global perspective.

a. raise prices

b. lower prices

c. lower service

d. raise quality

e. reduce costs


Recall the examples we had in class of the Japanese products being too expensive for the Indian

market if the current price, given in US$, is retained.

.

If Wrigley chewing gum company were to make 3-stick rather than 5-stick packages of gum for

the Philippines market, this would be an example of _______________ for low per-capita

income market.

a. downsizing

b. upgrading

c. synthesis

d. copying

e. paralleling


Sales tax rates, tariffs, and price controls are all examples of _______________ that can have a

direct or indirect impact on the pricing policies of a firm in the international marketplace.

a. sales volume policies

b. price policies

c. government policies

d. restrictions

e. punishments


There are two ways to deal with the price escalation phenomenon. One of these methods is to

cut the export price. The other is to:

a. change the promotion strategy.

b. position the product as a (super) premium brand.

c. position the product as a lower quality brand.

d. reduce retailer margins.

e. reduce distances that the good must be shipped.


There’s many more than this! You can reduce the Cost Insurance and Freight. You can use

FTZ’s. MANY MORE!

When the U.S. levied a 10 percent tax on plus-$30,000 luxury cars, Land Rover changed the

weight of Range Rover models so they could be classed as a truck and thereby avoid the luxury

status, the company was attempting to follow which of the

price strategies listed below for lowering the price of an exported product?

a. rearrange the distribution channel.

b. eliminate costly features (or make them optional).

c. downsize the product.

d. adapt the product to escape tariffs or tax levies.

e. assemble or manufacture the product in foreign markets.


Which of the following are considered to be exporter strategies when the domestic (home

market) currency is weak?

a. conduct conventional cash-for-goods trade.

b. engage in nonprice competition by improving quality, delivery, and aftersale

service.

c. improve productivity and engage in vigorous cost reduction.

d. shift sourcing and manufacturing overseas.

e. give priority to exports to relatively strong-currency countries.

Answer: (a) Difficulty: (3) Knowledge: (F) Page: 425, Exhibit 13-3

CHAPTER 14

In Spanish, five different words can be used for the word “tires” (cauchos, cubiertas, gomas,

llantas, and neumaticos). Obviously, this might present problems in advertising. This would be

an example of which of the following types of translation

errors?

a. simple carelessness.

b. idioms.

c. local slang.

d. multiple-meaning words.

e. incorrect grammar.


In an advertising message, the original slogan was “Body by Fisher.” The translation in a

foreign market was “Corpse by Fisher.” This would be an example of which of the following

constraints on international promotion?

a. language barriers.

b. advertising regulations.

c. cultural constraints.

d. local attitudes toward advertising.

e. poor media infrastructure.


As an illustration of a barrier to advertising standardization, Ray-Ban had to re-shoot a

sunglasses commercial for Malaysia because the original version had Caucasian actors. In

Malaysia, ads featuring Caucasians are not allowed. This example would be an example of

which of the following barriers to standardization of international advertising?

a. cultural differences.

b. budget.

c. advertising regulations.

d. differences in the degree of market development.

e. the “Not Invented Here” syndrome.


Sampling, price-offs, coupons, sweepstakes, bonus packs, and trade allowances are all examples

of ____________________.

a. advertising

b. sales promotion

c. direct marketing

d. public relations

e. publicity


CHAPTER 15 - Personal Selling

What is meant by power distance? How can it affect how people relate to each other in a

personal selling situation?

The form of selling that best describes the way that the majority of cars are sold in

Japan is:

a. at car lots or dealerships.

b. via the Internet.

c. by door-to-door salespeople.

d. direct from the manufacturer.

e. via used car lots.


. Selling through an Export Management Company (EMC) or an Export Trading

Company (ETC) is considered a _____________ involvement approach to

international sales.

a. low

b. middle

c. high

d. backward

e. parallel


Which of the following degrees of involvement would probably be in use when

there is a traveling global sales force and high technology experts are used by the

firm?

a. limited foreign involvement and visibility

b. local management and sales force

c. expatriate management and local sales force (mixed)

d. heavy to complete expatriate sales force

e. maximum global control and world wide ownership

Answer: (d) Difficulty: (2) Knowledge: (A) Page: 489, Exhibit 15-2

. Based on Geert Hofstede’s cultural dimensions scale, which of the following

countries most likely scores high on the power distance scale?

a. Japan

b. United States

c. Germany

d. Australia

e. Canada

Answer: (a) Difficulty: (1) Knowledge: (A) Page: 494, Exhibit 15-3

Based on Geert Hofstede’s cultural dimensions scale, which of the following

countries most likely scores high on the individualism versus collectivism scale?

a. Japan

b. United States

c. China

d. Mexico

e. Pakistan

Answer: (b) Difficulty: (1) Knowledge: (A) Page: 494, Exhibit 15-3

Based on Geert Hofstede’s cultural dimensions scale, which of the following

countries most likely scores high on the long-term orientation scale?

a. Hong Kong

b. United States

c. Great Britain

d. Germany

e. Pakistan

Answer: (a) Difficulty: (2) Knowledge: (A) Page: 494, Exhibit 15-3

If a company attempted to integrate men and women in the sales force in Saudi

Arabia, the company would have to deal with __________________ problems.

a. focus

b. vision

c. mission

d. corporate culture

e. country culture

Answer: (e) Difficulty: (1) Knowledge: (A) Page: 493-494

Setting sales force objectives internationally will not only depend on the company

goals but will also depend on:

a. the training procedures.

b. the recruiting procedures.

c. the evaluation procedures.

d. an analysis of the culture and the values of the country it is entering.

e. management standards for excellence.


Not all United States sales methods or systems can automatically be exported

abroad. Considering the information provided by research on different cultural dimensions, why

might it be difficult to adopt a U.S.-style commission system for salespeople in such countries as

Japan or Mexico. Be sure to remember how these two countries might rank on the five cultural

dimension scales.

CHAPTER 16 - Retailing and Distribution

Consider the KFC video that we viewed in class. Even though the video represents KFC's

entrance into Japan several years ago, many of the same operating principles apply today with

global firm's expansion into many new markets. Explain.

2. In our discussion of the Tricon Branding article, we learned that KFC has been the target of

some protest actions following the September 11, 2001 events. KFC has 5,000 US restaurants

and 6,000 abroad (Nov. 26, 2001), including stores in more than 80 countries. How can KFC's

analysts use the notion of political risk to estimate such threats?

http://www.prsgroup.com/

_____________ is defined as the design and management of a system that directs

and controls the flows of materials into, through and out of the firm across national

boundaries to achieve its corporate objectives at a minimum total cost.

a. Global goods flow

b. Global distribution

c. Global logistics

d. Global wholesaling

e. Global shipping


Multinational corporations can use _______________ as a strategic tool in dealing

with currency fluctuations and as a hedge against inflation.

a. buying power

b. just-in-time management

c. just-in-time delivery

d. purchasing management

e. inventory

http://www.prsgroup.com/


When companies like Dell Computer and Chrysler (that rely heavily on components

such as auto parts and computer chips) are able to take advantage of free trade zones,

they usually do it by having:

a. cheap parts sent to their manufacturing facility from abroad.

b. their manufacturing facilities designated as subzones of an FTZ.

c. buying cheap “dumped” products.

d. creating gray markets.

e. by passing customs because of being designated a security area.


CHAPTER 17 - EXPORTING

1. We considered numerous standard export forms in class. One is the "country of origin" form.

Describe what this concept means and why it is so important in global trade.

2. As an aid to expanding information about world trade, increasingly, international

marketing information is available in the form of _____________________.

a. CD-ROMs.

b. electronic encyclopedias.

c. electronic databases.

d. CIA reports.

e. government intelligence reports.


3. We used several electronic databases in class to research exporting laws, regulations, market

research information, and documentation. Describe one of the databases and its usefulness to an

exporter.

4. Conducting export research on China and Russia would best be done by:

a. doing database research.

b. doing on-line searches.

c. doing field work.

d. using existing government facts and figures.

e. using data supplied by trade missions.


5. Explain your answer.

When the exporter quotes a price for the goods, including charges for delivery

of the goods alongside a vessel at a port (the seller covers all costs of unloading and

wharfage at the shipment port and the buyer covers all other charges to get the goods

to the buyer), this form of terms of shipment is called:

a. ex-works.

b. free alongside ship (FAS).

c. free on board (FOB).

d. cost and freight (CFR).

e. Cost, Insurance, and Freight (CIF).

Answer: (b) Difficulty: (3) Knowledge: (A) Page: 555 Exhibit 17-6

CHAPTER - E-COMMERCE

1. We looked at several barriers to e-commerce in various country settings. Name three and

explain why they are barriers.

2. How can infrastructure affect individuals' likelihood of adopting Internet service?

3. One of the major limitations on consumer purchasing on the Internet is:

a. Products are not available that they seek

b. Prices are not acceptable on web site

c. They often do not have a credit card to make their purchases

d. Consumers always prefer to see products in person

SANEX QUESTIONS: you many have a short case described on the final. Be prepared to

answer questions similar to those used in the Sanex case

Consider the Sanex case in the text. The product under consideration is a liquid hand soap. Here

is a link to an online site so that you can see the product and some competitors.

http://store.europe.yahoo.com/pharmacy2u-uk/personal-care-bath---shower-preparations-soaps---

handwash-liquid-soap.html

1. Following up on your new product question about the research you’d want to conduct,

comment on the appropriateness of the research conducted for Sanex. If you were a product

manager who could give the “go ahead” for the product, would you? How would you have

designed the initial research?

2. Analyze this product in terms of product innovativeness and change concepts used in class.

3. Sanex was initially introduced with a Spanish theme. In moving to other markets, suppose

that you were considering whether any local market adaptations were necessary, such as those

we discussed in your assignment (e.g. color, scent, etc). How would you determine their

importance?

4. Suppose the product were under consideration for export to a lesser developed country where

liquid handsoap is not known. How would you analyze the degree of behavioral change assumed

by the product design?

5. The name “Sanex” was created in order to make this brand a Eurobrand, and later a global

brand. Suppose that CVL could have acquired a local brand instead in Spain, such as Henkel or

Nivea. What do you advise?

6. Let’s just suppose that CVL acquired Ernopon and was attempting to determine whether to use

fade in/fade out, transparent forewarning, summary axing, or a dual new brand plus local

strategy. How would you analyze the situation and make recommendations? Please draw

connections to our discussions of "Shark".

http://store.europe.yahoo.com/pharmacy2u-uk/personal-care-bath---shower-preparations-soaps---handwash-liquid-soap.html

http://store.europe.yahoo.com/pharmacy2u-uk/personal-care-bath---shower-preparations-soaps---handwash-liquid-soap.html

7. Sanex was initially priced as a “premium” product in Spain as a signal of high quality. The

product was later taken to several other countries with great success, such France. Suppose that

you were asked to investigate pricing strategies for the EU given the impending date for euro

integration.

8. Suppose that you are considering bringing the product to India, but are concerned that the

price is higher than the typical consumer might accept. You consider using a target price

approach rather than a cost-based approach. Explain.

9. The promotion for the product needed to encode the message of “healthy skin” in a way that

allowed consumers to decode the message accurately. One ad showed a woman kissing a man’s

armpit. Explain possible problems in terms of encoding and decoding.

10. Consumer education was used early in the process. Why?

STARBUCKS CASE:

1. What type of brand positioning is Starbucks attempting to use?

2. Recent studies have identified Starbucks as a successful global brand.

a. What is a global brand? Can you define it?

b. Why can we consider Starbucks to be a global brand?

3. Starbucks took a way of doing business that was developed in the United States and has

successfully brought that business format to other markets. Is their approach ethnocentric? Why

or why not?

ANHEUSER BUSCH CASE:

1. What model can we use to help AB management determine whether they should enter a

certain market?

2. The spending power of consumers in many foreign markets is often reduced due to currency

fluctuations. How could AC modify their marketing to maximize consumer value?

3. AB originally intended to utilize advertising developed for Hispanic markets in the United

States. Would these be likely to communicate correctly to persons in AB's destination markets of

Mexico and Brazil? Why or why not? Can you use the communications model to support your

point?

PEPSI ONE:

1. This product was introduced to other markets as "PEPSI MAX." We have studied the

importance of branding in a global context. Did Pepsi follow the correct strategy?

2. In choosing the name Pepsi One, the benefit of maximum taste is removed from the name as a

benefit cue. Do you agree or disagree with this move? Explain.

3. Research needed to be carried out to determine whether gender is a relevant variable in the

U.S. market and what attributes were the key drivers of product purchase. This must be done

before new advertising can be designed. Discuss the type of research that you would recommend

in order to answer these major questions.

4. Suppose we were going to use the communications model to analyze and diagnose U.S.

consumers' reactions to ads for Pepsi One that are aimed at young adventurous men. We want to

design a study testing women's reactions to the current series of ads using Cuba Gooding

Jr. What type of information would we want to examine?

5. There were several major problems with using the European data to build a strategy for the

U.S. market. Identify and discuss three of the problem areas.

6. We considered the "House of Quality" article in terms of the Pepsi One case.First, describe the

major ideas in the articles. Next, suggest a possible analysis for Pepsi One using the frameworks

that are proposed.

WAL-MART

1. Suppose you were going to consult with WM in determining a site selection plan. You have

studied information about how consumers shop in Brazil. What type of site might maximize your

ability to meet consumer needs?

2. Consumers are known to buy in bulk in Brazil and to have their families accompany them in

their shopping trips. There are several ways to buy in bulk: single large packages, multiple small

packages, and so forth. Which method would you recommend for WM and why?

3. How does this case compare to the video shown regarding Kentucky Fried Chicken's entry

into Japan? Suppose that you showed the KFC video to a group of managers for KFC's

international division. What would you want them to learn?

AOL

1. What is the difference betweeen the technology of AOL as a service and the appliance used to

make it available? Did AOL take this into account?

2. Joint venture partners can help with acquiring market access if they are the "right" fit with a

company's needs. Comment on the original AOL joint venture discussed in the case.

3. Suppose that you were consulting with AOL back at the time of their entry into Japan.

Describe and defend three types of research that you would recommend.

THE GAP

1. GAP has three different store formats at different levels of cost and quality. How can these

formats be utilized when consumer spending power has been reduced?

2. Compare and contrast the market entry strategies chosen for Germany and Japan.

3. It is wise to work with an advertising agency in Germany in addressing potential regulations in

that market. Why?

Global Marketing Test Bank

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