Chapter 16 True False
1. A global marketing strategy that views the
world's consumers as similar in their preferences is
consistent with the mass production of a standardized
output.
True False
2. A critical aspect of the marketing function is
identifying gaps in the market so that a firm can develop
new products to fill those gaps.
True False
3. Firms vary their marketing mix from country to
country depending on differences in national culture
True False
4. According to Theodore Levitt, technology has
resulted in the emergence of global markets for
standardized consumer products on a previously
unimagined scale of magnitude.
True False
5. Markets can be segmented by geography,
demography, sociocultural factors, and psychological
factors.
True False
6. Market segmentation refers to identifying
distinct groups of consumers whose purchasing behavior
differs from others in important ways.
True False
7. When managers in an international business
consider market segmentation in foreign countries, they
need to be cognizant of the difference between
countries in the structure of market segments.
True False
8. For a market segment to transcend national
borders, consumers in that segment must have some
compelling similarities along important dimensions such
as age, values, and lifestyle choices.
9. In terms of factors influencing product
attributes, the impact of tradition is particularly
important in foodstuffs and beverages.
True False
10. The fact that tastes and preferences of
consumers are not universal disproves Theodore Levitt's
views on the globalization of markets.
True False
11. Consumers in the most developed countries are
often willing to sacrifice their preferred product
attributes for lower priced products.
True False
12. Firms based in less developed nations tend to
build a lot of extra performance attributes into their
products.
True False
13. Differences in government-mandated product
standards can rule out mass production and marketing
of a standardized product.
True False
14. A concentrated retail system is one in which
there are many retailers, none of which has a major
share of the market.
True False
15. In terms of the differences between countries
with respect to distribution systems, there is a tendency
for lesser retail concentration in developed countries.
True False
16. In terms of channel length, the more
fragmented the retail system, the less expensive it is for
a firm to make contact with each individual retailer.
True False
17. The expertise, competencies, and skills of
established retailers in a nation, and their ability to sell
and support the products of international business is
referred to as channel exclusivity.
True False
18. There is generally a critical link between channel
length, the final selling price, and the firm's profit
margin because each intermediary in a channel adds its
own markup to the products.
True False
19. One benefit of a longer distribution channel is
that it cuts selling costs when the degree of
fragmentation of the retail sector is less.
True False
20. The effectiveness of a firm's international
communication can be jeopardized by cultural barriers
only.
True False
21. In international marketing, a message that
means one thing in one country may mean something
quite different in another due to cultural differences.
True False
22. Many international businesses try to counter
negative source effects by deemphasizing their foreign
origins.
True False
23. A pull strategy refers to a marketing strategy
that emphasizes personal selling rather than mass
media advertising in the promotional mix.
True False
24. Firms in consumer goods industries that are
trying to sell to a large segment of the market generally
favor a push strategy.
True False
25. The shorter the distribution channel, the more
intermediaries there are that must be persuaded to
carry the product for it to reach the consumer.
True False
26. A firm's ability to use a pull marketing strategy is
limited in some countries by media availability.
True False
27. A disadvantage of standardized advertising is
that it increases the costs of value creation by spreading
the fixed costs of developing the advertisements over
many countries.
True False
28. The elasticity of demand for a product in a given
country is determined by a number of factors, of which
income level and competitive conditions are the two
most important.
True False
29. Predatory pricing exists whenever consumers in
different countries are charged different prices for the
same product, or for slightly different variations of the
product.
True False
30. Predatory pricing and experience curve pricing
do not violate antidumping regulations.
True False
31. In terms of pricing decisions, full responsibility
for pricing decisions should be delegated to the
managers of various national subsidiaries, thereby
reaping the benefits of decentralization.
True False
32. In terms of pricing strategies, dumping occurs
whenever an international firm sells a product for a
price that is less than the price charged by domestic
producers.
True False
33. A technological innovation can make established
products obsolete overnight.
True False
34. Dispersing research and development activities C. R&D defines the market's needs for the
to many locations around the world allows a firm to stay marketing personnel.
close to the center of leading-edge activity to gather D. Marketing fails to guide R&D whether to produce
scientific and competitive information and to draw on globally standardized or locally customized products.
local scientific resources. E. marketing plan

True False 39. Which of the following is an element of a firm's

marketing mix?
35. Firms can reduce the failure of new-product
development by insisting that research and A. Product attributes
development, marketing, and production functions B. Employee management
work independently. C. Customer service
D. Population demographics
True False E. Domestic competition

40. Who among the following asserted in an article

Multiple Choice Questions in the Harvard Business Review that modern
transportation and communications technologies are
36. Which of the following functions of an facilitating a convergence of certain tastes and
international business is required to create new preferences among consumers in the more advanced
products? countries of the world?

A. Supply chain A. Gary Hamel

B. Logistics B. Theodore Levitt
C. Operations C. Christopher Bartlett
D. Research and development D. Peter Drucker
E. Customer service E. C.K. Prahalad

37. Which of the following is true of the marketing 41. Which of the following is true according to
and research and development (R&D) departments in an Theodore Levitt's article in the Harvard Business Review
international firm? about the globalization of world markets?

A. Marketing and R&D should always work A. Accustomed differences in national or regional
independently. preferences are significant in world markets.
B. R&D identifies gaps in a market so that marketing B. The global corporation operates consistently at
can work to fill those gaps. high relative cost.
C. R&D defines the market's needs for the C. Technology has led to the emergence of global
marketing personnel. markets for standardized consumer products.
D. Marketing fails to guide R&D whether to produce D. The global corporation sells different things in
globally standardized or locally customized products. different ways.
E. A major contributor to the success of new- E. Ancient differences in national tastes or modes of
product introductions is a close relationship between doing business are reinforced.
marketing and R&D.
42. Which of the following is true according to
38. Which of the following is true of the marketing Theodore Levitt's article in the Harvard Business Review
and research and development (R&D) departments in an about the globalization of world markets?
international firm?
A. Multinational corporations consider the world
A. Marketing and R&D should always work to consist of distinct and unique entities.
independently. B. Multinational corporations operate at low
B. R&D identifies gaps in a market so that marketing relative costs.
can work to fill those gaps. C. Multinational corporations operate from a single
country.
D. Multinational corporations do not adjust their D. Levitt's arguments hold true with respect to
products and practices to suit each country. consumer goods markets but not for basic industrial
E. Multinational corporations are in danger of losing products.
out to small businesses. E. As observed by Levitt, in global markets, firms
do not tailor their products to suit different countries.
43. Which of the following is a statement made by
Theodore Levitt about the globalization of world 46. Which of the following is true of Theodore
markets? Levitt's arguments concerning globalization of world
markets?
A. Capitalism is the force that drives the world
toward a converging commonality. A. Levitt's argument holds true for basic industrial
B. Multinational corporations consider the world products, such as steel, bulk chemicals, and
to consist of distinct and unique entities. semiconductor chips but not for consumer goods
C. Accustomed differences in national or regional markets.
preferences are becoming more significant. B. Levitt understates his case concerning global
D. Multinational corporations are in danger of losing markets and the fall of multinational corporations.
out to small businesses. C. Globalization, in the sense used by Levitt, is the
E. Global markets for standardized consumer rule rather than the exception in consumer goods
products have emerged on a large scale of magnitude. markets.
D. Levitt's arguments have no implications for the
44. Which of the following is true of Theodore marketing strategies pursued by an international
Levitt's arguments concerning the globalization of world business.
markets? E. There is no evidence to suggest the convergence
of preferences among consumers across advanced
A. The rise of global media phenomenon seems to countries.
support Levitt's argument.
B. Academics feel that Levitt understates his case 47. Which of the following factors constrain a firm's
concerning global markets and the fall of multinational ability to sell a standardized product to a global market
corporations. using a standardized marketing strategy?
C. Globalization, in the sense used by Levitt, is the
rule in consumer goods markets and industrial markets. A. Modern transportation
D. Levitt's arguments hold true with respect to B. Modern communications technologies
consumer goods markets but not for basic industrial C. Rise of the global media phenomenon
products. D. Development of a global culture
E. As observed by Levitt, in real-world global E. Differences in product and technical standards
markets, firms do not tailor their products to suit
different countries. 48. _____ refers to identifying distinct groups of
consumers whose purchasing behavior differs from
45. Which of the following is true of Theodore others in important ways.
Levitt's arguments concerning the globalization of world
markets? A. Market penetration
B. Market development
A. Modern transportation is facilitating a C. Market segmentation
convergence of tastes and preferences among D. Product development
consumers in advanced countries of the world. E. Diversification
B. Academics feel that Levitt understates his case
concerning global markets and the fall of multinational 49. Which of the following is a definition of market
corporations. segmentation?
C. Globalization, in the sense used by Levitt, is the
rule rather in consumer goods markets and industrial A. It refers to identifying distinct groups of
markets. customers whose purchasing behavior differs from
others.
B. It refers to developing existing market segments
and increasing market share within those segments.
C. It refers to identifying the need for new products
in existing markets and developing products for those
markets.
D. It refers to identifying new markets that can buy
existing products.
E. It refers to identifying the needs of a new market
and developing new products for that market.
50. Which of the following is a sociocultural factor
that is used to segment markets?
A. An important market segment in a foreign
country always has a parallel in a firm's home country.
B. Markets can be segmented only on the basis of
geography and demography.
C. The structure of market segments is quite similar
across various countries.
D. Since market segments are similar across various
countries, firms can pursue a global marketing strategy
without varying the marketing mix.
E. For a segment to transcend national borders,
consumers in that segment must have some compelling
similarities along important dimensions.

A. Personality 54. Which of the following is true of a product?

B. Race
C. Values A. A product can be viewed as the focal point of a
D. Income marketing mix.
E. Education level B. A product can be viewed as the center of market
segmentation.
51. Which of the following is a goal of market C. A product can be viewed as a bundle of
segmentation? attributes.
D. A product can be viewed as a forced need or
A. To optimize the fit between the purchasing want.
behavior of consumers in a given segment and the E. A product can be viewed as an object that
marketing mix transcends customer behavior.
B. To increase participation in shared global
conversations by drawing upon shared symbols that 55. In terms of the factors affecting product
include global brands attributes, the impact of _____ is particularly important
C. To reduce cultural and economic differences in foodstuffs and beverages.
which act as a barrier to the emergence of global trends
D. To standardize products, manufacturing, and the A. language
institutes of trade and commerce B. nationality
E. To increase the costs of value creation and add C. religion
value by better serving customer needs D. tradition
E. gender
52. Which of the following is a reason why firms
need to adjust their marketing mix from segment to 56. In terms of the influence of cultural differences
segment? on product attributes, which of the following is evidence
of the trends that Theodore Levitt described?
A. Different segments exhibit different patterns of
purchasing behavior. A. Differences in traditional eating habits
B. Each market segment is completely isolated from B. Cultural differences due to historical and
other market segments. idiosyncratic reasons
C. The technology required for standardized C. Market segments that remained confined to
production is not yet available. national borders
D. Changing the marketing mix prevents the D. Tastes and preferences becoming cosmopolitan
phenomena of product cannibalization. E. Varying product and technical standards
E. Consumers of one market segment are
completely isolated from those of other segments. 57. Which of the following is true of the influence of
cultural differences on product attributes?
53. Which of the following is true of market
segmentation? A. Cultural differences have no implications for
marketing strategies.
B. Tradition has the least impact on a firm's 61. Which of the following factors constrains the
marketing strategies. globalization of markets?
C. Tastes and preferences of consumers are
becoming less cosmopolitan. A. Difference in technical standards
D. There is evidence of cultural convergence B. Uniform standard of living
between the advanced industrial nations of Asia and C. Cosmopolitan tastes and preferences
North America. D. Market segments that transcend national borders
E. The impact of tradition is important in E. Convergence of cultures
foodstuffs and beverages.
62. A _____ refers to the means that a firm chooses
58. Firms based in _____ countries tend to build a for delivering a product to its consumer.
lot of extra performance attributes into their products.
A. pull strategy
A. highly developed B. distribution strategy
B. least developed C. push strategy
C. highly-indebted D. communication strategy
D. developing countries E. pricing strategy
E. agriculture-based
63. In a(n) _____ retail system, a few retailers supply
59. Which of the following contradicts Theodore most of the market.
Levitt's arguments for the globalization of world
markets? A. fragmented
B. dispersed
A. Consumers in most developed countries do not C. isolated
sacrifice preferred attributes for lower prices. D. concentrated
B. Tastes and preferences are becoming more E. exclusive
cosmopolitan due to cultural convergence.
C. Similar product and technical standards across 64. A(n) _____ retail system is one in which there
countries help a firm sell the same product worldwide. are many retailers, no one of which has a major share of
D. The emergence of the global youth segment is the market.
evidence of market segments that transcend national
borders. A. concentrated
E. The structure of market segments is extremely B. fragmented
similar in various countries. C. focused
D. consolidated
60. Which of the following is true of the influence of E. exclusive
economic development on consumer preferences?
65. Which of the following is a basis for the
A. The level of economic development does not differences in retail concentration in various countries?
impact consumer preferences as much as cultural
difference does. A. Tradition
B. Firms based in highly developed countries do not B. Idiosyncracies
build extra performance attributes into their products. C. Prejudices
C. Consumers in less developed nations demand to D. Demographics
have extra attributes built into products. E. Geography
D. Consumers in developed countries are often
willing to sacrifice their preferred attributes for lower 66. Which of the following is a factor that has
prices. contributed to greater retail concentration in developed
E. Consumers in developed nations are willing to countries?
pay more for products that have additional features
customized to their tastes. A. A tradition of established local neighborhood
stores
B. An increase in car ownership
C. A decrease in the number of freezers and
refrigerators A. The more fragmented the retail system, the more
D. An increase in the number of single-income economical it is for a firm to make contact with each
households individual retailer.
E. An increase in the population density B. Countries with fragmented retail systems tend to
have short channels of distribution.
67. Which of the following is a factor that C. A relatively small sales force is required to deal
contributes to greater retail concentration in developed with a fragmented retail sector.
countries? D. It makes economic sense for the firm to sell to
the wholesalers and the wholesalers to deal with the
A. Number of households owning televisions retailers.
B. Number of families with two or more children E. The sales orders generated from each sales call is
C. Increase in the value of the currency of the more than that in a concentrated retail system.
country
D. Number of households with refrigerators and 72. Which of the following is a characteristic of
freezers fragmented retail systems?
E. Decrease in per capita income
A. Long channels of distribution
68. The number of intermediaries between the B. Single-layer distribution systems
product (or manufacturer) and the consumer is referred C. Lower sales call to sales order ratio
to as _____. D. Relatively smaller sales force compared to
concentrated retail systems
A. channel length E. Promotion of direct interaction between retailers
B. channel quality and firms
C. channel exclusivity
D. channel fragmentation 73. When the retail sector is very concentrated:
E. channel concentration
A. it is more expensive for a firm to make contact
69. Which of the following is the most important with each individual retailer.
determinant of channel length? B. it makes sense for a firm to deal directly with
retailers, cutting out wholesalers.
A. The degree to which the retail system is C. a relatively large sales force is required to deal
fragmented with the retail sector.
B. An increase in car ownership and two-income D. the channels of distribution tend to be long.
households E. the growth of wholesalers is promoted.
C. The level of consolidation in the global retail
industry 74. When the retail sector is very concentrated:
D. The amount of difference between product or
technical standards A. it is more expensive for the firm to make contact
E. The level of economic development of a country with each individual retailer.
B. it makes sense for a firm to deal with wholesalers
70. _____ retail systems tend to promote the instead of retailers.
growth of wholesalers to serve retailers, which C. a relatively large sales force is required to deal
lengthens distribution channels. with the retail sector.
D. there are long channels of distribution.
A. Centralized E. the orders generated from each sales call can be
B. Focused large.
C. Concentrated
D. Fragmented 75. Which of the following factors helps a firm
E. Exclusive shorten channel length?

71. Which of the following is true about fragmented A. The entry of large discount superstores
retail systems?
B. A firm's insistence on dealing with wholesalers E. The lack of a high-quality channel does not
instead of retailers impede market entry.
C. Fragmentation of a retail system
D. A small sales force 80. Which of the following is a factor that
E. Smaller sales orders generated from sales calls determines the optimal distribution strategy?

76. A(n) _____ distribution channel is one that is A. Communication strategy

difficult for outsiders to access. B. Country of origin effects
C. Channel quality
A. exclusive D. Noise levels
B. intensive E. Source effects
C. selective
D. concentrated 81. Which of the following is true of choosing a
E. fragmented distribution strategy?

77. Which of the following is true of distribution
channel exclusivity?
A. In Japan, relationships among manufacturers,
wholesalers, and retailers often go back decade.
B. Japan's distribution system is often held up as
one of the least exclusive systems.
C. An exclusive distribution channel refers to a
channel that outsiders find convenient to access.
D. Retailers tend to prefer to carry the products of
emerging firms rather than established firms.
E. The exclusivity of a distribution system is similar
across most countries of the world.
A. The optimal distribution strategy is determined
by the relative costs and benefits of each alternative,
which vary from country to country.
B. A choice of distribution strategy does not
determine which channel the firm will use to reach
potential consumers.
C. The channel length, the final selling price, and the
firm’s profit margin are completely independent of each
other.
D. The longer a distribution channel, the lower the
aggregate markup.
E. The longer a distribution channel, the lower the
price that consumers are charged for the final product.

78. _____ refers to the expertise, competencies, and 82. Which of the following is a drawback of longer
skills of established retailers in a nation, and their ability distribution channels?
to sell and support the products of international
businesses. A. Higher selling costs in a fragmented retail sector
B. The inability to enter exclusive distribution
A. Channel exclusivity channels
B. Channel quality C. Lower selling costs in a concentrated retail sector
C. Channel length D. Lower product prices
D. Channel dominance E. Greater aggregate markups
E. Channel concentration
83. Which of the following is a drawback of longer
79. Which of the following is true about channel distribution channels?
quality?
A. Higher selling costs in a fragmented retail sector
A. The quality of retailers is variable in developed B. The inability to enter exclusive distribution
nations. channels
B. The quality of retailers is variable in emerging C. Lower selling costs in a concentrated retail sector
markets and less developed nations. D. Higher prices that consumers are charged
C. Chanel quality refers to a measure of the number E. Greater aggregate markups due to a lack of
of intermediaries between the manufacturer and the intermediaries
consumer.
D. An international business cannot establish its 84. Which of the following is an advantage of longer
own distribution channel when the existing channel distribution channels?
quality is poor.
A. Decreased profit margins A. source effects
B. Lower markups B. noise levels
C. Lower product prices C. cultural barriers
D. Reduced selling costs in concentrated retail D. pull strategy
sectors E. push strategy
E. Greater market access
90. When are source effects damaging for an
85. Which of the following is an advantage of longer international business?
distribution channels?
A. When promotional messages are used to stress
A. Competitive pricing strategies the positive performance attributes of its product
B. Lower markups B. When fewer firms compete for the attention of
C. Lower product prices prospective customers in developing countries
D. Reduced selling costs in fragmented retail C. When the firm's marketing strategy emphasizes
sectors personal selling rather than mass media advertising
E. Lower profit margins due to multiple D. When potential consumers in a target country
intermediaries have a bias against foreign firms
E. When international businesses deemphasize their
86. Which of the following is a potentially critical foreign origins
variable that can jeopardize the effectiveness of a firm's
international communication? 91. _____ refer(s) to the extent to which the place
of manufacturing influences product evaluations.
A. Channel length
B. Market segmentation A. Noise levels
C. Import effects B. Country of origin effects
D. Noise levels C. Source effects
E. Channel quality D. Push strategies
E. Pull strategies
87. The best way for a firm to overcome cultural
barriers is to: 92. According to research, when do consumers
usually use the country of origin as a cue when
A. hire only local managers. evaluating a product?
B. develop cross-cultural literacy.
C. encourage cosmopolitan tastes and preferences. A. When a firm tries to deemphasize its foreign
D. operate in markets that are culturally similar to origins
its home market. B. When consumers lack detailed knowledge of a
E. use the same marketing message in every product
country. C. When an advertising campaign stresses the
positive performance attributes of a product
88. Which of the following factors limits a firm's D. When a limited number of messages compete
ability to use the same marketing message? with each other for consumers' attention
E. When a firm resorts to personal selling instead of
A. Channel exclusivity mass media advertising
B. Channel quality
C. Cultural differences 93. In the context of barriers to international
D. Concentrated retail systems communication, _____ refer(s) to the amount of other
E. Fragmented retail systems messages competing for a potential consumer's
attention.
89. In terms of communication strategy, _____
refer(s) to the situation when the receiver of a message A. alternative signals
evaluates the message based on the status or image of B. source effects
the sender. C. noise
D. channel effects
E. country of origin effects 98. Firms in consumer goods industries that are
trying to sell to a large segment of the market generally
94. In terms of communication strategy, in highly favor a(n) _____ strategy.
developed countries such as the United States:
A. push
A. noise is extremely high. B. international
B. source effects are always positive. C. lag
C. country of origin effects are not applicable. D. pull
D. cultural barriers do not exist. E. exclusive distribution
E. pull strategies are more important than push
strategies. 99. Firms that sell _____ favor a push strategy.
Direct selling allows these firms to educate potential
95. Which of the following is true of barriers to consumers about the features of their product.
international communication?
A. professional services
A. Noise tends to increase the probability of B. food grains
effective communication. C. consumer products
B. Source effects can be beneficial for an D. industrial products
international business when potential consumers in a E. standardized products
target country have a bias against foreign firms.
C. Many international businesses try to promote 100. Which of the following allows a firm to educate
positive source effects by deemphasizing their foreign potential consumers about the features of a product?
origins.
D. Fewer firms vie for the attention of prospective A. Direct selling
customers in developing countries, thus the noise level B. Mass media advertising
is lower. C. Pull strategy
E. Research suggests that a consumer may use D. Standardized advertising
country of origin as a cue when evaluating a product, E. Lag strategy
particularly if he or she has detailed knowledge of the
product. 101. Which of the following is a drawback of push
strategies?
96. Which of the following communication
strategies relies primarily on personal selling rather than A. It can be expensive when the distribution
mass media advertising? channel is long.
B. It decreases interaction with consumers.
A. Visual merchandising C. It does not allow consumers to be educated on
B. Pull strategy the benefits of a complex product.
C. Push strategy D. It is useful only in advanced nations where
D. Copy testing consumers are sophisticated and highly educated.
E. Standardized advertising E. It can only be used to sell industrial products.

97. Which of the following communication 102. Which of the following marketing strategies
strategies relies primarily on mass media advertising as relies on access to advertising media?
opposed to personal selling?
A. Personal selling
A. Telemarketing B. Direct selling
B. Pull strategy C. Push strategy
C. Push strategy D. Pull strategy
D. Customized advertising E. Copy testing
E. Point-of-purchase advertising
103. A push strategy is emphasized when:

A. distribution channels are short.

B. sufficient print and electronic media are available 108. _____ exists whenever consumers in different
to carry the marketing message. countries are charged different prices for the same
C. consumers have a low level of literacy. product.
D. the products being sold are consumer goods.
E. professional services are being offered. A. Penetration pricing
B. Premium pricing
104. Pull strategies tend to be emphasized: C. Predatory pricing
D. Price discrimination
A. for complex new products E. Price skimming
B. for consumer goods
C. for industrial goods 109. Which of the following is true of price
D. when distribution channels are short. discrimination?
E. when few print or electronic media are available.
A. It involves charging whatever the market will
105. Which of the following is an argument for bear.
standardized advertising? B. In a competitive market, prices may have to be
higher than in a market where the firm has a monopoly.
A. Consumer tastes and preferences are universal. C. It makes economic sense to charge the same
B. A message that works in one nation will prices in different countries.
invariably work in every other country. D. It exists whenever consumers in different
C. Advertising regulations always promote countries are charged the same price for the same
standardized advertising. product, irrespective of variations.
D. Many brand names are global. E. It cannot help a company maximize its profits.
E. The costs of value creation may be increased by
standardized advertising. 110. Which of the following is necessary for a firm to
ensure profitable price discrimination?
106. Which of the following is an argument against
standardized advertising? A. The firm must sell a standardized product.
B. The firm must be able to keep its national
A. One large effort to develop a campaign fails to markets separate.
produce better results than 40 or 50 smaller efforts. C. The firm must encourage other firms and
B. It fails to make use of local talent available in competitors to engage in arbitration.
other cultures. D. Products sold by the firm must have same prices
C. Advertising regulations may block elasticities of demand in different countries.
implementation of standardized advertising. E. Products must be sold in countries where a small
D. Royalties make it the most expensive form of change in prices produces a large change in demand.
advertising.
E. It increases the costs of value creation. 111. If a firm is unable to keep its national markets
separate, individuals or businesses may undercut its
107. Which of the following is an argument against attempt at price discrimination by engaging in _____.
standardized advertising?
A. speculation
A. One large effort to develop a campaign fails to B. arbitrage
produce better results than 40 or 50 smaller efforts. C. dumping
B. It fails to make use of local talent available in D. countertrade
other cultures. E. forecasting
C. Cultural diversity makes it extremely difficult to
develop a single advertising theme that is effective 112. In which of the following conditions does
worldwide. arbitrage occur?
D. Royalties make it the most expensive form of
advertising. A. When a firm offers a product at low prices
E. It increases the costs of value creation. through discount coupons and promotions
B. When a firm sells a product at higher prices to E. If a firm raises its prices above those of its
make a profit from relatively fewer sales competitors, consumers will refuse to switch to the
C. When a firm imports products from a competitors’ products.
manufacturer and distributes it directly through retail
outlets 117. Which of the following is true of price elasticity
D. When a firm purchases products in a country of demand?
where prices are lower and resells it in a country where
prices are higher A. The price elasticity of demand is only defined by
E. When a firm prices its products at the least cost, the competitive conditions in a country.
risking losses, in order to grab market share B. Demand is said to be inelastic when a large
change in price produces a small change in demand.
113. A measure of the responsiveness of demand for C. Demand is said to be elastic when a large change
a product to changes in price is known as _____. in price produces a small change in demand.
D. Price elasticity tends to be greater in countries
A. the demand to price ratio with low income levels.
B. demand and price dynamics E. The elasticity of demand is inversely proportional
C. price-demand rigidity to the number of competitors offering a particular
D. demand function of pricing product.
E. price elasticity of demand
118. The use of price as a competitive weapon to
114. Demand is said to be _____ when a small change drive weaker competitors out of a national market is
in price produces a large change in demand. known as _____.

A. elastic A. multipoint pricing

B. inelastic B. predatory pricing
C. relative C. leader pricing
D. rigid D. price discrimination
E. dynamic E. price skimming

115. When a large change in price produces only a 119. _____ refers to the fact that a firm's pricing
small change in demand, demand is said to be _____. strategy in one market may have an impact on its rivals'
pricing strategy in another market.
A. flexible
B. consistent A. Dumping
C. inelastic B. Predatory pricing
D. elastic C. Leader pricing
E. dynamic D. Multipoint pricing
E. Price skimming
116. Which of the following is true of price
discrimination as a part of international pricing 120. Which of the following is true of multipoint
strategy? pricing?

A. The more competitors there are, the lesser
consumers’ bargaining power will be.
B. The more competitors there are, the less likely
consumers will be to buy from the firm that charges the
lowest price.
C. A firm may charge a higher price for its product
in a country where competition is limited than in one
where competition is intense.
D. Many competitors cause low elasticity of
demand.
A. It involves aggressive pricing in one market to
elicit a competitive response from a rival in another
market.
B. It involves a firm pricing its products at a loss in
order to drive out competitors from the market.
C. It involves buying products at a cheaper rate in
one country and selling those at a higher price in another
country.
D. It involves allowing markets to determine the
pricing of a product.
E. It involves pricing two similar products at low and 125. In the context of strategic pricing, _____ occurs
high prices in order to boost sales of the lower priced whenever a firm sells a product for a price that is less
products. than the cost of producing it.

121. Many firms pursuing a(n) _____ strategy on an A. inflation

international scale will price low worldwide to build B. dumping
global sales volume as rapidly as possible. C. arbitrage
D. speculation
A. price discrimination E. outsourcing
B. experience curve pricing
C. price skimming 126. Which of the following is a consequence of the
D. penetration pricing vague terminology used in most antidumping actions?
E. economy pricing
A. A firm believes that in several years, it will be
122. Firms pursuing a(n) _____ strategy on an making substantial profits and have a cost advantage
international scale will price low worldwide in over its less-aggressive competitors.
attempting to build global sales volume as rapidly as B. Firms further down the experience curve will
possible, even if this means taking large losses initially. have a cost advantage vis-à-vis those further up the
curve.
A. experience curve pricing C. Pricing decisions around the world will need to be
B. multipoint pricing centrally monitored.
C. economy pricing D. A firm’s ability to engage in price discrimination
D. predatory pricing may also be challenged.
E. premium pricing E. Antidumping regulations cannot be used to limit
the prices a firm can charge in a given country.
123. Which of the following is a true of a firm
pursuing an experience curve pricing strategy? 127. The _____ industry is often thought of as one in
which global standardization of the marketing mix is the
A. Moving down the experience curve, the firm will norm.
be making substantial profits and have a cost advantage
over its less-aggressive competitors. A. electronics
B. Vigorous price wars need to be launched in a B. retail
market in an attempt to gain market dominance. C. pharmaceutical
C. Aggressive pricing in one market may elicit a D. financial services
response from rivals in another market. E. heavy machinery
D. By using profits from one market, competitors
can be driven out from another market by considerably 128. Which of the following has resulted in a
lowering prices in that market. dramatic shortening of product life cycles?
E. When competitors are numerous, consumers’
bargaining power is weaker and price is less important as A. Acceleration of the pace of technological change
a competitive weapon. B. Intensity of domestic competition
C. Affluence of customers
124. Which of the following pricing strategies can run D. Increase in the number of educated consumers
afoul of antidumping regulations? E. Removal of trade barriers

A. Experience curve pricing 129. Other things being equal, the rate of new-
B. Premium pricing product development seems to be greater in countries
C. Market-based pricing where:
D. Dynamic pricing
E. Price skimming A. more money is spent on marketing instead of
applied research.
B. consumers demand for cheaper products since
they are not affluent.
C. competition between firms is intense. E. Its team members should be a part of more than
D. pioneering costs outweigh the disadvantages of two cross-functional teams.
being a second mover.
E. a large change in prices of a product only 134. The project manager of a cross-functional team
produces a small change in demand. should:

130. Which of the following factors creates a A. have the ability to persuade other team members
potential market for new products? to implement his idea.
B. not be hesitant to claim responsibility for the
A. Rising inflation success of a project.
B. Affluent consumers C. be able to act as an advocate of the team to
C. Lack of competition among firms senior management.
D. Firms suffering from first-mover disadvantages D. help each function determine individual goals
E. Centralized research and development activity rather than focus on the project as a whole.
E. get involved in conflict resolution only when
131. Which of the following is a consequence of tight absolutely necessary.
cross-functional integration between research and
development (R&D), production, and marketing?
135. The members of a cross-functional team should
A. Maximizing the time to market a product have:
B. Letting R&D dictate terms to marketing and
production A. low standing within their respective functions.
C. Keeping development costs in check B. the ability to put functional and national
D. Ensuring that product development projects are advocacy first.
driven by organizational needs C. the ability to contribute functional expertise.
E. Increasing selling costs and maximizing profits D. the ability to solely focus on the ongoing work of
their respective functions.
132. Which of the following is a reason for the high E. the ability to work on several projects
failure rate of research and development endeavors? simultaneously.

A. Developing a technology for which demand

exceeds the supply
B. Excessive commercialization of new technologies
C. Delivering new products to the market ahead of
major competitors
D. Inability to manufacture a new product cost
effectively
E. High pioneering costs

133. Which of the following is an important attribute

for a product development team to function effectively
and meet all of its development milestones?

A. It should be led by a "heavyweight" project

manager who has high status within the organization.
B. The team members should always be physically in
diverse locations in order to cover multiple bases.
C. It should have preset processes for
communication and conflict resolution that are
developed by top management.
D. It should have at least three members from each
key function included.