University of Houston, Downtown

MBA 6208

1)According to Hofstede, cultures with low power distance are                         .

1. collectivist
2. assertive
3. egalitarian
4. risk-averse
5. risk-tolerant

2. According to Hofstede, cultures with weak uncertainty avoidance are best described as                        .

1. collectivist
2. hierarchical
3. egalitarian
4. risk-averse
5. risk-tolerant

3. A risk averse attitude is associated with high                             .

1. uncertainty avoidance
2. femininity
3. power distance
4. individualism
5. collectivism

4. A market survey by LG revealed that Indians preferred not to mix vegetarian and non-vegetarian food items. Hence, LG refrigerators in India include a special convertible box with separate compartments to store and control the temperature of vegetarian and non-vegetarian food. This is an example of customizing       to local needs.

1. advertising media
2. product features
3. packaging
4. brand name
5. labeling

5. Straight extension of the product means introducing                .

1. the product to the foreign market without any changes to the product
2. the product to the foreign market with minor changes to the product
3. the product to the foreign market with major changes to the product
4. a customized product to the foreign market with a new marketing strategy
5. a customized product to the foreign market with existing marketing strategy

6. Which of the following is most likely to be successful when introduced in foreign markets as a straight extension?

1. laundry detergent
2. khaki pants
3. dessert mixes
4. digital camera
5. condensed soup

7. For the launch of "Trema," your company's new pocket organizer that can also be used as a cell phone, the CMO has decided that the product can be launched in international markets without any changes in its features or the marketing strategy. This introduction can be described as a               .

1. dual adaptation
2. straight extension
3. product adaptation
4. forward invention
5. backward invention

8. Finnish cellular phone giant Nokia customized its 6100 series mobile phone for every major market in which it is present. In Asia, for example, the series came with higher ring volume so that it could be heard on the crowded Asian streets. This is an example of            .

1. straight extension
2. forward invention
3. regional version
4. city version
5. country version

9. In an attempt to tailor its products to suit the requirements of consumers in India, LG introduced the aero-comfort system. A remote control is programed to regulate both the air-conditioning and the ceiling fan. Consumers can switch off the AC and increase the ceiling fan's flow once the desired temperature is achieved. This not only increases convenience, but also cuts down electricity charges. LG's aero-comfort system is an example of which of the following?

1. backward invention
2. dual invention
3. country version product
4. straight extension
5. communication adaptation

10. Your firm has decided to enter the international market with your product called "Trema," a combination of a pocket organizer and cell phone. Even though the product has been a huge success in the home country, market research suggests some changes may be required before it can be introduced in Europe. Your CMO is of the opinion that the product requires certain extra features and the product will also have to be marketed differently. Your CMO is advocating

                   .

1. product invention
2. dual adaptation
3. straight extension
4. forward adaptation
5. product standardization

11. Product adaptation involves                   .

1. altering the product to meet local preferences with no change in communication strategy
2. altering the product to meet minimum acceptable standards
3. altering both the product and the communication strategy to meet local preferences
4. altering neither the product nor the communication strategy while entering a new market
5. developing a new product and adapting the communication strategy to enter a new market

12. Backward invention occurs when a firm                    .

1. creates a new product to meet a need in another country
2. reintroduces earlier product forms adapted to suit another country's needs
3. invents products that are similar to competing offerings
4. takes an existing product into a new market
5. produces its own raw materials

13. Forward invention is                    .

1. creating a new product to meet a need in another country
2. creating a new product to meet the need in the home country
3. inventing products that are superior to competing offerings
4. taking an existing product into a new market
5. inventing something that as yet has no "market"

14. Companies can run the same marketing communications programs as used in the home market or change them for each local market, a process called .

1. product communications
2. market development
3. dual adaptation
4. diversification
5. communication adaptation

15. If a company adapts or changes both a product and the communications, the company engages in a process called

                   .

1. straight extension
2. product reinvention
3. product adaptation
4. dual adaptation
5. full adaptation

16. A Gucci bag sells for $120 in Italy and $240 in the United States due to the differences in the costs of distributing the

product in the two countries. This phenomenon is called a(n)

1. opportunity cost
2. market pricing
3. tactical pricing
4. price escalation
5. transfer pricing

problem.

17. Trends Inc. produces and markets casual wear for men and women. The company wants to be a global brand and is planning to enter a few chosen markets across Europe and Asia. To accommodate the differences in purchasing power and costs of shipping goods to the retailers, the company has decided to use cost-based pricing in each country. In order to

ensure that this strategy is successful, Trends must first make sure that              .

1. all the countries it is planning to enter have similar laws and regulations
2. competing offerings in the different markets are not priced lower
3. all competitors follow cost-based pricing
4. its marketing communication targets rival firms in the respective markets to prove its superiority
5. its transfer prices are high

18. The problem with setting a uniform global price for a product is that                  .

1. it allows intermediaries in low-price countries to reship their products to high-price countries
2. the company would earn the same profits everywhere, regardless of the cost structure
3. this strategy can price the product out of the market in countries where costs are high
4. this strategy makes the price too high in poor countries and not high enough in rich countries
5. it is ineffective for products that are homogeneous

19. When companies are setting prices in different countries, the problem with setting a market-based price in each country is that       .

1. it allows intermediaries in low-price countries to reship their products to high-price countries
2. the company would earn the same profits everywhere, regardless of the cost structure
3. this strategy might price the product out of the market in countries where costs are high
4. this strategy would make the price too high in poor countries and not high enough in rich countries
5. it prevents the company from differentiating its products

20. When one unit charges another unit in the same company for goods it ships to its foreign subsidiaries, the charge is called a(n)    price.

1. original
2. transfer
3. margin
4. break-even
5. customer value

21. Existence of gray markets leads to which of the following outcomes?

1. They make the distribution channel stronger.
2. They create a free-rider problem making legitimate distributors' investments in supporting a manufacturer's product less productive.
3. Goods sold in grey markets are always counterfeit.
4. Goods sold in grey markets come with standard product warranties.
5. Taxes imposed on grey market products are very high.

22. Dumping occurs when a company                    .

1. entering a foreign market charges either less than its costs or less than it charges at home
2. entering a foreign market charges more than the price in its home market
3. entering a foreign market charges prices that are lower than those charged by its competitors in this market
4. sets its price equal to its average cost of production
5. exports its products to a foreign country to increase its revenue in spite of excess demand in the home country

23. Various governments force companies to charge the                 price, which is charged by other competitors for the same or a similar product.

1. gray market
2. implicit
3. arm's-length
4. authorized
5. contingent

24. In India, where people often buy items like cigarettes one at a time because incomes are low and people shop daily because homes lack storage and refrigeration,           remains an important function of intermediaries and helps perpetuate long channels of distribution.

1. breaking bulk
2. jobbing
3. type of transportation
4. information sharing
5. reinforcing policies

25. Which of the following is likely if the distribution channel for a product in the foreign country is long?

1. The foreign country buyers pay a high price.
2. The consumer will pay arms-length price.
3. The profit margin of the sellers increases.
4. The intermediaries are motivated to reship the product to another country to earn higher profits.
5. The seller can increase profit margins by charging a uniform price.

26. As people in developing countries often prefer to buy in smaller quantities,                is one of the most important functions of intermediaries in developing countries and helps perpetuate the long channels of distribution, which are a major obstacle to the expansion of retailing.

1. product adaptation
2. breaking bulk
3. diversification
4. transfer pricing
5. dual adaptation

27. If PepsiCo charges what each country could afford, ignoring cost differences from country to country, it would be using a(n)  price.

1. uniform
2. market-based
3. cost-based
4. escalation
5. skimming

28. If a society is collectivist, it would imply that the self-worth of the people is rooted in individual achievements.

29. Straight extension means using an established product's brand name for a new item in the same product category.

30. Product adaptation not only involves altering the product to meet local preferences, but also calls for a change in the communication strategy.

31. Forward invention refers to reintroducing earlier product forms that are well adapted to a foreign country's needs.

32. Communication adaptation occurs when companies change marketing communications for each local market.

33. If Kellogg's offered different varieties of breakfast cereals in India as compared to Australia, and also positioned its products differently in the two countries, then Kellogg's would be engaging in dual adaptation.

34. The use of media may require international adaptation because media availability varies from country to country.

35. When companies sell on the Internet, price becomes transparent, and price differentiation between countries declines.

36. If a company charges its subsidiary in a foreign country too low a transfer price, it can be accused of dumping.

37. Gray market activities harm distributor relations, tarnish the manufacturer's brand equity, and undermine the integrity of the distribution channel.

38. Web-crawling technology searches for counterfeit storefronts and sales by detecting domain names similar to legitimate brands.

39. As required levels of distribution increase, so do customer prices relative to the importer's price.

40. Coors brand slogan "Turn it loose" translated into Spanish was interpreted as "suffer from diarrhea," which is an example of why marketers may need to change brand elements when they launch products and services globally.

41. Comparative advertising is not acceptable in Japan, and is illegal in India and Brazil.