Q&A Hero

Q: From a sociological point of view, any idea perceived as new by a group of people is an innovation.

Q: Adaptation of the nonphysical features of a product should be avoided when adapting the product to a new culture.

Q: An important first step in adapting a product to a foreign market is to determine the cost-benefit as perceived by the intended market.

Q: The European Commission (EC) mandate requires a product to be evaluated on all significant environmental effects throughout its life cycle, from manufacturing to disposal.

Q: Green marketing is the term frequently used to identify a marketer's efforts to reduce its dependency on U.S. dollars as the standard for international exchange.

Q: The term product homogenization is used to describe the changes mandated by local product and service standards.

Q: The decision to standardize or adapt a product is less important in delivering quality than price.

Q: When there are alternative products in a market, all of which meet performance quality standards, the product chosen is the one that meets market-perceived quality attributes.

Q: Consumer perceptions of a quality product often have more to do with market-perceived quality than performance quality.

Q: The cost and quality of the product are among the most important criteria by which purchases are made.

Q: Global competition has put more power in the hands of the seller.

Q: Define country-of-origin effect. How can a company overcome this effect?

Q: Define the term global brand. How are global brands important?

Q: What are the four barriers faced by consumer services marketers when they enter the global market?

Q: Describe the five characteristics of an innovation that assist in determining the rate of acceptance or resistance of the market to a product.

Q: Everett Rogers noted that four crucial elements affect the diffusion of new ideas. What are those elements?

Q: What is green marketing? How does it affect product development?

Q: What are the five factors that influence product adaptation in new markets?

Q: In the context of product adaptation, what is product homologation?

Q: Compare and contrast the two ways consumers determine a product's quality.

Q: How has the increased presence of global competition changed business strategies in the marketplace?

Q: Kroger grocery stores stock many food items that are sold under the brand name Simple Truth , which is sold exclusively in Kroger stores. This is an example of a ________ brand. A) global B) private C) specialty D) market. E) retail

Q: In Russia, products are divided into two categories"ours" and "imported." This is an example of A) an autarky. B) ethnocentrism. C) theocentrism. D) feudalism. E) a closed economy.

Q: Consumers have broad but somewhat vague stereotypes about specific countries and specific product categories that they judge "best." Which item would most likely not fit in the "best" stereotype scheme? A) English tea B) Indian cars C) French perfume D) Chinese silk E) Jamaican rum

Q: A shoe manufacturer in the Philippines shipped its entire production to San Francisco and then brought it back to the Philippines to market it as "Made in the U.S." The manufacturer believed that people would prefer buying products made in the U.S. rather than those domestically produced. The factor that is influencing the perception of the customers in the given scenario is called the ________ effect. A) doppler B) comparative advantage C) country-of-origin D) mass E) placebo

Q: The ________ effect refers to the possibility that the place of manufacture may affect product or brand image. A) doppler B) polar C) transfer D) misinformation E) country-of-origin

Q: A manufacturer of toiletries and cleaning products uses the name Home Helper, for most products in their international markets. The name has created a universal appeal for its products as customers identify their products with the name; hence, Home Helper can be regarded as a ________ brand. A) retailer's B) shelf C) store D) global E) dual

Q: A name, term, sign, symbol, design, or combination used worldwide to identify goods or services of one seller and to differentiate them from those of competitors is called a B) product mark. C) global brand. D) brand's equity position. E) trademark. Answer: C

Q: An insurance firm based in California had difficulty expanding its operations to Asian markets as most of the target countries had strict regulations on sharing details about their customers with the home office. The company had to obtain approval from its customers before sharing their personal information with its U.S. office. Which barrier is most likely to have affected the services of the insurance firm? A) protectionism B) control on transborder data flows C) protection of intellectual property D) cultural requirements for adaptation E) language translation barriers

Q: Blue Lobster considered opening restaurants in China. However, the restaurant's labor union felt that since accepting tips by wait staff is considered in bad taste in China, they would face considerable income loss. Therefore, they demanded to know how employees would be compensated for this since a great portion of a typical wait staff person's compensation comes in the form of tips. Which barrier does a consumer services marketer face in this illustration? A) protectionism B) controls on transborder data flows C) protection of intellectual property D) cultural requirements for adaptation E) language translation barriers

Q: Which barrier faced by consumer service marketers is in force when a foreign market applies a tariff on the service that is operating there? A) trade protectionism B) lack of transborder data flows restrictions C) protection of intellectual property D) religious requirements for adaptation E) language translation barriers

Q: How do the vast majority of services enter a foreign market? A) importing and exporting B) smuggling and pirating C) licensing, franchising, or direct investment D) through brokers E) through diaspora population

Q: What is the largest services export of the United States, ranking behind only capital goods and industrial supplies when all exports are counted? A) automobile services B) international tourism C) banking services D) research and development E) education services

Q: Levon, a hairstylist at a salon in Portland, styles his customers in various ways. His work looks different on different people even though he has styled all of them. This unique character of a service that is unique for every customer as it is individually produced is referred to as A) tangibility. B) separability. C) durability. D) heterogeneity. E) divisibility.

Q: A characteristic of a service is that it is ________, since it cannot be stored and must be consumed simultaneously with its creation. A) durable B) feasible C) indelible D) tangible E) perishable

Q: Dr. Thomas is a dentist practicing in Chicago. During a four-day stretch in March, it snowed so heavily that not a single patient was able to visit him. Since none of the appointments took place, he did not make any money in those four days, even though his normal expenses remained. In this scenario, which characteristic of services most likely affected Dr. Thomas' business? A) tangibility B) feasibility C) durability D) homogeneity E) perishability

Q: Because a service is individually produced and is virtually unique, the service is said to have A) liquidity. B) coherence. C) inseparability. D) heterogeneity. E) tangibility.

Q: Dry cleaning, hair styling, and hotel accommodations have intrinsic value resulting from a process, a performance, or an occurrence that only exists while it is being created. Which characteristic of services is being referred to here? A) intangibility B) separability C) liquidity D) homogeneity E) durability

Q: The washing machines marketed by Talcho failed in Asian markets as those countries lacked the skills necessary to repair and maintain Talcho's products. Also, the washing machine parts available in local markets were not compatible with these machines. This product failure is most likely to be a result of lack of attention by the company to the ________ component of the product. A) marketing B) price C) packaging D) support services E) style

Q: A South Korean electronics company had to add detailed instructions about the repair and replacement of its product to make it easier for the local consumers to maintain it. Which element of the Product Component Model relates to this issue? A) support services B) design C) core D) packaging E) functional

Q: Since the consumer is automatically angry with the manufacturer when something goes wrong with the vehicle, repair and maintenance has become a concern of the various automobile manufacturers. In which component of the Product Component Model would the management need to make improvements if problems such as this are to be solved? A) core B) functional C) packaging D) support services E) price

Q: Eugene bought a new watch in January, and by March it stopped keeping time accurately. The warranty was still valid, so he sent it back to the manufacturer for repair. According to the Product Component Model, this demonstrates the ________ component of the product. A) core B) support services C) packaging D) functional E) styling

Q: A Brazilian food company had to change the labeling on its products to meet the specifications regarding vegetarian and nonvegetarian foods set by the government in the Taiwan market. It also had to mention the ingredients in Taiwanese to provide clarity to local customers. The component of the product that is affected is the ________ component. A) support services B) packaging C) functional D) design E) core

Q: A Canadian computer company had difficulties when it first entered the Japanese market. Some of its computers were returned unused after customers found the wrapping on the instruction manual damaged. Though this would probably be an insignificant problem in Canada, it was certainly a cause of concern in quality-conscious Japan. Which component of the Product Component Model should the company concentrate on to fix this problem? A) core B) support services C) packaging D) functional E) design

Q: When a company alters the price of its product to compete with local companies in the international market, it is focusing on the ________ component of the product, according to the Product Component Model. A) core B) support C) design D) maintenance E) packaging

Q: Appliances-a-Rama, an Indian company that manufactures kitchen appliances, alters the design of its ranges to suit the needs of its Japanese consumers. The Japanese prefer compact and efficient appliances to fit their small kitchens. According to the Product Component Model, which product component is being addressed? A) packaging B) invisible C) core D) ancillary E) support services

Q: If a company wished to alter a product's platform so that the product could be manufactured in a variety of forms to meet local differences in five different foreign markets, the component of the Product Component Model that is most likely to be under consideration is A) support services. B) packaging. C) delivery. D) ancillary. E) core.

Q: Sarj, a specialist in product design, is responsible for a product's functional design. With respect to the Product Component Model, in which component category would Sarj's talents most likely be used? A) core B) support services C) packaging D) invisible E) auxiliary

Q: The product platform, design features, and functional features are all found in the ________ component of the physical product according to the Product Component Model. A) core B) support C) packaging D) supplementary E) auxiliary

Q: The success achieved by firms when they take their inventions to market is referred to as A) conversion-ability. B) liquidation. C) formation-ability. D) homologation. E) consultation.

Q: What factor is mainly responsible for a perceptual bias when interpreting the characteristics of a product? A) too much product information B) a shorter distribution channel C) a market analyst's self-reference criterion D) a low number of product competitors E) authoritative product information of the market analyst

Q: In general, the rate of acceptance or resistance of the market to a product is negatively related to A) relative advantage. B) compatibility. C) trialability. D) complexity. E) observability.

Q: AllClean develops promotional materials and product demonstrations to clearly and easily communicate the benefits of its cleaning products. In this scenario, AllClean is attempting to enhance the ________ of its products. A) relative advantage B) compatibility C) complexity D) trialability E) observability

Q: A product's ________ refers to the ease with which its benefits can be communicated to the customers. A) relative advantage B) compatibility C) complexity D) trialability E) observability

Q: An American company wants to launch a new product in Madrid. Freda asks her product manager to distribute some samples to potential customers there so that she can gauge the consumer preferences there before introducing the product. Freda is attempting to reduce the degree of economic and/or social risk, also known as ________, associated with product use. A) compatibility B) relative advantage C) complexity D) trialability E) observability

Q: Maya was happy that she did not have to read the instruction manual to determine how to turn on her new camera, snap a digital picture, and export the picture to her computer. The signs (symbols) on the camera body made it very clear what she was to do to achieve digital photography success. What characteristic of Maya's "new product" makes it easy for her to begin her digital experience? A) high partibility B) low susceptibility C) low complexity D) high trialability E) low compatibility

Q: An infinite number of organizational patterns for the headquarters' activities of multinational firms exist, but most fit into one of three categories. Describe these categories and the advantages and disadvantages of each.

Q: Assume that you are a consultant for a telecom giant based in the United States that wishes to create a joint venture with a Chinese electronics company. The joint venture is expected to enter and compete in the eastern European market. Suggest an organizational structure that would be most suitable for this joint venture. Also, comment on why the structure might be a good one to use.

Q: You have just been hired as a consultant by Physical Mobility to advise the company on how to enter the European market. You have decided that direct foreign investment would be the best mode for Physical Mobility to follow. Write a one-paragraph memo that outlines the benefits of direct foreign investment in this scenario.

Q: Explain the difference between joint ventures and consortia.

Q: Briefly explain a strategic international alliance (SIA).

Q: Describe the two basic contractual agreements that most companies follow in their attempt to enter a foreign market: licensing and franchising. Illustrate a situation in which each type of agreement would be appropriate. Students' answers will vary.

Q: A company has a choice of four different modes of foreign market entry. Briefly describe each of these modes, and explain when each would be the best option.

Q: Describe the four phases of the international planning process.

Q: Compare and contrast corporate, strategic, and tactical planning.

Q: Describe three benefits of marketing to diverse customers with global marketing operations.

Q: Which organizational structure is the most extensive of those commonly adopted by companies seeking to compete globally? A) transnational structure B) geographical division structure C) region-specific structure D) global product division structure E) matrix structure

Q: HealthStore Inc. provides a broad and diverse range of services for the healthcare industry. It also manufactures a variety of hospital equipment. It wants to experience rapid growth and intends to have an organizational structure to better face international competition. What organizational structure will suit HealthStore best? A) a global product division structure B) a geographical division structure C) a matrix structure D) a pyramid structure E) a hierarchical structure

Q: Companies that have the ________ organizational structure generally experience rapid growth and have broad, diverse product lines. A) global product division B) pyramid C) hierarchical D) geographical division E) matrix organization

Q: A small-scale apparel manufacturer in Florida collaborates with several other similar firms and they form a separate company in India. None of the participants in this collaboration has previously had active operations in the Indian market. The newly created firm manufactures apparel suited to the tastes and preferences of the Indian customers. Identify the type of foreign market-entry approach depicted in this scenario. A) a franchising agreement B) a consortium C) a licensing agreement D) direct exporting E) indirect exporting

Q: A consortium differs from a joint venture in that a consortium A) usually operates in a country in which the participants are already active. B) typically involves a large number of participants. C) restricts the right to hold an equity position by its major partners. D) does not involve the creation of a separate legal entity. E) is formed mainly for executing short-term projects.

Q: What is a partnership called in which several companies have joined forces to create a separate legal entity to facilitate doing business in a country where none of the participants is currently active? A) a consortium B) a franchise pact C) a license arrangement D) indirect exporting E) direct foreign investment

Q: What refers to two or more participating companies joining forces to create a separate legal entity to facilitate doing business in the international arena? A) indirect exporting B) franchise C) license arrangement D) joint venture E) direct investment agreement

Q: In the context of foreign market entry, a ________ is a business relationship established by two or more companies to cooperate out of mutual need and to share risk in achieving a common objective without forming a separate legal entity. A) direct sales group B) consortium arrangement C) franchising arrangement D) strategic international alliance E) joint venture

Q: The key factors that influence success of franchising approaches are monitoring costs (based on physical and cultural distances), the principal's international experience, and A) the principal's financial investment in the business. B) the principal's marketing expertise. C) the brand equity in the new market. D) learning the competition. E) the level of involvement from the company.

Q: Why are foreign laws and regulations friendly toward franchising? A) It is an important form of horizontal market integration. B) It gives the franchiser little control on marketing of the products at the point of final sale. C) It tends to foster local ownership, operations, and employment. D) It provides an effective blending of skill decentralization and operational centralization. E) It provides to the franchiser market knowledge, capital, and personal involvement in management.

Q: Kwan wants to open a new business in his own country, Singapore. He has decided on a form of licensing that will provide him with a standard package of products, systems, and management services in order to sell fast food to local residents. What is the form of business Kwan has chosen? A) direct sales B) indirect exporting C) joint venture D) strategic alliance E) franchising

Q: What is true of franchising? A) It provides an effective blending of skill decentralization and operational centralization. B) The franchisee provides market knowledge, capital, and personal involvement in management. C) Foreign laws and regulations are usually hostile toward franchising. D) It is an important form of horizontal market integration. E) The franchiser has little control on marketing of the products at the point of final sale.

Q: Which form of business relationship lets a company grant patent rights, trademark rights, and the rights to use technological processes to another company in a foreign country? A) licensing B) exporting arrangements C) joint ventures D) consortia E) strategic alliances

Q: Cho wanted to sell her custom jewelry made in China to the U.S. market, but she didn't have a lot of capital to get started, nor did she know how to get around import restrictions. She decided to give an American company the rights to produce and sell her products for a fee and gave them patent rights. Cho was pursuing which entry method? A) consortia B) exporting arrangements C) strategic alliances D) licensing E) joint ventures